DSML2018-presentation Global Energy Outlook

Global energy Outlook 2018

1. © OECD/IEA 2018
The Global Energy Outlook and the
Increasing Role of India
Dr. Fatih Birol
Executive Director, International Energy Agency

IEA
Darbari Seth Memorial Lecture, 29 August 2018

2. © OECD/IEA 2018
A fast-changing energy landscape
Four large-scale upheavals in global energy set the scene:
India moves to centre stage and China’s new drive to “make the skies blue again” is
recasting its role in energy
The United States is turning into the undisputed global leader for oil & gas
Solar PV is on track to be the cheapest source of new electricity in many countries
The future is electrifying, spurred by cooling, electric vehicles & digitalisation
These changes brighten the prospects for affordable, sustainable energy &
require a reappraisal of approaches to energy security

3. © OECD/IEA 2018
India takes the lead as China’s energy growth slows

Old ways of understanding the world of energy are losing value as countries change roles.
420
Southeast
Asia
China
790
United States
-30
Japan
-50
Europe
-200
270
Central and
South America
485
Africa
135 Eurasia
480
Middle
East
India
1 005
Change in energy demand, 2016-40 (Mtoe)

4. © 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;
Petrochemicals are becoming increasingly important drivers of oil demand
0
0.4
0.8
1.2
1.6
2
2005-2014
mb
/d

2016 2017 2018 2019 2015

5. © OECD/IEA 2018
Electric cars are helping to transform energy use for passenger cars, slowing the pace of growth in
global oil demand: however, trucks, aviation, shipping & petrochemicals keep oil on a rising trend
Electric car fleet
EVs are in the fast lane, but oil demand still keeps rising
100
200
300
2016 2025 2040
Million cars

Other countries
United States
India
European Union
China
Passenger cars
Other sectors
4
8
12
16
Petrochemicals
Aviation and shipping
Trucks
mb
/d

- 4
2016-2040
0
Change in global oil demand

6. © OECD/IEA 2018
The future is electrifying
India adds the equivalent of today’s European Union to its electricity generation by 2040.
Electricity generation by selected region
Middle East
2 000 4 000 6 000 8 000 10 000
Africa
Southeast Asia
European Union
India
United States
China
TWh
2016 Growth to 2040

7. © OECD/IEA 2018
India is now one of the top destinations for energy investment, but more is needed
Energy investment in India amounted to over $80 billion in 2017, driven by renewables and electricity grids. With 18% of
the global population, but less than 5% of total investment, the region urgently needs to increase spending.
Energy investment in selected markets, 2017
USD 2017 billion
0 100 200 300 400
Southeast Asia
India
Russia
Europe
United States
China

8. © OECD/IEA 2018
After remaining flat for 3 years, global CO2 emissions rose again in 2017, to an all-time high
Global energy-related CO
2 emissions
After plateauing for 3 years, global emissions are on the rise again
CO
2 emissions
Increase in 2017
5
10
15
20
25
30
35 Gt CO
2

9. © OECD/IEA 2018
India’s per capita emissions remain well below the world average.
India emissions continue to grow, but per capita emissions remain among the lowest in the world.
CO
2 emissions per capita
0
2
4
6
8
10
12
14
16
United
States
Japan Middle
East
China European
Union
World
average
Southeast
Asia
India Africa
t CO
2
per capita

2016 2040

10. © OECD/IEA 2018
Energy is the leading source of all major air pollutants; Premature deaths due to outdoor air pollution
currently stand at around 3 million per year
Pollutant emissions, 2015
Air pollution is an energy problem
81 Mt 108 Mt 41 Mt
Fine particulate matter (PM
2.5)
Sulfur dioxide (SO
2)
Nitrogen oxides (NO
X)

>99% >99%
>99% >99% 85%
Coal
42%
Oil
62%
Biomass
39%
Non-energy Energy-related Coal Oil Gas Bioenergy Other

11. © OECD/IEA 2018
Led by India, many countries are on track to achieve full electrification by 2030, but – despite recent
progress – efforts in sub-Saharan Africa need to redouble
Population without electricity access
Electrification success in India, but work to do in sub-Saharan Africa
500
1 000
1 500
2 000
2 500
1985 2000 2017 2030
million

Rest of World
Sub - Saharan Africa
India
China

12. © OECD/IEA 2018
Air conditioning is driving electricity demand higher
Air conditioners could represent 35% of the growth in India’s electricity demand to 2050;
Currently 5% of households in India have air conditioners compared to over 90% in Japan and the US
Share of final electricity demand growth to 2050 in India
Cooling
35%
Lighting and appliances
23%
Other buildings
7%
Industry 24%
Other
11%

13. © OECD/IEA 2018
Technology progress and competition have driven down prices to record-low levels in several countries,
but best-practice policies addressing system integration are critically important for future deployment
Announced wind and solar PV average auction prices by commissioning date
Wind and solar PV transforming the power sector
0
20
40
60
80
100
120
140
160
180
201220132014201520162017201820192020
USD/MWh
Onshore wind
average auction
price
Solar PV average
auction price

14. © 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

15. © OECD/IEA 2018
Global energy – Implications for India

•Higher oil prices are hurting consumers & putting pressure on governments to
reintroduce subsidies; crucial that any subsidies are carefully targeted
•Energy investment is a critical issue for India – particularly in the power sector to
respond to rapid demand growth & sustainability challenges
•Renewables & energy efficiency can cost effectively tackle air pollution and fossil fuel
imports, but need best-practice policy to lock-in investment
•The IEA stands ready to support India navigate its energy transition, with data,
analysis, an “all fuels and technologies “ approach & real-world solutions