dr. fatih birol executive director international energy ... · dr. fatih birol executive director...
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© OECD/IEA 2016 © OECD/IEA 2016
Dr. Fatih Birol Executive Director International Energy Agency Brisbane, 24 February 2017
© OECD/IEA 2016
Key points of orientation:
Middle East share of oil production at highest level in 40yrs
Transformation in gas markets deepening with a 30% rise in LNG
Additions of renewable capacity in the power sector higher in 2015 than coal, gas, oil and nuclear combined
Energy sector in the spotlight as the Paris Agreement enters into force
Billions remain without basic energy services
There is no single story about the future of global energy; policies will determine where we go from here
The global energy context today
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Change in total primary energy demand
Low-carbon fuels & technologies, mostly renewables, supply nearly half of the increase in energy demand to 2040
Low- carbon
Oil Gas Coal
A new ‘fuel’ in pole position
500
1 000
1 500
2 000 1990-2015 2015-2040
Mto
e
Low- carbon
Oil Gas Coal
Nuclear
Nuclear
Ren
ewab
les
Ren
ewab
les
Rest of world
European Union Latin
America
India
US
Africa
China
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1 000
2 000
3 000
4 000
TWh
1 500
3 000
4 500
6 000
TWh
Greater policy support boosts prospects for solar PV and wind
Solar PV and wind generation, 2040
Stronger policies on solar PV and wind help renewables make up 37% of electricity generation in 2040 in our main scenario – & nearly 60% in the 2 °C scenario
Additional in the 2 °C scenario
Rest of world
United States
China
WEO-2015
Increase in WEO-2016:
Solar PV Wind power
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Net oil imports
The energy transition provides instruments to address traditional energy security concerns, while shifting attention to electricity supply
A suite of tools to address energy security
5
10
15
20
2014 2040
mb
/d
Switch to electric and natural gas vehicles Switch to renewables Efficiency improvements
Increase in oil production 2014-2040
Net oil imports
United States
2014 2040
European Union
2014 2040
China
2014 2040
India
Reduction in net oil imports due to:
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Approvals of new conventional crude oil projects in 2015-2016 have fallen to the lowest level since the 1950s
If approvals remains low in 2017, an unprecedented effort will be needed to avoid a supply-demand gap in a few years’ time
US tight oil provides a potential lifeline, but cannot be relied upon to cover a major shortfall in the ‘baseload’ of oil supply
Without a pick-up in investment, or a rapid slowdown in demand growth, the stage is set for the next boom-and-bust cycle for oil
Entering a period of greater oil market volatility
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-3
0
3
6 mb/d
The global car fleet doubles, but efficiency gains, biofuels & electric cars reduce oil
Change in oil demand by sector, 2015-2040
No peak yet in sight, but a slowdown in growth for oil demand
Power generation
Buildings Passenger cars
Maritime Freight Aviation Petrochemicals
demand for passenger cars;
growth elsewhere pushes total demand higher
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A wave of LNG spurs a second natural gas revolution
Share of LNG in global long-distance gas trade
Contractual terms and pricing arrangements are all being tested as new LNG from Australia, the US & others collides into an already well-supplied market
2014 685 bcm
2040 1 150 bcm
2000 525 bcm
LNG 53%
Pipeline Pipeline LNG 42% Pipeline
LNG 26%
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The need for new investment
Average annual oil and gas upstream investment 2017-2040, by scenario
Upstream oil & gas investment remains significant even in a decarbonisation scenario to 2040, to compensate for major declines in output from existing fields
0
100
200
300
400
500
600
700
800
2016 Central scenario 2 Degree scenario
USD
bill
ion
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Coal demand in key regions
The peak in Chinese demand is an inflexion point for coal; held back by concerns over air pollution & carbon emissions, global coal use is overtaken by gas in the 2030s
Coal: a rock in a hard place
500 1 000 1 500 2 000 2 500 3 000
Southeast Asia
European Union
India
United States
China
Mtce
2014
Decreasing demand
Change 2014-2040:
Increasing demand
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Cost of clean energy continues to fall
Indexed cost of onshore wind, utility scale PV, batteries and LED lighting
The falling cost of clean energies opens new opportunities but appropriate market design and regulatory frameworks remain critically important
0
20
40
60
80
100
120
2008 2009 2010 2011 2012 2013 2014 2015 2016
20
08
= 1
00
Onshorewind
Solar PV -utility scale
Grid-scalebatteries
LEDs
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Efficiency and renewables key to climate change mitigation
Global CO2 emissions reductions in the Central & 2 °C Scenario by technology
Improvements in energy efficiency and faster deployment of low-carbon technologies will be critical to achieving climate goals
Gt
18
22
26
30
34
38
2010 2020 2030 2040
Central Scenario
Efficiency
Renewables
CCS Nuclear Fuel switching
Other
2 °C Scenario
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Energy security remains a major concern; potential vulnerabilities are growing, so too is the range of tools available to address them
A wave of LNG is the catalyst for a second natural gas revolution, with far-reaching implications for gas pricing & contracts
The next chapter in the rise of renewables requires policies to push their role in heat & transport & changes in power market design
The Paris Agreement is a framework; its impact on energy depends on how its goals are translated into real government policy actions
Digital technologies & electrification are opening up new challenges & opportunities across the energy system
Conclusions