The International Energy Agency (IEA) has launched the 2025 edition of the World Energy Outlook (WEO). The annual publication is recognised as the most authoritative global source of energy analysis and projections.

Speaking at the publication launch, IEA Executive Director Dr. Fatih Birol said substantial divergence in government policy had created the need to provide multiple scenarios, each mapping out a distinct energy future. He said highlighting different opportunities and vulnerabilities as well as commonalities enabled analysis of the implications of different policy, investment, and technology choices for energy security, affordability, and emissions.

Among the many trends common to all the scenarios in this year’s WEO is the world’s growing need for energy services over the coming decades – with demand rising for mobility; for heating, cooling, lighting and other household and industrial uses; and increasingly for data and AI-related services.

Said Dr Birol, “In a break from the trend of the past decade, the increase in electricity consumption is no longer limited to emerging and developing economies. Breakneck demand growth from data centres and AI is helping drive up electricity use in advanced economies, too. Global investment in data centres is expected to reach $580 billion in 2025. Those who say that ‘data is the new oil’ will note that this surpasses the $540 billion being spent on global oil supply – a striking example of the changing nature of modern economies.”

Another common trend, aside from traditional energy risks affecting the security of oil and gas supply, is the vulnerability in supply chains for critical minerals due to high levels of market concentration. A single country is the dominant refiner for 19 out of 20 energy-related strategic minerals, with an average market share of around 70%. The minerals in question are vital for power grids, batteries and EVs, but they also play a crucial role in AI chips, jet engines, defence systems and other strategic industries. Geographic concentration in refining has increased for nearly all key energy minerals since 2020, and particularly for nickel and cobalt. Analysis in this year’s WEO of the pipeline of announced projects suggests that reversing this process is set to be slow, calling for stronger action by governments.

Finally, with climate risks rising, WEO-2025 shows the world surpassing 1.5°C of warming in any scenario, including those with very rapid emissions reductions. The energy sector will need to prepare for the security risks brought by higher temperatures, but there is still scope to avoid the worst climate outcomes. The updated scenario in which the world reaches net zero emissions by mid-century brings temperatures back below 1.5°C in the long term.

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