The global energy outlook and what it means for Japaneneken.ieej.or.jp/data/6954.pdf · Long-term energy demand set to grow fast in Asia. Change in energy demand in selected regions,

© OECD/IEA 2016

The global energy outlook

and what it means for Japan

Paul Simons

Deputy Executive Director, International Energy Agency

Japan IDR launch

Tokyo, 21 September 2016

IEEJ：October 2016 © IEEJ2016

Long-term energy demand set to grow fast in Asia

Change in energy demand in selected regions, 2014-2040

Energy use worldwide grows by one-third to 2040, driven by Asia.

Mto

e

-300

0

300

600

900

1 200

European Union

United States

Japan Latin America

Middle East

Southeast Asia

Africa China India


© IEA 2016

2009-15

2015-21

© OECD/IEA, 2016(kb/d)

-179 -76138 52

283

27

164 215

104 155

Americas

Africa

Middle East

Europe

FSU

969826

Asia/Pacific

Global oil demand set to grow slower in the medium term

+1.2% 2016-21 versus 1.7% in previous 5-year period, as efficiency gains trim momentum

Oil demand growth projections by region


0

100

200

300

400

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600

2009-15 2015-21

bcm

Also natural gas demand growth slows

Change in global natural gas demand

Gas faces greater competition in the power sector; yet it is the only fossil fuel that does not suffer a decline in its share of the energy mix.


Unprecedented wave of investment cuts in the upstream oil and gas industry

Global upstream capital spending 2010-2017

Cost deflation, efficiency improvements and reduced activity levels might lead for the first time to three consecutive years of investment decline

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100

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900 2

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11

20

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17

USD

(2

01

5)

bill

ion

-24%

-25%


There is no “second” China waiting to drive medium-term coal use

Global coal demand by region, 2000-2020

Strong growth in coal use in India & Southeast Asia to offset declines in the EU & the US, but does not match the rise seen over last decade in China.

1 000

2 000

3 000

4 000

5 000

6 000

Mtce

China

India

Southeast Asia

United States

European Union

Rest of world

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020


© OECD/IEA 2016

Global energy-related CO2 emissions

IEA analysis shows renewables, led by wind, and improvements in energy efficiency were key to keeping emissions flat for a second year in a row.

5

10

15

20

25

30

35 Gt

1975 1980 1990 2000 2010 2015

Global economic downturn

Dissolution of Soviet Union Second

oil shock

1985 1995 2005

Slowing fossil fuels demand growth – have energy-related CO2 emissions peaked?


© OECD/IEA 2016

Indexed cost of onshore wind, utility scale PV and LED lighting

The falling cost of clean technologies opens new opportunities, but support mechanisms need to be reviewed as costs decline.

The cost of clean energy continues to fall

0%

20%

40%

60%

80%

100%

120%

2008 2009 2010 2011 2012 2013 2014 2015

Ind

exed

co

st (

20

08

=10

0%

)

Onshore wind Solar PV - utility scale LEDs

)


© OECD/IEA 2016

Energy efficiency & renewables will deliver most of the additional emissions reductions required for a 2°C pathway, but all forms of clean technology are needed

16

20

24

28

32

36

40

2010 2015 2020 2025 2030 2035 2040

Gt

2°C Scenario

17.9 Gt

Energy efficiency

Fuel & technology switching in end-uses

Renewables

Nuclear

CCS

Other

Trend post-COP21

Greater efforts are still needed to reach a 2°C pathway


© OECD/IEA 2016

From global energy context to

a focus on Japan’s energy policy

Turning to Japan IEEJ：October 2016 © IEEJ2016

© OECD/IEA 2016

CO2 emissions in relation to GDP and total primary energy supply

Japan has decoupled energy demand from economic growth, but CO2 emissions have jumped since 2009.

How can Japan contribute?


© OECD/IEA 2016

Monthly electricity generation by source, July 2010 to March 2016

Increased use of fossil fuels helped maintain electricity supply, but raised CO2 emissions, import dependence and electricity prices.

Electricity generation dominated by fossil fuels, especially since nuclear shutdown


© OECD/IEA 2016

To reach 2030 INDC (-26% from 2013), fossil fuels use must decline. The outlook also foresees nuclear restarts and a strong increase in renewables.

Electricity demand and electricity supply by source

Electricity outlook to 2030


© OECD/IEA 2016

2030 INDC: -26% from 2013

Meeting the INDC relies on improving energy efficiency, restarting nuclear power plants and increasing renewable energy supply

Efficiency: Japan can build on its successful policies and measures for industry, vehicles and appliances. New requirement for buildings to be introduced.

Nuclear: safety approvals and public acceptance must be won

Renewables: reducing cost and removing technical and non-technical barriers essential

2050 objective: -80%

The leap from -26% by 2030 to -80% by 2050 requires new technology

Japan is world leader in several low-carbon technology sectors already

National Strategy on Energy Technology Innovation to 2050 adopted in April 2016

Plans to cut GHG emissions by 2030 and 2050


© OECD/IEA 2016

Reform in 2015-20 aims to:

Secure stable supply of electricity, suppress electricity prices, and expand consumer choice and business opportunities.

Suggestions for further steps

Build more transmission lines and frequency conversion capacity

Develop the Organization for Cross-regional Co-ordination of Transmission Operators (OCCTO) into a fully independent Transmission System Operator

Establish regional price zones to give sufficiently strong signals for locating power generation where it is most valuable

Develop a liquid and transparent wholesale electricity market, including a vibrant power exchange

Develop demand side response

Ensure the regulator and competition authority have sufficient independence and resources

Electricity market reform very welcome


© OECD/IEA 2016

Gas infrastructure 2015

Combination of domestic and international market reform efforts should benefit Japanese gas consumers

IEA also welcomes natural gas market reform


© OECD/IEA 2016

RES can help reduce CO2 emissions and import dependence

2012 feed-in tariffs led to fast growth in renewable electricity generation

Growth concentrated to some regions and solar PV. Cost control and grid integration became concerns.

To control costs:

tariffs for new facilities are reviewed every year

comprehensive reform of the feed-in tariff system and other renewable energy support policies is underway

auctions for large solar PV projects will be introduced in April 2017.

An independent body should be designated to address technical issues with grid integration of variable renewables

Renewable energy receiving a boost


© OECD/IEA 2016

Take measures to meet the 2030 and 2050 objectives

increase low-carbon sources in TPES and electricity supply, and address safety, costs and public acceptance

continue to gradually introduce fiscal incentives and stricter requirements for energy efficiency

promote Japan’s proven potential for innovation in low-carbon technologies.

Fully implement electricity and gas market reforms.

Continue to support renewable energy, control the costs and aim for a more balanced capacity mix by region and technology.

IEA recommendations: how can Japan meet its challenges?


Contact :[email protected]

Documents

The global energy outlook and what it means for Japaneneken.ieej.or.jp/data/6954.pdf · Long-term energy demand set to grow fast in Asia. Change in energy demand in selected regions,