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© OECD/IEA 2018 Global Energy Futures Implications for Emerging Economies Matthew Wittenstein, Senior Electricity Analyst July 19, 2018, Washington, D.C. IEA

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Page 1: Global Energy Futures Implications for Emerging Economies · Global Energy Futures Implications for Emerging Economies Matthew Wittenstein, Senior Electricity Analyst July 19, 2018,

© OECD/IEA 2018

Global Energy FuturesImplications for Emerging Economies

Matthew Wittenstein, Senior Electricity Analyst

July 19, 2018, Washington, D.C.

IEA

Page 2: Global Energy Futures Implications for Emerging Economies · Global Energy Futures Implications for Emerging Economies Matthew Wittenstein, Senior Electricity Analyst July 19, 2018,

2© OECD/IEA 2018

The future is electrifying

Electricity generation by selected region

India adds the equivalent of today’s European Union to its electricity generation by 2040,

Middle East

2 000 4 000 6 000 8 000 10 000

Africa

Southeast Asia

European Union

India

United States

China

TWh2016 Growth to 2040

Sources of global

electricity demand growth

Industrial motors

Cooling

Large appliances

Connected & small

appliances

Electric vehicles

Other

while China adds the equivalent of today’s United States

Source: World Energy Outlook 2017

Page 3: Global Energy Futures Implications for Emerging Economies · Global Energy Futures Implications for Emerging Economies Matthew Wittenstein, Senior Electricity Analyst July 19, 2018,

3© OECD/IEA 2018

Transport represents a major issue for climate change

Electrification can leverage power sector decarbonisation to support decarbonisation of

other sectors – in particular, transport.

CO2 emissions in the 2 Degree Scenario

Source: ETP 2017

Page 4: Global Energy Futures Implications for Emerging Economies · Global Energy Futures Implications for Emerging Economies Matthew Wittenstein, Senior Electricity Analyst July 19, 2018,

4© OECD/IEA 2018

The global electric car stock is expanding rapidly, crossing the 3 million vehicle threshold in 2017. However, nearly all of these growth is constrained to three regions.

Transport electrification: rapid but uneven

Evolution of the global electric car stock, 2013-17

Source: IEA GEVO 2018

Page 5: Global Energy Futures Implications for Emerging Economies · Global Energy Futures Implications for Emerging Economies Matthew Wittenstein, Senior Electricity Analyst July 19, 2018,

5© OECD/IEA 2018

China dominates global electricity demand for EVs. Largest year-on-year growth in electricity demand comes from light-duty vehicles (LDVs).

Electricity demand from EVs: China in the lead

Total electricity demand from EVs by country, 2017

Source: IEA GEVO 2018

Page 6: Global Energy Futures Implications for Emerging Economies · Global Energy Futures Implications for Emerging Economies Matthew Wittenstein, Senior Electricity Analyst July 19, 2018,

6© OECD/IEA 2018

The EV30@30 Scenario sees 228 million EVs (excluding two- and three-wheelers), mostly LDVs, by 2030; around 100 million more than in the New Policies Scenario.

Global EV growth: the long road ahead

Global EV stock in the New Policies and EV30@30 scenarios, 2017-30

Source: IEA GEVO 2018

Page 7: Global Energy Futures Implications for Emerging Economies · Global Energy Futures Implications for Emerging Economies Matthew Wittenstein, Senior Electricity Analyst July 19, 2018,

7© OECD/IEA 2018

Electricity demand in India is significantly higher in the transport and buildings sectors under the SDS, as compared to the NPS.

India focus: demand growth under NPS and SDS

India's energy consumption by sector and fuel in different scenarios

Source: World Energy Outlook 2017

Page 8: Global Energy Futures Implications for Emerging Economies · Global Energy Futures Implications for Emerging Economies Matthew Wittenstein, Senior Electricity Analyst July 19, 2018,

8© OECD/IEA 2018

India has made significant progress in expanding electricity access throughout the country. However, a number of regions remain significantly underserved.

Electricity access: significant progress but more work to do

Source: IEA WEO 2017

Page 9: Global Energy Futures Implications for Emerging Economies · Global Energy Futures Implications for Emerging Economies Matthew Wittenstein, Senior Electricity Analyst July 19, 2018,

9© OECD/IEA 2018

Adjusted for purchasing power parity (PPP), electricity in India is among the most expensive in the world. Residential prices are 30% higher than the global average, and industrial 40% higher.

Challenge for India: electricity affordability

Electricity prices for select countries in USD (adjusted for PPP)/ MWh

Source: IEA statistics

Page 10: Global Energy Futures Implications for Emerging Economies · Global Energy Futures Implications for Emerging Economies Matthew Wittenstein, Senior Electricity Analyst July 19, 2018,

10© OECD/IEA 2018

For most distribution companies in India, the cost of supply of electricity is considerably higher than the average revenues they receive.

Challenge for India: distribution company financial viability

Comparison of cost of supply vs revenue realization for select states of India (2015)

Source: state distribution companies

Page 11: Global Energy Futures Implications for Emerging Economies · Global Energy Futures Implications for Emerging Economies Matthew Wittenstein, Senior Electricity Analyst July 19, 2018,

11© OECD/IEA 2018

0

20

40

60

80

100

120

140

1750 1800 1850 1900 1950 2000

Ad

op

tio

n r

ate

(Yea

rs)

Year of invention

It took approximately 110 years for the steam ship to become adopted globally, 47 years for electricity, 14 years for PCs and cell phones, and only 6 years for the internet.

The opportunity: accelerating rate of technology adoption

Technological adoption lag between rich and poor countries, by year of invention

Electricity

Steam ships

PCs, cell phones

Internet

Electric furnace

Source: D. Comin and M. Mestieri, 2018

Page 12: Global Energy Futures Implications for Emerging Economies · Global Energy Futures Implications for Emerging Economies Matthew Wittenstein, Senior Electricity Analyst July 19, 2018,

12© OECD/IEA 2018

www.iea.orgIEA