increase the installed capacity of battery storage
by a factor of 17, creating new business
opportunities.
The increasing use of electric vehicles
(EVs) will raise demand for electricity as well as
help balance the power grid. By 2040, EVs will
consume 13 and 12% of the power output in
Europe and the USA respectively. Since EVs can
be charged at peak times of renewable energy
generation or when the wholesale electricity
price is low, the power system will be able to
accommodate intermittent energy sources such as
solar and wind power better. The development of
EVs will drive a reduction of 73% in the cost of
lithium-ion batteries by 2030. At the same time,
the use of fixed power storage technologies like
EV batteries helps decarbonise energy end-use
applications.
Household photovoltaic (PV) systems will
become increasingly popular. By 2040, the output from rooftop PV systems will account for 24,
20, 15, 12, 5 and 5% of the total power output in
Australia, Brazil, Germany, Japan, the USA and
India respectively. The development of large
renewable energy systems will squeeze the
demand for power generated by coal- and natural
gas-fired power plants. Even with the increased
power demand from EVs, large fossil fuel-fired
power plants will be under pressure to maintain
their profitability.
1.7 Accelerating Change in Global
Energy Governance:
From OPEC and the IEA
to Win-Win Cooperation
Global energy governance in the second half of
the 20th century was epitomised by the ongoing
struggle between the Organization of Petroleum
Exporting Countries (OPEC), representing the
interests of oil producers, and the International
Energy Agency (IEA) under the Organization for
Economic Co-operation and Development
(OECD), which represents the interests of Western oil consumers.
In the 21st century, countries are increasingly
concerned about energy security, as a result of
which global energy governance has gradually
improved. As the most important international
energy organisation, the IEA has shifted from its
initial goal of “preventing oil supply disruption”
to “maintaining and improving system response
to oil supply disruptions, promoting reasonable
energy policies, strengthening cooperation with
non-IEA countries, and industrial and international organisations across the world, operating a
permanent international oil market information
system, improving the global energy supply and
demand structure, driving forward international
collaborations on energy technologies through
development of alternative energy and improvement of energy utilisation efficiency, and helping
integrate environmental and energy policies”. To
this end, it has taken a series of measures:
strengthening exchange and negotiations with
OPEC to promote stability in the international oil
market; developing cooperation with Russia and
emerging economies such as China and India
through the G7 platform; and improving energy
efficiency and promoting clean energy to address
the huge challenges of global energy development and climate change. In 2012, the IEA put
forward six basic principles to build an “efficient
energy world”. These include making the economic benefits of energy efficiency more visible,
so that regulation can encourage the promotion
of energy-efficient technologies.
Global energy governance has developed as
the energy industry has evolved. Over 150 years,
the energy industry has become a major driver of
progress in the world and a core industry in most
major countries. However, as the number of
participants in the world energy market gradually
increases, global energy governance has become
ever-more complicated. Despite the current
mainstream message of win-win cooperation, the
diverse economic and political features of energy
make global governance a difficult task in the
long term. It will take several decades for the
world’s energy consumption to shift from fossil
fuels to new energy alternatives, and the global
game that currently surrounds fossil energy production, transport and consumption will remain
and even intensify while the transition takes
place. This can significantly affect international
Special Report 4: China’s Energy System Revolution
409
by a factor of 17, creating new business
opportunities.
The increasing use of electric vehicles
(EVs) will raise demand for electricity as well as
help balance the power grid. By 2040, EVs will
consume 13 and 12% of the power output in
Europe and the USA respectively. Since EVs can
be charged at peak times of renewable energy
generation or when the wholesale electricity
price is low, the power system will be able to
accommodate intermittent energy sources such as
solar and wind power better. The development of
EVs will drive a reduction of 73% in the cost of
lithium-ion batteries by 2030. At the same time,
the use of fixed power storage technologies like
EV batteries helps decarbonise energy end-use
applications.
Household photovoltaic (PV) systems will
become increasingly popular. By 2040, the output from rooftop PV systems will account for 24,
20, 15, 12, 5 and 5% of the total power output in
Australia, Brazil, Germany, Japan, the USA and
India respectively. The development of large
renewable energy systems will squeeze the
demand for power generated by coal- and natural
gas-fired power plants. Even with the increased
power demand from EVs, large fossil fuel-fired
power plants will be under pressure to maintain
their profitability.
1.7 Accelerating Change in Global
Energy Governance:
From OPEC and the IEA
to Win-Win Cooperation
Global energy governance in the second half of
the 20th century was epitomised by the ongoing
struggle between the Organization of Petroleum
Exporting Countries (OPEC), representing the
interests of oil producers, and the International
Energy Agency (IEA) under the Organization for
Economic Co-operation and Development
(OECD), which represents the interests of Western oil consumers.
In the 21st century, countries are increasingly
concerned about energy security, as a result of
which global energy governance has gradually
improved. As the most important international
energy organisation, the IEA has shifted from its
initial goal of “preventing oil supply disruption”
to “maintaining and improving system response
to oil supply disruptions, promoting reasonable
energy policies, strengthening cooperation with
non-IEA countries, and industrial and international organisations across the world, operating a
permanent international oil market information
system, improving the global energy supply and
demand structure, driving forward international
collaborations on energy technologies through
development of alternative energy and improvement of energy utilisation efficiency, and helping
integrate environmental and energy policies”. To
this end, it has taken a series of measures:
strengthening exchange and negotiations with
OPEC to promote stability in the international oil
market; developing cooperation with Russia and
emerging economies such as China and India
through the G7 platform; and improving energy
efficiency and promoting clean energy to address
the huge challenges of global energy development and climate change. In 2012, the IEA put
forward six basic principles to build an “efficient
energy world”. These include making the economic benefits of energy efficiency more visible,
so that regulation can encourage the promotion
of energy-efficient technologies.
Global energy governance has developed as
the energy industry has evolved. Over 150 years,
the energy industry has become a major driver of
progress in the world and a core industry in most
major countries. However, as the number of
participants in the world energy market gradually
increases, global energy governance has become
ever-more complicated. Despite the current
mainstream message of win-win cooperation, the
diverse economic and political features of energy
make global governance a difficult task in the
long term. It will take several decades for the
world’s energy consumption to shift from fossil
fuels to new energy alternatives, and the global
game that currently surrounds fossil energy production, transport and consumption will remain
and even intensify while the transition takes
place. This can significantly affect international
Special Report 4: China’s Energy System Revolution
409