The global energy system is entering one of its most turbulent phases in decades, with governments confronting overlapping security threats, soaring electricity demand, and rising climate risks. The World Energy Outlook 2025 (WEO-2025), released by the International Energy Agency (IEA), warns that energy security is now inseparable from geopolitics, supply chain resilience and climate stability — and that emerging economies, particularly India and Asia, will shape the next era of global demand. The report — the IEA’s most authoritative assessment of global energy trajectories — finds that traditional oil and gas risks are now compounded by vulnerabilities in critical minerals, electricity grids, cyberattacks, extreme weather, and rapidly expanding data-centre loads. “When we look at the history of the energy world, there is no other time when security tensions have applied to so many fuels and technologies at once,” IEA Executive Director Fatih Birol notes. “This requires the same spirit and focus that governments showed when they created the IEA after the 1973 oil shock.”
India and Asia assume centre stage
One of the most significant structural shifts documented in WEO-2025 is the movement of global energy demand away from China toward India, Southeast Asia, the Middle East and parts of Africa. Between now and 2035, 80% of global energy consumption growth will come from regions with strong solar resources, with India and Southeast Asia emerging as the decisive growth poles.
Energy demand is set to rise 3–3.6% annually in India and 2.6% annually in Southeast Asia, compared with near-flat growth in advanced economies. This stands in sharp contrast to the previous decade, when China alone accounted for half of global oil and gas demand growth and 60% of electricity demand growth. India’s rise is particularly important for electricity markets. The report finds that global electricity demand will increase by 40% by 2035, and India will be the largest contributor to that growth outside China. Breakneck expansion in air-conditioning, digital services, manufacturing, mobility and rural electrification will push India’s electricity consumption sharply upward.
Climate activist Harjeet Singh, who is the founding director of Satat Sampada Climate Foundation, said India’s challenge now is integrating the nearly 40% of generation expected from wind and solar by 2035, which will require major investment in grids and storage. “India is walking the talk on climate action, but we cannot be expected to run this marathon with our legs tied… We need accessible finance and shared technologies to build a resilient, zero-carbon system for 1.4 billion people.” “The baton of demand growth is clearly moving to emerging economies,” said Dave Jones, chief analyst at Ember. “Solar is permeating even through the Middle East and Southeast Asia, while EVs are taking off in places like Vietnam and Indonesia. Technology is outrunning traditional forecasts.”
Asia’s coal conundrum
Nowhere is Asia’s influence more pronounced than in coal. The report bluntly states that the storyline for global coal will be written in Asia, especially in India, Indonesia, and China. Even as renewables surge, India’s coal use in industry alone is projected to rise 60% by 2035, while Indonesia’s industrial coal demand may climb 45%. In scenarios where renewable deployment slows due to grid bottlenecks, WEO-2025 warns that coal demand will remain stubbornly high, undermining global emissions targets. However, in the Stated Policies Scenario (STEPS), rapid solar and wind expansion in emerging economies — averaging 600 GW per year globally through 2035 — steadily pushes coal into decline. Laurence Tubiana of the European Climate Foundation cautions that delaying clean energy would carry steep costs. “Every tonne of carbon we avoid today saves far greater costs tomorrow,” she said. “We can keep looking backwards and burying our heads in the sand — or face the future we must build.”
LNG wave and Asia’s balancing act
The report highlights a looming wave of liquefied natural gas (LNG): 300 bcm of new annual LNG export capacity will come online by 2030, primarily from the US (50%) and Qatar (20%). But with demand flattening in Europe and China, WEO-2025 asks a critical question: Where will all this LNG go? India and Southeast Asia emerge as the most likely markets, as they struggle to replace declining domestic gas reserves and meet industrial and power sector demand. Lower LNG prices could accelerate coal-to-gas switching, but affordability remains a barrier.
Some Asian markets — including Thailand, Bangladesh, Pakistan and Indonesia — are natural candidates for expanded LNG import infrastructure. Yet even in these regions, LNG remains a “premium fuel” compared to renewables and domestically abundant coal. Olivier Bois von Kursk of IISD notes that doubling down on fossil fuels is economically unsound. “Renewables and EVs are outperforming expectations, driven primarily by markets. Betting on fossil fuels now is betting against progress,” he said.
Electricity is heart of the new energy economy
WEO-2025 declares that the Age of Electricity has already arrived. Electricity today makes up only 21% of final energy consumption, but it powers sectors representing 40% of global GDP, and will dominate future growth. Global investment in electricity supply — grids, storage, renewables, and electrified end-uses — already accounts for half of all energy investment. But this shift is not keeping pace with demand. While electricity generation investment has grown 70% since 2015, grid investment has grown at less than half that pace. This mismatch is creating congestion, curtailment of solar and wind power, and higher prices. The IEA warns that without rapid acceleration in grid deployment and flexibility solutions, the world risks severe reliability shortfalls. A newer challenge is the explosive growth of data centres and AI.
Investment in data centres is projected at $580 billion in 2025 — surpassing global oil supply investment ($540 billion). While globally data-centre electricity demand will account for less than 10% of growth, the impact is highly concentrated. The US, China and Europe will host 85% of new data centres, straining already-overloaded networks.
Critical minerals: New security threat
Perhaps the most alarming finding relates to critical minerals. A single country controls around 70% of refining capacity in 19 of 20 strategic minerals essential for solar panels, EV batteries, power grids, semiconductors, AI chips, and defence systems. More than half of these minerals now face some form of export restrictions. This concentration has deep implications for India, which is rapidly scaling solar, EVs, battery storage and semiconductor investments, but remains dependent on external supply chains. WEO-2025 predicts it will take years for new refining projects elsewhere to meaningfully reduce this dependence.
Climate goals slipping out of reach
The report bluntly states that the world will surpass 1.5°C in all scenarios, though a return below 1.5°C by century’s end is possible in the Net Zero scenario through aggressive emissions cuts and large-scale carbon removal technologies.
In the Current Policies Scenario, global CO2 emissions stay near record highs and put the planet on course for almost 3°C of warming by 2100. In the Stated Policies Scenario, emissions decline more gradually, corresponding to around 2.5°C of warming — still far above safe limits. Only in the Net Zero Emissions Scenario do emissions fall rapidly enough to eventually return global temperatures below 1.5°C. Even then, warming peaks at around 1.65°C in mid-century before slowly declining as carbon removal technologies scale up.
David Tong of Oil Change International said: “We can protect communities by aiming for 1.5°C, settle for a disastrous 2.5°C, or slip into a nightmare future. Holding to 1.5°C means no new fossil fuels, no delay, and a just transition.” Despite political pressure in some countries to revive fossil-fuel-heavy scenarios, WEO-2025 concludes that the energy transition is irreversible. Between now and 2030, the world will build more renewables than in the last 40 years combined.
“Nearly all new electricity demand — from manufacturing to AI to cooling — will be supplied by renewables,” said Bruce Douglas of the Global Renewables Alliance. “An energy revolution is underway, and fossil fuels are on the sidelines.”