© OECD/IEA 2016 © OECD/IEA 2015

Trends in global gas markets: implications of decarbonization policies

Marc-Antoine Eyl-Mazzega

Russia Programme Manager

Energetyka conference

Saint-Petersburg, 10-11 November 2016

© OECD/IEA 2016

Even greater efforts in efficiency, renewables, nuclear power and other low carbon technologies would be required to get close to a 1.5 °C pathway

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2010 2015 2020 2025 2030 2035 2040

Gt

Trend post-COP 21

2 °C Scenario

17.9 Gt

Energy efficiency

Fuel & technology switching in end-uses

Renewables

Nuclear

CCS

Other

CO2 emissions in a post COP 21 world

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

© OECD/IEA 2016

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.

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e

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European Union

United States

Japan Latin America

Middle East

Southeast Asia

Africa China India

© OECD/IEA 2016

Energy demand

GDP

A new chapter in China’s growth story with regional and global impacts

Along with energy efficiency, structural shifts in China’s economy favouring expansion of services, mean less energy is required to generate economic growth

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Energy demand

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Total primary energy demand & GDP in China Energy demand in China (WEO 2015)

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Coal

Oil

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© 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…

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exed

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Onshore wind Solar PV - utility scale LEDs

)

© OECD/IEA 2016

Gas has a growing role in a low carbon future… but methane emissions must be reduced

© OECD/IEA 2016

China is an energy efficiency heavyweight

Primary energy savings from efficiency gains since 2000 and renewable energy supply in China

Dramatic progress on energy efficiency saved 350 million tonnes of coal in 2014. Energy savings are as large as China’s renewable energy supply.

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2008 2009 2010 2011 2012 2013 2014

Mtoe

Energy savings

Renewable energy

supply

© OECD/IEA 2016

Renewable capacity additions to 2021

China, USA and EU led strong additional renewables deployment

© OECD/IEA 2016

Growth in global gas demand slows

Growth in gas demand slows as it 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

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2009-15 2015-21

bcm

Change in world natural gas demand

Change in total gas demand

2.5 % 1.5 %

Change in per cent

© OECD/IEA 2016

China drives increase in global gas demand

US gas demand growth slows sharply, driven by stagnation in the power sector; EU gas demand gradually recovers on coal & nuclear power plant retirements

© OECD/IEA 2016

Growth in gas production is led by the United States and Australia

The United States & Australia rather than the more established exporters – Russia, Qatar & ASEAN – are the main source of production growth

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United States Australia Qatar China Russia ASEAN EU

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Change in natural gas production by region (bcm)

2009-15 2015-21

© OECD/IEA 2016

Global LNG export capacity increases sharply

LNG capacity additions will be led by the US & Australia over the next five years; projects in Canada & East Africa could also move ahead if demand & prices recover

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2009-15 2015-21

bcm

Liquefaction capacity additions

Australia Qatar U.S. Others

© OECD/IEA 2016

New investment in new LNG export capacity has ground to a halt

The collapse in investment increases the risk of tighter markets in the next decade; concerns about gas supply security could quickly re-emerge

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2011 2012 2013 2014 2015 2016 (to date)

bcm

Final investment decisions in liquefaction capacity by year

© OECD/IEA 2016

As imports from Japan & Korea are set to decline, the rebalancing of global markets will depend on the rate of expansion in China & other developing Asia

Developing Asia emerges as key engine of LNG import growth

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Change in LNG imports by region (bcm)

India China Other developing Asia EU Korea + Japan

© OECD/IEA 2016

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Infrastructure investment cost for a 1 GW power plant in Asia Coal and gas-fired power investment in Asian markets (2015)

Infrastructure costs favour coal power over gas in Asian energy importers

Asian markets comprised 85% of global coal power investment, while N. America and Middle East, with robust infrastructure, favoured gas for new fossil fuel power

© OECD/IEA 2016

Europe: growing gas imports but what future role for gas after COP21?

OECD Europe’s gas demand is likely to have peaked it may need to

increase imports by ~50 bcm/year by 2021 and by ~ 65 bcm/year by

2025 compared with 2015, even after including additional supplies

via Southern gas corridor

Source: 2016MTGMR, 2015 WEO New Policies Scenario

OECD Europe gas balance, 2000-2040E Bcm

© OECD/IEA 2016 © OECD/IEA 2015

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