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World Energy Outlook 2022 (Special)

  • Category
  • Published
    11th Nov, 2022


The International Energy Agency (IEA) has recently released its World Energy Outlook 2022 report.


  • The World Energy Outlook 2022, provides critical analysis and insights on trends in energy demand and supply.
  • The 2022 report explores key questions about the energy crisis:
  • Clean energy transitions
  • Government responses shape energy markets
  • Obstacles on the path to net zero emissions
  • The World Energy Outlook 2022 analyzed the future global energy scenario by exploring through three different scenarios differentiated primarily by the assumptions made on government policies. They are:
  • Announced Pledges Scenario (APS): It assumes that all aspirational targets announced by governments are met on time and in full, including their long-term net zero and energy access goals
  • Stated Policies Scenario (STEPS): It shows the trajectory implied by current policy measures on energy.
  • Net Zero Emissions by 2050 Scenario: It maps out a way to achieve a 1.5 °C stabilization in global average temperature and meet key energy?related UN Sustainable Development Goals.

World Energy Outlook is an annual publication of the International Energy Agency (IEA), widely recognized as the most authoritative source for global energy projections and analysis.

  • Establishment: The IEA was set up under the framework of the Organization for Economic Co-operation and Development (OECD) in the aftermath of the 1973 oil crisis to respond to physical disruptions in global oil supplies.
  • Headquarters: Paris, France.
  • Other Important Publications:
    • World Energy Outlook Report.
    • World Energy Investment Report.
    • World Energy Statistics.
    • World Energy Balances.
    • Energy Technology Perspectives.
    • India Energy Outlook Report

World Energy Outlook 2022 Highlights

  • The Global Energy Crisis:
    • The world is in the middle of a global energy crisis of unprecedented depth and complexity.
    • Europe is at the center of this crisis, but it is having major implications for markets, policies, and economies worldwide.
  • How is Russia’s Invasion of Ukraine Reshaping the Energy World?
    • Energy markets: High and volatile energy prices are hurting households and businesses, shifting the choice of fuels and setting back progress toward achieving universal access to energy
    • Energy policy: Short-term responses have focused on securing available supply and protecting consumers, but many governments in the US, EU, and elsewhere have adopted new policies that give a major boost to investments in clean energy and efficiency.
    • Energy trade: European sanctions on coal and oil imports and Gazprom’s decisions to cut gas supply are triggering a profound reshuffling of trade flows around the world.
    • Economic impacts: High fossil fuel prices are stoking inflationary pressures; the combination of falling real incomes and rising prices is creating a looming risk of a global recession.
  • Outlook for Energy Demand:
    • Natural gas: Its annual demand growth slows to 0.4% from now to 2030 in the STEPS, down from 2.3% from 2010 to 2019.
    • Coal: It sees a temporary surge in demand but efforts to reduce emissions soon put coal into decline again, ending the decade with demand 9% lower than today.
    • Renewables: Notably solar PV and wind, gain the most ground of any energy source this decade, accounting for 43% of electricity generation worldwide in 2030, up from 28% today.
    • Oil: The demand for oil rises 0.8% per year to 2030, but peaks soon after at around 103 million barrels per day as electric vehicles (EVs) and efficiency gains undermine its prospects.

India-specific points:

  • Energy demand: Primary challenge for the country is going to be about meeting its rising electricity demand.
    • India will have the highest population by 2025. This, along with urbanization and industrialization, will spur a huge rise in energy demand of more than 3% per year from 2021-2030, as per the STEPS scenario.
  • Demand for Coal: It revealed that India became the world’s second?largest coal producer in 2021 (in energy terms), overtaking Australia and Indonesia.
    • At present, India accounts for just over 10 percent of global coal consumption, after China which accounts for 55 percent.
    • Coal use in India dropped by 7 percent in 2020 due to the pandemic but increased by 13 percent in 2021, therefore already surpassing the 2019 levels.
  • Renewables: Government programs such as the Gati Shakti National Master Plan and the Atmanirbhar Bharat Abhiyaan could promote a “robust growth” in renewables and electric mobility, notably for two/three?wheelers.
  • Net Zero by 2070: As per the Announced Pledges Scenario, more rapid progress in deploying low?emissions alternatives in power, industry, and transport sectors in particular means that India could be within reach of its goal to achieve net zero emissions by 2070.

Impact of Russian invasion:

  • Russia’s invasion of Ukraine has sparked a global energy crisis.
  • Coal prices have also hit record levels, while oil rose well above USD?100 per barrel in mid-2022 before falling back.
  • High gas and coal prices account for 90% of the upward pressure on electricity costs around the world.
  • The crisis has stoked inflationary pressures and created a looming risk of recession.
  • It has resulted in a huge USD?2?trillion windfall for fossil fuel producers above their 2021 net income.
  • Higher energy prices are also increasing food insecurity in many developing economies.
  • Some 75 million people who recently gained access to electricity are likely to lose the ability to pay for it.
  • Almost 100 million people may be pushed back into reliance on firewood for cooking instead of cleaner, healthier solutions.

Threats to Energy Security:

  • Political Instability of Several Energy-Producing Countries
  • Manipulation of Energy Supplies
  • Competition over Energy Sources
  • Attacks/Accidents on supply infrastructure
  • Natural Disasters
  • Terrorism
  • Reliance on Foreign Countries for Oil

Suggestions made in the Report:

  • Affordable transition: A focus on affordable, secure transitions based on resilient supply chains from non-renewables to renewables should be made.
  • Scale up clean energy technologies: Synchronize scaling up a range of clean energy technologies by scaling back fossil fuels.
  • Inclusive energy economy: Reverse the slide into energy poverty and give poor communities a lift into the new energy economy.
  • Bring down the cost: Collaborate to bring down the cost of capital in emerging markets and developing economies.
  • Foster the climate resilience of energy infrastructure: The growing frequency and intensity of extreme weather events present major risks to the security of energy supplies.
  • Promote supply chain resilience: Ensure diverse and resilient clean energy supply chains.
  • Promote energy efficiency: Tackle the demand side and prioritize energy efficiency.

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