1.
© OECD/IEA 2018
Global energy prospects and their
implications for Indonesia
Jakarta, 16 July 2018
IEA
Dr. Fatih Birol, Executive Director, IEA

2.
© OECD/IEA 2018
Old ways of understanding the world of energy are losing value as shifts occur in demand and supply;
Southeast Asia, with China and India, is moving to the centre of the global energy demand picture
Southeast Asia becoming pivotal to the global energy landscape
Change in energy demand, 2016-40 (Mtoe)
India
1 005
420
Southeast
Asia
China
790
United
States
-30
Japan
-50
Europe
-200
270Central and
South America
485
Africa
135 Eurasia
480
Middle
East

3.
© OECD/IEA 2018
Global oil demand remains robust
Global oil demand is set to rise by 1.4 mb/d in 2019, with Southeast Asia, China and India making up 60% of the increase;
Southeast Asia is becoming increasingly dependent on oil imports, making energy security a pressing concern
0
0.4
0.8
1.2
1.6
2
2005-2014
mb/d
2016 2017 2018 20192015

4.
© OECD/IEA 2018
Higher oil prices unleash second wave of US supply
Supply growth from the United States alone will cover 80% of the world’s demand growth to 2023, with
Canada, Brazil and Norway – all members of the IEA family – also growing strongly
Changes in global oil supply capacity 2017-2023
-1.0
0.0
1.0
2.0
3.0
4.0
US
Brazil
Canada
Iraq
Iran
Norway
Colombia
Indonesia
China
Mexico
Angola
Venezuela
mb/d

5.
© OECD/IEA 2018
Prices & reforms have cut the global subsidy bill
Estimated value of global fossil-fuel consumption subsidies
Subsidy reforms have made global oil demand more price-sensitive, but the recent rise in prices
mean governments face growing pressure to reinstall subsidies
10
20
30
40
50
60
70
100
200
300
400
500
600
700
2009 2010 2011 2012 2013 2014 2015 2016 2017
Billiondollars,2017
Electricity
Coal
Gas
Oil
ASEAN
total subsidies
(right axis)

6.
© OECD/IEA 2018
The global gas supply outlook
The US accounts for almost 75% of growth in global LNG exports to 2023; Southeast Asia will need to
increasingly import LNG from Qatar, Australia & the US to meet growing demand
Natural gas production growth for selected countries and regions, 2017-23
6
-50
0
50
100
150
200
United States Middle East China Australia Russia Egypt Europe
bcm
Domestic market Export market

7.
© OECD/IEA 2018
Global coal trade: age of rapid expansion is over but levels remain robust
Global coal trade remains robust to 2040, as a drop in imports into China and mature economies is offset by higher
imports in South and Southeast Asia
Global steam coal exports
100
200
300
400
500
600
700
800
2000 2005 2010 2016 2025 2030 2035 2040
Mtce
Indonesia
Australia
Rest of world

8.
© OECD/IEA 2018
Southeast Asian electricity generation is set to more than double by 2040, requiring additions greater
than Japan’s current power capacity
Electricity generation by selected regions
The future is electrifying
Indonesia
500 1 000 1 500 2 000 2 500
Japan
TWh
2016 Growth to 2040
Southeast Asia
Korea

9.
© OECD/IEA 2018
Air conditioning is driving electricity demand higher
Air conditioners will represent 35% of the growth in ASEAN electricity demand to 2050; In Indonesia,
10% of households have air conditioners compared to over 90% in Japan and the US
Share of final electricity demand growth to 2050 in ASEAN countries
Cooling
35%
Lighting and appliances
21%
Other buildings
11%
Industry 26%
Other
7%

10.
© OECD/IEA 2018
Technology progress and competition have driven down prices to record-low levels in countries with
good renewable resources, transparent policies and well-designed auction schemes
Announced wind and solar PV average auction prices by commissioning date
Wind and solar PV costs falling rapidly
0
20
40
60
80
100
120
140
160
180
2012 2013 2014 2015 2016 2017 2018 2019 2020
USD/MWh
Onshore wind
average auction
price
Solar PV average
auction price

11.
© OECD/IEA 2018
Global energy – Implications for Indonesia
• Higher oil prices are hurting consumers & putting pressure on governments to
reintroduce subsidies; crucial that any subsidies are carefully targeted
• The emergence of a competitive, global gas market with the rise of LNG provides
opportunities for Indonesia on both the demand & supply sides
• Energy investment is a critical issue for Indonesia – particularly in the power sector to
respond to rapid demand growth & sustainability challenges
• Renewables & energy efficiency can cost effectively tackle air pollution and fossil fuel
imports, but need best-practice policy to lock-in cost reductions & aid deployment
• The IEA stands ready to support Indonesia navigate its energy transition, with data,
analysis, an “all fuels and technologies “ approach & real-world solutions

12.
© OECD/IEA 2018
www.iea.org
IEA