World Energy Outlook 2018
The gold standard of energy analysis
"Over 70% of global energy investments will be government-driven and as such the message is clear – the world’s energy destiny lies with decisions and policies made by governments."
Dr Fatih Birol, Executive Director, IEA
The World Energy Outlook 2018 examines future patterns of a changing global energy system at a time of increasing uncertainties and finds that major transformations are underway for the global energy sector, from growing electrification to the expansion of renewables, upheavals in oil production and globalisation of natural gas markets. Across all regions and fuels, policy choices made by governments will determine the shape of the energy system of the future.
WEO 2018 details global energy trends and what possible impact they will have on supply and demand, carbon emissions, air pollution, and energy access. Its scenario-based analysis outlines different possible futures for the energy system, contrasting the path taken by current and planned policies with those that can meet long-term climate goals under the Paris Agreement, reduce air pollution, and ensure universal energy access.
Overview
Major transformations are underway for the global energy sector, from growing electrification to the expansion of renewables, upheavals in oil production and globalization of natural gas markets. Across all regions and fuels, policy choices made by governments will determine the shape of the energy system of the future.
At a time when geopolitical factors are exerting new and complex influences on energy markets, underscoring the critical importance of energy security, the World Energy Outlook 2018, the International Energy Agency’s flagship publication, details global energy trends and what possible impact they will have on supply and demand, carbon emissions, air pollution, and energy access.
The WEO’s scenario-based analysis outlines different possible futures for the energy system across all fuels and technologies. It offers a contrast with different pathways, based on current and planned policies, and those that can meet long-term climate goals under the Paris Agreement, reduce air pollution, and ensure universal energy access.
Renewables Nuclear Industry Power Other Passenger cars Petrochemicals Other Power Other Renewables Nuclear Industry Power Other Passenger cars Petrochemicals Other Power Other Advanced Economies 482.4879462 -60.44911 Developing Economies 1106.697054 343.91272 Advanced Economies 28.69602512 13.42862 108.7717613 Developing Economies 378.5958054 372.58805 386.5455028 Advanced Economies -236.8691698 0 -216.5388106 Developing Economies 240.7396526 214.943869 287.7881189 Advanced Economies -335.860174 -19.46728548 Developing Economies 298.58279 115.5146683
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While the geography of energy consumption continues its historic shift to Asia, WEO 2018 finds mixed signals on the pace and direction of change. Oil markets, for instance, are entering a period of renewed uncertainty and volatility, including a possible supply gap in the early 2020s. Demand for natural gas is on the rise, erasing talk of a glut as China emerges as a giant consumer. Solar PV is charging ahead, but other low-carbon technologies and especially efficiency policies still require a big push.
In all cases, governments will have a critical influence in the direction of the future energy system. Under current and planned policies, modeled in the New Policies Scenario, energy demand is set to grow by more than 25% to 2040, requiring more than $2 trillion a year of investment in new energy supply.
The analysis shows oil consumption growing in coming decades, due to rising petrochemicals, trucking and aviation demand. But meeting this growth in the near term means that approvals of conventional oil projects need to double from their current low levels. Without such a pick-up in investment, US shale production, which has already been expanding at record pace, would have to add more than 10 million barrels a day from today to 2025, the equivalent of adding another Russia to global supply in seven years – which would be an historically unprecedented feat.
Currently producing fields Growth from other sources (at current project approval rates) Growth required from US shale Demand 2010 86.5735 0 0 86.5735 2011 86.6915 0 0 86.6915 2012 88.0329 0 0 88.0329 2013 89.6583 0 0 89.6583 2014 90.7119 0 0 90.7119 2015 92.4755 0 0 92.4755 2016 93.3613 0 0 93.3613 2017 94.8103 0 0 94.8103 2018 92.85276737 1.6354405 1.764392131 96.2526 2019 90.03695584 3.685653232 3.995690923 97.7183 2020 86.20588088 6.781717322 5.954001794 98.9416 2021 82.13472391 9.300932093 8.210443999 99.6461 2022 78.31312521 11.83482231 10.22405248 100.372 2023 74.60872882 14.15046548 12.2908057 101.05 2024 71.15144605 16.10702196 14.486532 101.745 2025 67.93687612 17.83632682 16.66679707 102.44
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In power markets, renewables have become the technology of choice, making up almost two-thirds of global capacity additions to 2040, thanks to falling costs and supportive government policies. This is transforming the global power mix, with the share of renewables in generation rising to over 40% by 2040, from 25% today, even though coal remains the largest source and gas remains the second-largest.
This expansion brings major environmental benefits but also a new set of challenges that policy makers need to address quickly. With higher variability in supplies, power systems will need to make flexibility the cornerstone of future electricity markets in order to keep the lights on. The issue is of growing urgency as countries around the world are quickly ramping up their share of solar PV and wind, and will require market reforms, grid investments, as well as improving demand-response technologies, such as smart meters and battery storage technologies.
Electricity markets are also undergoing a unique transformation with higher demand brought by the digital economy, electric vehicles and other technological change. As part of its deep-dive into the electricity sector this year, WEO 2018 also examines what impact of higher electrification in transportation, buildings and industry. The analysis finds that higher electrification would lead to a peak in oil demand by 2030, and reduce harmful local air pollutant. But it would have a negligible impact on carbon emissions without stronger efforts to increase the share of renewables and low-carbon sources of power.
New Policies Scenario Future is Electric Scenario Future is Electric Scenario with power sector decarbonisation Sustainable Development Scenario 2015 32.08090364 32.08090364 32.08096724 32.08090364 2016 32.05308108 32.05308108 32.05315272 32.05308108 2017 32.58035787 32.58035778 32.5804312 32.5807653 2018 32.93909656 32.95404177 32.86871255 32.71733187 2019 33.17156555 33.18123187 32.91365204 32.62204493 2020 33.26256826 33.30729764 32.72805063 32.24612668 2021 33.35711939 33.44167297 32.51759737 31.78543659 2022 33.45767932 33.57054692 32.26744861 31.27930334 2023 33.56998019 33.71883097 31.97036271 30.70696468 2024 33.7493454 33.90627872 31.7167824 30.15707734 2025 33.90241066 34.005235 31.36689451 29.53513792 2026 34.06102189 34.09889958 30.92197827 28.8296239 2027 34.20872238 34.18258865 30.37933259 28.03544919 2028 34.34611001 34.25147975 29.80999221 27.21715926 2029 34.48063928 34.32757652 29.2292091 26.39101221 2030 34.5759179 34.38346442 28.56390111 25.4815813 2031 34.66236687 34.40532487 27.87025399 24.55861866 2032 34.76359044 34.42273974 27.1324492 23.61460635 2033 34.87798126 34.44606391 26.42347156 22.70777584 2034 35.00541287 34.45096285 25.69057104 21.804754 2035 35.15715777 34.4746261 25.02207998 20.98192906 2036 35.28661531 34.47007025 24.36898323 20.20649606 2037 35.44471999 34.48620923 23.78972131 19.50990154 2038 35.61132131 34.5054074 23.22235886 18.8397596 2039 35.75775261 34.5107167 22.67089902 18.20241743 2040 35.88134505 34.49197 22.2054987 17.64690866
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The IEA’s Sustainable Development Scenario offers a pathway to meeting various climate, air quality and universal access goals in an integrated way. In this scenario, global energy-related CO2 emissions peak around 2020 and then enter a steep and sustained decline, fully in line with the trajectory required to achieve the objectives of the Paris Agreement on climate change.
But most emissions linked to energy infrastructure are already essentially locked-in. In particular, coal-fired power plants, which account for one-third of energy-related CO2 emissions today, represent more than a third of cumulative locked-in emissions to 2040. The vast majority of these are related to projects in Asia, where average coal plants are just 11-years-old on average with decades left to operate, compared with 40 years on average age in the United States and Europe.
The analysis reviewed all current and under-construction energy infrastructure around the world – such as power plants, refineries, cars and trucks, industrial boilers, and home heaters – and finds those will account for some 95% of all emissions permitted under international climate targets in coming decades.
“This means that if the world is serious about meeting its climate targets then, as of today, there needs to be a systematic preference for investment in sustainable energy technologies. But we also need to be much smarter about the way that we use our existing energy system. We can create some room for manoeuver by expanding the use of carbon capture, utilisation and storage (CCUS), hydrogen, improving energy efficiency, and in some cases, retiring capital stock early. To be successful, this will need an unprecedented global political and economic effort,” said Dr Birol.
NPS Efficiency and fossil fuel subsidy reform Renewables and reducing least-efficient coal power Reducing upstream oil and gas methane Other: nuclear, CCUS, fuel-switching SDS Blank 2010 34.17448404 0 0 0 0 34.17448404 2011 34.9962676 0 0 0 0 34.9962676 2012 35.44435031 0 0 0 0 35.44435031 2013 36.03195415 0 0 0 0 36.03195415 2014 36.04807513 0 0 0 0 36.04807513 2015 35.9802664 0 0 0 0 35.98026645 2016 35.91477514 0 0 0 0 35.9147751 2017 36.51196493 0 0 0 0 36.51230107 2018 36.90357272 0.172019338 0.053420081 0.134164992 0.037877464 36.50609085 36.50609085 2019 37.14517562 0.317846241 0.224983018 0.264517846 0.081307757 36.25652076 36.25652076 2020 37.1861456 0.60773087 0.407560503 0.325265698 0.170901993 35.67468654 35.67468654 2021 37.22191269 0.874699462 0.675508282 0.438438512 0.233738534 34.9995279 34.9995279 2022 37.2803588 1.177837665 0.929203478 0.543498095 0.335078253 34.29474131 34.29474131 2023 37.35392075 1.53328774 1.218085048 0.652323083 0.440810027 33.50941485 33.50941485 2024 37.48001628 1.889209187 1.530862751 0.755693607 0.550888782 32.75336195 32.75336195 2025 37.58066605 2.242463651 1.844966091 0.868219866 0.715606696 31.90940975 31.90940975 2026 37.70892846 2.611732989 2.237584517 0.921922533 0.915321211 31.02236721 31.02236721 2027 37.8273994 2.955698403 2.674911292 0.982211707 1.164669754 30.04990824 30.04990824 2028 37.93080459 3.318181189 3.137229867 1.047319548 1.383842959 29.04423103 29.04423103 2029 38.03586084 3.702955529 3.500798102 1.088392971 1.700565061 28.04314917 28.04314917 2030 38.10275445 4.106547876 3.900462132 1.121196915 2.013980737 26.96056679 26.96056679 2031 38.15551294 4.502509663 4.267210918 1.077776905 2.311072807 25.99694265 25.99694265 2032 38.21950677 4.84638533 4.704544232 1.028266188 2.626660932 25.01365009 25.01365009 2033 38.29673313 5.22070066 5.096197833 0.97208698 2.940713693 24.06703397 24.06703397 2034 38.38562592 5.538661 5.537665842 0.922259455 3.265527038 23.12151258 23.12151258 2035 38.49905902 5.826232151 5.951822145 0.876934616 3.579411329 22.26465878 22.26465878 2036 38.58741218 6.083774475 6.351780175 0.830523063 3.865189364 21.4561451 21.4561451 2037 38.70448205 6.353153681 6.731698422 0.777978065 4.108222321 20.73342956 20.73342956 2038 38.82684755 6.565146619 7.139111304 0.72446727 4.363177992 20.03494436 20.03494436 2039 38.92703202 6.768906366 7.543644044 0.680598456 4.563135654 19.3707475 19.3707475 2040 39.00186675 6.971641488 7.897265092 0.636764603 4.704953041 18.79124253 18.79124253
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