Why IEA & Microsoft Have Launched AI Tool for Sustainability
The energy sector’s transition towards renewable sources has created unprecedented demand for data analysis and market intelligence. Investment firms, utilities and governments require detailed insights into market trends, technological developments and policy changes to navigate the shift away from fossil fuels.
This demand for analysis has led to a proliferation of research reports and market studies. The International Energy Agency (IEA)’s World Energy Outlook stands apart as a cornerstone publication for the sector, providing analysis of global energy trends and their implications for security, emissions and economic development.
The IEA has now collaborated with Microsoft to develop an AI tool that analyses these global energy trends and market data.
The World Energy Outlook GPT (WEO GPT) enables users to interrogate the IEA’s annual report, which examines global energy security, emissions and economic development. The tool processes queries about specific sectors or regions, providing customised responses from the report’s data.
Microsoft Chief Sustainability Officer Melanie Nakagawa says: “At Microsoft, we're working to harness the power of AI for sustainability. This includes building tools to empower individuals, organisations and communities to learn about the environment and take action.”
Microsoft and IEA target energy sector transformation
The launch comes as the energy sector faces disruption from geopolitical tensions in the Middle East and increasing demand for clean technology. The IEA reports that global investment in clean energy projects approaches US$2tn annually, representing double the combined expenditure on oil, gas and coal supply.
The data indicates that renewable power generation capacity, which refers to the maximum output of electricity that installations can produce, will increase from 4,250 gigawatts to 10,000 gigawatts by 2030.
Market conditions present challenges for technology deployment. The IEA identifies 200 measures affecting clean energy technologies introduced since 2020, impacting the movement of components and finished products across borders.
The report notes that 2023 saw the immediate effects of the global energy crisis recede, though risk of future disruptions remains. Supply chain concentration in clean energy technologies creates vulnerabilities similar to those observed in traditional fuel markets.
Political uncertainty influences market dynamics, with countries representing half of global energy demand holding elections in 2024. Energy prices and climate events have emerged as voter priorities.
Manufacturing capacity and market competition
Analysis reveals an oversupply of oil and liquefied natural gas expected during the second half of the 2020s. Manufacturing capacity for solar photovoltaic panels and batteries exceeds current demand, creating price competition among suppliers.
The renewable energy sector added 560 gigawatts of new capacity in 2023. The IEA projects that low-emission sources, including nuclear power, will generate more than half of global electricity before 2030.
Data centres and electricity demand
The report also examines the growth of data centres. While there are 11,000 data centres globally, their impact on electricity demand remains contained through 2030.
Global electricity consumption has increased at twice the rate of overall energy demand over the past decade. China contributed two-thirds of this growth. The IEA’s projections for global electricity demand in 2035 exceed previous estimates by 2,200 terawatt-hours, equivalent to 6%.
Electric vehicle adoption represents a shift in China's energy consumption patterns. Electric vehicles currently represent 20% of new car sales worldwide, with projections indicating this will reach 50% by 2030.
Melanie Nakagawa says: “I’m excited to share that Microsoft partnered with the International Energy Agency to launch WEO GPT to help you explore IEA’s flagship annual report with a new AI-powered agent. This allows users to more easily find insights and dig into their analysis in new ways.”
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