Trends in Energy Scenario Development Cecilia Tam, Senior Energy Analyst, International Energy Agency APERC Annual Conference, Tokyo 30-31 May 2018 IEA
Context Energy Efficiency: The world is generating more value than ever from its energy use, and there has been a noticeable acceleration in recent years Renewables: Solar PV broke new records in 2016, led by China and is on track to be the cheapest source of new electricity in many countries China: Drive to make the skies blue again is recasting its role in energy United States: Is turning into the undisputed global leader in oil and gas Electrification: The future is electrifying, spurred by cooling, electric vehicles & digitalisation There are many possible pathways ahead & many potential pitfalls if governments or industry misread the signs of change IEA 2017
Annual change in energy intensity The world is generating more value from its energy use 0.0% Changes in global energy intensity (energy per unit of GDP) -1.0% -2.0% -3.0% 1981-90 1991-2000 2001-10 2011 2012 2013 2014 2015 2016 Average annual change 1981-2010 Average annual change 2011-2016 This decade has seen intensity improvement rates at almost double the historic average, suggesting that the world has entered a new era of faster intensity gains. IEA 2018
Renewables growth more and more dependent on wind and solar 1 200 1 000 800 600 400 200 0 Renewable electricity capacity growth by technology Capacity growth (GW) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1999-2004 2005-10 2011-16 2017-22 Additional - accelerated case s Hydropower Solar PV Wind % from wind and solar PV (right axis) Solar PV enters a new era, becoming the undisputed leader in renewable power capacity growth; PV also accounts for 60% of the upside potential in the accelerated case IEA 2018
A shift in the global centre of gravity for energy OECD/IEA 2017 Change in primary energy demand to 2040 (Mtoe) Share of global growth 2016-2040 United States -30 Latin America 320 Europe -280 Middle East 485 Africa Eurasia 135 485 China 790 India 420 1 005 Japan -50 Southeast Asia Eurasia Latin 3% 5% America 8% Africa Middle East 13% 13% 11% 26% Southeast Asia 21% India China Southeast Asia, India and China are the engine of future energy demand growth, together accounting for almost 60% of the global increase to 2040
US becomes undisputed leader of oil & gas production Oil and gas production in the United States mboe/d mboe/d 35 30 25 20 15 10 5 Shale oil Shale gas unconventionals Conventional oil & gas 1980 1990 2000 2010 2020 2030 2040 The US is already switching to become a net exporter of gas & becomes a net exporter of oil in the 2020s, helped also by the demand-side impact of fuel efficiency & fuel switching
Solar PV forges ahead in the global power mix Global average annual net capacity additions by type Coal 2010-2016 Gas Nuclear Renewables Solar PV Wind Coal Gas 2017-2040 Nuclear Renewables 20 40 60 80 100 120 GW Solar PV Wind 20 40 60 80 100 120 GW 140 160 GW China, India & the US lead the charge for solar PV, while Europe is a frontrunner for onshore & offshore wind: rising shares of solar & wind require more flexibility to match power demand & supply
Energy demand by fuel in selected end-use sectors in China in the New Policies Scenario Mtoe 1 500 1 200 Industry Transport Buildings renewables Biomass 900 Heat Electricity 600 Gas Oil 300 Coal 2000 2016 2040 2000 2016 2040 2000 2016 2040 As China enters the next phase of development, the focus shifts from industry-led towards services-led growth with a focus on energy efficiency and electricity use
The future is electrifying Electricity generation by selected region Sources of global electricity demand growth China United States India European Union Southeast Asia Middle East Africa 2 000 4 000 6 000 8 000 10 000 TWh 2016 Growth to 2040 Electric vehicles Large appliances Connected & small appliances Industrial motors Cooling China adds the equivalent of today s United States to its electricity generation by 2040 and Southeast Asia becomes the 5 th largest electricity consumer
LNG ushers in a new global gas order Global Gas importers exporters gas trade 1 230 bcm in 2040 706 bcm in 2016 Russia & Caspian Europe 52% Middle East Africa 39% shipped by US LNG & Australia Canada Asia 37% Russia & Caspian Europe 35% US & Canada 59% shipped by LNG Middle East Asia 60% Africa Australia Growing gas import requirements in developing Asia, Japan and Korea are largely met by LNG, with exports from the US accelerating a shift towards a more flexible, liquid global market
Conclusions While energy efficiency has improved in recent years, 68% of global energy use remains uncovered by mandatory policy and low rate of policy implementation needs to accelerate. Prospects for renewables driven by developments in solar PV and wind requiring greater focus on systems integration China continues to shape global trends, but in new ways as its energy revolution drives cost reductions for a wide range of clean energy technologies that can benefit APEC Electrification & digitalisation are the future for many parts of the global energy system, creating new opportunities
Suggestions for future APERC scenarios Accelerated energy efficiency scenario assuming efficient urban design and optimised heating and cooling networks High electrification scenario to identify opportunities for decarbonising end uses with low cost renewables and shifting away from fossil fuels Energy scenarios under a Sustainable Development Goal lens; IEA s Sustainable Development Scenario covers SDG 3 (Clean Air), 7 (Access and Renewables) and 13 (Climate Change)
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