I very much appreciate the warm welcome from [inaudible] , likewise from Professor [inaudible] and only to echo the words that we have benefited greatly from the support that we've had from some really excellent students who've come through the IAEA. I've mentioned four, there are also alumni who are contributing in different ways to the work of the IAEA and the work of the World Energy Outlook Team. So it's really been an outstanding opportunity for us and I'm hopefully one that we can continue. You're aware that the World Energy Outlook was released last week. It's a great opportunity and it's always a pleasure to come back here to present. I always find that there's lots of engaged discussion and interesting questions. So I'm looking forward to that as well, as well as the expert's views of our panel. I always have to apologize somewhat for the size of this book and we haven't made the book smaller this year, but what we have done is we've chopped it up in the way that we release it into the public domain. So it used to be that on one day in November, we would release all of this in and expect people to digest it. What we've done this year is that we released at the end of October, already an outlook for offshore wind, which was one of the special areas this year. Then the following week an outlook for Southeast Asia. A week after that, the chapters on Africa, and then only last week, the full set of projections. I'm going to talk about some of that today. Obviously, I can only cover some selected findings, but hopefully you'll find them of interest. I'd like to start with a few words about the context and the way that we've chosen to frame the energy scene this year is with our observations on a series of quite profound disparities that we think are visible today. The first one is in oil markets, where over the last 18-24 months, you've had a number of things happening in the world, that ordinarily would be very disruptive for markets. So Iran exports have gone from 2.8 million barrels a day down to 300,000 barrels a day today because of sanctions. Venezuela, eight or nine months ago, was producing 1.2 - 1.3 million barrels a day. Now it's down to just over 600,000 and of course, in September, you had the attacks on Saudi export or production and export facilities. Any of those under normal circumstances would have been expected to be very disruptive for markets and the fact that they weren't, the fact that prices have really been trading within a fairly narrow range tells us that there's something different happening in our markets and a lot of that has to do with the abundant supply that's coming in part from US [inaudible] , but also for some other parts of the world. But the most profound disparity that I'd like to focus on, and there's really a theme for our presentation today is the disparity between the wealth of scientific evidence telling us that we have to reduce emissions rapidly, and the evidence that we get from our analysis, from our data showing that 2018, another historic high in global emissions. Just to give you a sense of context there's, sometimes in discussions on energy transitions, you'll encounter the view that, well, at least there's a few things that we've cracked. There's a few problems that we've solved. We've solved the issue of the power sector because of increasingly cost-competitive renewables. The other thing we've solved is personal mobility because obviously EV is on the rise and those two issues are done. I think it's important not to declare victory too soon on these because if you look at what's actually happened since 2010, so where has there been an increase in global energy related CO2 emissions? The biggest factor that's driven up emissions since 2010 by far has been the power sector. The second biggest has been individual mobility and more precisely, it's been the increasing consumer preference for larger vehicles, for SUVs. So I think people are aware that by now there's well over five million EVs on the road, two millions sold last year. SUV's is now 200 million on the road and there were 33 million sold last year. The vast majority of those are not electrified. It's actually quite difficult to electrify larger vehicles. In terms of their fuel efficiency, they consume on average about a quarter more fuel per distance traveled than an ordinary medium-sized car. So let's have this evidence-based discussion about where we are today and where we need to go. A third disparity in one that, if you've followed the World Energy Outlook, you know that we make a regular feature of our analysis, is this disparity between the promise also in the UN Sustainable Development Goals of energy for all and the fact that we have 850 million people worldwide that still remain without access to electricity. There's another 2.6 billion people that continue to rely on solid biomass, mostly firewood, as a cooking fuel. When that's used on a regular three stone fire indoors, that's also a course of major health difficulties, as well as being a barrier to particularly women's participation in economic life. I think we're all aware that there are some very promising technology developments. You can point to the cost of solar PV, you can point to wind both onshore and offshore, you can point to storage technologies and this rise of digital applications, all of which are very promising. So we have some of the tools that we need to accelerate energy transitions. But those tools are not going to do the job by themselves. One of the themes again of the World Energy Outlook is that you do need that helping hand from policy. You do need a push from governments in order to get deployment up to the levels that are needed. So in a sense, our starting point for the work that we do on the World Energy Outlook is the need for this hard, evidence-based look at where we are and the choices that we face. The purpose of this book is not to explain to you where we're going to be in a decade or two's time. The purpose of this book is to understand the choices that we face today and the actions or inactions that lead us down different pathways. So we have different scenarios about the future. The first of which is what happens if we do nothing else beyond what we're already doing? So if there are no additional policy measures that are put in place, then what are the implications then for energy use out to 2040? We also have a scenario which we've renamed this year. It's now called the stated policy scenario, which looks at what if you incorporate also the things that governments say they would like to achieve. So that could be in the nationally determined contributions, it could be efficiency targets, it could be renewables targets. In other parts of the world, it could be targets to reach full electrification or to reform the pricing regimes. So we assess all of these and it's considered their implications and that's what goes into this stated policy scenario. The reason why we changed the name is to underline that we only consider things that have already been announced. So this is, if you like, the aim is to hold up a mirror to the things that governments say they would like to achieve. Its not to try and guess how those policy preferences might evolve in future. The way that we assess the adequacy of those policy intentions is through a different scenario. One where we fix the endpoint and then work back to the present to understand how that can be achieved. That endpoint is all sorts of normative goals. So things that we think or things that governments have signed up to. So it's full compliance with the Paris Agreement. It's full access to modern energy, both for electricity and for clean cooking by 2030, and it's also a dramatic reduction in the pollutants that cause poor air quality and a host of health risks around the world. So that's the scenario structure. Now I'm going to take a little bit of a detour because normally I now start talking about the future and I am instead going to start talking about the past. I'm going to take you back 100 years to 1919, to a time when, even though Cole had grown very strongly since the Industrial Revolution, 30 percent of the world's needs, energy needs, were still met by wood. Fast-forward to 1950, oil has really taken this upward journey, 60 percent of that is produced in North America, but the second largest producer after the United States in 1950 was Venezuela producing considerably more than it does today. 1974, you'll think the first oil crisis, and that's also the year in which the International Energy Agency was founded. That was the high point for oils share of global energy supply. So in the intervening period, 1950-1974, that was the period when some Middle East producers, notably Saudi Arabia, really became these mainstays of global supply. Also, the Soviet Union, Russian Federation. You can also see that natural gas starts to make inroads into the global energy mix, primarily at that stage as a source of heating for buildings and for industry. Move on to 2000, and partly as a result of the oil shock, you've had increased diversification of the global energy mix. You've had a lot of nuclear capacity built in Europe, in Japan, in the United States, the share of oil has come down, but it's really gas then becomes a much larger components of global energy, not least because that was the period when exports from the Soviet Union really expanded. Gas started to get a foothold also as a fuel for power generation. Now, the present day, two things I'd like to highlight that have happened over the last couple of decades. The first, partly and mainly because of the rise of China as this economic powerhouse. The share of coal in the global energy mix today is slightly higher than it was in the year 2000. Then on the other side, you've had this large expansion of modern renewables in Europe, in the United States, China, India, and many other countries, the technologies that you know very well. So the question we ask ourselves in this book, is where do we go from here? One of the things that we need to take into account when we ask that question is, not just how the mix has changed over the last a 100 years but also some questions of scale. Because if you just look at that, those stacked columns, you think, well actually, over the last 100 years, there have been some quite sharp transitions between fuels. We have changed energy mixed quite substantially. But the big difference between 1919 and today, is that in 1919, there were less than two billion people in the world. Now we have well over seven billion. The global economy is 20 times larger than it was. We're also using 10 times more energy than we were. So in practice, those transitions that you saw on the previous slide, they really changes in the way that we met growth in global energy consumption. We didn't have a transition that really pushed down consumption of an incumbent field. When we think through the task that is ahead in tackling climate change, then you either need to do that or you need to, in a sense, disassociate the use of that fuel from the emissions. I wanted to say a word now on energy efficiency because this is obviously a very large energy system that we have today. But we're still convinced that this amount of energy could actually support a global economy much larger than the one we have. But we think that if you took advantage of the economically viable opportunities for energy efficiency, this much energy would be enough for a global economy twice today's size. That's one of the key things that gets you to this sustainable development scenario that I'll come back to. But as Professor Luciani hinted at the start, we're not on track for that scenario. We are changing many things about energy. But if you look at what happens in this stated policy scenario, that's another 25 percent on global primary energy. We changed the way that we meet that growth. So more than half of that growth is met by low-carbon energy led by solar PV. Another third comes from natural gas and that's aided by the rise of LNG. But the momentum behind today's clean energy transitions is not yet strong enough to offset the effects of an expanding global economy and a much larger global population to 2040. We're going to come back to the implications of that. But one of the questions you're left with when you see that slide on history is, well, how quickly can things change? There are many different examples that you could bring to bear. But one of the most striking examples is US Shale. Because back in 1970, it had seemed to many that US oil and gas production had peaked. So US policymakers and others were faced with the prospect of rising demand, well, rising imports for fuels, both for oil and gas. Policymakers at the time said, ''Well, we're going to see if we can do something about that." So there was a large publicly funded research and development effort focusing both on some demand-side technologies, but also supply-side technologies. Those supply side technologies eventually, after some tax credits, some partnerships with industry, innovation and large-scale investment, that's what produced the Shale revolution. So 10 years ago, it would have been almost unthinkable to stand here and say that in 10 years time, the US is going to be a net exporter of oil and gas'. But here we are, trillion dollars of investment later both in the upstream and the midstream. That situation has some quite profound implications also for the geopolitics of energy, for trade, for markets operation. Because what it does is it pushes down the share of some of the other, in a sense, traditional incumbent producers. The share of OPEC plus Russia in global oil production, because of Shale and goes from a high of around 55 percent in the 2000 down to well below 50 percent out to 2030. So as we say on the slide, this provides a very strong counterweight efforts to manage oil markets. One other switch that I'd like to bring to your attention is on the consumption side. So when we as energy consumers wanted to meet our incremental needs for energy, the first place that we went over the last 20 years was oil. That was a larger increase than the increase on the electricity side. The main reason for that was because we were demanding more oil for mobility, from gasoline, diesel. The future though doesn't look like the past. One reason for that, and I think we could all instinctively understand why, is because electricity is at the very heart of our modern lifestyles. It's the go-to source of energy for many of our needs as consumers. Meanwhile, on the oil side, this engine of growth from the past, which is personal mobility, that really stalls when you start to look into the future. Because fuel efficiency, but also because we're thinking of different ways to meet that need for mobility. When you look at the sustainable development scenario, that kind of shift is even more pronounced because electricity then really becomes even more important as a way to meet our energy needs. It becomes this primary vector for de-carbonization through low-carbon electricity and oil demand in that scenario peaks very soon. By 2040, we're back down to levels of oil demand that we haven't seen since the early 1990s. I want to say a few words about natural gas as well, since that's a growth story in this stated policy scenario. But it's not a growth story in Europe. European gas demand in that scenario because of efficiency measures, because of changes in the power sector, it goes down by around a 100 billion cubic meters. You might think from that or well, that means, that we'll have to import less. Not really, because European production also goes down by about 80 billion cubic meters. But increasingly, market dynamics across the world are determined by what happens in Asia. You might imagine from our European experience or from the experience of the United States, that Asia is importing gas or producing gas in order to use for electricity. That's partially true, but much bigger source of growth over the years to 2040 is industrial uses, whether that's for fertilizer or to produce methanol, or for some of these lighter industrial sectors or food processing or textiles. If you look at the supply side, some of that gas gets produced at home but a much larger share is imported. So the affordability of that gas in very price sensitive markets is one of these really key variables then for the future. You can see that pipeline gas to China increases quite a lot largely from Russia, but there's an extra line coming in from Turkmenistan, but most of that is LNG, and that's coming from the US, from Canada, from East Africa, from Qatar, from Russia, and from a few other places. There's been a huge wave of LNG approvals, especially in 2019, that paved the way for this outcome. I mentioned at the start of the presentation that we've done some work and detailed work on Africa this year. I wanted to highlight a few things to you because I think this Africa energy story is not quite the one that has typically been told in the past. One aspect of it, which I think is very important to have in mind is just sheer demographics. So within the next few years, the population of Africa overtakes that of China and India. By 2040, we have more than two billion people living in Africa. It's not just the increase in population, it's also the implied increase in the urban population because that is the implications of a rising urban population in energy term so that much more significant. So about 600 million extra people living in African cities by 2040 compared with today. That's the equivalent of the entire European Union population finding a home in African cities. That has really strong implications. Then for all of the energy intensive products that go into our built environment, for that cement or steel, or all of the other things that we need for our urban infrastructure. So the design of those cities, the governance of those cities becomes a very crucial variable in how you think about the future of energy as well. Africa makes its mark on all of the, in a sense, traditional vectors for measuring energy is oil demand because of transportation, because of LPG for cooking. Gas demand is interesting because over the last few years, there's been a series of gas discoveries of Egypt, of Mozambique, Tanzania, of Mauritania, Senegal, and most recently South Africa. So the question is, is that going to be part of Africa's I mean energy and industrialization story, or is that an export good? The difference between those two scenarios is actually quite significant for the way that you think about African development. You would've imagine and you would hope that renewables are going to be the big growth story for Africa. That's true to a degree, but is not as strong a story as you'd imagine. For me was one of the most striking things that emerged during this work on Africa. I'm from the UK. UK, not very sunny, we have installed just under 15 gigawatts of solar cumulatively over the last whatever 10-15 years, Africa is 40 percent of the world's solar resource and has installed five gigawatts of solar to date. So three times less than the UK across the entire African continent. That mean there's a number of reasons why that's the case. But that has to change, and it has to change dramatically in order to paint a brighter picture for the African Energy Outlook. We think through in the Africa Energy Outlook some an upside case, which I'd be happy to talk about a bit later as well. But solar PV is very much, in a sense, the star of the show when we look at our stated policy scenario, when we look at investment out to 2040. I'm just going to go through now, the way that capacity evolves. So this is not generation, but this is just the installed capacity that you have for different technologies. Coal flat lines we have in many European countries, but other countries around the world, the Powering Past Coal Alliance, where countries are moving away from unabated coal generation, but there are still plants under construction and plants to expand coal use in parts of Asia, and that's reflected in these projections. Gas continues to grow, but it's role in power systems changes very much becoming a source of flexibility rather than a source of base load or mid-merit power. Nuclear, again that looks like a slightly tedious line, but there's a lot happening there. In practice, nuclear generation in 2019 is likely to be the highest ever. So we're going to get back above those pre-Fukushima levels of generation. Buying large in advanced economies, you have net retirements, but you have continued growth in the nuclear fleet in China in particular, but also some other developing economies. China towards 2030 becomes the country with the largest installed nuclear fleet. Hydro is still growing in Latin America, but also there's a plant in China, that's the second largest. Well, once it's completed, it will be the second largest in the world. Wind, again a strong growth story, but the thing that we would like to highlight this time around is the cost reductions and this huge potential there is for offshore wind. I'll come back to that in a minute. But it is solar PV that breaks through by the early 2030s, to become the single largest source of global installed capacity. That's an indication of the cost competitiveness, it's an indication of where money is going, it's an indication of an increasingly supportive policy environment in many parts of the world. But it does raise a number of questions. The first that I'd like to come to is about what happens to power systems when you install a lot more variable generation? I'd like to take you back to when was it? Last July. I suspect many people in this room would have been watching the World Cup final. It was in the evening, so the sun had gone down. It wasn't a windy evening, and but all over Europe, people were coming home, turning on the tele. When halftime came around, they will switch on the kettle, at least they would in the UK. That led to a very significant upswing then in electricity demand over the course of one hour. What we're trying to calculate with this chart is what was required of the rest of the electricity system. So once you take out demand, you take out solar, you take out wind, what did the rest of the system need to do in order to balance on an hourly basis? So how much did it need to change over the course of one hour? Over the course of that hour, which I think was between 8:00 and 9:00 PM in Europe, the whole of the rest of the system needed to speed up by 20 percent. So that's the equivalent of turning on France's entire electricity system in the course of one hour. So that was the flexibility that we needed to balance and keep the lights on in the course of that hour. It's not just in Europe. This is an example in India also happens to be the final of a sporting event. It's their IPL Crickets final. The reverse is also true. Particularly at this time of year when you have an approaching storm system, the wind picks up, all of a sudden you have abundant available wind power, and you want to use that power because it's cheap and it's emission is free. So the optimal way to bring that in, everything else has to dial back. So in the course of that hour, which was in November last year, you had to turn off the equivalent of Germany's entire generation capacity in order to bring that wind into the system. So I think we're all familiar with the idea that you need these balancing services in power markets. But with the rise of wind and solar, the point that we would like to emphasize is that those flexibility needs are going to increase substantially between now and 2040. So what you see here is our plot of each hour of the year, and how much the rest of the system needed to react hour by hour over the course of 2018. When you go through to 2040, that effect is magnified. So in the European Union, you would need additional sources of flexibility. Whether that's regional interconnections, additional dispatchable power, demand side response, or additional elements of energy storage. The one I would particularly like to draw your attention to is India. Because there you have a very big expansion of solar, and you have this mismatch between a lunchtime peak in solar and an evening peak in electricity demand, which is also spurred by the increased availability of the incomes and then by air conditioners and all sorts of other appliances they get switched on in the evening. So India faces this big challenge, how to match up, either move some of that supply from lunchtime to the evening, or to move some of that demand from the evening to the times of day when you have ample solar availability. In the case of India, we really think that batteries are going to play an important parts of that story, especially if those cost decline that you've seen over the last years can be maintained. Batteries are actually ideal for those kinds of short term, four-hour managing those kinds of fluctuations. Another issue that I wanted to bring to your attention is to push back a little bit on the idea that if we add solar or if we add solar and wind, then our problems in the electricity sector with emissions are resolved. Because that's simply not the case when you look at the existing stock of assets, particularly coal-fired power plants that are relatively young, in some cases quite inefficient, and would normally have operating lifetimes that extend well into the future. So today, there's about a 170 gigawatts of coal-fired power under construction, and a fleet of over 2,000. A chunk of that is sub-critical technologies, so it's the least efficient technology, and most of the plants are in developing economies in Asia. There's a big distinction to be made between the coal fleet in Europe or North America, which by now is quite old, the average age is over 40 years, and the fleet in Asia, which has an average age of 12 years. Right now, the coal-fired fleet is the single largest source of global emissions. So that's 10 gigatons out of 33 gigatons for the energy sector. Even if we didn't build any new coal beyond that, which is under-construction already, then the emissions from that existing fleet would still be pretty much the largest source of emissions in 2050. So if you're going to tackle, if you're going to bring the world onto a trajectory consistent with Paris, it's not just what you add, it's what you do with the stuff that you already have. That is a technology story, but it's also a social and just transition story because here, there are also jobs in the coal supply chain and implications for countries that can't just switch off that source of generation overnight. The solutions that we look at, you can retrofit in some cases with carbon capture, utilization, and storage technologies, particularly where you have a youngish plant and efficient plant that's close to places where you can store the CO2. You can also repurpose some of the coal-fired plants for flexible operations. So they can provide some of the flexibility that we were talking about in the previous slide then in the end, you can also retire some of them early. Is what you see the agreement to phase out coal in Germany involving. You also got China has already started facing out some small inefficient plants at ages of 20 years or less. But for us, this is a very important part of the energy transition story. It's a much more difficult problem in some ways for policymakers, but it's an essential part of the way that you get to a sustainable development scenario. I mentioned at the start of the presentation that we did some work on offshore wind. I wanted to highlight quite how strong an opportunity that is for Europe, because we've done some analysis about what Europe's power mix would look like in the context of ambitions for carbon neutrality by mid-century. What we find is that if we switch over to the renewable technologies, and in fact with the cost reductions that we see, with the higher capacity factors, so there's more reliable wind speeds that you get far from shore. There's a reasonable prospect that offshore wind could become the single largest source of European electricity generation by the 2040s, and then it becomes this important pillar of the way that Europe could meet its emissions reductions targets. That could even increase further if that offshore resource were to be harnessed to the production of low carbon hydrogen, for example. So I'd like to, before concluding, just to sum up what does this all amounts to when you think of energy-related CO2 emissions. You remember the start we talked about three scenarios. So if we stay on our current course, we don't add any additional policies depend the curve, that's pretty much where we end up, that's continuing the upward trend of CO2 emissions that we've seen since 2010. We talked about adding in the stated policy. So all the things that governments have committed to doing, and that does make a significant difference in flattening emissions. But I think you're all aware that flattening emissions is not the task that we have been set. What we need to do, and this is certainly true in the sustainable development scenario, is to bring those emissions down very sharply so that by 2050, a leading edge of countries are very close to that net-zero point, and among them, many countries in Europe. That puts us the world on track to get to net zero by 2070 in the scenario, and I'm sure we'll come back to aspects of that in the conversation later. But how do we get from the blue stated policy scenario line to the sustainable development scenario? The large picture one come as a huge surprise to you, the big categories or efficiency, renewables, and then there's a host of other technologies. But what I really wanted to highlight is the fact that there is a whole range of policy levers and technologies that you would need to apply in order to get from one trajectory to the other. So efficiency, not just in general, but efficiency across a specified wide range of industrial applications, appliances, and so on. Renewable is not just in the power sector, but also in end uses. Nuclear, fuel switching, hydrogen, some CCUS, particularly in hard to obey industrial sectors, and then some other areas of behavioral change and material efficiency as well. So the message here is that there is no silver bullet, there is no single or simple answer that is going to move us from where we are to where we need to be. We're going to have to need to work on a whole range of fronts in order to get there. Then some concluding thoughts. We are seeing some progress. I mean, you can look at the debate in France that talk about net-zero are now an increasing number of jurisdictions, 65 jurisdictions by our count after the UN Climate Summit in September had announced we're actively considering net-zero targets by mid-century. So there's a lot of movement, but we're still a long way from the goals that we have set ourselves, both in terms of environmental threats but also energy security. Shell is really having a profound impact on the oil and gas landscape. The question that we're now asking of oil and gas companies is: how are these changes that are on the way in the energy sector? What are the implications then for your operations, for your business models? Even more importantly, what contribution are you going to make to the sorts of changes that we think we need? Are the oil and gas companies in that sense, can they position themselves as really part of the solution to the challenges that we face? In relation to the electricity sector, it's the transformation that's underway, but I would urge you to not just think about the electricity sector is what we add, but it's also about what we do with the things that we've already built. In relation to Africa, I would urge you to have in mind that Africa is not just, in a sense, an energy access story, it's also a huge urbanization and potentially a huge industrialization story as well. Then we do recognize that the impetus for energy transitions is coming from a really wide range of angles. So from civil society, from municipalities, from cities, from investors, from companies. But in our view, there is the indispensable role that governments play. They're the ones who chart, who define the conditions under which people innovate, under which they invest, and it's really the governments who we're looking for the lead when we look for a more secure and sustainable future. So with that, thank you very much for your attention.
