NEW DELHI: Countries worldwide are facing mounting energy security threats and long-term risks across an unprecedented range of fuels and technologies. Energy has become central to geopolitical tensions and a core issue of national and economic security. The IEA’s 2025 World Energy Outlook (WEO) calls for greater diversification of supply and stronger international cooperation to navigate these challenges.
As the leading global source of energy analysis and projections, the WEO examines three scenarios — not forecasts — that map out different futures for energy security, affordability, and emissions. Despite their differences, all scenarios show rising demand for energy services in the decades ahead, driven by needs for transport, heating, cooling, lighting, and increasingly, data and AI infrastructure.
Emerging economies — led by India and Southeast Asia, alongside countries in the Middle East, Africa, and Latin America — are set to shape global energy dynamics, taking over from China, which dominated demand growth since 2010. However, none are expected to match China’s energy-intensive expansion.
Traditional oil and gas security risks are now compounded by new vulnerabilities in critical mineral supply chains. Refining of 19 out of 20 key energy-related minerals is dominated by a single country, holding about 70% of the market. These minerals are essential not only for batteries, EVs, and power grids but also for AI chips, jet engines, and defence systems. Refining concentration has deepened since 2020, particularly for nickel and cobalt, and reversing this trend will be slow without stronger government action.
IEA Executive Director Fatih Birol emphasized that energy security challenges now span more fuels and technologies than ever before, requiring the same urgency that led to the IEA’s creation after the 1973 oil shock. Governments, he said, must balance security with affordability, competitiveness, and climate goals.
Electricity sits at the core of modern economies, with demand growing faster than overall energy use in every WEO scenario. Electricity already attracts half of global energy investment, though it currently provides only 20% of total consumption. Rising demand from AI and data centers — with investment expected to reach $580 billion in 2025, surpassing global oil supply spending — underscores how the world has entered what Birol calls “the Age of Electricity.” (IANS)
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