ANNS CONTENTS TABLEOF SPECIAL FOCUS ON ELECTRICITY PART B PART A GLOBAL ENERGY TRENDS PART C WEO INSIGHT WEO_2018_ToC_V4.indd 1 19-10-2018 125942 OECD/IEA, 2018Anns Alternative electricity futures 9 Global implications of an electrifying future 10 Electricity today 7 Outlook for electricity demand and supply 8 Energy efficiency and renewable energy 6 Overview and key findings 1 Energy and the Sustainable Development Goals 2 Outlook for oil 3 Outlook for coal 5 Outlook for natural gas 4 Innovation and the environmental perance of oil and gas supply 11 WEO_2018_ToC_V4.indd 2 19-10-2018 125942 OECD/IEA, 201816 World Energy Outlook 2018 3 5 23 Foreword Acknowledgements cutive Summary Introduction 29 Part A Global Energy Trends 33 Overview and key findings 35 Introduction 37 Scenarios 38 1.1 Overview 38 1.2 Primary energy demand by region 40 1.3 Total final consumption and efficiency 42 1.4 Power generation and energy supply 44 1.5 Emissions 46 1.6 Trade 48 1.7 Investment 50 Key themes 52 1.8 Energy policy in a time of transitions 52 1.9 How can policy makers enhance long-term energy security 63 Energy and the Sustainable Development Goals 81 Introduction 83 Sustainable Development Scenario 84 2.1 Scenario design and overview 84 2.2 Scenario outcomes Universal energy access 86 2.3 Scenario outcomes Air pollution 87 2.4 Scenario outcomes CO 2and other GHG emissions 88 2.5 Energy sector transation in the Sustainable Development Scenario 90 2.6 Investment in the Sustainable Development Scenario 94 Key themes 95 2.7 Tracking progress towards energy-related SDGs 95 2.8 Boosting efforts to meet the energy-related SDGs 107 2.9 Water-energy nexus and SDG 6 121 1 2 OECD/IEA, 2018Table of Contents 17 Outlook for oil 133 Introduction 135 Scenarios 136 3.1 Overview 136 3.2 Oil demand by region 138 3.3 Oil demand by sector 140 3.4 Oil supply by type 142 3.5 Oil supply by region 144 3.6 Refining and oil product demand 147 3.7 Trade 149 3.8 Investment 150 Key themes 151 3.9 Will road transport remain the stronghold of oil demand 151 3.10 Crunching the numbers are we heading for an oil supply shock 156 3.11 Oil product demand where are the winners and losers, and what could be the unintended consequences 164 Outlook for natural gas 171 Introduction 173 Scenarios 174 4.1 Natural gas overview by scenario 174 4.2 Natural gas demand in the New Policies Scenario 176 4.3 Natural gas production in the New Policies Scenario 179 4.4 Trade and investment 182 Key themes 184 4.5 The future of gas demand in emerging Asian economies 184 4.6 Exporter strategies in a changing gas market order 193 4.7 Natural gas in Europe’s Energy Union 199 Outlook for coal 215 Introduction 217 Scenarios 218 5.1 Coal overview by scenario 218 5.2 Coal demand by region and sector 220 5.3 Coal production by region 222 5.4 Trade 224 5.5 Investment 225 3 4 5 OECD/IEA, 201818 World Energy Outlook 2018 Key themes 226 5.6 A role for coal in the transation of the power sector 226 5.7 What are the prospects for the world’s coal exporters 233 Energy efficiency and renewable energy 243 Introduction 245 Scenarios 246 6.1 Energy efficiency by scenario 246 6.2 Renewables by scenario 249 6.3 Energy efficiency policies and investments 251 6.4 Renewables policies and investments 253 6.5 Renewables support 255 Key themes 256 6.6 Tracking progress in meeting sustainable development goals 256 6.7 Efficiency and use of renewables in the transport sector 263 6.8 Buildings a key component of the energy transition in Europe 270 Part B Special Focus on Electricity 279 Electricity today 281 7.1 Introduction electricity in the global energy system 283 7.2 Electricity demand 284 7.2.1 Electricity demand by region 285 7.2.2 Electricity use by sector 290 7.3 Electricity supply 292 7.3.1 Recent market developments 292 7.3.2 Renewable energy technology costs 295 7.3.3 State of renewables integration 298 7.4 Electricity flexibility 301 7.4.1 Flexibility from power plants 303 7.4.2 Demand-side response 305 7.4.3 Storage 306 7.4.4 Expanding and “smartening” electricity grids 307 7.5 Electricity investment, markets and security a changing landscape 309 7.5.1 Recent investment trends 309 7.5.2 Key players 312 6 7 OECD/IEA, 2018Table of Contents 19 7.5.3 Securing investments 315 7.6 Power sector emissions 319 Outlook for electricity demand and supply 323 8.1 Introduction 325 8.2 Electricity demand in the New Policies Scenario 325 8.2.1 Policies shape electricity demand 326 8.2.2 Electricity demand by region 328 8.2.3 What drives electricity growth and what holds it back 331 8.2.4 A closer look at electricity demand growth from end-uses 334 8.3 Electricity supply outlook in the New Policies Scenario 340 8.3.1 Recent policy developments 340 8.3.2 Electricity generation by region 342 8.3.3 Power generation capacity by region 344 8.3.4 Power generation technology costs, value and competitiveness 349 8.3.5 Power sector emissions 357 8.4 Outlook for flexibility in electricity systems 359 8.4.1 The need for flexibility will increase 359 8.4.2 Grids provide and enable further flexibility 362 8.4.3 Demand-side response the sleeping giant of system flexibility 363 8.4.4 Energy storage 364 8.5 Regional deep dives 367 8.5.1 European Union 367 8.5.2 India 375 Alternative electricity futures 383 9.1 Introduction 385 9.2 Pushing the frontiers of electricity demand 386 9.2.1 Overview of demand in the Future is Electric Scenario 386 9.2.2 More electrified and digital homes and services 390 9.2.3 Electrifying transport 398 9.2.4 Electrifying industrial processes 403 9.3 Electricity supply for an electric future 408 9.3.1 Higher electricity demand leads to more renewables and more fossil fuels 408 9.3.2 Electrified does not necessarily mean sustainable 412 9.4 Electricity in the Sustainable Development Scenario 415 8 9 OECD/IEA, 201820 World Energy Outlook 2018 9.4.1 Electricity demand in the Sustainable Development Scenario 415 9.4.2 Electricity supply in the Sustainable Development Scenario 420 9.5 System flexibility for alternative electricity futures 426 9.5.1 Combined drivers of electrification, digitalization and variable renewables 426 9.5.2 A smarter push for decarbonisation reveals vast amounts of flexibility in the Sustainable Development Scenario 429 Global implications of an electrifying future 433 10.1 Introduction 435 10.2 Electrifying the global energy sector – is it the start of something new 435 10.3 Achieving environmental goals through electricity 442 10.4 Energy security and investment in an electrifying future 449 10.4.1 Energy security in an electrifying world 450 10.4.2 Electricity security in a changing world 453 10.5 Affordability of electricity 468 Part C WEO Insight 475 Innovation and the environmental perance of oil and gas supply 477 11.1 Introduction 479 11.2 Energy use and emissions from the oil and gas industry 480 11.2.1 Oil 482 11.2.2 Gas 487 11.2.3 Summary of indirect oil and gas GHG emissions 490 11.3 Indirect emissions in the New Policies Scenario 491 11.4 Reducing the emissions intensity of oil and gas 493 11.4.1 Tackling methane emissions 493 11.4.2 Electrification of operations 494 11.4.3 Carbon capture, utilisation and storage 499 11.4.4 Enhanced oil recovery using CO 2 502 11.4.5 Hydrogen as an alternative fuel 506 11.5 Implications for policy makers and industry 511 11.5.1 Policy options to encourage emissions reductions in oil and gas 511 11.5.2 Bending the indirect emissions curve 513 10 11 OECD/IEA, 2018Table of Contents 21 Anns 515 Annex A. Tables for scenario projections 517 Annex B. Design of the scenarios 597 Annex C. Definitions 617 Annex D. References 633 OECD/IEA, 2018World Energy Outlook 2018 22-I List of figures Part A Global Energy Trends Figures for Chapter 1 Overview and key findings 1.1 Change in total primary energy demand in selected regions in the New Policies Scenario, 2017-2040 35 1.2 World primary energy demand and energy-related CO 2emissions by scenario 39 1.3 Change in low-carbon generation and fossil fuel demand by region in the New Policies Scenario, 2017-2040 41 1.4 Average annual change in total final electricity consumption by scenario and sector, 2017-2025 and 2025-2040 43 1.5 Oil and gas production for selected countries in the New Policies Scenario 45 1.6 World energy-related CO 2emissions by sector in the New Policies and Sustainable Development scenarios 47 1.7 Net oil and gas imports by Asian destination in the New Policies Scenario 49 1.8 Cumulative investment needs by sector in the New Policies and Sustainable Development scenarios, 2018-2040 51 1.9 Levelised costs of selected new sources of electricity generation in selected countries in the New Policies Scenario 53 1.10 Subcritical coal-fired capacity by age and scenario 55 1.11 IEA member and association countries in world primary energy demand by scenario 56 1.12 Lithium and cobalt requirements for electric vehicle batteries in the New Policies and Sustainable Development scenarios 60 1.13 Global end-user energy spending by fuel and scenario 61 1.14 Cumulative energy supply investment by type in the New Policies Scenario 62 1.15 Evolving flexibility needs in the power sector in the New Policies Scenario 64 1.16 Electricity demand in IEA member countries and demand without efficiency policies or without new electricity uses 66 1.17 Emissions intensity of the supply of the least- and most-emitting sources of oil and gas worldwide 68 1.18 China natural gas balance in the New Policies Scenario 71 1.19 Declines in current oil production and demand in the New Policies and Sustainable Development scenarios 74 1.20 Electricity generation by source in the European Union in the New Policies Scenario 76 1.21 Access to electricity and clean cooking in the New Policies Scenario 79 Figures for Chapter 2 Energy and the Sustainable Development Goals 2.1 Proportion of population with access to electricity and clean fuels for cooking in the Sustainable Development Scenario 86 2.2 Exposure to fine particulate pollution PM 2.5 in selected regions, 2015, and in the Sustainable Development Scenario, 2040 87 2.3 GHG emissions from selected sectors, 2017, and in the Sustainable Development Scenario, 2040 88 OECD/IEA, 2018Table of Contents 22-II 2.4 CO 2emissions in the Sustainable Development Scenario and other “well below 2 C” scenarios 1.7-1.8 C 89 2.5 Power generation and carbon intensity of electricity in the Sustainable Development Scenario 93 2.6 Energy sector investment in 2017 and average annual investment in the Sustainable Development Scenario, 2018-2040 94 2.7 Population without modern energy access 96 2.8 Progress since 2000 and outlook to 2030 for electricity and clean cooking access in the New Policies Scenario 101 2.9 Air pollution emissions by sector and scenario, 2015 and 2040 104 2.10 CO 2emissions by region and sector in the New Policies Scenario 106 2.11 CO 2trajectories relative to aggregate emissions levels implied by NDCs, 2015-2030 108 2.12 Progress on key measures for achieving a peak in energy-related GHG emissions in the Bridge Scenario, 2015-2017 109 2.13 Renewable electricity investment and capacity additions, 2013-2017 110 2.14 Tracking subcritical coal-fired power investment and CO 2emissions 111 2.15 Fossil fuel consumption subsidies in selected regions 112 2.16 CO 2and methane emissions reductions by measure in the Sustainable Development Scenario relative to the New Policies Scenario 113 2.17 Total primary energy demand and CO 2emissions per capita by selected region and scenario 117 2.18 Energy access-related GHG emissions from electricity and clean cooking access by scenario 117 2.19 Drivers of pollutant emissions reductions in the Sustainable Development Scenario relative to the New Policies Scenario 119 2.20 Global energy use in the water sector, 2016 122 2.21 Share of population without access to electricity or water in rural areas today 125 2.22 Electricity consumption in urban municipal wastewater treatment facilities from achieving SDG targets 6.2 and 6.3 in 2030 128 2.23 Global water use by the energy sector by scenario 130 2.24 Global water use in the energy sector by fuel and power generation type in the Sustainable Development Scenario 131 Figures for Chapter 3 Outlook for oil 3.1 Change in global oil demand by sector in the New Policies Scenario, 2017-2040 133 3.2 Change in global oil production in the New Policies Scenario 134 3.3 Global oil demand and prices by scenario 137 3.4 Change in oil demand in the New Policies Scenario, 2000-2040 139 3.5 Global oil demand by sector in the New Policies Scenario 140 3.6 Oil production by type in the New Policies Scenario 142 3.7 Change in tight oil production in the New Policies Scenario 143 3.8 Oil demand by road vehicles, and car and truck fleets by region 151 3.9 Average annual change in road transport oil demand by region in the New Policies Scenario 153 OECD/IEA, 2018World Energy Outlook 2018 3.10 Oil demand from cars, oil displacement and car sales globally in the New Policies Scenario 154 3.11 Oil demand from trucks and oil displacement globally in the New Policies Scenario 156 3.12 Tight oil production according to well start-up date in the United States in the New Policies Scenario 158 3.13 Oil production with no new investment from 2018 and demand in the New Policies and Sustainable Development scenarios 159 3.14 Average annual change in production from conventional crude oil fields with no new approvals 160 3.15 Annual average conventional crude oil resources approved for development historically and volumes needed in the New Policies and Sustainable Development scenarios 161 3.16 US tight oil production needed to meet demand in the New Policies Scenario at different levels of conventional resources approved each year between 2018 and 2025 162 3.17 Change in global oil product demand by scenario, 2017-2040 164 3.18 Fuel mix for the international shipping sector in the New Policies Scenario 166 3.19 Change in the composition of global oil product demand 167 3.20 Average refining margins today and change in demand in the Sustainable Development Scenario by product, 2017-2040 168 Figures for Chapter 4 Outlook for natural gas 4.1 Gas demand in China and net gas imports by region in the New Policies Scenario 171 4.2 Natural gas imports and dependence in the European Union in the New Policies Scenario 172 4.3 Natural gas prices in key regions in the New Policies Scenario 175 4.4 Share of gas in the energy mix by region in the New Policies Scenario 177 4.5 Global gas demand by sector in the New Policies Scenario 178 4.6 Share by region in gas production growth in the New Policies Scenario 180 4.7 LNG net trade by region in the New Policies Scenario 183 4.8 Share of natural gas in the energy mix by sector in emerging Asian economies, 2017 185 4.9 China’s natural gas demand by sector and import needs in the New Policies Scenario 186 4.10 A