Summary of the key findings of investigators regarding global energy trends and scenarios.
Every year the International Energy Agency (IEA) produces a hefty book reflecting worldwide trends and scenarios in energy. The 40th edition of this World Energy Outlook was published in November. We have summarised the investigators’ key findings.
Four significant trends noted by the IEA are:
- China’s impact on the global energy market, partly due to its large economy and partly due to its energy policy;
- The growing share of shale gas and shale oil in the US is having a pronounced effect on global energy streams;
- Sustainable technology such as wind and solar power have become much less expensive;
- Electricity is gaining a greater share of the world’s total energy consumption.
The World Energy Outlook describes future scenarios that countries can use when developing their climate and energy policy. In the baseline scenario, which assumes that the proposed policy is indeed implemented, a sharp increase in supply and demand of natural gas is predicted. The IEA takes the view that demand for natural gas will rise in China and India in particular, for various reasons including the desire to combat severe local air pollution. The development of the Chinese economy is crucial in this regard. The size of the economy and the associated energy is now so large that a relatively small change has a significant effect at global level.
The US has an important part to play on the gas supply side because it is increasing its exports of liquid natural gas (LNG). This has major consequences for the way in which LNG is traded. The market is becoming more diverse and free; the main factor in determining the destination of liquid gas are price differences. Growing American exports of LNG also increases regional security of supply because more gas is coming onto the market in addition to traditional gas.
Effects of climate targets
The IEA has also analysed the effects of climate targets on energy demand. In the baseline scenario for Europe, the proposed policy has been converted into the target of reducing CO2 emissions by 40% in 2030. This is necessary in order to meet the agreements set out in the Paris Climate Agreement.
This means that the EU member states are well ahead of other countries. Many countries in the world will not be able to achieve the Paris climate targets by means of the proposed policy. The IEA has set up a separate scenario in order to meet the UN’s broader Sustainable Development Goals which include the targets from the Paris climate agreement but also include access to energy and clean air. Among other things this assumes significant electrification of passenger transport, the closure of coal-fired power stations and a significant rise in the share of sustainable energy, along with a rise in demand for natural gas.
The significant rise in sustainable energy in this scenario is partly due to the sharp fall in costs in this segment. This can also be seen in the Netherlands, in particular with regard to wind and solar power. The volume of wind energy is expected to rise sharply in response to a further fall in costs. The Dutch gas sector is making an active contribution to solutions rendering this stream in the energy system cost-effective, for example by converting surpluses into hydrogen or methane, the main component of natural gas. These forms of renewable gas, and also green gas, were mentioned in the World Energy Outlook for the first time this year.
Read more: https://www.iea.org/weo2017/