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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 documentation section.  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 2014

The WEO-2014 uses a scenario approach to examine future energy trends and is the first time extended to 2040. It presents three scenarios: the New Policies Scenario, the Current Policies Scenario and the The 450 Scenario.

Comprehensive historical data through to 2012 are presented and used in the modelling, although wherever possible preliminary 2013 data are also included.

Some of the changes made to the WEM for the purposes of the WEO-2014 are highlighted below:

  • The oil and natural gas supply modules were expanded to cover in detail 43 countries and regions in Africa, as well as coal-to-gas plants and methane hydrates were included as new supply sources in the gas module
  • The power sector module was expanded to 6 regions in Africa, to support the regional focus and better represent the emerging regional power pools in sub-Saharan Africa
  • To support the regional focus, the representation of mini- and off-grid systems, related to those gaining access to electricity, was improved (including additional small-scale technologies)
  • The modelling of the traditional use of solid biomass in households has been enhanced relying on various variables (availability and prices of fuelwood and charcoal, availability of alternative fuels and stoves, population growth, etc)
  • A net-present value calculation for the adoption of carbon capture and storage in industry was introduced for each process in the different industrial sub-sectors
  • The technology cost curves for incremental energy savings in vehicle technologies, including gasoline/diesel, gas, plug-in hybrid vehicles, and electric vehicles, were updated

Full details may be found in the detailed description of WEM