World Energy Outlook 2019

The gold standard of energy analysis

World Energy Outlook 2019 explains the impact of today’s decisions on tomorrow’s energy systems, and describes a pathway that enables the world to meet climate, energy access and air quality goals while maintaining a strong focus on the reliability and affordability of energy for a growing global population.

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What is the Stated Policies Scenario and what is its purpose?

The Stated Policies Scenario, or STEPS, replaces the New Policies Scenario this year. As with its predecessor, STEPS incorporates not just existing policies, but also today’s stated policy plans. The name change underlines that this scenario considers only those policy initiatives that have already been announced. The aim of the Stated Policies Scenario is to hold up a mirror to today’s stated policies and to illustrate their consequences.

Is STEPS a forecast of what will happen in the future?

No. IEA scenarios are not forecasts and should not be treated as such. Rather, they are designed to help decision-makers understand the consequences of different policy choices.

The Stated Policies Scenario includes a detailed assessment of policies that have already been announced (“stated”), but it does not speculate on how these might evolve in future.

Our intention in the Stated Policies Scenario is to provide a candid picture of where these policies lead the energy world, providing the opportunity for decision makers to reflect on the additional changes that would be required to reach their various long-term goals.

Is the Sustainable Development Scenario aligned with the Paris Agreement?

Yes, the Sustainable Development Scenario is fully aligned with the Paris Agreement, which has an objective of “holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.”

To achieve this goal, the Paris Agreement calls for emissions to peak as soon as possible and reduce rapidly thereafter; and achieve a balance between anthropogenic emissions by sources and removals by sinks (i.e. net zero emissions) in the second half of this century. These conditions are all met in the Sustainable Development Scenario.

Global CO2 emissions fall from 33 billion tonnes in 2018 to less than 10 billion tonnes by 2050 and are on track to net zero emissions by 2070. The long term temperature outcome of the Sustainable Development Scenario  depends on technology deployment post 2050.  Without reliance on global net-negative CO2 emissions, the Sustainable Development Scenario holds the temperature rise to below 1.8 °C with a 66% probability (this is equivalent to limiting the temperature rise to 1.65°C with a 50% probability).

The overwhelming majority of 1.5°C scenarios assessed by the IPCC envisage some negative emissions in the second half of the century. Deploying a level of negative emissions after 2050 significantly smaller than that used in most of these scenarios would provide the Sustainable Development Scenario with a 50% probability of limiting the rise in global temperatures to 1.5°C.

What has changed with the Sustainable Development Scenario this year?

In this year’s WEO, the time horizon for the Sustainable Development Scenario is extended by a decade to 2050. This has little impact on achieving modern energy for all, both for electricity and clean cooking. That goal is reached by 2030 in this scenario. But it provides a clearer view on how dramatic improvements in air quality reduce pollution-related premature deaths.

It also gives considerable additional clarity on how the scenario meets the Paris Agreement goal of holding the rise in global temperatures to “well below 2 °C … and pursuing efforts to limit [it] to 1.5 °C.”

The Sustainable Development Scenario models a rapid and deep transformation of the global energy sector. It is consistent with all the “net zero” goals contemplated today being reached on schedule and in full. The technology learning and policy momentum that they generate means that they become the leading edge of a much broader worldwide effort, bringing global energy-related CO2 emissions down sharply to less than 10 billion tonnes by 2050, on track for global net zero by 2070.

Does the Sustainable Development Scenario rely on large levels of negative emissions technologies?

No. The Sustainable Development Scenario does not rely on net negative emissions to achieve temperature stabilisation at 1.8 °C with a 66% probability.

In fact, a level of net negative emissions significantly smaller than that used in most of these IPCC scenarios would provide the Sustainable Development Scenario with a 50% probability of limiting global temperature rise to 1.5°C.

The Sustainable Development Scenario does have some modest deployment of negative emissions technologies: around 0.25 billion tonnes of CO2 is captured using bioenergy with carbon capture, utilisation and storage (BECCS) in 2050. This level of deployment of BECCS in 2050 is lower than nearly all of the 1.5 °C scenarios assessed by the IPCC.

How are “net zero” emissions targets incorporated in your scenarios?

The Stated Policies Scenario incorporates “net zero” targets only if there is a clear pathway to reach them. As always with the World Energy Outlook, the details matter. Is there a well-defined strategy to decarbonise heat? What about heavy industry? What about trucks or aviation? To the extent that these pathways are laid out, then the overall ambition is also reflected in this scenario.

The Sustainable Development Scenario, on the other hand, is consistent with all countries’ net zero goals contemplated today being reached on schedule and in full. Because of the technology learning and policy momentum that these net zero goals generate, they, in effect, become the leading edge of a much broader worldwide effort to bring all global emissions to net-zero.

Is the Sustainable Development Scenario the same as the IEA’s former 450 scenario?

No. The IEA’s new Sustainable Development Scenario is very different from the 450 Scenario proposed in the WEO-2009 for three main reasons:

  • The Sustainable Development Scenario has a tougher starting point. Energy-related CO2 emissions in 2018 reached a record high of 33 billion tonnes (Gt) – 2.5 Gt above the level what was set out in the 450 Scenario for 2018.
  • The Sustainable Development Scenario has higher ambitions. The 450 Scenario was compatible with reaching net-zero CO2 emissions by the end of the century whereas this year’s Sustainable Development Scenario aims to achieve net-zero CO2 emissions in 2070. Combined with the higher starting point, this means that emissions in the Sustainable Development Scenario decline by some 800 million tonnes (Mt) on average each year compared with a 400 Mt average annual decline in the 450 Scenario.
  • The Sustainable Development Scenario relies much more on solar and wind in the power sector, and less on carbon capture, utilisation and storage (CCUS) and nuclear than the 450 Scenario.

Why is investment into new sources of oil and gas required in the Sustainable Development Scenario when demand for them is falling?

There is a significant shift in capital spending away from fossil fuels in the Sustainable Development Scenario to renewables and other low-carbon sources as well as to electricity

Nonetheless, some investment in oil and gas production is required in the Sustainable Development Scenario during the transitions. Overall oil demand drops on average by 2% every year between 2018 to 2050. This is well short, however, of the decline in production that would occur if all capital investment in currently producing fields were to cease immediately, which would lead to a loss of over 8% of supply each year. Continued investment in both new and existing oil fields, even as overall production declines in line with climate goals, is therefore a necessary part of the energy transition envisaged in the Sustainable Development Scenario.

Demand for natural gas grows by around 10% between 2018 and the late 2020s, including as a replacement for higher-emitting coal. Later, during the 2030s, natural gas consumption falls as it becomes too emissions intensive to be consistent with the emissions reductions required. Decline rates from existing gas fields are similar to those for oil, and investment in new gas assets continues to be necessary even as the use of gas declines. Investment in maintaining gas infrastructure is also important as the gas grid helps to support the uptake of low-carbon gases such as biomethane and hydrogen.

How do past WEO projections for solar PV fare against what actually happened?

In previous editions of the New Policies Scenario (the predecessor to the Stated Policies Scenario), projections for solar PV capacity additions were in many cases lower than actual deployment. These past projections reflected the policy and technology environment at the time they were made. Since then, policy makers have stepped up their support for these technologies.

This is good news, which has helped to narrow the gap to achieve the Sustainable Development Scenario.

The evolution of solar PV policies and investment in China is a good example. Policies and targets have strengthened dramatically over the last ten years: in 2007, China’s plans were to reach 1.8 GW of solar by 2020 (reflected in WEO 2008) but the level of ambition has soared since then. We did not try and anticipate these changes (as a forecaster might, see question above), but assessed their implications at each step. When policies changed, so did the projections.

We also find that – with sufficient initial support from policy – at a certain point costs fall to a level that is competitive with other forms of generation; deployment then becomes less reliant on specific policy targets. That is increasingly where solar PV is getting to in countries with a strong solar resource.

What we need is many more instances of this virtuous cycle of policy ambition, increased deployment and reduced costs – covering a wide variety of technologies – for the world overall to move from the Stated Policies Scenario to the Sustainable Development Scenario.

Does the IEA have a 1.5°C scenario?

In the Sustainable Development Scenario, energy-related emissions fall to 10 Gt in 2050 and are on course to reach net zero in 2070. If emissions were to remain at exactly zero after 2070 (i.e. there are no net negative emissions), then this would provide a 66% chance of keeping the temperature rise below 1.8 °C (a 50% chance of staying below 1.65 °C). Almost all of the 1.5 °C scenarios assessed by the IPCC assume some level of net negative emissions. A level of net negative emissions significantly smaller than that used in most of these scenarios would provide the Sustainable Development Scenario with a 50% probability of limiting the rise in global temperatures to 1.5°C.

However, there are reasons to limit reliance on early-stage technologies for which future rates of deployment are highly uncertain. In the WEO-2019, we therefore also explore what it would take to achieve stabilisation at 1.5 °C with a 50% probability without net negative emissions. This would require global energy sector CO2 emissions to be net-zero by 2050.

Who produces the World Energy Outlook?

The World Energy Outlook, the IEA’s flagship report and the world’s most authoritative source of energy-market analysis and projections, reflects the Agency’s independence and is published under the authority of the IEA Executive Director.

It is based on objective data, providing dispassionate analysis and critical insights on trends in energy demand and supply, and what they mean for energy security, environmental protection, and economic development. The WEO team includes economists, modellers, engineers and research analysts from a variety of countries.

Each publication also undergoes an extensive peer review process by leading international experts in the relevant fields from governments, industry, research institutions and other organisations. The list of peer reviewers is made public each year in the front of the book in an effort of full transparency.

The WEO was first published in 1977 and has been an annual publication since 1998. The detailed projections are generated by the World Energy Model, a large-scale simulation tool, developed at the IEA over a period of more than 20 years and designed to replicate how energy markets function. It covers the whole energy system, allowing for a range of analytical perspectives from global aggregates to elements of detail, such as the prospects for a particular technology or the outlook for end-user prices in a specific country or region.