The AIE recently attended the presentation of the latest World Energy Outlook, report edited by the International Energy Agency (IEA) on the future trends and perspectives of the energy markets worldwide. Evelyne Schellekens reports on the main conclusions:
> Energy security is and remains a major concern.
> There are new oil market dynamics and thus we are entering a period of greater oil market volatility.
Oil security in the US has become their top priority, with the major goal to make the US independent of oil imports by increasing their own production! The IEA expects that they may reach their target because their domestic oil production is increasing tremendously. But there is another reason, the efficiency standards for oil in the US for the transport sector is resulting in decreasing the use of oil in this sector and reducing their import, if they will import at all! There will be an oil decrease demand in the US and maybe also in the EU but in other areas of the world, there is a growth demand of oil, such as in India and Southeast Asia (cheapest solution for them).
The oil production in the Middle East reached their highest production since 40 years. Even if we see a stronger penetration of passengers e-vehicles, it will not reduce the world oil demand! The growth of oil is coming from elsewhere: the maritime, freight (trucks in Asia in particular), aviation and petrochemicals sector, because we don’t have alternatives. There are no technologies or investment in efficiency standards for these sectors, e.g. trucks in Asia or planes.
> A major change occurred in the gas market = a silent revolution with the shale gas evolution in the US resulting in a 30% rise in LNG. A wave of LNG in Australia and US spurs a second natural gas revolution.
> Of all the power plants installed in the world last year, more than 50% was RES and which is higher than coal, gas, oil and nuclear together. RES is not anymore a romantic story but has become a very important issue.
RES in a first stage was successful thanks to governmental support but now we have 2 important challenges: RES needs to penetrate the transport and heat sector and these changes resulting in the market design. Cost of RES are reducing (wind by 30%, solar by 80%) but we can’t deny the importance of government policies. There are new government policies mainly in the US and China, but RES still needs governmental support.
Stronger policies on solar PV and wind help RES make up 37% of electricity generation in 2040. The RES use today is par in the electricity sector, heat and transport. In 2040 it will be mainly in electricity.
> The Paris agreement is a historic moment which puts the energy sector in the spotlight. It is a diplomatic answer, not solving everything but creating a very important framework. We need however to ensure that it is properly implemented in practice and taken seriously and consciously by the governments. It will be the governments who will have to transform it into real policies and policy actions to shape the future of tomorrow!
Want to read more?
> Download the summary from the International Agencies Website or take or short glimpse via the AIE Digital Library.
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