© OECD/IEA 2018

The IEA Sustainable Development Scenario Andrew Prag Katowice, 6 December 2018

The IEA works around the world to support accelerated clean energy transitions that are

enabled by real-world SOLUTIONS supported by ANALYSIS and built on DATA

www.iea.org/COP24

© OECD/IEA 2018

Sustainable Development Scenario

© OECD/IEA 2018

Today’s energy context

Mixed signals about the pace & direction of change in global energy: Oil markets are entering a period of renewed uncertainty & volatility Natural gas is on the rise: China’s rapid demand growth is erasing talk of a ‘gas glut’ Solar PV has the momentum while other key technologies & efficiency policies need a push Our assessment points to energy-related CO2 emissions reaching a historic high in 2018 For the first time, the global population without access to electricity fell below 1 billion

Electricity is carrying great expectations, but questions remain over the extent of its reach in meeting demand & how the power systems of the future will operate

Policy makers need well-grounded insights about different possible futures & how they come about. The WEO provides two key scenarios: New Policies Scenario Sustainable Development Scenario

© OECD/IEA 2018

An integrated strategy for energy & sustainable development

The Sustainable Development Scenario reduces CO2 emissions while also tackling air pollution, achieving universal energy access, and assessing implications for water

Sustainable Development

Scenario

change climate

Address

access energy

universal Achieve

Improve air quality

© OECD/IEA 2018

Benefits of the Sustainable Development Scenario

Outcomes of the Sustainable Development Scenario vs. New Policies Scenario

In an integrated approach, universal energy access can be reached while also achieving climate goals and reducing air pollutant emissions, at little extra cost

Carbon dioxide emissions (Gt CO2, 2040)

Population without access to modern energy (billion people, 2030)

Premature deaths related to air pollution (million, 2040)

0.5

1.0

1.5

2.0

Electricity Clean cooking

1

2

3

4

5

Indoor Outdoor

10

20

30

40

CO2 emissions

© OECD/IEA 2018

Progress and outlook for electricity access

The world population without electricity access fell below 1 billion in 2017, led by India; but despite recent progress, efforts in sub-Saharan Africa need to redouble

Population without electricity access (New Policies Scenario)

0.5

1.0

1.5

2.0

2000 2005 2010 2015 2020 2025 2030

Billi

on

Sub-Saharan Africa

Other Asia

India

Latin America North Africa and Middle East

2017

Latin America North Africa and Middle East

2017

0.5

1.0

1.5

2.0

2000 2005 2010 2015 2020 2025 2030

billi

on

Sub-Saharan Africa

Other Asia

India

Latin America North Africa and Middle East

2017

© OECD/IEA 2018

Clean cooking access is best achieved through LPG and improved biomass cookstoves, and could significantly lower annual premature deaths related to household air pollution

Clean cooking for all: planned effort lags behind

0.4

0.8

1.2

1.6

2000 2010 2020 2030

Population without access to clean cooking

New Policies Sustainable Development

Sub-Saharan Africa Other Asia India

Other developing countries

2017

Sub-Saharan Africa Other Asia

India

Other developing countries

LPG 53%

Improved biomass cookstoves 37%

Biogas digesters 8%

Electric stoves 2%

Population gaining access to clean cooking in the Sustainable Development Scenario,

2018-2030

billi

on

2017

0.4

0.8

1.2

1.6

2000 2010 2020 2030

Sub-Saharan AfricaOther AsiaIndia

Other developing countries

2017billi

on

© OECD/IEA 2018

Synergies between energy access and GHG mitigation

Higher CO2 emissions from increased fossil fuel consumption for access are more than offset by a reduction in other GHGs from avoided traditional use of biomass

Energy access-related GHG emissions in 2030 compared to today by scenario

- 50

0

50

100

150

200 M

t CO

2-eq

LPG Off-grid Mini-grid Grid Traditional use of biomass (CH4and N2O)

Net change

New Policies Sustainable Development

- 50

0

50

100

150

200M

t CO

2-eq

New Policies Sustainable Development

© OECD/IEA 2018

Pollutant emissions fall in the New Policies Scenario, but not enough to make premature deaths due to air pollution stop from increasing

Air pollution outlook

Air pollution emissions by sector in the New Policies Scenario, 2015 and 2040

15 30

Other

Buildings

Transport

Industry

Power 2015 2040

SO 2

Mt 30 60

NO X

Mt 10 20

PM 2.5

Mt

REPLACE with Olivia’s slide

© OECD/IEA 2018

The SDS is fully in line with the Paris agreement

The CO2 emissions trajectory to 2040 in the SDS is at the lower end of a range of scenarios projecting a global temperature rise of 1.7-1.8 °C in 2100

CO2 emissions in the Sustainable Development Scenario and other “well below 2 °C” scenarios

-30

0

30

60

2010 2040 2070 2100

Gt C

O2

Sustainable Development Scenario Scenarios projecting a 1.7-1.8 °C rise in 2100

© OECD/IEA 2018

Energy efficiency and renewables remain key to achieving the emissions reductions needed in the SDS

Global CO2 and CH4 emissions in the New Policies and Sustainable Development scenarios

Emissions savings in the Sustainable Development Scenario

15

20

25

30

35

40

2015 2020 2025 2030 2035 2040

Gt C

O2-

eq

New Policies Scenario

Sustainable Development Scenario

Bridge Scenario measures Further action in SDS

37% End-use efficiency and fossil fuel subsidies reform

9% Reducing upstream oil and gas methane

36% Renewables and reducing least-efficient coal-fired power

20% Other: nuclear, CCUS, fuel-switching

© OECD/IEA 2018

Avoiding “lock-in” from existing infrastructure

Global energy-related CO2 emissions

Coal plants make up one-third of CO2 emissions today and half are less than 15 years old; policies are needed to support CCUS, efficient operations and technology innovation

12

18

24

30

2017 2025 2030 2035 2040

Gt CO2 36

Sustainable Development Scenario

Coal-fired power plants

Increased room to manoeuvre

6

New Policies Scenario

Existing and under construction power plants, factories, buildings etc.

© OECD/IEA 2018

Synergies: low-carbon measures reduce air pollution

Low-carbon measures rather than measures specific to air pollution account for 57% of NOX and 40% of SO2 emissions reductions

2015 2020 2025 2030 2035 2040

20

40

60

80

100

120 M

t

Low-carbon measures Air pollution measures Universal access

New Policies Scenario Sustainable Development Scenario

NOx

SO2

PM2.5

Drivers of pollutant emissions reductions

© OECD/IEA 2018

200

400

600

800

1 000

2017 2040

Electric car fleet

(million cars)

5

10

15

20

25

2017 2040

Energy productivity ($GDP/Mtoe)

0.5

1.0

1.5

2.0

2.5

2017 2040

CCUS deployment

(Gt CO2 captured)

10%

20%

30%

40%

50%

2017 2040

Share of non-fossil energy

Wind and solar generation

(thousand TWh)

4

8

12

16

20

2017 2040

Energy Sector Transformation in the SDS

Delivering the energy transformation in the SDS requires 13% more energy sector investment than the NPS, due particularly to ramped up demand-side investment

Additional in Sustainable Development Scenario New Policies Scenario

© OECD/IEA 2018

The energy sector requires water

A focus on an integrated approach rather than just a decarbonisation approach results in the lowest level of water withdrawals in 2030

Global water use by the energy sector by scenario

100

200

300

400

New Policies

Climate only

Sustainable Development

bcm

Withdrawal

Consumption

2016 2030

© OECD/IEA 2018

Conclusions

Energy-related CO2 emissions continue to rise and will hit record highs in 2018

Progress is being made towards the SDGs, but under current trends goals on climate change, air pollution and universal access will not be met

Our strategy for sustainable energy shows that concerted action to address climate change is fully compatible with global goals on universal access & air quality

There is no single solution to turn emissions around: renewables, efficiency & a host of innovative technologies, including storage, CCUS & hydrogen, are all required

Our global scenario can be drilled down into regional and country trends to provide a benchmark for companies seeking to align with SDG outcomes

www.iea.org IEA

© OECD/IEA 2018

Greenhouse gas reductions: mixed progress on key cost-effective measures

Progress on Bridge Scenario measures for an early peak

On track More effort needed Not on track

2015 start

2017 intended progress

2030 level in Bridge Scenario

Reducing upstream oil and gas methane

Reducing inefficient fossil fuel subsidies

Reducing least-efficient coal-fired power

Investing in renewables

Enhancing energy efficiency

Investment in renewables in power generation is on track with the Bridge Scenario, but more efforts on other measures are required