Dr Fatih Birol highlighted the growth of electrification at IE Week. (Image source: Alain Charles Publishing)

Giving a keynote address on 25 February at International Energy Week in London, hosted by the Energy Institute, Dr Fatih Birol, executive director of the International Energy Agency (IEA) highlighted the soaring growth in electricity demand and its implications

“We are entering an important new chapter in the history of energy, where electricity is going to be even more important,” he said. “When we look at the numbers, we see the age of electricity is coming.”

Dr Birol pointed out that in the last 10 years global energy demand has increased – but global electricity demand has increased two and a half times higher. In the next 10 years, global electricity demand will increase six times more than global energy demand.

The biggest driver of this demand growth is the increase in air conditioning, set to increase further as incomes and temperatures rise. Growth is also coming from manufacturing, with processes becoming more electrified, and electric vehicles, with one in five cars globally being electric in 2024 compared with one in 25 five years ago. AI and data centres are also a major source of demand, with one medium-sized data centre consuming as much electricity as 100,000 homes.

“This is why we see the age of electricity coming – and it has many implications,” he said.

Constraints to growth

Addressing the constraints, Dr Birol said grids are a major bottleneck, with permitting and licensing processing being an issue. “Last year we saw 7 GB of renewables added to the global power system, the biggest in history, but 1,600 GW in renewables waiting in the queue to be connected. This is economically a criminal story.”

He also noted the bottleneck in terms of manufacturing capacity of electrical components. “If you want to buy a cable, especially a DC cable, you have to wait four years, for transformers, five years,” he noted.  

A second issue is electricity pricing, “very important for the competitiveness of any economy. It’s crucial that governments have the right pricing system. Having the right taxes and subsidies is extremely important. In Europe, electricity prices today are two times higher than before the energy crisis. We need the right diagnosis and the right cure so that economies and citizens are not hit by high electricity prices, a key indicator of whether a country can be economically competitive in the future.”

Another issue is the skyrocketing demand for copper, with a major supply deficit predicted by 2035. “The availability and affordability of copper can be a serious issue in the age of electricity.”

Fourthly, nuclear power is making a strong comeback around the world, driven by energy security concerns. “By 2025 we expect global nuclear electricity generation to be the highest in history,” Dr Birol said, noting that 70 GB of nuclear power plants are under construction, the highest amount in the last three decades, with more than 40 countries having firm plans to expand their nuclear capacity. “By around 2030 we may see commercial SMRs hitting the market,” he added.

Concluding, Dr Birol said, “We are seeing the global economy is being electrified in a rapid sense, mainly driven by emerging countries, but advanced economies are also part of it, driven by traditional as well as new sectors such as AI and electric vehicles. It will not be easy to address all the challenges that the new age will bring. Countries and companies who read what is happening and develop policies and strategies to make the most out of the age of electricity, will have a significant advantage over others in the race of global economic competition.”

Natural gas, particularly LNG, will be critical in the shift to a lower-carbon future. (Image source: Adobe Stock)

A new Horizons report from Wood Mackenzie highlights the role of gas in the energy transition, supporting renewables and accelerating the shift away from coal

The report, titled "The bridge: Natural gas's crucial role as a transitional energy source" argues that despite the growth of renewable energy, natural gas remains fundamental to meeting global energy needs and reducing emissions in the medium term.

"Gas demand has surged by 80% over the past 25 years, now meeting almost a quarter of the world's energy needs," said Massimo Di Odoardo, vice president of gas and LNG research at Wood Mackenzie. "Its success lies in the scale of global resources, low production costs, ease of storage and dispatch, and comparative environmental advantages."

Despite growing electrification, increasingly delivered by renewable power sources, and the adoption of emerging low-carbon technologies, progress is currently too slow to achieve net-zero emissions by 2050. With coal still accounting for 30% of the world’s energy needs, shifting to gas as a transition fuel is a compelling option.

Key findings

Key findings from the report include:
• Gas produces only half the carbon dioxide of coal and 70% of oil when burned, and generates considerably less pollution, making it the cleanest fossil fuel option.
• Replacing coal with natural gas has already helped deliver substantial CO2 reduction and can help decarbonise markets across Asia which remain dependent on coal.
• Gas-fired plants are key to provide reliable and flexible supply supporting the integration of intermittent renewable energy sources.
• Natural gas can act as a catalyst for advancing other lower-carbon technologies, including carbon capture and storage (CCS) and low-carbon hydrogen.

Challenges 

The report also highlights challenges facing the gas industry, such as high LNG prices acting as a brake on adoption in Asia.

“In China and India, where gas usage is mainly used for peak shaving, gas demand is still expected to grow by almost 100 bcm through to 2050 in the power sector, offering the most practical option for ensuring flexibility as renewable investments surge,” said Di Odoardo. “Without a carbon price of around US$100/tonne, reducing China’s and India’s dependency on baseload coal looks like a massive ask. But the prize could be a reduction of more than 300 Mt of CO2 by 2035.”

Its CO2 and methane emissions also need to be addressed to ensure it remains attractive as a bridging fuels, although the reports points out that LNG has around 60% lower GHG intensity than coal.

The report concludes that natural gas, particularly LNG, will be critical in the shift to a lower-carbon future, bridging the gap as emerging low-carbon technologies strive to reach critical mass.

Only 9% of hydrogen projects have reached FID. (image source: Adobe Stock)

A new report from the UK’s Energy Industries Council (EIC) finds that energy industry confidence in reaching global net-zero targets is declining sharply, with policy instability, financial uncertainty and slow project approvals cited as obstacles to progress

Only 16% of senior energy executives interviewed for the EIC’s Net Zero Jeopardy Report II now believe the world can achieve net zero by 2050, down from 45% last year, with growing concerns over the lack of clear regulatory frameworks, underinvestment in clean technologies and delays in bringing projects to the final investment decision (FID) stage. Only 14% of respondents believe their country will meet 2030 climate goals, down from 16% in last year’s report. Globally, 5% believe interim targets will be met, compared to 11% a year ago.

A key issue is financing, with investors cautious about backing new clean technologies, particularly in sectors such as hydrogen, carbon capture and storage, and grid infrastructure. Executives say that while the private sector is willing to invest, the absence of long-term, stable policies creates financial risk.

The report points out that rates for clean energy projects remain very low. Despite ambitious targets, only 10% of offshore wind projects and 9% of hydrogen projects have reached FID, compared to 21% for upstream oil and gas. In the UK offshore wind sector, for example, lengthy permitting processes, grid access constraints and an uncertain investment climate are factors behind the slow pace of new projects moving from planning to construction.

Supply chain vulnerabilities

The report also highlights concern about supply chain vulnerabilities, particularly in clean technology manufacturing and logistics, pointing out that the reliance on China for many renewable energy project components raises concerns about energy security, trade policy, and supply chain resilience. There are also concerns about manufacturing capacity and skills availability.

“The energy industry is facing real challenges in turning pledges into projects,” said Stuart Broadley, EIC CEO. “Business leaders are not seeing the level of policy certainty or investment required to deliver net-zero ambitions. We need a lot of immediate reforms that speed up licensing processing and cut other red tape, ensure consistent policy and regulation, have the right financial incentives.”

“The data leaves no room for optimism—confidence in net-zero targets is collapsing across the energy sector,” said Mahmoud Habboush, author of the Net Zero Jeopardy II report. “Industry leaders are not merely expressing frustration, they are passionately warning about fundamental barriers, including unstable policy, weak investment appetite, and slow project approvals. And these barriers, if left without tackling, will no doubt derail the energy transition.”

“For many, one clear path toward net zero is ensuring that energy projects are commercially viable. For that to happen, work needs to be done on the demand side, including facilitating a regulatory environment conducive to creating demand. This will make banks less apprehensive, and more capital will flow.”

It is hoped the collaboration will set the stage for pioneering geothermal energy solutions in Saudi Arabia. (Image source: Adobe Stock)

Geothermal energy development in Saudi Arabia is set to advance with the signing of an MoU by EDF Saudi Arabia and TAQA Geothermal Energy Company to collaborate on geothermal energy technologies

These will include power generation and HVAC applications as well as compressed air energy storage in Saudi Arabia.

Saudi Arabia aims to achieve net zero greenhouse gas (GHG) emissions by 2060, and has set the goal of sourcing at least 50% of its power from renewable energy by 2030. Geothermal energy, which harnesses the heat produced from the Earth's crust and converts it to cooling, heating, desalination, or direct electricity generation, is a renewable and sustainable form of energy. It has the advantage of being a constant and reliable energy source compared to other renewable energy sources such as solar and wind, given it is not affected by seasonal or weather variations. Saudi Arabia has vast geothermal energy resources, in particular along the Red Sea coast, home to volcanic fields and hot springs. TAQA Geothermal, a joint venture between Taqa Energy and Reykjavik Geothermal (RG) is playing a leading role in pursuing opportunities to explore, assess, and develop geothermal resources in the kingdom and the region with the ultimate target of adding 1GW of sustainable geothermally produced energy to the energy mix.

EDF Saudi Arabia operates in the areas of thermal, renewables, district cooling, and energy efficiency, with a focus on aligning its R&D efforts with the strategic objectives of the Saudi Arabian government and Vision 2030.

Omar Aldaweesh, CEO of EDF Saudi Arabia, said: “Over the past decade, we have been actively contributing to the Kingdom’s energy landscape through our expertise in sustainable solutions, and this MoU further strengthens our role in advancing innovative technologies. By collaborating with TAQA Geothermal, we are leveraging our extensive experience to explore new frontiers in geothermal energies and compressed air energy storage. This initiative is fully aligned with both Saudi Arabia’s Vision 2030 and EDF’s Ambitions 2035, reinforcing our shared commitment to sustainability and to the country’s transition to a cleaner energy future.”

Meshary Alayed, CEO of TAQA Geothermal, added, “Geothermal energy utilisation whether via direct heat use or electricity generation is a critical and untapped resource to drive the global transition to clean energy, as it is a reliable, renewable base load resource. The partnership between EDF and TAQA Geothermal in the field of geothermal solutions redefining space cooling, will have tremendous positive impacts on efficiency and carbon footprint reduction. The combined strengths will demonstrate cutting-edge geothermal cooling systems for the Kingdom’s growing energy needs while supporting Saudi Arabia’s Vision 2030 in economic diversification and the Ministry of Energy’s renewable energy mandates.”

It is hoped this collaboration will catalyse pioneering geothermal energy solutions in Saudi Arabia, paving the way for cleaner and more efficient power and cooling technologies.