Aytaj Shiraliyeva
Economics Journalist Read more
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.