Energy has moved back to the centre of global security and economic stability. This is the central message of the World Energy Outlook 2025 from the International Energy Agency (IEA). In a world marked by geopolitical tensions, climate stress and rapid technological change, energy policy is no longer framed mainly as a technical or environmental issue. It is increasingly seen as a strategic matter, tied to economic resilience, supply chain security and geopolitical power.
One of the report’s key points is that there is no single future for energy. Rather than making predictions, the IEA explores several scenarios that show how different policy choices shape outcomes. Some reflect today’s policies, others include measures that governments have announced but not yet fully implemented, and one describes a pathway compatible with net zero emissions by 2050. These scenarios are not forecasts. They are tools to understand consequences.
Across all of them, one trend is unmistakable. The age of electricity has arrived. Electricity demand is growing much faster than overall energy use, driven by air conditioning, electric vehicles, data centres, digital services and electrified heating. By 2035, global electricity demand could be around 40 percent higher than today if current policy trends continue. This makes electricity prices, grids and reliability central to daily life and economic competitiveness.
The report also highlights a growing imbalance. Investment in power generation, especially solar and wind, has surged to around one trillion dollars per year worldwide. Investment in electricity grids has not kept pace. Congested and outdated networks delay new connections, increase the risk of blackouts and even force renewable electricity to be wasted. Batteries help, but they cannot replace the need for stronger grids and long-term system flexibility.
Another major shift concerns energy security itself. Critical minerals such as lithium, cobalt, nickel and rare earth elements are essential for batteries, power grids, electric vehicles and artificial intelligence hardware. The problem is concentration. Refining of most of these minerals is dominated by a single country, and export restrictions are becoming more common. The IEA is clear that more resilient and diversified supply chains will not emerge spontaneously. They require active and coordinated policies.
On climate, the outlook is sobering. Despite record growth in renewables, global energy related emissions remain high, and the world is not on track to avoid a prolonged overshoot of the 1.5 degree warming threshold. Faster progress on efficiency, clean electricity, methane reduction and electrification is possible and often cost effective, but it is not happening at the necessary scale.
The main conclusion is not inevitability, but choice. The World Energy Outlook 2025 shows that the future of energy will be shaped less by physics than by policy, investment and cooperation. The direction is still open, but the time to steer it is increasingly limited.
Disclaimer: This is a work derived by Raul Saez Rodriguez from IEA material and Raul Saez Rodriguez is solely liable and responsible for this derived work. The derived work is not endorsed by the IEA or its Member countries in any manner.
Researcher in Energy Systems at ISAAC – SUPSI