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By Jeff Young
Environment and Sustainability Editor
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International Energy Agency Executive Director Fatih Birol used Monday's release of the IEA's Global Energy Review to defend his agency and engage in a bit of chest-thumping about the strength of the IEA's work.
When the IEA forecasted in 2023 that oil demand would slow, the agency raised eyebrows for its outlook on oil that was at odds with other forecasters.
"This was, to be very frank, an outlier compared with other institutions," Birol said Monday in a press briefing. Where other forecasters saw a likely increase in oil demand of 2 million barrels a day, the IEA projected less than half of that, just under 1 million.
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Oil interests were outraged. A group of U.S. Republican lawmakers from oil-producing states sent the IEA a letter last year that accused Birol of turning the agency into "an 'energy transition' cheerleader" and suggested cutting off U.S. funding for the IEA.
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But Birol said Monday that the latest data vindicated his agency. The report released Monday showed that global oil demand in 2024 grew at a little less than 1 million barrels a day, as the IEA forecasters projected.
"We say at IEA, 'Data always wins,'" Birol said, adding a short lecture for his critics. "In our world today, where so many geopolitical uncertainties persist and there are so many different narratives on energy driven by different motivations, we believe it is important to have real data and to discuss energy issues based on real objective data."
Birol said the slowdown in oil demand meant that for the first time, oil fell below 30 percent of the global energy mix in 2024, even as overall energy demand increased.
The world's appetite for energy grew last year by nearly twice the historic average over the previous decade, the report found. That growth was primarily driven by surging global demand for electricity to power air conditioning in developing countries, new manufacturing and data centers in developed nations and the transition to electric vehicles.
"Even though oil and gas will remain essential," Birol said, "we hear the footsteps of the age of electricity coming."
The IEA report showed that demand for electricity in 2024 grew far faster than did demand for other forms of energy. Those results support projections in an earlier report from the IEA released last month showing a coming surge in global demand for electricity in the next three years. In its annual report on global electricity, the IEA said it expects electricity demand through 2027 to grow by 4 percent a year.
Renewable energy sources from wind, water and sun, along with low-carbon electricity from nuclear power, provided the bulk of new electricity to meet the additional demand in 2024, the IEA said.
Renewable energy sources hit a record high for new generation capacity last year, the 22nd consecutive year of record additions for clean energy, the IEA said. Nuclear energy also saw growth last year, and Birol predicted that nuclear power will hit a record high of global electricity production in 2025. Natural gas also saw strong demand in 2024, with most of it going to generate electricity.
Despite the record-breaking growth for clean energy, greenhouse gas emissions from the energy sector also grew in 2024, although at a slower rate than in the previous year.
"If we want to find a silver lining, we see there is a continuous decoupling of economic growth from emissions growth," Birol said.
Birol cautioned that the rise of clean-energy technology brings its own challenges. While the supply of energy from the sun and wind is practically limitless, the supply of critical minerals for wind turbines, solar panels and batteries is not.
"Critical minerals are becoming, day by day, very important in the energy business," he said. Mining and processing of copper, lithium, cobalt and many rare-earth minerals used in clean-energy technology are concentrated in a few areas. Birol warned that the demand for some minerals could exceed supply early in the coming decade. He recommended a diversification of both mining and processing to reduce risks to the supply chain.
As the world enters another year of potential volatility in energy and geopolitical uncertainty, Birol said, the IEA offers an important source of objective data.
"It is something we all need to learn," Birol said. "Stick to data, stick to realities."
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