World Energy Outlook 2022
Laura Cozzi, Chief Energy Modeller
Tim Gould, Chief Energy Economist
IEEJ International Energy Symposium, 11 November 2022

An energy shock of unprecedented breadth and complexity
Percentage of countries with annual inflation greater than 6%1973
oil crisis

1979
oil crisis2022
energy crisis

100%
80%
60%
40%
20%

1970

1975

1980

1985

1990

Advanced economies

1995

2000

2005

2010

2015

2020

Emerging and developing economies

Exacerbating already tight energy markets, the Russian invasion of Ukraine has tipped the world into a global energy
crisis of unprecedented breadth and complexity, affecting all countries and the vulnerable in particularGovernment responses are fast-tracking the clean energy economy
Clean energy investment in the Stated Policies Scenario

2Trillion
USD(2021)

12015

2016

2017

2018

2019

2020

2021

2030

The US Inflation Reduction Act, the EU’s Fit for 55 package, Japan’s GX, China’s new clean energy targets and India’ssolar revolution propel clean energy investment to new highs, but $4 trillion is needed by 2030 to be on track for 1.5 °C

Electricity is turning the cornerin generation,
20212022
2025
Change inChangegenerationin the STEPS,
20212030

Power sector CO2 emissions

3 000

16TWhGt
2 000

121 000
8

Emerging market anddeveloping economies

04
Advanced economies-1 000Solar PV

Wind

NuclearNaturalgasCoal

1990

2020

2050

As
As markets
markets rebalance,
rebalance, thethe upside
upside forfor coal
coal isis temporary
temporary as
as renewable
renewable generation
generation rises
rises byby 90%
90% toto 2030
030 ; the peak inpower sector emissions needs to be followed by a much steeper decline to be consistent with global climate goals

Clean energy manufacturers prepare the ground for faster transitions
Announced manufacturing capacity pipeline compared with NZE Scenario deployment in 2030

100%

NZE deployment in 2030

75%
50%
25%

Solar PVBatteries

Electrolysers

2021

Announced pipeline to 2030

Lithium

Announced plans to scale up clean energy manufacturing capacity help to accelerate cost reductions and would,
in some cases, approach the levels needed to put the world on track with a 1.5 °C pathway

The era of natural gas demand growth is coming to an end
Change in global gas trade,2021-2030

Global natural gas demand in the Stated Policies Scenario
200

6 000bcmbcm

4 500

toAsia100
Other

Advanced economies

Are we entering aGolden Age of Gas? (2011)

3 000

Russia to China

0Emerging market anddeveloping economies

1 500-100

Russia toEuropean
Union

toEuropean
Union
Other-200
2010

2020

2030

2040

2050

Pipeline

LNG

Strengthened policies, high near-term prices & energy security concerns bring the “Golden Age of Gas” to a close
but LNG remains crucial amid lower pipeline flows to Europe & robust import demand in Asia

Peak fossil fuel demand is coming this decade
Fossil fuel demand in the Stated Policies Scenario, 1900-2050
600
EJ

Historical

Projected450

OilOil

300

Coal

Coal

150

Natural gas
1900

1950

Natural gas

2000

2050

Today’s policy settings are now sufficiently strong that they produce a distinct peak in fossil fuel use before 2030

Russia faces a much-diminished role in international energy
Russian oil and gas exports in the Stated Policies Scenario
Oil exports

Gas exports

9375

mb/d

WEO
2021
2022

bcm
WEO
2021
2022
6250

3125

2010

2015

2020

2025

2030

2010

2015

2020

2025

2030

Russia’s share of global oil and gas trade halves by 2030, with exports from the United States, Middle East,
South America and East Africa – and enhanced efforts to reduce demand – filling the gap

A new energy security paradigm is needed for secure transitions
Scale up clean energy
to scale back fossil fuels

Lift emerging economies into thenew energy economy

Manage new vulnerabilities

Investment
Energyininvestment,
NZE Scenario,
20212030

Cost of capital for solar PV, 2021

Share of top 3 countries in mineral production

Trillion 4USD(2021) 3

16%

100%

12%

75%

28%

50%

4%

25%9x2-3x

1.5x
1Fossilfuels

Cleanenergy

Advanced
economies

Emerging &developing
economies

Lithium Cobalt Nickel

Rareearths

For the duration of energy transitions, the clean energy and fossil fuel systems are both required to deliver
energy services; assessing & managing the evolving co-existence of both systems is crucial

Keeping the door to 1.5 °C open
Global energy related CO2 emissions
50

Pre-Parisbaseline

Gt CO240

StatedPolicies
Scenario

30

20

Announced
Pledges
Scenario

10Net Zero
Emissions by2050 Scenario
1990

2000

2010

2021

2030

2050

Policy and technology progress since 2015 has shaved 1 °C off projected warming, a step in the right direction;
but much more needs to be done in order to avoid severe climate disruptions

Conclusions•Government responses to today’s energy crisis are marking this out as a major turning point towards acleaner and more secure energy system•

Russia’s invasion of Ukraine is prompting a wholesale reorientation of energy trade & investment flows,leaving Russia with a much-diminished position in global energy•

Global fossil fuel use has grown alongside GDP since the Industrial Revolution: putting fossil fuel demand
into reverse will be a pivotal moment in energy history•A massive surge in clean energy investment is vital to keep the door to 1.5 °C open; without this, avoiding
renewed price volatility would require higher oil & gas investment, putting climate goals in jeopardy•

Today’s energy crisis provides a stark reminder of why we have to press ahead with energy transitions,& the importance of making change inclusive, affordable & secure