Paris: The International Energy Agency (IEA) has warned that the global energy system faces its 'broadest test in decades,' as overlapping risks stretch from fuel markets to supply chains and digital infrastructure.
According to Anadolu Agency, in its World Energy Outlook 2025, released Tuesday, the Paris-based agency said the world has entered what it calls the 'Age of Electricity' -- a period when power demand is rising faster than total energy use, reshaping economies and exposing new vulnerabilities.
IEA Executive Director Fatih Birol stated that the world has never faced energy security pressures across so many fronts at once, from oil and gas to grids, data, and minerals. He urged governments to demonstrate the same determination that led to the agency's creation after the 1973 oil crisis.
Electricity now accounts for one-fifth of all final energy use but powers more than 40% of global economic activity, according to the report. Birol noted that the transformation is accelerating faster than expected, emphasizing that the world has already entered the Age of Electricity.
Unlike previous decades, the surge in power use is now driven by advanced economies rather than emerging ones. Data centers and artificial intelligence have become major energy consumers, with global investment in digital infrastructure forecast to hit $580 billion in 2025 -- surpassing spending on oil supply. Birol pointed out that those who claim 'data is the new oil' now have numbers to support their assertion.
The report highlights critical minerals as the next major chokepoint in energy security. One country currently refines 19 of the 20 key energy-related minerals, controlling roughly 70% of global processing -- a concentration the IEA warns could expose economies to disruption or coercion. These minerals are the foundation of batteries, wind turbines, solar panels, and AI hardware, the agency noted, emphasizing the need for stronger policy coordination to diversify and secure supply chains.
Birol stated that minerals have become akin to what oil was in the 20th century -- a matter of national resilience.
The IEA projects that India and Southeast Asia will overtake China as the main engines of global energy demand in the next decade. By 2035, around 80% of consumption growth is expected to come from regions rich in solar potential, accelerating the adoption of renewable technologies. Solar photovoltaic energy remains the fastest-growing power source, while nuclear energy is poised for a revival. Global nuclear capacity is forecast to expand by at least one-third by 2035, driven by new small modular reactors designed to supply energy-intensive data centers.
The agency indicated that oil and gas markets are currently well-supplied, with prices expected to remain around $60-65 per barrel. A new wave of liquefied natural gas (LNG) projects is set to boost capacity by 50% by 2030, though the IEA warned that geopolitical risks remain acute and complacency could destabilize markets.
Despite record growth in renewables, the world remains off course to meet global climate and energy access targets, the report said. Approximately 730 million people still live without electricity, and nearly 2 billion rely on unsafe cooking fuels. The IEA's updated roadmap calls for full electricity access by 2035 and universal clean cooking by 2040, largely through liquefied petroleum gas (LPG) and decentralized power systems.
Yet even with accelerated efforts, global temperatures are projected to rise beyond 1.5°C, marking what Birol described as a 'critical decade' for governments to act. He emphasized that the choices made this decade will shape energy security and climate stability for generations, urging that while the data shows the path forward, it also highlights the urgency to move.