On April 9th, Mr. Paul Simons, Deputy Executive Director of the International Energy Agency (IEA), presented at the Inter-American Development Bank (IDB) the key findings from IEA’s flagship report, World Energy Outlook 2017 (WEO 2017). Mr. Simons addressed the important role of emerging economies, where the Latin American and the Caribbean (LAC) region will become an increasingly active player in the global energy market. In the New Policies Scenario[1] of WEO 2017 (Figure 1), global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. China, India, Africa and Latin America will maintain a growing expansion of energy demand, while major developed economies, e.g. US and Europe, are expected to experience a gradual decrease in energy needs.
Figure 1. Change in Global Energy Demand, 2016-2040
Source: IEA World Energy Outlook 2017
The report envisioned four major trends that will shape the global energy sector in the coming decades: (1) Rapid deployment and falling costs of clean-energy technologies; (2) Growing electrification of energy; (3) Shift to a more services-oriented economy and a cleaner energy mix in China; and (4) Resilience and further growth potential of shale gas and tight oil resources in the United States.
Mapping these trends into the LAC region, Mr. Simons also commented on the opportunities and challenges for our member countries. In 2040, the share of variable renewables exceeds the 15% in the Sustainable Development Scenario (Figure 2, Panel A). A rising share of non-conventional renewable requires a range of policy responses to enhance the flexibility of the power system. In terms of hydrocarbons, Latin America will remain a crucial producer of oil, with one-third of the net increase in global oil supply accounted by the region. During the next 25 years, Latin America’s gas demand will grow 50% and will become the eights-largest gas consumer in the world (Panel B). Concerning access to electricity, the report expects that Latin America reaches near-universal access by 2030. Nevertheless, the picture for access to clean cooking facilities is less clear.
Figure 2. A closer look at Latin America energy trends
| Panel A. Share of non-conventional renewables in power generation | Panel B. Gas demand in selected regions |
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Source: IEA World Energy Outlook 2017
To conclude, Mr. Simmons shared the initiatives that the IEA has in the region. IEA is closely cooperating with Latin America countries and initiating bilateral work programs in Mexico, Brazil, Chile and Argentina concerning Energy Efficiency, Renewable Energy and Technology Adoption. The perspective of IEA, together with World Energy Outlook, will be an important benchmark for Latin America and the Caribbean development in the years to come, and it will serve as a bridge in the global energy market to facilitate regional dialogue.
Photo: Mr. Paul Simons presenting at the IDB
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[1] The New Policies Scenario broadly serves as the IEA baseline scenario. It takes account of broad policy commitments and plans that have been announced by countries, including national pledges to reduce greenhouse-gas emissions and plans to phase out fossil-energy subsidies, even if the measures to implement these commitments have yet to be identified or announced.
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