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.

Purchase report Press release Executive summary

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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