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World Energy Outlook

World Energy Model

Since 1993, the International Energy Agency (IEA) has provided medium to long-term energy projections using the World Energy Model (WEM). The model is a large-scale simulation model designed to replicate how energy markets function and is the principal tool used to generate detailed sector-by-sector and region-by-region projections for the World Energy Outlook (WEO) scenarios. Developed over many years, the model broadly consists of three main sections covering:

  • final energy consumption including residential, services, agriculture, industry, transport and non-energy use
  • energy transformation including power generation and heat, refinery and other transformation and
  • fossil-fuel and bioenergy supply

Outputs from the model include energy flows by fuel, investment needs and costs, CO2 emissions and end-user pricing and is calculated for each of the 25 regions modelled in the WEM. An extensive effort is undertaken each year to incorporate energy and climate-related policies and measures into our modelling and analysis with details and sources provided under Policy Databases.

A detailed description of the World Energy Model and supporting documents covering topics such as energy efficiency, energy subsidies, climate change analysis and power sector analysis may be found in the WEM Methodology.  The investment costs section outlines input assumptions to the WEM for the power generation sector and for end-use energy efficiency.

New Features in World Energy Outlook 2015

The WEO-2015 uses a scenario approach to examine future energy trends. It presents three scenarios: the New Policies Scenario, the Current Policies Scenario and the 450 Scenario. Comprehensive historical data through to 2013 are presented and used in the modelling, although wherever possible preliminary 2014 data are also included. Some of the changes made to the WEM for the purposes of the WEO-2015 are highlighted below:

  • The aluminium sector has been broken out of ‘other industry’ and added as a separate energy-intensive sector, distinguishing between primary and secondary aluminium production 
  • Two material flow models for aluminium and steel respectively have been created, which feed back into the World Energy Model to assess the material need and the need for primary production
  • The energy use in appliances has been further disaggregated via the addition of four new sub-sectors: refrigeration; cleaning; brown goods (television and computer); and other appliances (i.e. small consumer electronics, which together account for around half of all electricity use in the residential sector)
  • A new clean cooking access module has been linked to the residential module for developing countries, enabling better representation of the drivers of demand and the possible changes in the energy system resulting from the increased use of improved cookstoves and substitution of solid biomass by liquefied petroleum gas (LPG) and natural gas
  • The aviation module has been overhauled to improve the modelling and depth of analysis of the growth of revenue passenger-kilometres and revenue ton-kilometres and their impact on future fuel use
  • The electricity price module has been revised to better represent the cost elements of the power system, from generation costs, to the costs associated with transmission and distribution, and subsidies for fossil fuels, electricity and renewable energy technologies 

Full details may be found in the WEM Methodology