1. Laura Cozzi Helsinki, 23 November 2016

2. The global energy context today
Key points of orientation:
Middle East share in global oil production in 2016 at highest level for 40 years
Transformation in gas markets deepening with a 30% rise in LNG
Additions of renewable capacity in the power sector higher in than coal, gas, oil and nuclear combined
Energy sector in the spotlight as the Paris Agreement enters into force
Billions remain without basic energy services
There is no single story about the future of global energy; policies will determine where we go from here

3. Change in total primary energy demand
A new ‘fuel’ in pole position
Change in total primary energy demand
2 000
Mtoe
Rest of world
European
Union
Latin America
India US
Africa
China
1 500
Renewables
1 000
Renewables
500
Nuclear
Nuclear
Coal
Oil
Gas
Low-
carbon
Coal
Oil
Gas
Low-
carbon
Low-carbon fuels & technologies, mostly renewables, supply nearly half of the increase in energy demand to 2040

4. Greater policy support boosts prospects for solar PV and wind
Solar PV and wind generation, 2040
1 000
2 000
3 000
4 000
TWh
1 500
4 500
6 000
Additional in the
2 °C scenario
Increase in WEO-2016:
Rest of world
United States
China
WEO-2015
Solar PV
Wind power
Stronger policies on solar PV and wind help renewables make up 37% of electricity generation in 2040 in our main scenario – & nearly 60% in the 2 °C scenario

5. Amount of hours of curtailment in the European Union
Integration measures are key for more use of wind & solar PV
Amount of hours of curtailment in the European Union
10%
20%
30%
40%
Share of wind generation 2% 6% 8%
Share of solar PV generation 4%
4 months
1 month
Grid expansion & flexible plants can integrate wind & solar PV to close to 30% share.
Beyond, demand-side response and storage are needed, requiring market reform

6. The next frontiers for renewables are heat and transport
Renewable energy use by sector
300
600
900
1 200
Mtoe
Additional
to 2040
2015
Electricity
Heat
Transport
Today renewables in electricity and heat use are nearly at par;
by 2040, the largest untapped potential lies in heat and transport

7. A suite of tools to address energy security
Net oil imports
United States
European Union
China
India 20
mb/d
Net oil imports 15
Reduction in net oil imports due to:
Switch to electric and natural gas vehicles 10
Switch to renewables
Efficiency improvements 5
Increase in oil production
2014
2040
2014
2040
2014
2040
2014
2040
The energy transition provides instruments to address traditional energy security concerns, while shifting attention to electricity supply

8. Entering a period of greater oil market volatility
Approvals of new conventional crude oil projects in have fallen to the lowest level since the 1950s
If approvals remains low in 2017, an unprecedented effort will be needed to avoid a supply-demand gap in a few years’ time
US tight oil provides a potential lifeline, but cannot be relied upon to cover a major shortfall in the ‘baseload’ of oil supply
Without a pick-up in investment, or a rapid slowdown in demand growth, the stage is set for the next boom-and-bust cycle for oil

9. Change in oil demand by sector, 2015-2040 demand for passenger cars;
No peak yet in sight, but a slowdown in growth for oil demand
Change in oil demand by sector, -3 3 6
mb/d
Power
generation
Buildings
Passenger
cars
Maritime
Freight
Aviation
Petrochemicals
growth elsewhere pushes total demand higher
demand for passenger cars;
The global car fleet doubles, but efficiency gains, biofuels & electric cars reduce oil

10. A wave of LNG spurs a second natural gas revolution
Share of LNG in global long-distance gas trade
2000
525 bcm
2014
685 bcm
2040
1 150 bcm
LNG 53%
Pipeline
Pipeline
LNG 42%
Pipeline
LNG 26%
Contractual terms and pricing arrangements are all being tested as new LNG from Australia, the US & others collides into an already well-supplied market

11. Still a long way from a pathway to energy sector decarbonisation
Energy-sector CO2 emissions Gt 40
Central scenario 30
2 °C scenario
Early peak in emissions
Net-zero by the end of the century 20 10
2060
2080
2100
2050
2070
2090
1990
2000
2010
2020
2030
2040
Current pledges fall short of limiting the temperature increase to below 2 °C;
raising ambition to 1.5 °C is uncharted territory

12. Conclusions
Energy security remains a major concern; potential vulnerabilities are growing, so too is the range of tools available to address them
New oil market dynamics & subdued upstream investment are ushering in a period of greater market volatility
A wave of LNG is the catalyst for a second natural gas revolution, with far-reaching implications for gas pricing & contracts
The next chapter in the rise of renewables requires policies to push their role in heat & transport & changes in power market design
The Paris Agreement is a framework; its impact on energy depends on how its goals are translated into real government policy actions

13. www.worldenergyoutlook.org @IEA @IEABirol