global energy markets outlook versus post-paris agreement impact on south east … ·...
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© OECD/IEA 2011
Global energy markets outlook versus post-Paris Agreement Impact on South East Europe
Sylvia Elisabeth Beyer
International Energy Agency
Thessaloniki, 29 June 2016
© OECD/IEA 2011
A 2 °C pathway requires more technological innovation, investment & policy ambition
Massive additional investments in efficiency, renewables, nuclear power and other low carbon technologies are required to reach a 2 C pathway
16
20
24
28
32
36
40
2010 2015 2020 2025 2030 2035 2040
Gt
Trend post-COP 21
2 C Scenario
17.9 Gt
Energy efficiency
Fuel & technology switching in end-uses
Renewables
Nuclear
CCS
Other
CO2 emissions in a post-COP 21 world
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The share of gas in the global demand will increase in relation to other fossil fuels Scenarios 2030
Despite gas share in the primary energy (23%) is the same in NPS and 450ppm, in 450ppm gas is increasingly used to balance renewable in the power system,
which leads to a more rigid demand.
2030 (14 673 Mtoe)
2030 (16 349 Mtoe)
New Policy Scenario 450 Scenario
2013 (13 579 Mtoe)
Source: WEO 2015
Global gas share remains important
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Power is leading the transformation Global electricity generation by source
Driven by continued policy support, renewables account for half of additional global generation, overtaking coal around 2030 to become the largest power source
3 000 12 000 15 000
TWh
Change to 2040
2014 Renewables
Coal
Gas
Nuclear
Oil
Hydro
Wind
Solar
Other renewables
Of which:
6 000 9 000
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but – for oil & gas – the gains are offset by the move to more complex fields
Policies spur innovation to low-carbon
Costs in 2040 for different energy sources/technologies, relative to 2014
-60%
-40%
-20%
0%
20%
40%
60%
Solar PV Onshore wind
Efficient industrial heat production
Efficient lighting
Upstream oil and gas
Innovation reduces the costs of low-carbon technologies & energy efficiency,
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Other renewable power
Buildings
Nuclear
Transport
Appliances and lighting
Energy storage
Industry
Biofuels
Carbon capture and storage
More efficient coal-fired power
Electric vehicles
Solar PV and onshore wind
Technology Status today against 2DS targets
Not on track Accelerated improvement needed On track
Global clean energy deployment is still overall behind what is required to meet the 2 C goal, but recent progress on electric vehicles, solar PV and wind is promising
Acceleration of clean energy progress
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Mtoe
-300
0
300
600
900
1 200
Global demand growth moves to Asia
Change in energy demand in selected regions, 2014-2040
By 2040, India’s energy demand closes in on that of the United States, even though demand per capita remains 40% below the world average
European Union
United States
Japan Latin America
Middle East
Southeast Asia
Africa China India
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Energy demand
GDP
A new chapter in China’s growth story
Total primary energy demand & GDP in China
Along with energy efficiency, structural shifts in China’s economy favouring expansion of services, mean less energy is required to generate economic growth
3 000
6 000
9 000
2000 2010 2020 2030 2040
Ener
gy d
eman
d (
Mto
e)
20
40
60
GD
P (
trill
ion
do
llars
, PP
P)
Energy demand
GDP 1 000
2 000
3 000
4 000
Coal
Oil
Gas
Nuclear
Renewables
Energy demand
GDP
3 000
6 000
9 000
2000 2010 2020 2030 2040
Ener
gy d
eman
d (
Mto
e)
20
40
60
GD
P (
trill
ion
do
llars
, PP
P)
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Natural gas demand and supply in developing Asia, 2014 vs 2040
Developing Asia
Developing Asia accounts for almost half of the rise in global gas demand & 75% of the increase in imports, but gas faces strong competition from renewables & coal
300
600
900
1 200
1 500
Demand Production
bcm
Conventional
Unconventional
Additional to 2040
2014
Imports
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Oil rallies to 2016 high above $51/bbl
20
30
40
50
60
70
80
90
100
110
120
May 14 Nov 14 May 15 Nov 15 May 16
$/bblCrude Futures
Front Month Close
NYMEX WTI ICE Brent
Source: ICE, NYMEX
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0
100
200
300
400
500
600
700
800
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
- 23%
- 22%
Upstream oil & gas investment falling
Upstream oil and gas investment
Upstream oil and gas investment continues to fall, particularly in high-cost regions; this raises the prospect of price volatility in the future
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US still the world’s growth engine
In 2015-21, oil supply growth slows to 4.1 mb/d vs 11 mb/d in 2009-15;
US, Iran, Brazil & Canada see the biggest increases, drop in Russia and China
Selected sources of non-OPEC supply change 2015-21
- 400
- 200
0
200
400
600
800
1 000
1 200
1 400
kb/d
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Growth in global gas demand slows
Growth in gas demand slows as it faces greater competition in the power sector; yet it is the only fossil fuel that does not suffer a decline in its share of the energy mix
0
100
200
300
400
500
600
2009-15 2015-21
bcm
Change in world natural gas demand
Change in total gas demand
2.5 % 1.5 %
Change in per cent
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Growth in gas supply led by US and Australia
The United States & Australia rather than the more established exporters – Russia, Qatar & ASEAN – are the main source of production growth
-100
-50
0
50
100
150
200
United States Australia Qatar China Russia ASEAN EU
bcm
Change in natural gas production by region (bcm)
2009-15 2015-21
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Greater competition in EU gas market
US LNG is competitive in Europe
Oversupply in global LNG markets will intensify competition; flexible US LNG volumes are well-placed to compete in Europe
Nb: Based on cash costs and on forward curves as of June 7th 2016
0
2
4
6
8
10
12
2013 2015 2017
US
D/M
btu
European hub prices (TTF) Henry Hub indexed LNG delivered to Europe
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Algerian gas exports to OECD Europe
0
10
20
30
40
50
60
2010 2011 2012 2013 2014
bcm
Pipeline LNG
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Global LNG export capacity increases
LNG capacity additions will be led by the US & Australia over the next five years; projects in Canada & East Africa could also move ahead if demand & prices recover
0
40
80
120
160
200
2009-15 2015-21
bcm
Liquefaction capacity additions
Australia Qatar U.S. Others
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Impact on South East Europe
Developing Asia changes global demand: China’s transition to a more diversified & much less energy-intensive model for growth re-shapes energy markets
Natural gas landscape is changing: Ample low cost LNG supplies available for SEE markets – opportunity for competition and diversification
Low oil prices bring gains to consumers, but can also sow the seeds of future risks to energy security and energy transition
Paris Agreement: the energy transition is underway, but not on track and governments need to ring-fence policies against market swings