BAKU, Azerbaijan, October 17.
Global household real revenues can be nearly 1.6% higher than the
levels projected under a "current policies" scenario by 2050
through an accelerated energy transition.
This was reflected in the World Energy Transition Outlook 2026
report, published on the website of the International Renewable
Energy Agency (IRENA).
The report noted, however, that households may face additional
financial pressure during the initial stages of this process.
According to the report, under a Deeper Energy System
Transformation (DES) scenario, real household revenues in the early
years of the transition would be lower than they would be under a
Planned Energy Scenario (PES), which assumes the continuation of
current policies.
"A significant improvement is expected after 2030–2035, and by
2050, this figure could exceed the levels projected under the PES
scenario by approximately 1.6%," the report said.
According to IRENA estimates, the initial pressure on revenues
will stem, in part, from the need for substantial upfront
investments, shifts in energy prices, the introduction of carbon
pricing, and the reform of fossil fuel subsidies.
"In the long term, these factors will be offset by technological
advancements, improved energy efficiency, lower electricity costs,
the creation of new jobs, and increased productivity.
An analysis of household welfare also indicates that, during the
early stages of accelerated decarbonization, the energy sector will
contribute more significantly to overall inflation. In the medium
term, however, the situation will shift: households will benefit
from reduced exposure to volatile fossil fuel prices and the
increased efficiency of electrification powered by renewable energy
sources.
As a result, the affordability of energy resources for
households will improve over time," IRENA pointed out.
At the same time, IRENA warned that poorly planned or ill-timed
measures could exacerbate existing cost-of-living pressures, erode
public support for the energy transition, and slow down its
implementation.
"In this regard, the agency emphasizes the need for targeted
measures to ensure energy affordability, progressive fiscal
policies, the phased implementation of price reforms, and the
expansion of social protection.
Also of great importance is providing support to workers
affected by structural changes in the energy sector, as well as
investing in communities that may suffer from a decline in
traditional energy-related activities," IRENA added.
According to the report, a critical task is not only to secure
the overall economic benefits of the energy transition, but also to
determine the timing of costs, the distribution of the burden
across different population groups, and the creation of conditions
for households to participate in new economic opportunities.
