Dr Fatih Birol IEA Executive Director Berlin, 16 November 2018
Global energy demand and the growing IEA Family Share of IEA member and association Global energy countries demand in global energy demand Mtoe 20 000 15 000 10 000 Rest of the world IEA family Association countries 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
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 CO 2 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
The new geography of energy Energy demand 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 United States China European United States Union China European Union China India European Union Africa India European Union Africa India Southeast Middle Asia East Southeast Middle Asia East 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 in Asia. By 2040, this situation is completely reversed.
Fuelling the demand for energy Change in global energy demand, 2017-2040 Mtoe 1 500 Renewables & nuclear Gas Oil Coal 1 200 Nuclear 900 Other 600 300 0-300 Renewables Power Industry Cars Other Petrochemical Cars Power Other Power -600 Advanced Developing Advanced Developing Advanced Developing Advanced Developing The increase in demand would be twice as large without continued improvements in energy efficiency, a powerful tool to address energy security & sustainability concerns
Can US shale alone avoid a turbulent oil market? Global oil outlook mb/d 105 100 95 90 85 80 75 70 Currently producing fields 65 2010 2015 2020 2025 Demand Growth required from US shale Growth from other sources (at current project approval rates) 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
China the emerging giant of gas demand bcm 400 Net gas imports in 2017 2040 Shares in long-distance gas trade, 2017 2040 300 200 100 Pipeline LNG 0-100 European Union Japan & Korea China India Southeast 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
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
Wind to become the largest power source in the EU 35% 30% 25% 20% 15% 10% 5% Share of electricity generation by source in the EU, 2017-40 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
Flexibility: the cornerstone of tomorrow s power systems Integration phase Phases of integration with variable renewables share, 2017 2030 All sources of flexibility needed 6 5 Germany United Kingdom Targeted investment in flexibility needed Mobilise existing power system flexibility 4 3 2 1 European Union China Germany United United StatesKingdom India China India United States European Union 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 0% 10% 20% 30% 40% 50% 60% Wind and solar PV share of generation
What if the future is electric? 45 Electricity demand (thousand TWh) 125 Oil demand (mb/d) Energy-related CO 2 emissions (Gt) 40 40 100 32 35 30 75 50 24 16 Scenario: New Policies Future is Electric 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 pollutionrelated premature deaths, but does not necessarily lead to large CO 2 emissions reductions
Can we unlock a different energy future? Global energy-related CO 2 emissions Gt CO 2 36 New Policies Scenario 30 24 18 12 Existing and under construction power plants, factories, buildings etc. Increased room to manoeuvre Sustainable Development Scenario 6 Coal-fired power plants Coal plants make up one-third of CO 2 emissions today and half are less than 15 years old; policies are needed to support CCUS, efficient operations and technology innovation 2017 2025 2030 2035 2040
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
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