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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)
These risks can be managed and reduced provided that nations work together to fight global warming, boost energy security and achieve national security, it added.
The report, released as the U.N. climate summit, COP30, began in Brazil, noted that "traditional risks to fuel supply now are accompanied by restrictions affecting supplies of critical minerals. The electricity sector--so essential to modern economies--also is increasingly vulnerable to cyber, operational and weather-related hazards."
The 518-page report continued: "Recent annual operational disruptions to critical energy infrastructure affected energy supplies to more than 200 million households around the world. Droughts constrain output from hydropower and some thermal generators, while storms, floods and wildfires force shutdowns and damage different types of energy facilities, from solar plants to offshore oil and gas facilities. Power lines are particularly vulnerable: transmission and distribution grids were affected in about 85%" of disruptions.
On a global basis, carbon dioxide (CO2) levels in the atmosphere have been rising for years. The production and consumption of energy accounts for most of the CO2 emissions in the atmosphere. A scientific consensus has concluded that rising levels of atmospheric CO2 are changing climate patterns and creating new "weather-related hazards." In 2024, for the 10th consecutive year, the world set yet another record for highest average temperatures.
Last year also was the first time that the world recorded a temperature gain exceeding 1.5° Celsius above pre-industrial times, the IEA report noted. The goal of the Paris Agreement of 2015 was to limit global average temperature gain during the 21st century to no more than 2°C, ideally 1.5°C, over pre-industrial times.
Commenting on the report, Britt Burt, Industrial Info's senior vice president of research for the global electric power industry, said, "CO2 emissions from the U.S. have been trending downward since around 2007, largely because fossil-fueled power plants have been retired, or their fuel has been switched to natural gas, which emits about half the carbon of coal when combusted."
He added, "Other factors behind the declining trend: energy efficiency programs and a massive buildout of renewable generation."
Increased use of fossil fuels in electric generation this year may end up pushing up America's CO2 emissions, he said.
"It's true that President Donald Trump's administration has cut federal funding for renewable energy, but that does not mean development of those resources just stops," Burt continued. "There remains a robust pipeline of renewable power projects under development in the U.S. In many cases, wind and solar generation are cost competitive with gas-fired generation even without federal subsidies. But wind and solar are intermittent. They can't be dispatched when needed. That's why the U.S. is in a big gas build-out now. It needs more dispatchable generation capacity."
Click on the image at right to see the IEA's projection of global temperature gain in scenarios it developed.
The NZE scenario starts at 2050 and looks backward, to map the pathway to achieve specific energy and climate-related goals. The other two cases, the Current Policies Scenario (CPS) and the Stated Policies Scenario (STEPS), start with current conditions and move forward under different assumptions to examine their respective implications.
The CPS case effectively is the business-as-usual scenario that considers policies and regulations that are already in place.
The STEPS case goes a little farther and "considers the application of a broader range of policies, including those that have been formally put forward but not yet adopted, as well as other official strategy documents that indicate the direction of travel." It is a touch more aspirational than the CPS case.
The IEA uses a different mix of scenarios compared to outlooks in prior years. It marks the return of the CPS case, which had been discontinued after the 2020 report, and replaces the Announced Pledges Case (APS). The APS case assumed that global use of fossil fuels would peak in the 2030s. The CPS, on the other hand, assumed fossil fuel use will continue growing.
The agency noted its scenarios were not predictions; rather, they were created to trace the implication of various policy choices made by the global community.
The CPS and STEPS cases both see "continued increases in energy demand as a larger and richer global population demands more energy services. In the STEPS, total energy demand increases by around 55 exajoules (EJ) to 2035, an 8% increase over today's level. In the CPS, it grows faster, rising by 90 EJ by the same year, or 14%. In both scenarios, emerging market and developing economies drive nearly all the increase in global energy demand. Energy demand in advanced economies remains below its 2007 peak through to 2035 in both scenarios."
In a statement accompanying the release of the report, IEA Executive Director Fatih Birol said, "Breakneck demand growth from data centers and AI is helping drive up electricity use in advanced economies, too."
Global investment in data centers is expected to reach $580 billion in 2025, surpassing the $540 billion being spent on global oil supply, "a striking example of the changing nature of modern economies," Birol added.
"Traditional hazards affecting the security of oil and gas supply are now accompanied by vulnerabilities in other areas, most visibly in critical minerals supply chains," the report said, noting that China is the dominant refiner for 19 out of 20 energy-related strategic minerals, with an average market share of around 70%.
Click on the image at right to see China's share of the refining of 20 strategic minerals.
"The minerals in question are vital for power grids, batteries and electric vehicles (EVs), but they also play a crucial role in AI chips, jet engines, defense systems and other strategic industries," the report continued. This is where energy security and national security intersect. The U.S. president may oppose renewable energy and electric vehicles, but he has made "winning the AI war" and the buildup of U.S. military forces top priorities. The reality of a world connected by trade stands in stark relief to the U.S. "go it alone" strategy on energy and national security.
"Fostering more diverse and resilient supply chains for critical minerals will take a concerted policy effort; market forces alone will not deliver," the IEA said, noting particular concerns over nickel and cobalt.
Key Takeaways
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Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Summary
The International Energy Agency details a broadening range of risks facing nations relating to energy security and urges greater cooperation to counter global warming.Rising CO2 Levels Create More Weather-Related Risks to Energy Security
A variety of new threats, including some stemming from extreme weather, have placed energy security "at the heart of today's geopolitical tensions," the International Energy Agency (IEA) (Paris, France) declared at the start of its "World Energy Outlook 2025" ("WEO-25"), released November 12.These risks can be managed and reduced provided that nations work together to fight global warming, boost energy security and achieve national security, it added.
The report, released as the U.N. climate summit, COP30, began in Brazil, noted that "traditional risks to fuel supply now are accompanied by restrictions affecting supplies of critical minerals. The electricity sector--so essential to modern economies--also is increasingly vulnerable to cyber, operational and weather-related hazards."
The 518-page report continued: "Recent annual operational disruptions to critical energy infrastructure affected energy supplies to more than 200 million households around the world. Droughts constrain output from hydropower and some thermal generators, while storms, floods and wildfires force shutdowns and damage different types of energy facilities, from solar plants to offshore oil and gas facilities. Power lines are particularly vulnerable: transmission and distribution grids were affected in about 85%" of disruptions.
On a global basis, carbon dioxide (CO2) levels in the atmosphere have been rising for years. The production and consumption of energy accounts for most of the CO2 emissions in the atmosphere. A scientific consensus has concluded that rising levels of atmospheric CO2 are changing climate patterns and creating new "weather-related hazards." In 2024, for the 10th consecutive year, the world set yet another record for highest average temperatures.
Last year also was the first time that the world recorded a temperature gain exceeding 1.5° Celsius above pre-industrial times, the IEA report noted. The goal of the Paris Agreement of 2015 was to limit global average temperature gain during the 21st century to no more than 2°C, ideally 1.5°C, over pre-industrial times.
Divergent Paths Taken to Achieve Energy Security
In a steadily warming world, nations have taken divergent paths to enhance energy security and affordability, the report noted: "Some, including many fuel-importing countries, lean towards renewables and efficiency as solutions. Others focus more on ensuring ample supplies of traditional fuels."Commenting on the report, Britt Burt, Industrial Info's senior vice president of research for the global electric power industry, said, "CO2 emissions from the U.S. have been trending downward since around 2007, largely because fossil-fueled power plants have been retired, or their fuel has been switched to natural gas, which emits about half the carbon of coal when combusted."
He added, "Other factors behind the declining trend: energy efficiency programs and a massive buildout of renewable generation."
Increased use of fossil fuels in electric generation this year may end up pushing up America's CO2 emissions, he said.
"It's true that President Donald Trump's administration has cut federal funding for renewable energy, but that does not mean development of those resources just stops," Burt continued. "There remains a robust pipeline of renewable power projects under development in the U.S. In many cases, wind and solar generation are cost competitive with gas-fired generation even without federal subsidies. But wind and solar are intermittent. They can't be dispatched when needed. That's why the U.S. is in a big gas build-out now. It needs more dispatchable generation capacity."
IEA Scenarios
In two of the report's "exploratory" scenarios, global average temperatures rise by far more than 2° C by 2100. A third "normative" scenario includes net-zero carbon emissions (NZE) by 2050, keeping temperature gain to 1.5°C by 2100.The NZE scenario starts at 2050 and looks backward, to map the pathway to achieve specific energy and climate-related goals. The other two cases, the Current Policies Scenario (CPS) and the Stated Policies Scenario (STEPS), start with current conditions and move forward under different assumptions to examine their respective implications.
The CPS case effectively is the business-as-usual scenario that considers policies and regulations that are already in place.
The STEPS case goes a little farther and "considers the application of a broader range of policies, including those that have been formally put forward but not yet adopted, as well as other official strategy documents that indicate the direction of travel." It is a touch more aspirational than the CPS case.
The IEA uses a different mix of scenarios compared to outlooks in prior years. It marks the return of the CPS case, which had been discontinued after the 2020 report, and replaces the Announced Pledges Case (APS). The APS case assumed that global use of fossil fuels would peak in the 2030s. The CPS, on the other hand, assumed fossil fuel use will continue growing.
The agency noted its scenarios were not predictions; rather, they were created to trace the implication of various policy choices made by the global community.
Global Demand Will Rise for Electricity, Energy and Energy Services
"As economies expand and populations and incomes grow," the report said, "each scenario sees the world's need for energy services increase with demand rising for mobility; for heating, cooling, lighting and other household and industrial uses; and increasingly for data and artificial intelligence (AI)-related services."The CPS and STEPS cases both see "continued increases in energy demand as a larger and richer global population demands more energy services. In the STEPS, total energy demand increases by around 55 exajoules (EJ) to 2035, an 8% increase over today's level. In the CPS, it grows faster, rising by 90 EJ by the same year, or 14%. In both scenarios, emerging market and developing economies drive nearly all the increase in global energy demand. Energy demand in advanced economies remains below its 2007 peak through to 2035 in both scenarios."
In a statement accompanying the release of the report, IEA Executive Director Fatih Birol said, "Breakneck demand growth from data centers and AI is helping drive up electricity use in advanced economies, too."
Global investment in data centers is expected to reach $580 billion in 2025, surpassing the $540 billion being spent on global oil supply, "a striking example of the changing nature of modern economies," Birol added.
China's Dominance of Strategic Minerals
The outlook report also assesses the implications of China's dominant share of strategic minerals mining and processing."Traditional hazards affecting the security of oil and gas supply are now accompanied by vulnerabilities in other areas, most visibly in critical minerals supply chains," the report said, noting that China is the dominant refiner for 19 out of 20 energy-related strategic minerals, with an average market share of around 70%.
"The minerals in question are vital for power grids, batteries and electric vehicles (EVs), but they also play a crucial role in AI chips, jet engines, defense systems and other strategic industries," the report continued. This is where energy security and national security intersect. The U.S. president may oppose renewable energy and electric vehicles, but he has made "winning the AI war" and the buildup of U.S. military forces top priorities. The reality of a world connected by trade stands in stark relief to the U.S. "go it alone" strategy on energy and national security.
"Fostering more diverse and resilient supply chains for critical minerals will take a concerted policy effort; market forces alone will not deliver," the IEA said, noting particular concerns over nickel and cobalt.
Key Takeaways
- The IEA's "World Energy Outlook 2025" report sketches a future in which global energy demand is expected to rise sharply in emerging economies over the coming decades.
- This expected growth can be met in two ways: through greater reliance on fossil fuels or with a combination of renewable energy (including nuclear power) and energy efficiency.
- Greater reliance on fossil fuels will lead to higher concentrations of carbon dioxide (CO2) in the atmosphere, worsening global warming.
- The growing importance of strategic minerals is where energy security intersects with national security.
About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
