©OECD/IEA2017

London, 14 November 2017

©OECD/IEA2017

Tippingtheenergyworldoffitsaxis

n Fourlarge-scaleupheavalsinglobalenergysetthesceneforthenewOutlook:Ø TheUnitedStatesisturningintotheundisputed globalleaderforoil&gas

Ø SolarPVisontracktobethecheapestsourceofnewelectricityinmanycountries

Ø Chinaisswitchingtoaneweconomicmodel&acleanerenergymix

Ø Electricity isbroadeningitshorizon,spurredbycooling,electricvehicles&digitalisation

n Thesechangesbrightentheprospectsforaffordable,sustainableenergy&requireareappraisalofapproachestoenergysecurity

n Therearemanypossiblepathwaysahead&manypotentialpitfallsifgovernmentsorindustrymisreadthesignsofchange

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India takes the lead, as China energy growth slows

Changeinenergydemand,2016-40(Mtoe)

Oldwaysofunderstandingtheworldofenergyarelosingvalueascountrieschangeroles:

India1005

420

SoutheastAsia

China790

UnitedStates-30

Japan-50

Europe-200

270CentralandSouthAmerica

485Africa

135 Eurasia

480MiddleEast

theMiddleEastisfastbecomingamajorenergyconsumer&theUnitedStatesamajorexporter

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.. as China moves global energy markets, again

Changeinworldenergydemandbyfuel

Worldwidedemandgrowthto2040wouldbetwiceashighwithout energyefficiencyimprovements:

Coal(Mtce)

0

500

1000

1500

2000

2500

- 5001990-2016 2016-40

Oil (mb/d)

6

12

18

24

30

1990-2016 2016-40

Gas(bcm)

400

800

1200

1600

2000

1990-2016 2016-40

Low-carbon(Mtoe)

400

800

1200

1600

2000

1990-2016 2016-40

A world in motion..

globaltrendsareshapedbyChina’sswitchtowardsnaturalgas&low-carbonfuels

OthercountriesChina

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GW

Solar PV forges ahead in the global power mix

Globalaverageannualnetcapacityadditionsbytype

China,India&theUSleadthechargeforsolarPV,whiletheEUisafrontrunnerforonshore&offshorewind:risingsharesofsolar&windrequiremoreflexibilitytomatchpowerdemand&supply

RenewablesNuclear

GasCoal

RenewablesNuclear

GasCoal

20 40 60 80 100 120 140 160GW

2010-2016

2017-2040

SolarPV Wind

SolarPV Wind Other

Other

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The future is electrifying

Electricitygenerationbyselectedregion

Indiaaddstheequivalentoftoday’sEuropeanUniontoitselectricitygenerationby2040,

MiddleEast

2000 4000 6000 8000 10000

Africa

SoutheastAsia

EuropeanUnion

India

UnitedStates

China

TWh2016 Growthto2040

Sourcesofglobalelectricitydemandgrowth

Industrial motors

Cooling

Largeappliances

Connected&small

appliances

Electric vehicles

Other

whileChinaaddstheequivalentoftoday’sUnitedStates

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Electriccarsarehelpingtotransformenergyuseforpassengercars,slowingthepaceofgrowthinglobaloildemand:however,trucks,aviation,shipping&petrochemicalskeepoilonarisingtrend

Electriccarsarehelpingtotransformenergyuseforpassengercars,slowingthepaceofgrowthinglobaloildemand: however,trucks,aviation,shipping&petrochemicalskeepoilonarisingtrend

Electriccarsarehelpingtotransformenergyuseforpassengercars,slowingthepaceofgrowthinglobaloildemand:however,trucks,aviation,shipping&petrochemicalskeepoilonarisingtrend

EVs are on the way, but oil demand still keeps rising

Electriccarfleet

100

200

300

2016 2025 2040

Millioncars Othercountries

UnitedStatesIndiaEuropeanUnionChina

PassengercarsOthersectors

Changeinglobaloildemand

4

8

12

16

Petrochemicals

Aviationandshipping

Trucks

mb/d

- 42016-2040

0

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25

30

35

Shale makes US the undisputed leader for oil & gas

OilandgasproductionintheUnitedStates

TheUSisalreadyswitchingtobecomeanetexporterofgas&becomesanetexporterofoilinthe2020s,helpedalsobythedemand-sideimpactoffuelefficiency&fuelswitching

5

10

15

20

1980 1990 2000 2010 2020 2030 2040

mboe/d ShaleoilShalegasOtherunconventionalsConventional oil&gas

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706bcmin2016

Globalgastrade

Asia’sgrowinggasimportrequirementsarelargelymetbyLNG,withexportsfromtheUSacceleratingashifttowardsamoreflexible,liquidglobalmarket

LNG ushers in a new global gas order

GasexportersGasimporters

39%shippedbyLNG

1230bcmin2040

59%shippedbyLNG

AustraliaRussia&Caspian

MiddleEast

Other

Africa

US&Canada

AustraliaRussia&Caspian

MiddleEast Other

AfricaUS&Canada

Asia37%

Europe52%

Other

Asia60%

Europe35%

OtherOther Asia

China

Japan&Korea

Japan&Korea

China

Other Asia

Europe

Europe

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A new strategy for energy & sustainable development

Sustainable Development

Scenario

TheSustainableDevelopmentScenarioreducesCO2 emissionsinlinewiththeobjectivesoftheParisAgreement,whilealsotacklingairpollutionandachievinguniversalenergyaccess

NewPoliciesScenario

SustainableDevelopmentScenario

GlobalCO2 emissionsbyscenario

10

20

30

40

2000 2010 2020 2030 2040Gt

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Stronger policies for a more sustainable world

580bcmadditionalgasdemand

2timesmoreefficientthantoday

3250GWglobal solarPVcapacity

875millionelectric

vehicles

Only15%additionalinvestmentisrequiredto2040toachievetheSustainableDevelopmentScenario,withtwo-thirdsofenergysupply investmentgoingtoelectricitygeneration&networks

TheSustainableDevelopmentScenarioin2040

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Conclusions

n Theoil&gasresurgenceoftheUnitedStatesisshakinguptheestablishedorder,withmajorimplicationsformarkets,tradeflows,investment&energysecurity

n Theversatilityofnaturalgasmeansthatitiswellplacedtogrow,butitcannotaffordpricespikesoruncertaintyovermethaneleaks

n China’scontinuestoshapeglobaltrends,butinnewwaysasits“energyrevolution”drivescostreductionsforawiderangeofcleanenergytechnologies

n Ourstrategyforsustainableenergyshowsthatconcertedactiontoaddressclimatechangeisfullycompatiblewithglobalgoalsonuniversalaccess&airquality

n Electrification&digitalisationarethefutureformanypartsoftheglobalenergysystem,creatingnewopportunitiesbutalsorisksthatpolicymakershavetoaddress

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