© OECD/IEA 2018

Prospects for Global Energy Markets and

Energy Sustainability

IEA

Dr. Fatih Birol

Executive Director, IEA

G20 Energy Ministerial – San Carlos de Bariloche, 15 June 2018

© OECD/IEA 2018

Global oil demand remains robust

Global oil demand is set to rise by 1.4 mb/d in 2019, with China and India accounting for almost half of the increase; petrochemical feedstocks are becoming increasingly important drivers of oil demand

0.4

0.8

1.2

1.6

2

2005-2014

mb/d

2016 2017 2018 20192015

Growth in global oil demand

© OECD/IEA 2018

Industry & buildings have taken over from the power sector as the drivers of gas demand; China accounted for 30% of the increase in global gas demand in 2017

Growth in global gas demand

Natural gas – life in the fast lane

bcm

2000-2016average

2017

30

60

90

120 Industry, buildings & others

Power generation

© OECD/IEA 2018

Renewables accounted for almost half of the growth in electricity generation in 2017 and are set to meet a higher share of the growth going forward

Annual electricity generation growth by technology

Renewables growing rapidly in the power sector

0

50

100

150

200

250

300

350

400

450

Renewables Other sources Renewables Other sources

Annual average (2000-16) 2017

Other sources

Hydro and other renewables

Wind

Solar PV

TWh

© OECD/IEA 2018

Wind & solar making strong inroads, but new challenges may emerge

Four phases of wind and solar integration

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After remaining flat for 3 years, global CO2 emissions rose again in 2017, to an all-time high

Global energy-related CO2 emissions

After plateauing for 3 years, global emissions are on the rise again

CO2 emissions

Increase in 2017

5

10

15

20

25

30

35Gt CO2

© OECD/IEA 2018

How are clean energy technologies progressing?

Power

Renewable power

Solar PV

Onshore wind

Offshore wind

Hydropower

Bioenergy

Geothermal

Concentrating solar

power

Ocean

Nuclear power

Natural gas-fired power

Coal-fired power

CCS in power

Industry

Cement

Chemicals

Steel

Aluminum

Pulp and paper

CCS in industry

Transport

Electric vehicles

International shipping

Fuel economy

Trucks

Transport biofuels

Aviation

Rail

Buildings

Building codes

Heating

Cooling

Lighting

Appliances &

equipment

Data centres and networks

IEA’s latest tracking of 38 clean-energy technologies reveals, 4 are on track, 23 have to improve & 11 are off track

© OECD/IEA 2018

Cooling is driving electricity demand growth

Share of world electricity demand growth to 2050

Space cooling

21%

Appliances

15%Heating

7%

Other buildings 15%

Industry 32% Other

10%

Today, 90% of households in the US & Japan have air conditioners versus 32% in developing Asia; Electricity demand for air conditioning could more than triple by 2050

© OECD/IEA 2018

LED lighting is on track, thanks to government policy & innovation

LEDs are on track to dominate residential lighting by around 2020; 3.3 billion LEDs were installed in 2017, underpinned by falling costs & government policy

Global residential lighting sales by type

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015 2016 2017

LEDs Fluorescents Incandescents & other

© OECD/IEA 2018

Cost for CO2 capture and storage or utilisation in industry

CCUS is one of few solutions to cut emissions in industry; 450 Mt CO2 can be abated per year for under $40/t

Carbon capture, utilisation & storage is crucial for industry

0

50

100

150

200

Under $10 $10 - 20 $20 - 30 $30 - 40

MtCO2/yr

$ per tonne CO2 captured

© OECD/IEA 2018

Clean energy R&D investment is finally on the rise…

Investment in clean energy R&D rose in 2017, but more is needed

0

5

10

15

20

25

2012 2013 2014 2015 2016 2017E

North America Europe Asia and Oceania Rest of World

Total public spending on clean energy technology RD&D

Billion USD

© OECD/IEA 2018

China was a remarkable success story for electrification, bringing access to hundreds of millions in record time; India achieved electricity access for all its villages in 2018; today the challenge is concentrated in sub-Saharan Africa

Population without electricity access

Electrification success stories, but need to focus on sub-Saharan Africa

500

1 000

1 500

2 000

2 500

1985 2000 2017 2030

mill

ion

Rest of World

Sub-Saharan Africa

India

China

© OECD/IEA 2018

Conclusions

Global energy markets are undergoing fundamental changes, with major

implications for trade flows, investment, energy security & geopolitics

Faster energy-technology innovation can overcome sustainability challenges, while

spurring economic growth & improving energy security

Achieving universal access to electricity and clean cooking is imperative for global

economic growth, stability, health and gender equality

The IEA can help the G20 make well-founded energy decisions, by providing timely

data, rigorous analysis, an all-of-technology approach & real-world solutions