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Tokyo, 14 December© OECD/IEA 2017

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Tipping the energy world off its axis
 Four large-scale upheavals in global energy set the scene for the new Outlook: The United States is turning into the undisputed global leader for oil & gas
 Solar PV is on track to be the cheapest source of new electricity in many countries
 China’s new drive to “make the skies blue again” is recasting its role in energy The future is electrifying, spurred by cooling, electric vehicles & digitalisation

 These changes brighten the prospects for affordable, sustainable energy &require a reappraisal of approaches to energy security

 There are many possible pathways ahead & many potential pitfalls ifgovernments or industry misread the signs of change© OECD/IEA 2017

IEEJ：December 2017 © IEEJ2017

India takes the lead, as China energy growth slows
Change in energy demand, 2016-40 (Mtoe)

135 Eurasia

Europe-200
United States-30

MiddleEast
485

Central andSouth America

270

Africa

480

India
1 005

China790

Japan-50

420

SoutheastAsia

Old ways of understanding the world of energy are losing value as countries change roles:
the Middle East is fast becoming a major energy consumer & the United States a major exporter© OECD/IEA 2017

IEEJ：December 2017 © IEEJ2017

A world in motion..
Change in world energy demand by fuelCoal (Mtce)

Oil (mb/d)

Gas (bcm)

Low-carbon (Mtoe)

2 500

30

2 000

2 000

2 000

24

1 600

1 600

1 500

18

1 200

1 200

1 000

12800

800

500

6400

400

0

1990-2016 2016-40- 500
1990-2016 2016-40

1990-2016 2016-40

China

1990-2016 2016-40

1990-2016 2016-40

Other countries

Low-carbon sources & natural gas meet 85% of the increase in global demand:
China’s switch to a new economic model & a cleaner energy mix drives global trends© OECD/IEA 2017

IEEJ：December 2017 © IEEJ2017

Solar PV forges ahead in the global power mix
Global average annual net capacity additions by type© OECD/IEA 2017

IEEJ：December 2017 © IEEJ2017

Renewables enter the mainstream
Share of renewables in total capacity additions by region in the New Policies Scenario

Wind

European Union
China

Solar PVKorea

Bioenergy

C & S AmericaJapanHydro

United States

Otherrenewables

IndiaAfrica
Southeast Asia
Middle East
20%40%60%80%

Two-thirds of global investment in new capacity goes to renewables,
bringing their average share in global power generation up to 40% by 2040
© OECD/IEA 2017

IEEJ：December 2017 © IEEJ2017

The future is electrifying
Electricity generation by selected region

Sources of global
electricity demand growth

China
United States
India
OtherEuropean Union
Southeast Asia

Electric vehicles

Industrial
motorsLargeappliances

Middle East

Connected& small
appliances

AfricaCoolingJapan
2 000
2016

4 000

6 000

8 000

10 000
TWhGrowth to 2040

India adds the equivalent of today’s European Union to its electricity generation by 2040,
while China adds the equivalent of today’s United States© OECD/IEA 2017

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EVs are on the way, but oil demand still keeps risingElectric car fleet

Million cars

300

Change in global oil demand
16

Other countries
Japan

12United States
200

India

Petrochemicals

8European Union

Aviation and shipping

China

4

100
mb/dTrucks
0-4
2016

2025

2040

Passenger cars
Other sectors
2016-2040

Electric cars are helping to transform energy use for passenger cars, slowing the pace of growth inglobal oil demand: however, trucks, aviation, shipping & petrochemicals keep oil on a rising trend© OECD/IEA 2017

IEEJ：December 2017 © IEEJ2017

US becomes undisputed leader of oil & gas production
Oil and gas production in the United States

mboe/d35

Shale oil

30

Shale gas
Other unconventionals

25
mboe/dConventional oil & gas

20
151051980

1990

2000

2010

2020

2030

2040

The US is already switching to become a net exporter of gas & becomes a net exporter of oilin the 2020s, helped also by the demand-side impact of fuel efficiency & fuel switching© OECD/IEA 2017

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A new strategy for energy & sustainable development

Gt

Global CO2 emissions by scenario

40

New Policies Scenario

30
SustainableDevelopmentScenario

20
Sustainable Development Scenario
102000

2010

2020

2030

2040

The Sustainable Development Scenario reduces CO2 emissions in line with the objectives of theParis Agreement, while also tackling air pollution and achieving universal energy access© OECD/IEA 2017

IEEJ：December 2017 © IEEJ2017

Stronger policies for a more sustainable world
The Sustainable Development Scenario in 2040

2875

times
more efficientthan today

million electricvehicles

3 250
global solar PV capacity

GW

580

bcm
additional gas demand

Only 15% additional investment is required to 2040 to achieve the Sustainable Development Scenario,
with two-thirds of energy supply investment going to electricity generation & networks© OECD/IEA 2017

IEEJ：December 2017 © IEEJ2017

Conclusions
 The oil & gas boom in the United States is shaking up the established order, with major

implications for markets, trade flows, investment & energy security
 The versatility of natural gas means that it is well placed to grow, but it cannot afford

price spikes or uncertainty over methane leaks
 China continues to shape global trends, but in new ways as its “energy revolution”

drives cost reductions for a wide range of clean energy technologies
 Our strategy for sustainable energy shows that concerted action to address climatechange is fully compatible with global goals on universal access & air quality
 Electrification & digitalisation are the future for many parts of the global energy system,

creating new opportunities but also risks that policy makers have to address© OECD/IEA 2017

IEEJ：December 2017 © IEEJ2017

iea.org/weo

Contact :report@tky.ieej.or.jp© OECD/IEA 2017