The world isn’t ready for the electricity surge that’s coming, IEA warns, saying it’s ‘no longer limited to emerging and developing economies’ – Fortune

Global Energy Outlook: An Analysis in the Context of Sustainable Development Goals

Executive Summary

A recent analysis by the International Energy Agency (IEA) highlights a significant projected increase in global electricity demand, outpacing overall energy growth. This trend underscores the critical need for a diversified energy mix to meet global needs while advancing the United Nations Sustainable Development Goals (SDGs), particularly SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action). The report indicates a rapid expansion of renewable energy, a potential peak in fossil fuel demand, and a resurgence in nuclear power, all set against a backdrop of complex regional dynamics and evolving climate policies.

Energy Transition and Alignment with SDG 7 and SDG 13

The global energy landscape is undergoing a significant transformation, driven by the dual imperatives of meeting rising demand and mitigating climate change. This transition is central to achieving key SDG targets.

• Renewable Energy Growth (SDG 7): Renewable sources, led by solar power, are projected to grow faster than any other major energy source in the coming years. This aligns directly with Target 7.2 to increase substantially the share of renewable energy in the global energy mix.
• Fossil Fuel Peak (SDG 13): The report forecasts that demand for coal and oil will likely peak globally by the end of this decade, a crucial step towards reducing greenhouse gas emissions as mandated by SDG 13.
• Nuclear Power Expansion (SDG 7, SDG 13): Global nuclear power capacity is expected to increase by at least one-third by 2035. As a low-carbon energy source, this contributes to both clean energy access and climate action objectives.
• Natural Gas Supply: Despite a focus on decarbonization, an increase in approved natural gas projects in 2025 indicates a rising global supply, posing questions about its role in a sustainable energy future.

Infrastructure, Innovation, and Economic Growth

Meeting the surge in electricity demand, driven by data centers, electrification, and economic development, requires substantial investment in resilient infrastructure, directly supporting SDG 9 (Industry, Innovation, and Infrastructure) and SDG 8 (Decent Work and Economic Growth).

Key Investment and Demand Drivers:

1. Data Centers: Investment in data centers is projected to reach $580 billion in 2025, exceeding investment in oil supply and highlighting a major new driver of electricity consumption.
2. Regional Economic Growth (SDG 8): Growing economies, including India and nations in Southeast Asia, the Middle East, Africa, and Latin America, are increasingly shaping global energy markets. Their potential for solar power presents a significant opportunity for sustainable development.
3. Infrastructure Resilience (SDG 9): The IEA emphasizes the need for rapid improvements to electricity grids, energy storage, and broader infrastructure to manage rising demand and ensure system stability.

Challenges to Achieving Global Goals

Despite progress, the world is falling short of critical targets for universal energy access and climate protection, indicating significant gaps in the implementation of the SDGs.

• Energy Access Deficit (SDG 7): Approximately 730 million people still live without access to electricity, a direct challenge to Target 7.1 for universal access to affordable, reliable, and modern energy services.
• Clean Cooking Gap (SDG 7, SDG 3): Nearly one-quarter of the global population relies on inefficient and polluting cooking methods, negatively impacting health (SDG 3) and the environment.
• Climate Change Urgency (SDG 13): With 2024 being the hottest year on record, the report notes the high likelihood of surpassing the 1.5°C warming threshold established in the Paris Agreement, demanding more ambitious climate action.

Policy, Cooperation, and the Path Forward

Navigating the energy transition requires robust policy frameworks and international collaboration, aligning with SDG 17 (Partnerships for the Goals). The report stresses that governments must balance energy security with affordability, competitiveness, and climate goals.

Recommendations and Observations:

• Diversification and Supply Chains (SDG 17): Nations are urged to diversify energy sources and cooperate to expand and secure supply chains for critical minerals essential for renewable energy technologies and batteries.
• Electrification of Transport (SDG 11, SDG 13): The pace of transport electrification, which accounts for 45% of global oil consumption, will be a determining factor in future oil demand and progress toward sustainable cities (SDG 11).
• Policy Impact: The report acknowledges that policy shifts, such as the U.S. administration’s withdrawal from the Paris Agreement and renewed support for fossil fuels, create significant challenges. However, many analysts believe the momentum toward clean energy is driven by economic and technological factors that will persist regardless of specific climate policies.

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article discusses several interconnected issues related to global energy trends, climate change, and economic development, which directly align with the following Sustainable Development Goals (SDGs):

• SDG 7: Affordable and Clean Energy

  This is the most central SDG in the article. The text focuses on the rising demand for electricity, the shift towards renewable energy sources like solar and wind, the role of nuclear power, and the persistent lack of energy access for millions. It explicitly mentions that “Around 730 million people still live without electricity” and that many rely on “inefficient cooking methods,” which are core concerns of SDG 7.

• SDG 13: Climate Action

  The article is framed within the context of climate change. It mentions the “U.N. climate negotiations,” the goal of curbing “the planet’s warming,” the Paris Agreement’s 1.5 degrees Celsius threshold, and the need for decarbonization. The discussion of shifting from fossil fuels (coal, oil) to cleaner sources is fundamentally a climate action strategy.

• SDG 9: Industry, Innovation and Infrastructure

  The article highlights the need for significant infrastructure development to support the energy transition. It specifically calls for “quick improvements to the grid, energy storage and broader infrastructure.” The massive investment in data centers, which are driving electricity demand, also relates to this goal’s focus on infrastructure and industrialization.

• SDG 8: Decent Work and Economic Growth

  The article connects energy trends to economic dynamics. It notes that “Growing economies including India and nations in Southeast Asia, the Middle East, Africa and Latin America, will increasingly shape energy market dynamics.” It also quotes an analyst stating that for countries to “grow their economies,” they must focus on “energy efficiency and the (decarbonization) of energy demand,” linking sustainable energy to economic prosperity.

• SDG 17: Partnerships for the Goals

  The article underscores the need for international cooperation. It references the “U.N. climate negotiations,” the “Paris agreement,” and the IEA’s recommendation that nations “cooperate to expand supply chains for critical minerals.” The entire article is based on a report from the International Energy Agency (IEA), an international body, and includes perspectives from various global think tanks, highlighting the multi-stakeholder partnerships necessary to address these global challenges.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the article’s discussion, several specific SDG targets can be identified:

• SDG 7: Affordable and Clean Energy

  • Target 7.1: By 2030, ensure universal access to affordable, reliable and modern energy services. This is directly addressed when the article states, “The IEA says the world is falling short on universal energy access and climate change goals. Around 730 million people still live without electricity… nearly one-quarter of the global population still relies on inefficient cooking methods.”
  • Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix. The article’s core theme is the rapid growth of renewables, stating that “renewable energy, led by solar power, will grow faster than any other major source in the next few years.”
  • Target 7.a: By 2030, enhance international cooperation to facilitate access to clean energy research and technology… and promote investment in energy infrastructure and clean energy technology. This is supported by the IEA’s call for nations to “cooperate to expand supply chains for critical minerals” and make “improvements to the grid, energy storage and broader infrastructure.”

• SDG 13: Climate Action

  • Target 13.2: Integrate climate change measures into national policies, strategies and planning. The article contrasts different national approaches, highlighting how the Trump administration “opted out of the Paris agreement” and “rolled back dozens of climate regulations,” which is the opposite of integrating climate measures into policy. This discussion implicitly emphasizes the importance of this target.
  • Target 13.a: Implement the commitment undertaken by developed-country parties to the United Nations Framework Convention on Climate Change to a goal of mobilizing jointly $100 billion annually by 2020… The article’s mention of the “Paris Agreement” and the “1.5 degrees Celsius” threshold directly relates to the commitments made under this framework.

• SDG 9: Industry, Innovation and Infrastructure

  • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure… to support economic development and human well-being. This is clearly identified in the call for “quick improvements to the grid, energy storage and broader infrastructure” to handle the shift in energy sources and demand.
  • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies. The article’s focus on the “electrification of the transportation” sector and the overall shift to clean power reflects this target.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article mentions or implies several indicators that can be used to measure progress:

• Indicators for SDG 7

  • Indicator 7.1.1: Proportion of population with access to electricity. The article provides a direct data point for this indicator: “Around 730 million people still live without electricity.”
  • Indicator 7.1.2: Proportion of population with primary reliance on clean fuels and technology. This is implied when the article states that “nearly one-quarter of the global population still relies on inefficient cooking methods that hurt their health or the environment.”
  • Indicator 7.2.1: Renewable energy share in the total final energy consumption. The article discusses this qualitatively, noting that “renewable energy, led by solar power, will grow faster than any other major source” and that this shift will “dominate the future.”

• Indicators for SDG 13

  • Indicator 13.2.2: Total greenhouse gas emissions per year. While not stating a specific emissions number, the article’s entire discussion is centered on this. The reference to the “warming threshold of 1.5 degrees Celsius” is a direct consequence of cumulative GHG emissions. The mention of a goal of “98% CO2 emissions reductions by mid-century” is a specific target related to this indicator.

• Indicators for SDG 9

  • Indicator 9.a.1: Total official international financial flows to developing countries in support of infrastructure. The article points to the scale of investment needed by highlighting specific figures, such as the expected “$580 billion” investment in data centers this year, which exceeds investment in oil supply. This demonstrates the magnitude of financial flows in energy-related infrastructure.

4. Create a table with three columns titled ‘SDGs, Targets and Indicators” to present the findings from analyzing the article.

Source: fortune.com