On Friday, February 3rd, the Agoria Energy Technology Club, in collaboration with the Federal Public Service Economy, SMEs, Self-employed and Energy, organised the 3rd edition of the World Energy Outlook. Which new challenges can we expect from the shift to renewable energy? And which new opportunities will this transition offer us? Dr. Fatih Birol, executive director of the International Energy Agency (IEA), presented, in his own passionate style, an overview of the main trends in the energy market.
- The Middle East accounts for the highest oil production volumes since the 1970s. However, the region's instability constitutes a first formidable challenge for the security of energy supply.
- The US have clearly opted for oil and, in an attempt to free themselves from the need to import oil, they will increase indigenous production. Imports will therefore decline, in part because of the policy, and the drop in demand will also be the result of the inevitable shift to renewable energy.
- In the EU, and in contrast to the USA, the focus is more on natural gas for heating as well as for electricity generation. Even though the number of households has increased by 20%, gas consumption has not mirrored this trend. On the contrary, the share of gas has dropped as a result of more efficient standards and better insulated buildings.
- In this day and age, 20% of the world population (in Africa, India, etc.) still has no access to electricity.
Energy security remains one of the biggest challenges. The number of vulnerable regions is certainly growing, but the same goes for the instruments available to tackle the problems. A switch to electric cars, transition to renewable energy, higher efficiency ... And governments also have an important role to play in making sure the issue becomes a priority in their policy.
Oil market: is the end in sight?
This market is undergoing major changes. After OPEC decided to produce less, 2015-2016 saw the lowest number of projects ever approved since 1950. If investments remain at such a low level in 2017, a disparity will develop between supply and demand, which in turn will have a serious impact on the price of oil.
So, is the end of the stock peak in sight? Despite the increase in renewable energy generation, oil demand will continue to rise. This is because of transport (road freight, air and sea transport) and the petrochemical industry, for which there are still no alternatives.
The gas and coal rush
The share of LNG has increased by as much as 30%. This surge has led to a second gas revolution and is having a significant impact on prices and contracts.
Coal, too, remains a very important market. China is responsible for half of that consumtion, even though Chinese demand has fallen in the past two years. There is also growing demand in India and several other countries in Southeast Asia. There, coal is the cheapest energy alternative to electricity which is not available.
Renewable energy is the new fuel
In the overall growth of new electricity generation in 2015, the share of renewable energy was greater than that of coal, gas, oil and nuclear energy combined. And China has taken over Europe's leadership as the biggest producer and exporter. According to the general scenario, a strong energy policy will ensure that solar panels and wind turbines will account for 37% of electricity production by 2040. In the 2nd scenario, this share could reach almost 60%.
Once again, however, success will depend heavily on a strong government policy. Governments must take a stand and clearly commit to renewable energy, as the future of this segment will be entirely determined by their choice.
The Paris Climate Change Agreement: more than a framework?
The Paris Agreement is a perfect diplomatic answer to the huge challenges we face. But its impact will depend on our policy makers. They need to jump on the bandwagon and translate the Paris objectives into well-founded legislation and tangible actions.