The Global Path Forward: Thoughts on the IEA World Energy Outlook 2025

On November 12^th, 2025, the International Energy Agency (IEA) released their annual forward-looking report on global energy. As a company whose core experience and expertise are in the energy space, these reports are always interesting. The 2025 report did not disappoint. Below are our thoughts and take aways from reading it.

Global Thoughts

There is one key concept that globally covers the various topics of the report:

Shifting Landscapes.

The report looks at energy from multiple facets from fuel sources to direct usage and application, as a proxy for our battle with climate change, as a representation of global power, and as a tool for predicting economic change. In each of these vantage points, the global takeaway above applies. The centers of power and demand are shifting from the developed to the emerging economies of the world which are drastically changing fuel markets and therefore influence.

One of the most interesting representations of the shifting landscape of energy is in the future of climate change policy. The report uses a concept much closer to our work in project finance to try and get at a likely outcome. Rather than directly forecasting zero-emission or net-zero targets, the writers put forward several scenarios to understand the various alternatives before us. Like our financial models, these are sophisticated guesses based on inputs overlayed with complex assumptions about action and inaction. The scenario analysis concludes that our original climate targets set in Paris and elsewhere over the past decade are still achievable but most certainly are off-course at the moment.

Another interesting overarching theme with a broadly shifting landscape is electrification. Energy production plays various roles in society but it is clear that electricity in the modern age is the most pressing area of impact. Electrification demand is not only being driven by the AI arms race taking place but by poverty alleviation, the growth of emerging economies, and energy security. These conversations are engaging as they impact other large topics like constrained fuel sources, grid infrastructure investment, and affordability, namely, who bears the costs.

Key takeaways

1. Energy security has expanded beyond fuel and access: electricity infrastructure resilience on both the production and distribution side are core areas of focus. Critical mineral supply chains are now as important and strategic as access to oil and gas.
2. Electricity is reshaping everything: Expansion of electricity is now a key signal for demand growth; it is shifting investment priorities at a staggering pace; it is raising affordability concerns in developed and emerging economies alike; and the stability and primacy of electricity is raising associated security risks.
3. Emerging economies are now in the driver’s seat: India, Southeast Asia and other emerging economies are defining global energy trends more than advanced economies. This power is being derived from the demand side as the hegemony of energy supply is still located largely where one would expect it.
4. Abundance does not equal access: surplus capacity in LNG, renewable energy, batteries, and the like does not negate or solve impending climate risks. Access constraints persist across markets even those with surplus.
5. Climate goals are achievable but off-course: Scenario analysis shows that pathways still exist. However, the momentum and action of policy and investment are insufficient to meet the projected pathways currently.

Skills needed to meet demand

Simply put, energy investment remains critical to economic success and opportunity, technological innovation, and as a core tool to combat climate change.

To meet the demands of these shifting landscapes and evolving markets, the core skills of project finance remain paramount. Namely,

1. Creativity – complex problems require new, creative solutions.
2. Strong analytical skills – whether you are producing work or consuming output from others, you need to be able to deliver concise, thorough analysis to decision makers.
3. Critical thinking – transactions are moving faster and faster to try and meet demand. Therefore, your ability to perform due diligence with a critical eye at speed becomes an indispensable skill.
4. Financial modeling – we know our models will be wrong, but our skill determines in part how wrong they are. Best practice financial modeling tools are core to ensuring a solid, bankable investment.

Fortunately, we teach these skills and tie them to the renewable energy and critical mineral transactions that the IEA foresees as the next phase of energy investment.

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