Dr Fatih Birol IEA Executive Director Berlin, 16 November 2018
© OECD/IEA 2018 Global energy demand and the growing IEA Family
Share of IEA member and associationGlobal energy countries demand in global energy demand
Mtoe 20 000
Rest of the world 15 000 IEA family Association countries 10 000 Member countries
5 000
2017 2025 2040
With South Africa the latest country to join the IEA as an Association member, the IEA Family now accounts for over 70% of global energy demand from under 40% in 2015
© OECD/IEA 2018 Today’s energy context
Mixed signals about the pace & direction of change in global energy: Oil markets are entering a period of renewed uncertainty & volatility Natural gas is on the rise: China’s rapid demand growth is erasing talk of a ‘gas glut’ Solar PV has the momentum while other key technologies & efficiency policies need a push
Our assessment points to energy-related CO2 emissions reaching a historic high in 2018 For the first time, the global population without access to electricity fell below 1 billion
Electricity is carrying great expectations, but questions remain over the extent of its reach in meeting demand & how the power systems of the future will operate
Policy makers need well-grounded insights about different possible futures & how they come about. The WEO provides two key scenarios:
New Policies Scenario Sustainable Development Scenario
© OECD/IEA 2018 The new geography of energy
Energy demand 20002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022202320242025202620272028202920302031203220332034203520362037203820392040 United StatesChina
EuropeanUnited StatesUnionChina
European UnionChinaIndia
European UnionAfricaIndia
European UnionAfricaIndia
SoutheastMiddle AsiaEast
SoutheastMiddle AsiaEast
1 000 2 000 3 000 4 000 Mtoe In 2000, more than 40% of global demand was in Europe & North America and some 20% in developing economies in Asia. ByBy 2040, 2040, this this situation situation is is completely completely reversed. reversed. © OECD/IEA 2018 Fuelling the demand for energy
Change in global energy demand, 2017-2040 Renewables & nuclear Gas Oil Coal Mtoe 1 500 Nuclear 1 200 Other 900 s e l
600 b Other a Power w
e Petro-
n Other
300 e chemical
R Industry Cars Power 0 Cars Power -300
-600 Advanced Developing Advanced Developing Advanced Developing Advanced Developing economies economies economies economies economies economies economies economies The increase in demand would be twice as large without continued improvements in energy efficiency, a powerful tool to address energy security & sustainability concerns
© OECD/IEA 2018 Can US shale alone avoid a turbulent oil market?
Global oil outlook
mb/d 105 Demand 100
95 Growth required from US shale 90
85 80 Growth from other sources 75 (at current project approval rates) 70 Currently producing fields 65 2010 2015 2020 2025
Oil demand looks robust in the near term; if approvals of new conventional projects remain low, market stability would require continuous exceptional growth in US shale
© OECD/IEA 2018 China – the emerging giant of gas demand
Net gas imports in 20172040 Shares in long-distance bcm 400 gas trade, 20172040
300
200
100 Pipeline LNG
0
-100 European Japan China India Southeast Union & Korea Asia Developing countries in Asia – led by China – dominate the rise in long-distance gas trade; more than 80% of the growth to 2040 comes in the form of LNG © OECD/IEA 2018 Our energy destiny rests with governments
Total investment in energy supply to 2040: $42.3 trillion
Market-driven 30% 2018-2040 42.3 trillion dollars
Government-driven 70%
More than 70% of the $2 trillion required each year in energy supply investment either comes from state-directed entities or receives a full or partial revenue guarantee
© OECD/IEA 2018 Wind to become the largest power source in the EU
Share of electricity generation by source in the EU, 2017-40
35% 30% 25% 20% 15% 10% 5% 0% 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039
Coal Nuclear Gas Other renewables Solar PV Wind Wind electricity generation in the EU more than triples to 1 100 TWh by 2040; the rapid increase of variable forms of generation calls for new approaches to system integration © OECD/IEA 2018 Flexibility: the cornerstone of tomorrow’s power systems
Phases of integration with variable renewables share, 20172030
Integration phase 6 All sources of flexibility needed Germany 5 United Kingdom 4 Targeted investment European Union in flexibility needed European Union China Germany 3 UnitedUnited States KingdomIndia China 2 Mobilise existing India United States power system flexibility 1
0% 10% 20% 30% 40% 50% 60% Wind and solar PV share of generation Higher shares of variable renewables raise flexibility needs and call for reforms to deliver investment in power plants, grids & energy storage, and unlock demand-side response
© OECD/IEA 2018 What if the future is electric?
Electricity demand Oil demand Energy-related CO2 emissions (thousand TWh) (mb/d) (Gt) 45 125 40
40 100 32 Scenario: 35 75 24 New Policies Future is Electric 30 50 16
25 25 8
20 2015 2020 2030 2040 2015 2020 2030 2040 2015 2020 2030 2040
Increased electrification leads to a peak in oil demand, avoids 2 million air pollution-
related premature deaths, but does not necessarily lead to large CO2 emissions reductions © OECD/IEA 2018 Can we unlock a different energy future?
Global energy-related CO2 emissions
Gt CO2 36 New Policies Scenario
30
24 Sustainable Development 18 Existing and under construction Increased room Scenario power plants, factories, buildings etc. to manoeuvre 12
6 Coal-fired power plants
2017 2025 2030 2035 2040
Coal plants make up one-third of CO2 emissions today and half are less than 15 years old; policies are needed to support CCUS, efficient operations and technology innovation
© OECD/IEA 2018 Conclusions
The links between energy & geopolitics are strengthening & becoming more complex, a major factor in the outlook for energy security
A mismatch between robust oil demand in the near term & a shortfall in new projects risks a sharp tightening of oil markets in the 2020s
The rapid growth of electricity brings huge opportunities; but market designs need to deliver both electricity and flexibility to keep the lights on
There is no single solution to turn emissions around: renewables, efficiency & a host of innovative technologies, including storage, CCUS & hydrogen, are all required
The future pathway for energy is open: governments will determine where our energy destiny lies
© OECD/IEA 2018 iea.org/weo
© OECD/IEA 2018