Mirror Review
November 12, 2025
The World Energy Outlook 2025 (WEO 2025), published by the International Energy Agency (IEA), lands at a time when energy is not just a climate issue. Instead, it’s a geopolitical, economic, and national security one.
The report reveals that energy demand continues to rise, driven by developing economies, even as global leaders fall short of their net-zero promises.
The IEA warns of a widening gap between energy security and climate ambition and signals that 2026 could be a decisive year for correcting course.
According to IEA Executive Director Dr. Fatih Birol, “Energy security today is truly a matter of economic and national security — and safeguarding it requires the same spirit of cooperation that the IEA was founded on after the 1973 oil shock.”
1. Key Highlights: What the 2025 Outlook Says
The WEO 2025 builds around three main scenarios:
- Current Policies Scenario (CPS): Projects continued fossil fuel reliance.
- Stated Policies Scenario (STEPS): Reflects existing policy commitments and moderate transition.
- Net Zero Emissions Scenario (NZE): Outlines the 1.5°C pathway, though overshoot now seems inevitable.
Core findings:
- Energy demand continues to grow by 8–14% by 2035, largely driven by India and Southeast Asia.
- Electricity becomes the fastest-growing energy segment, and demand could rise 40–50% by 2035, powered by EVs, AI, and cooling needs.
- Critical minerals pose a major security risk, with 70% refining controlled by one country (China).
- Global CO₂ emissions hit a record 38 Gt in 2024, pushing temperature projections to 2.5–3°C by 2100.
2. The Rising Age of Electricity
In the World Energy Outlook 2025, the IEA calls this era the “Age of Electricity” since electricity use is no longer limited to homes or industries; it also powers data centers, EVs, and AI models.
In both policy scenarios, electricity’s share of total energy use jumps to over 21%, while renewables lead new capacity growth.
But a key bottleneck remains: grids.
Grid investments trail far behind renewable generation with $400 billion versus $1 trillion yearly, creating congestion and delaying connections. As Birol noted, “The risk isn’t lack of clean energy; it’s lack of clean energy delivery.”
3. AI, Data Centers, and the New Electricity Giants
A unique insight from WEO 2025 is the AI-driven electricity surge.
Data center investment in 2025 is projected to hit $580 billion, surpassing even global oil supply investment ($540 billion).
Electricity demand from data centers could triple by 2035, with 85% of new capacity concentrated in the US, EU, and China.
This new “digital energy demand” shows the transition from oil dependence to “data dependence”, reshaping global investment and policy priorities.
4. The Critical Minerals Crisis
Perhaps the most urgent takeaway from the World Energy Outlook 2025 is the critical minerals bottleneck.
Nineteen out of twenty key energy minerals, including lithium, nickel, and cobalt, are primarily refined by one nation: China. Over half of these minerals now face export controls.
The IEA warns that market concentration poses “a hard reality” that threatens clean tech supply chains and even national security.
This risk affects more than energy as it extends to defense, AI, and EV industries’ slowdown.
Thus, diversification of supply chains is now both a climate and geopolitical necessity.
5. Fossil Fuels, Renewables, and the 2026 Inflection Point
Despite record renewable expansion, fossil fuel demand remains stubborn:
- Oil and gas could continue growing into the 2040s under CPS.
- Coal demand finally begins to decline by 2030, but mostly in advanced economies.
- Renewables dominate all scenarios, with solar PV leading capacity additions of around 540 GW annually.
The report predicts 2026 will be pivotal: the first year renewables could overtake fossil fuels in new power capacity if current trends accelerate.
6. Global Divide: Emerging Economies Take the Lead
The centre of gravity in energy demand has shifted.
By 2035, 80% of new energy use will come from regions with high solar potential, notably India, Africa, and Southeast Asia.
Yet, energy poverty persists:
- 730 million people still lack electricity.
- 2 billion still rely on unsafe cooking fuels.
The IEA’s new ACCESS scenario targets universal electricity by 2035 and clean cooking by 2040. This is a realistic but urgent global mandate.
7. The Road to Net Zero — Now a Race Against Time
The WEO 2025 admits that limiting warming to 1.5°C is no longer possible without overshoot.
Even under the Net Zero Emissions Scenario, temperatures peak at 1.65°C by 2050 before stabilizing below 1.5°C by 2100.
With the United States’ withdrawal from the Paris Agreement and slow-moving NDC updates, the IEA warns that current pledges align only with 2.5°C warming.
However, all is not lost. The report identifies five low-cost levers that could still change the trajectory:
- Tripling renewable capacity by 2030 (COP28 goal).
- Doubling energy efficiency rates to 4% annually.
- Reducing methane emissions from oil and gas.
- Scaling nuclear and low-emission fuels.
- Boosting clean investment in developing nations.
8. What 2026 Could Bring
Looking ahead, the IEA projects that 2026 will test the global commitment to the energy transition:
- LNG oversupply could flood markets, affecting prices and slowing renewable uptake.
- EVs may surpass 30% of global new car sales, reshaping oil demand patterns.
- Critical minerals diversification policies could begin to bear fruit if implemented quickly.
The World Energy Outlook 2025 makes it clear that the next 12 months will determine whether the world’s transition speeds up or slips further behind.
Conclusion: The World Energy Outlook 2025 and the Crossroads Ahead
The World Energy Outlook 2025 is not a prediction but a map of choices.
It captures a world caught between two realities: the unstoppable growth of clean technologies and the immovable weight of fossil dependence.
2026 will be the year when governments and industries must decide whether to treat energy as a climate issue or a survival issue.
As the IEA puts it, “The decisions made now will shape the global energy landscape for decades — the pathway to net zero is narrowing, but it is not yet closed.”
