World Energy Outlook 2017
The oil & gas boom in the US is shaking up the established order, with major implications for markets, trade flows, investment & energy security. Deep declines in the cost of renewables and growing electrification are changing the face of the global energy system and upending traditional ways of meeting energy demand, according to the World Energy Outlook. Electric cars are helping to transform energy use for passenger cars, slowing the pace of growth in global oil demand. Asia’s growing gas import requirements are largely met by LNG, with exports from the US accelerating a shift towards a more flexible, liquid global market.
World Energy Outlook, the International Energy Agency’s flagship publication, finds that over the next two decades the global energy system is being reshaped by four major forces:
– The United States is turning into the undisputed global leader for oil & gas
– Solar PV is on track to be the cheapest source of new electricity in many countries
– China’s new drive to “make the skies blue again” is recasting its role in energy
– The future is electrifying, spurred by cooling, electric vehicles & digitalisation
Old ways of understanding the world of energy are losing value as countries change roles, the Middle East is fast becoming a major energy consumer & the United States a major exporter. The International Energy Agency predicted that a dramatic increase in shale production will transform the US into the world’s largest exporter of liquefied natural gas by the mid-2020s. By the late 2020s, the US, which only lifted its ban on oil exports in 2015, will ship more oil to foreign markets than it imports.
Over the next 25 years, the world’s growing energy needs are met first by renewables and natural gas, as fast-declining costs turn solar power into the cheapest source of new electricity generation. China, India & the US lead the charge for solar PV, while Europe is a frontrunner for onshore & offshore wind: rising shares of solar & wind require more flexibility to match power demand & supply.
Solar is forging ahead in global power markets as it becomes the cheapest source of electricity generation in many places, including China and India. Electric vehicles (EVs) are in the fast lane as a result of government support and declining battery costs but it is far too early to write the obituary of oil, as growth for trucks, aviation, petrochemicals, shipping and aviation keep pushing demand higher. The US becomes the undisputed leader for oil and gas production for decades, which represents a major upheaval for international market dynamics.
For more information about the World Energy Outlook 2017, visit International Energy Agency’s website.