IEA © OECD/IEA 2017

Energy Technology Perspectives 2017 Catalysing Energy Technology Transformations

Dave Turk, Acting Director, Directorate of Sustainability, Technology and Outlooks, IEA

Innovation for Cool Earth Forum (ICEF) - Side Event October 2017, Tokyo, Japan

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Introduction

• Accelerating technological progress strengthens economies,

energy security and sustainability

• Policies and RD&D drive down costs and improve performance

• Clean energy technologies are progressing, but few on track

• Need to focus on all technologies; lack of progress on some

puts even more pressure on others

• IEA’s new work on digitalization and energy brings new insights

in understanding the role of technologies and innovation

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Key points of orientation

• Global energy markets are changing rapidly

Renewables supplied half of global electricity demand growth in 2016, and increase

in nuclear capacity reached highest level since 1993

Global energy intensity improved by 2.1% in 2016

Electric car sales were up 40% in 2016, a new record year

• The energy sector remains key to sustainable economic growth

1.2B people lack access to electricity; 2.7B people lack access to clean cooking

Largest source of GHG emissions today, around two-thirds of global total

Largest source of air pollution, linked to 6.5 million premature deaths per year

• There is no single story about the future of global energy

Fast-paced technological progress and changing energy business models

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Global CO2 emissions flat for 3 years – an emerging trend?

IEA analysis shows that global CO2 emissions remained flat in 2016 for the third year in a row, even

though the global economy grew, led by emission declines in the US and China.

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1970 1975 1980 1985 1990 1995 2000 2005 2010 2014 2015 2016

Gt

Global energy-related CO2 emissions

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2014 2020 2030 2040 2050

GtC

O2

Efficiency 40%

Renewables 35%

Fuel switching 5%

Nuclear 6%

CCS 14%

How far can technology take us?

Pushing energy technology to achieve carbon neutrality by 2060

could meet the mid-point of the range of ambitions expressed in Paris.

Technology area contribution to global cumulative CO2 reductions

Efficiency 40%

Renewables35%Fuel switching5%Nuclear 6%

CCS 14%

Efficiency 34%

Renewables 15%

Fuel switching 18%

Nuclear 1%

CCS 32%

Global CO2 reductions by technology area

2 degrees Scenario – 2DS

Reference Technology Scenario – RTS

Beyond 2 degrees Scenario – B2DS

0 200 400

Gt CO2 cumulative reductions in 2060

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The potential of clean energy technology remains under-utilised

Recent progress in some clean energy areas is promising, but many technologies still need a strong

push to achieve their full potential and deliver a sustainable energy future.

Energy storage Solar PV and onshore wind

Building construction

Nuclear Transport – Fuel economy of light-duty vehicles

Lighting, appliances and building equipment

Electric vehicles

Energy-intensive industrial processes

Transport biofuels

Carbon capture and storage More efficient coal-fired power

●Not on track

●Accelerated improvement needed

●On track

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Centralised fuel production,power and storage

Systems Integration is essential for a sustainable energy future

We need to move away from a one-directional energy delivery philosophy

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Centralised fuel production,power and storage

Renewable energy resources

EV

Co-generation

Smart energysystem control

Distributedenergy resources

Surplus heat

H vehicle2

Systems Integration is essential for a sustainable energy future

We need to move away from a one-directional energy delivery philosophy to a digitally-enhanced,

multidirectional and integrated system that requires long-term planning for services delivery.

Digital smart energy system control

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The value of storage is starting to drive new solutions

Globally installed non-pumped hydro

electricity storage (GW)

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2016 2020 2025

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non-PHS Storage Pumped Hydropower Storage

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2011 2014 2016

GW

Globally installed electricity storage (GW)

Positive market and policy trends supported a year-on-year growth of over 50% for non-pumped hydro storage

But near-term storage needs will remain largely answered by existing or planned pumped hydro capacity.

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Can we change the landscape of transport ?

The transportation sector already experiences technological change,

but won’t shed its oil dependency without assertive policies.

Vehicle sales and technology shares under different scenarios Heavy-Duty Vehicles (millions) Light-duty Vehicles (millions)

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2015 RTS - 2060 B2DS - 2060 0

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2015 RTS - 2060 B2DS - 2060

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Enhanced buildings efficiency could also improve system flexibility

Efficiency technologies can provide the same level of comfort while reducing energy demand despite

doubling floor area.

112 EJ 157 EJ 123 EJ

2014

(123 EJ)

RTS 2060

(157 EJ)

B2DS 2060

(112 EJ)

31% 54% 61%

Electricity Electricity Electricity

37%

24%

3%

5%

Electricity31%

Fossil fuels Traditional biomass Renewables Other Electricity

Energy use in the buildings sector under different scenarios

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We need to produce materials more sustainably

Effective policies and public-private collaboration are needed to enable an extensive roll-out of energy

and material efficiency strategies as well as a suite of innovative technologies.

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Other industries

Pulp and paper

Aluminium

Chemicals and petrochemicals

Cement

Iron and steel

Direct CO2 emissions

Energy use and direct CO2 emissions in various industrial sectors under different scenarios

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CCS is happening today,

CCS is happening today, but needs to be ramped up hundreds of times to achieve long-term goals.

The role for CCS varies based on local circumstances.

A challenging task ahead for CCS

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Today 2DS B2DS

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Rest of world

EU

IND

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MEA

USA

Amount of CO2 captured under various scenarios

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Today

Mt

CO

₂

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ion

Private Public Top 3 firms

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Private Public Top 3 firms

Global clean energy RD&D spending needs a strong boost

Global RD&D spending in efficiency, renewables, nuclear and CCS plateaued at $26 billion annually,

coming mostly from governments.

Global clean energy RD&D spending

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2012 2021

USD

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Private Public Top 3 firms

Mission Innovation

Mission Innovation

Top 3 IT company R&D spenders

Global RD&D spending in efficiency, renewables, nuclear and CCS plateaued at $26 billion annually,

coming mostly from governments.

Mission Innovation could provide a much needed boost.

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Conclusions of the ETP 2017

• Early signs point to changes in energy trajectories, helped by

policies and technologies, but progress is too slow

• An integrated systems approach considering all technology

options must be implemented now to accelerate progress

• Each country should define its own transition path and scale-

up its RD&D and deployment support accordingly

• Achieving carbon neutrality by 2060 would require

unprecedented technology policies and investments

• Innovation can deliver, but policies must consider the full

technology cycle, and collaborative approaches can help

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IEA Efforts on Digitalization and Energy

• “Digitalization” is the increasing application of information and communications

technology (ICT) to the physical world – i.e., blurring/convergence of the “digital” and

physical worlds. Digital world = data + connectivity + analytics

• IEA digitalization work for many years

- Efficiency (More Data, Less Energy, 2014), system integration, outlooks, sustainability, transport, industry,

buildings, investment, data & statistics, electricity, oil & gas, renewables, technology (Smart Grids Technology

Roadmap, 2011)

• Growing interest for IEA Secretariat to focus more on digitalization by IEA Members, companies, etc.

• While interest on digitalization is wide, current understanding of the scale and scope of potential

impacts is limited, particularly quantitative and analytically-rigorous assessments

• Cross-IEA Digitalization & Energy Working Group consisting of multiple IEA divisions; several new

and enhanced streams of work

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Digitalization trends: Exponential growth in data

90% of data in the world today were created over past two years (IBM)

Annual Internet traffic data Sources: Cisco (2015). Historical Global Internet Traffic Data 1984 through 2014;

Cisco (2017). The Zettabyte Era — Trends and Analysis

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Digitalization trends: Growing connectivity

47% of global population (3.5 b) are now using the Internet,

up from only 8% (500 m) in 2001 (ITU, 2017)

Sources: ITU (2017) ICT Indicators database; IEA (2016) WEO Energy Access database. Note: Developed/developing country classifications are based on the UN M49

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2006 2008 2010 2012 2014 2016

Per 100 inhabitants or % households

Mobile-cellular subscriptions (per 100 inhabitants)

Household electricity access (%)

Household internet access (%)

Mobile-broadband subscriptions (per 100 inhabitants)

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IEA Digitalization and Energy Report (November 2017)

An assessment of the implications of digitalization on the energy sector, bringing together

new quantitative assessments, qualitative insights, and analysis of policy implications

• Current intersection of digital and energy

• Sector-by-sector trends and impacts - Demand (industry, transport, and buildings)

- Supply (e.g., oil & gas); electricity generation performance impacts (avoided investments)

- Digital technologies

• Longer-term, systemic impacts - Smart energy systems: connectivity in the power sector as an enabler for flexibility, demand side

management, integration of variable renewables, peer-to-peer energy transactions, new business models

• Challenges and opportunities for policy-makers - Digital resilience, privacy, economic disruption

- No-regrets policy recommendations

With real-world examples highlighting policy goals that digitalization can help achieve

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Current structure of electricity sector –

digitalization of silos Electricity system integration through digitally-

enabled connectivity

Digitalization of the power sector

Digitalization – especially connectivity – can fundamentally re-shape the electricity sector

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