Five things to know about the future of energy

A new report by the International Energy Agency gives cause for both optimism and alarm. In what direction is the global energy system headed??

“The world does not need to choose between ensuring reliable energy supplies and addressing the climate crisis.”?

After a year defined by uncertainty and instability, the message from Dr Fatih Birol, Executive Director of the International Energy Agency (IEA), is clear. It comes at the start of the IEA’s World Energy Outlook 2024, the most influential annual analysis of the global energy system.

The Outlook highlights growing energy security risks provoked by geopolitical conflicts. It also takes stock of progress made towards clean energy goals and a range of factors that could either facilitate or hold back that progress.

As we look ahead to 2025, the report offers an in-depth analysis of the steps taken over the past year and projections of how the global energy landscape might evolve in the months ahead.

Let’s explore five of the most interesting trends identified in the report.

Global instability is a risk, but it can be managed?

Geopolitical conflicts have thrown energy security into uncertainty. The growing frequency of heatwaves, droughts, floods and other extreme weather events due to climate change compounds the risks even further.?

These events bring into even sharper focus the need to diversify fuel suppliers. As the report points out: “The experience of the last few years shows how quickly dependencies can turn into vulnerabilities”.

To guarantee long- and short-term energy security, we need a more diversified energy system, both in terms of sources and suppliers. We must expand energy security approaches beyond traditional fuels to include clean technologies and the supply chains that underpin them, as well as building new trading relationships with reliable partners. That includes flows of rare earth metals and other materials critical to the energy transition.?

At OMV, we are ready to play our part. We are building a ~4TWh geothermal energy business by 2030 and sourcing new natural gas from stable regions like Norway and Romania to ensure a secure, affordable and diversified energy supply, both domestically and internationally. Our Neptun Deep project for example, will deliver 100 billion m3 of natural gas, expected to start becoming available from 2027, making Romania the largest gas producer in the EU.

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The energy transition is moving fast?

The report’s findings paint a quite optimistic picture of the clean energy transition in the coming years. Renewable energy capacity is growing rapidly, with more than 560 GW added in 2023 alone. After this progress, the IEA predicts that clean energy could meet nearly all new growth in energy demand between 2023 and 2035, meaning fossil fuels would reach peak demand by 2030.?

However, these predictions depend on a range of factors, including a fall in clean technology costs, rising manufacturing capacity as well as a continued adherence to current climate targets and energy policies. These trends vary substantially between countries in different regions and at different stages of economic development. And, as elections in 2024 have shown, radical changes in policy direction are not out of the question.?

At OMV, we plan our own transition strategy informed by the IEA’s Announced Pledges Scenario (APS), in which all energy and climate targets made by governments are made in full and on time. Our new investments undergo a stress test according to a “net zero emissions by 2050” scenario, largely based on the IEA’s Net Zero Emissions by 2050 (NZE) scenario.

We’re investing EUR 5 billion in low-carbon solutions including geothermal, renewables and carbon capture and storage (CCS), which the IEA cites as playing a key role in its NZE scenario.?

By 2030, we aim to store around 3 million metric tons of CO2 per year via CCS, equivalent to the emissions of 6 cement plants or 12% of Austria's annual industrial emissions. We’re also targeting around 4 TWh of geothermal energy by 2030 – with projects like our joint venture deeep. The first project will supply 20,000 households with low-carbon heat when it comes online in 2028. Overall, OMV and Wien Energie want to develop geothermal plants with a capacity of up to 200 megawatts.

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Electricity demand is soaring

Central to the net-zero transition is the shift towards a more electrified energy system, driven by technologies like electric vehicles and heat pumps.?

This will help reduce energy emissions but also overall energy demand. As the report explains: “a more electrified, renewables-rich system is inherently more efficient than one dominated by fossil fuel combustion (in which a lot of the energy generated is lost as waste heat).”

The Outlook cites China as an example. It accounted for 60% of the global renewable capacity added in 2023 and half of the cars sold there in 2024 were electric. These dramatic shifts are already starting to temper the rise in global energy demand and, if they continue, could heavily displace demand for oil and coal by 2035.

OMV is supporting the transition to zero-emission roads here in Europe, building up a dense EV charging network with 5,000 fast & ultra-fast EV charging points in our Retail core countries by 2030.?

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Putting people at the center of the transformation is key?

Everyone in the world has the right to safe, reliable and affordable energy. During the 2022 energy crisis, almost one in ten people in the EU couldn’t afford to heat their homes and, while this situation has begun to improve, energy bills remain high. The disparity between the Global North and South is even more stark. “The richest 10% of households in developing economies today consume about as much energy as the poorest 10% in advanced economies”, the report reveals.?

Providing that universal access and ensuring as much as possible of the need is met by clean sources is one of the greatest challenges the world will face in the coming decades. It is not insurmountable but it will require an unprecedented increase in financing to roll out clean cooking and grid expansion projects. Current measures fall a long way short.?

The world faces choices?

Although the clean energy transition is gathering pace, the world is still a long way from meeting climate goals. Current policies put us on course for 2.4 degrees of warming by 2100 and the risk of catastrophic consequences.?

The world needs ambition from governments, companies and individuals alike. Investments that seem costly in the short term will deliver long-term rewards, both to society at large and to those making them.?

At OMV, we are putting sustainability at the heart of our strategy. By 2030, we aim to reduce Scope 1 and 2 emissions by 30%, Scope 3 emissions by 20% and become a net-zero company by 2050. From CCS to renewable fuels, we are innovating across our entire business to expand our low-carbon solutions.??

As the IEA report makes clear, the energy transition is not a choice between security and sustainability – it’s the pathway to both. By acting with urgency, innovation, and collaboration, we can secure a cleaner, more resilient energy future for all.?