Clean energy will become world’s largest source of power by mid-2030s: IAE

A new report released by the International Energy Agency (IEA) on Wednesday says a coming shift will result in clean energy becoming the world’s largest energy source by mid 2030s.

The report predicts a surge in battery and solar panel production, leading to abundant clean energy by the end of the decade. However, the continued rise in fossil fuel emissions remains a major concern.

“We’re now moving at speed into the Age of Electricity,” IEA Executive Director Fatih Birol said in a press statement tied to the release of the annual World Energy Outlook.

He added that energy worldwide will “increasingly be based on clean sources of electricity.”

While the report forecasts a peak in oil and gas demand before 2030, it projects a worrying trajectory towards a global temperature increase of 2.4 degrees Celsius. This rise is significantly above preindustrial levels and the limit set in the Paris Agreement. Such an increase could also have severe implications for climate stability as the report notes the world is still off what’s needed to cap warming to 1.5 degrees Celsius.

According to the report, China, the world’s leading greenhouse gas emitter and top manufacturer of solar panels and batteries, is at the forefront of these energy transitions. With electric vehicles now making up 40 percent of new car sales in China and 20 percent globally, the country’s influence on global energy dynamics is growing. The IEA report suggests that China’s emissions could peak by 2025, though some experts believe the peak may have already occurred in 2023.

“Given the changes underway in China we think that might be a bit pessimistic,” Bill Hare, CEO of Climate Analytics said, adding that “there’s every chance” China’s emissions have already peaked in 2023, but more data is needed to be sure.

In addition to these advances, the report highlights that the global demand for clean energy is accelerating, including power produced by burning coal.

“This has meant that even as we saw record growth in clean energy installations and additions, emissions kept increasing,” said Lauri Myllyvirta, lead analyst at the think tank Centre for Research on Energy and Clean Air.

Electricity demand is growing even faster than expected, “driven by light industrial consumption, electric mobility, cooling, and data centers and AI,” the report said.

The report anticipates that by 2030, half of the world’s new car sales will be electric, which could reduce oil demand by up to 6 million barrels per day. According to the report, it’s projected that 70 percent of new car sales in China will be electric. With its massive additions of new wind and solar power, China is aligned with its target for addressing climate change.

In light of this shift in China, oil companies may find new opportunities as India’s energy needs grow. The IAE predicts India will add 2 million barrels per day of oil demand by 2035, becoming a critical market for fossil fuel producers.

Laveesh Bhandari of the Centre for Social and Economic Progress in New Delhi points to India’s booming economy as a driver of this trend.

“While demand for EVs will rise exponentially, the growth will not be able to cover all of the additional growth in demand for vehicles,” Bhandari said. “So fossil fuel-powered vehicles use will increase for some time before leveling off and falling.”

This article includes reporting from The Associated Press.