Get ready for a deep dive into the World Energy Outlook 2025, a report that's about to shake up the energy industry!
The World Energy Outlook has always been the go-to source for long-term energy insights, and this year's edition is no exception. Published annually since 1998, it offers a unique perspective by presenting multiple scenarios, each a different lens on the future of energy.
But here's where it gets controversial... These scenarios aren't predictions; they're tools to explore the consequences of various policy choices. And this year, the World Energy Outlook 2025 (WEO-2025) is bringing some exciting changes.
The WEO-2025 introduces two exploratory scenarios: the Current Policies Scenario (CPS) and the Stated Policies Scenario (STEPS). These scenarios don't predict specific outcomes but rather explore the potential energy futures based on existing and planned policies.
The CPS, which was a regular feature until the WEO-2020, is back due to the post-pandemic world's need for a fresh look at energy policies. It examines the energy sector's evolution based on existing legislation, providing a 'business as usual' perspective, but with a twist. In the CPS, potential constraints slow down the adoption of new technologies, offering a more conservative outlook compared to recent years.
On the other hand, the STEPS assumes a faster pace of change, taking into account not just existing policies but also the intentions and goals outlined by governments in strategy documents and broader development plans. However, it's important to note that not all policy intentions become reality, and the STEPS considers market, infrastructure, and financial constraints.
And this is the part most people miss... Policies are a critical factor, but they're not the only ones. The energy system is complex, influenced by macroeconomic conditions, investor strategies, technology progress, consumer preferences, and geopolitical factors.
The WEO-2025 also includes two normative scenarios: the Net Zero Emissions by 2050 (NZE) Scenario and the Accelerating Clean Cooking and Electricity Services Scenario (ACCESS). The NZE Scenario maps out a global pathway to limit warming to 1.5°C, while the ACCESS scenario focuses on achieving universal access to modern energy services by 2035 and 2040, respectively.
The NZE Scenario has been updated annually since 2021, and each update reflects the increasing challenge of reducing emissions. As countries prepare to update their nationally determined contributions under the Paris Agreement, the NZE Scenario provides a crucial overview of the steps needed to limit global warming.
The ACCESS scenario, a new addition, is a roadmap to energy access, prioritizing cost-effective solutions based on historical progress.
So, what do you think? Are these scenarios a realistic representation of the future energy landscape? Or do they miss the mark? We'd love to hear your thoughts in the comments!
