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2018 was a big year for energy, ‘the year of electrification’ as panelist Fatih Birol, Executive Director of the IEA has called it.
Birol says, the good news on electric cars is that we have now reached 5 million cars across the world – half of which are in China. This is a big achievement.
But it’s important to put this into context, he adds. Global oil demand is expected to increase by around 1.3 million barrels a day. And the effect of five million electric cars on the road is a reduction of only 50,000 barrels.
There are still one billion combustion engine cars on the road, but drivers are not the main causes of rising oil demand, Birol says. It’s trucking, and air travel – and people in Asia are just starting to fly around the world.
So it’s not accurate to say that electric cars will reverse our growing demand of oil.
Even if there were 300 million electric cars on the road, the impact on CO2 emissions would be less than 1%.
Nearly 50% of global energy is expected to be generated from wind and solar by 2050. How will the future of energy be reshaped by technological, social and political shifts?
On the Forum Agenda
Digitalization of energy systems
Emerging patterns of demand and supply
Shifting global energy governance models
The transition towards a green energy future is well underway. But with deep technological, social and political shifts taking place, how should the energy sector adapt? Nearly 50% of global energy is expected to be generated from wind and solar by 2050. A low-carbon energy future is coming, but we must move even faster.
Electricity demand is growing faster than many of us believe, Birol says. This is mainly driven by rising incomes, especially in emerging markets.
The number one driver of energy demand may surprise a lot of people, he says. It’s air conditioners. Air conditioners are a particularly prevalent in India, China and ASEAN, and these countries in turn are the drivers of energy consumption around the world.
So we need to choose our energy sources very carefully. No unnecessary energy plants, and we must become more efficient.
We will need oil, clean coal, gas and of course renewables, but electricity is the future of energy, he adds.
On the future of oil
Whatever scenario you look at, oil and gas will be with us for a long time, we just have to learn to use it more effectively, says Birol.
Many companies are making the right moves, he adds, and techniques like hydrogen power, Carbon Capture and Storage and reducing methane emissions during production are very positive.
The Middle East will remain the largest exporter of oil for many years to come, he says. The US is producing a lot of its own oil, but most of it is used for domestic consumption, he adds.