Vladimir Putin attended a plenary session of the first Russian Energy Week (REW) Energy Efficiency and Energy Development International Forum.
Following the plenary session, Vladimir Putin had a brief meeting with foreign guests of the Russian Energy Week who arrived in Moscow to take part in the Ministerial Meeting of the Gas Exporting Countries Forum (GECF). The President wished successful joint work during the Russian Energy Week to heads of the related ministries of the GECF member states.
Representatives from major international energy companies and organisations together with leading world experts have been invited to participate in the forum, which is taking place from October 3 to 7 in Moscow and St Petersburg.
The Russian Energy Week’s official programme includes about 50 business events. The main topics being discussed are the global energy agenda, the main directions of the fuel and energy sector, and the existing challenges in the energy sector.
Transcript of the Russian Energy Week plenary session
President of Russia Vladimir Putin: Good afternoon, ladies and gentlemen.
I cordially welcome everyone at our representative event. Four hundred companies, including 70 foreign partners, are a large team of those who are engaged in the most important sphere of the world economy – energy.
Today, at the Energy for Global Growth plenary session, we are discussing key, defining questions: what tomorrow’s global energy will be, what priority tasks we have to solve in order to ensure a reliable supply of energy to the largest macro-regions of the planet and each country separately, and on this basis to increase the competitiveness of national economies as well as improve the quality of life of millions of people.
Today I would like to outline the most important trends that will determine the common energy future of mankind, in our opinion.
The new energy layout will inevitably change. Experts believe that mankind will require 30 percent more energy than today in as soon as 20 years’ time. This is due to the global economic development, rising population, better quality of life and growing consumption, especially in developing countries. Let me remind you that, according to statistics, up to 2 billion people on earth still do not have full access to energy sources.
Undoubtedly, this situation will change in the coming decades, leading to the formation of new markets. The geography and structure of energy demand will primarily shift towards Asia-Pacific countries.
Further on. The energy community is now actively debating the future energy balance of the 21st century.
The majority agree that hydrocarbons will continue to play a leading role in the next 20–25 years, particularly in the conditions when some countries voluntarily restrict their nuclear power generation. At the same time, we can expect competition between fuel resources, above all conventional and new energy sources.
Presently, nearly all developed nations have opted for clean energy development, including renewable energy sources. They account for over half of the global power generation. By 2035, their share in the global energy balance is expected to grow from 15 to 23 percent, and in electric power generation – from the current 7 percent to 20 percent (without hydropower).
However, the traditional power sector will also undergo transformation. For instance, the modern prospecting and production technologies make hard-to-access oil and gas reserves more accessible, including the Arctic potential reserves.
Another key trend will be the lowering of energy intensity of the economy, first of all due to the mass use of modern technology. Internal combustion engines are an example. Twenty years ago, a car used on average 12.2 litres of petrol per 100 kilometres and now it is currently 8.5 litres, which is 31 percent lower.
Another very important trend is the digitalisation of the energy sector. The fast processing of huge amounts of data, artificial intelligence, the introduction of smart energy grids will allow for a system analysis of the production plus consumption of energy and in the future will lower the cost of energy, increasing its efficiency as well as cutting losses.
Another obvious tendency is the increased accessibility of energy and energy infrastructure in general. Regional markets are being integrated, traditional logistics chains see new energy delivery routes, first of all the Northern Sea Route and the Silk Road.
A flexible LNG market is being formed. Thus, the number of LNG consumers has doubled over the past decade.
All these trends will make the connection between producers and consumers stronger and will lead to the further globalisation of markets as well as growing energy interdependence between various parts of the planet.
Colleagues, being a leading energy nation, Russia understands well its role and responsibility in providing sustainability and the development of the global energy sector. Our country exports energy to dozens of countries in the world and has repeatedly confirmed its status as a reliable and stable partner.
We scrutinise and take into account the global energy trends. Over a period of the past few years, Russia has created conditions for major investments in the development of new technology, equipment production localisation plus increased added value. All this made it possible to increase the competitiveness of the Russian fuel and energy sector on the global market throughout the world.
We are upgrading oil refineries and creating powerful oil and gas processing facilities such as the Amur and Tobolsk clusters and the Eastern Petrochemical Company. We are concentrating on this sector in other regions of Russia, primarily in Tatarstan.
We are implementing projects that promote infrastructure development and export diversification, such as Yamal LNG. We are building gas pipelines: Nord Stream 1 is operational, and Nord Stream 2 is under construction, just as Turkish Stream and the Power of Siberia are. All this is of crucial significance for Eurasia. We are also increasing the capacity of the Eastern Siberia – Pacific Ocean (ESPO) pipeline.
I want to stress that these are modern high-tech projects. It is also important that our foreign partners are involved in them, which is evidence of our fuel and energy sector’s competitiveness and its attractiveness as a strategic investment destination.
Like other leading countries, we want to have cleaner energy and we have attained considerable progress in this respect.
I would like to say in this context that Russia’s energy balance is one of the cleanest among the world’s largest economies. Nuclear and hydroelectric power plants and renewable energy sources produce over one-third of our electricity. Fifty percent of electricity is produced at gas-fuelled stations, which helps to considerably reduce emissions and other negative impacts on the environment. This is why we so calmly pledged to reduce greenhouse gas emissions under the Paris climate agreement.
Taken together, the clean sources of energy produce some 84 percent of our electricity, and we expect this figure to increase to 90 percent by 2035.
The ongoing change in Russia’s energy balance will reduce domestic oil consumption, and the methods for coal use will become more environmentally friendly.
In accordance with Russia’s national energy strategy, renewable electricity generation in Russia will increase several-fold in the next 20 years. Also, the development of renewable resource technology will help us gain the competencies needed to shape the global energy field of the future, including the development our own technologies.
I would also like to note that we are employing effective mechanisms to support investment in renewable electricity generation, so investors can earn guaranteed profits. We will continue to encourage investment in this sector, including from our foreign partners, foreign companies.
I mentioned earlier that, unlike other countries, Russia has not abandoned its plans to develop clean and safe nuclear power. Moreover, Rosatom has become a leader in the atoms for peace market: at this point, Rosatom has received requests to build 34 power plants abroad.
In a bid to increase energy efficiency by 2035, we plan to cut our GDP energy intensity by 33 percent. This will be achieved through structural changes in the economy, as well as efforts to reduce electricity losses in the grids, the introduction of energy-efficient and digital technologies, and cutting the fuel consumption rate in the transport and electricity generation sectors.
No doubt, our energy sector is looking to the future and the future requires innovation. That is why we are paying special attention to research, engineering and design solutions in the energy sector and are creating conditions conducive to attracting private investment in promising projects.
One good illustration of this is the expanded production of modern solar panels using domestic technology, as well as equipment for wind-generated power.
Colleagues, existing opportunities, and at the same time, objective problems in the energy sector require that we join efforts to be able to move forward.
We are in favour of joint efforts in order to remove the obstacles that are hampering any further economic growth of countries, primarily developing states, which need a reliable and accessible supply of energy.
Regrettably, however, we often see different trends instead of progress towards this global energy partnership. For example, a number of restrictions (unilateral financial and so-called sectoral sanctions in the energy sector) are directly used by some of our partners, by some countries for unfair competition – you can’t say it in any other way – for peddling their own interests and energy resources, even in spite of their non-competitiveness.
The negative effect of these steps is obvious for the entire world economy plus the entire global energy sector. This primarily affects the consumers as well as the countries, which, in supporting these actions, are losing lucrative investment opportunities.
The growing technological inequality is also presenting an undoubted danger for the global energy sector. For example, only three companies from advanced economies account for two-thirds of hi-tech oil services in the world.
Today, it is important to consistently remove barriers in the path of a free movement of energy resources and investment in their production, to actively develop energy infrastructure, as well as to develop new technology by joint efforts.
Let me emphasise that we are indeed ready to cooperate in the energy sphere with all partners concerned on the basis of the principles of equality and mutual benefit.
We attach special importance to working within the framework of such authoritative organisations as BRICS, EAEU, SCO, OPEC, plus the Gas Exporting Countries Forum.
A good example of successful joint actions is the agreement that Russia and a number of other countries have signed with OPEC. Not only have we achieved stabilisation on the oil market, but we now see new opportunities opening before us, opportunities for the implementation of promising projects and for technological cooperation, because investment has flown back into this sector of the world economy.
I am confident that we will continue pooling our efforts for the sake of building a stable and fair energy future.
I wish all those taking part in the Russian Energy Week to be able to carry out lots of productive work and also have some interesting discussions.
John Fraher: President Putin, thank you very much for those opening words. I think they very eloquently have expressed the full range of the themes and the topics that we want to talk about today at this forum.
Let me first introduce our illustrious panel. My name is John Fraher. I am a senior executive editor at Bloomberg News. To my left is Mr Seyed Mohammed Hossein Adeli, Secretary General of the Gas Exporting Countries Forum. I am, of course, delighted to welcome our host Vladimir Putin. To his left is the Secretary-General of OPEC, Mohammed Sanusi Barkindo. And to his left is Adnan Amin, the Director-General of the International Renewable Energy Agency. Thank you very much for joining us.
President Putin, let me begin with you. You mentioned Russia’s alliance or recent agreement with OPEC, and you mentioned the fact that it opens up new opportunities for Russia. As you know, there is a lot of talk about whether Russia and OPEC will extend these production cuts, which are due to expire at the end of March. Would you consider extending them beyond the end of March?
Vladimir Putin: I put it a bit differently. I said this creates an opportunity to invest in the global energy industry because we are seeing investment return to the energy industry after prices stabilised. Remember that in 2016, when we agreed on these joint actions toward the end of the year, there was a surplus on the market, production exceeded consumption and reserves were critical. All this led to a critical reduction in energy prices, primarily oil.
In late 2016 we agreed on joint actions and reduced production. By the way, all countries are essentially meeting their commitments under these agreements. Initially, they were meeting them by 103 percent. Russia assumed the commitment to reduce production by 300,000 barrels per day and this is what we did. We fully meet our commitments. As you rightly noted, later we agreed to extend them by another nine months, until March 2018.
I believe all countries – not only oil producers but also consumers – have a stake in what is taking place today because when oil prices dropped below the lower limit, so to speak, investment in the industry stopped. This meant that sooner or later the world energy industry was bound to face a sharp and unexpected shortage of energy resources, and prices would have skyrocketed again. Nobody wants this. To the contrary, all countries want a stable market.
I believe what we did together with OPEC benefits the entire global economy. Whether we will extend these agreements or not will depend on the situation in the world market. In principle, I do not rule it out, but we will proceed from the realities that take shape by March 2018.
John Fraher: But nevertheless, that sounds a little bit to me like you would perhaps be in favour of extending them beyond March. Of course, the end of March is not very far away.
Vladimir Putin: I think this is possible. You know very well that we must be very cautious in our public statements at this point. Many countries that have not joined us have been very positive about our cuts to oil production. I understand that the Libyan leadership, for example, publicly stated recently that they are considering the possibility of Libyan companies signing onto our joint efforts, at least in the part of the country controlled by the forces that said this. I am referring to MarshalHaftar, for one.
Everyone understands this, everyone understand the need for such joint efforts. Again, we will have to see how the global energy balance looks in March 2018. We are in contact with our key partners, both with OPEC and major oil producers. I hope we will very soon have the pleasure and honour of receiving the King of Saudi Arabia in Russia, and we will certainly talk about this. We maintain a regular dialogue and, as I said, we will make a decision proceeding from the realities of March 2018. But I do not rule out that we may also extend these agreements.
John Fraher: I put to you one last question on this. Everyone in this room, of course, likes stability. Everyone in markets likes stability. If you were to decide to continue the production cuts, could you see the extension of cuts lasting until the end of next year?
Vladimir Putin: I am telling him that we do not yet know whether we will extend them or not, and he is asking us for how long we will extend them. When we decide whether to extend them or not we will determine the timeframe. But in general, speaking about a potential extension, it should last at least to the end of 2018.
John Fraher: You’ve always said that Russia would never join OPEC. Has the success of this agreement changed your mind on that? Is it something you would think about again?
Vladimir Putin: No, nothing has changed, all the more so since we all see and analysts see that we can effectively coordinate our work even while remaining outside OPEC. We do not consider it necessary to bind ourselves with administrative restrictions but will continue working with the OPEC countries and major producers on a voluntary, mutually beneficial basis. When we negotiated who must reduce production, by what amount and in what timeframe – and this was a complicated negotiation process – we looked at the production level of participants at the moment and when and by what amount they should cut it. This was not an easy job. We were ready to compromise and we did. Our partners were also ready to compromise to stabilise the entire global energy market. We have positive experience, which we will use going forward.
John Fraher: Mr Barkindo, let me turn to you. The oil market does look healthy right now; prices have rallied and global inventories are falling. Do you feel right now that the deal with Russia should be extended?
OPEC Secretary General Mohammed Sanusi Barkindo: Thank you very much, John, and let me begin by thanking the Russian authorities under the able leadership of President Vladimir Putin for putting together this premier event in the very timely situation that we are in today, and to thank them for inviting OPEC to participate.
I had listened attentively to the very comprehensive address of President Putin, which has covered the entire energy spectrum, and to the very apt answers that he gave to your very pointed questions.
I would like to use this opportunity, on behalf of OPEC, to really thank the President and his Government and his very able Minister Alexander Novak for the role they played in the run-up to these historic decisions that we reached last year. The declaration of cooperation that we agreed on December 10 last year, which the President just referred to, was very historic, and the work that went into each was very strenuous, very challenging. But thanks to Alexander Novak and his colleagues in OPEC, the president of the conference Mohammed Sada of Qatar, who is here with us today, and Bijan Zangeneh, del Pino for Venezuela – we all rallied together despite the fact that Russia is not a bona fide member of OPEC. But they took a leadership role in ensuring that we had this consensus not only within OPEC, but between OPEC and non-OPEC in order to restore stability to this market.
The President has made reference in his speech to stability. The issue is about stability. Without stability, which eluded the oil market in the last 2–3 years, we can all see the consequences on investments that the President had referred to. Investments in this industry have contracted in the last 2–3 years, cumulatively over 40 percent, threatening future supplies. And we all have the shared responsibility, whether OPEC or Russia, to ensure the security of future supplies. We are reliable and dependable suppliers of oil to the oil-consuming markets, not only now, but for the foreseeable future.
So I want to reiterate the vision of the declaration of cooperation and also state here that all the participating countries have been abiding by and implementing their own obligations fully. For the first time in history we are having a joint effort where conformity to these obligations has been extremely well, very high. Russia has played its part. It is actually implementing over 100 percent of its obligations, particularly in the last two months. So, we are all on course. And, as the President has just said, the fundamentals will decide in March of next year whether we have been able to achieve the objective of rebalancing the market. One variable in the equation, stocks, has been out of balance since the fall of 2014. And it was the collective decision of Russia and OPEC that in order to balance this equation we had to address this variable of stocks, to bring it down, to help the market to bring it down to the five-year average, and we are on course. From January to date, we have seen a stock drawdown of nearly 170 million barrels. So there is massive de-stocking that is taking place across the spectrum, across regions, both onshore and offshore. And I am confident [that with] this platform that we have created, thanks to President Putin and Alexander Novak and the ministers in OPEC, we will be able to restore stability on a sustainable basis to this industry. Thank you.
John Fraher: And how quickly do you think you will be ableto get to that point? I mean this restoring of stability. Is that happening more quickly than you would have anticipated maybe three months ago?
Mohammed Sanusi Barkindo: As you have seen, when we started, the stocks had built up to over nearly 380 million barrels over the five-year average, and this was unprecedented in the history of oil. But as a result of the full implementation of the declaration of cooperation, from January to date we have been able to stimulate the drawdown to about 168 million barrels as the latest numbers are showing. Therefore we are on course, the drawdown is ongoing, the market is rebalancing, going forward. And without pre-empting what Alexander Novak and his colleagues, the ministers, will decide on November 30, I think the fundamentals that will be presented to them at that time, as President Putin has just referred to, will inform the decision that they will eventually take on going forward. But all I can say is that the future is looking much brighter than before this decision was taken on December 10, and we are looking beyond the rebalancing of this market to further institutionalise this strategic partnership between OPEC and the non-OPEC through the Russian Federation, so that we will be able to sustain the level of cooperation beyond the issue of supply and demand on stocks.
John Fraher: And finally on that topic, could you give us a sense of what is the mood among the OPEC members? You obviously talk to them all the time, what is the current balance of opinion in OPEC as regards extending production cuts next year?
Mohammed Sanusi Barkindo: I think there is a common understanding, not only within OPEC but on the international oil markets, that for the first time we have got our act together, that for the first time we have shown and demonstrated our commitment of 24 producing countries to take full responsibility in restoring stability to this market. And we have also demonstrated beyond a reasonable doubt that we are committed to sustaining this beyond the rebalancing of the market.
The market in the fullness of time, based on the figures that are before us now, will rebalance, will come back to balance, and the equilibrium will be restored. But what happens the morning after? Now discussions are ongoing among my ministers in OPEC, together with Alexander Novak and his colleagues in the non-OPEC group, on how best we can institutionalise this partnership so that we can begin to address issues like investments that the President has just referred to. Without sustained investments in this industry in a predictable manner, we may be sowing the seeds of future shortages of energy, which is not in the interests of either producers or consumers. What we have done is not only in the interests of producers, but also in the interests of consumers as President Putin has aptly described.
John Fraher: Thank you for that.
Let’s shift gears now and turn to the future of the energy industry. So, governments around the world are throwing their weight behind fighting climate change regardless of what Donald Trump and the US thinks about Paris. Transport is becoming more fuel efficient and electric cars, self-driving cars, may transform societies in ways that are as yet impossible to predict.
Despite all this, a lot of oil producers say that the industry has still got decades of growth ahead of it as it tries to feed the needs of the world’s emerging middle classes.
But Mr Amin, you represent the renewables industry here in this panel. Do you think those predictions are wrong? Is there too much complacency? Do you find too much complacency when you come to conferences like this full of representatives of the energy establishment?
Director-General of the International Renewable Energy Agency (IRENA) Adnan Z. Amin: It’s a very interesting question but let me start by saying how privileged I feel to be here. And to have somebody from renewables on the same stage with the leader from a leading energy country and two leaders from the hydrocarbons is an indication of how this change is taking place. You wouldn’t have expected that a year ago. So that’s the first indictor.
But in a broader sense, if you look at the pulse of what is happening… I had the privilege of listening to President Putin three times this year. First was in Istanbul at the World Energy Congress when President Putin said the advent of green energy is moving fast and it is the right development for the world for the future. In St Petersburg, I was there and I listened to him when he said that we are reaching limits of sustainability and we need to find a new paradigm for development for the future based on more sustainable energy. And today, placing the whole energy discussion in the broader landscape of global affairs and how this is happening. And I think what I am hearing from a very visionary leader of a leading energy country in the world is that he sees the world of energy changing quite fast beyond what we expected. And I think this is what we see from the perspective of renewables.
Now you mentioned some of those trends but let me just give you a sense of what’s happening. And the fact that this is such a destructive force that we are seeing, is that the bulk of new capacity addition in the power sector – and I think we need to segment how energy is used to analyse it properly – but the bulk of capacity and investment in the global power sector, the majority in the last four years has been from renewable energy, and last year added capacity was 62 percent from renewables. What we are seeing here is that business case for renewables and power generation in different countries – and you cannot generalise among countries because every country has a very specific resource endowment – but in general across the world, the cost of renewables has come down dramatically, the technology to integrate renewables in a reliable way in electricity systems has advanced incredibly fast, and now we are seeing the advent…not just talking about capacity addition but talking about system transformation, how systems of electricity in the future are going to look, how they are going to be based on clean energy generation and how the cost of clean energy generation has come down so fast.
Just to give you some examples, solar PV has decreased, technology has decreased in cost by 80 percent in the past seven years. The cost of onshore wind has decreased by 60 percent. And we are projecting from our research looking at all the different sources that this trend is going to continue into the next ten years. And when you look at the cost of generation from some of the new projects, we are seeing wind and solar projects coming in at three US dollar cents a kilowatt/hour around the world. This is a remarkable new development, and yesterday was the most shocking news – the bid for 300 MW of solar generation in Saudi Arabia by Masdar in Abu Dhabi has been made at 1.7 US dollar cents a kilowatt/hour.
Now, I am not saying that the solar endowment in the Russian Federation is the same as in Saudi Arabia. Clearly not, but what I am saying is that the general trend of cost is coming to a point where we can expect transformative change to take place on the business side.
But on your last point in terms of what does this mean for the system. I was with the CEOs of all the major European utilities yesterday morning in Amsterdam to discuss the implications for them. They have gone through a very traumatic restructuring of their industry because they have now to deal with the advent of new technology, digitalisation of energy, demand response from renewables in ways they we had not imagined, and the fact that the renewables mix in Europe is now moving so incredibly fast that traditional utilities have to move to service models and have to change their business model. I think that this trend is something that will become global in a very short period of time. If you start to look at India and China and the ambitions on renewables; if you look at the fact that in Africa and in Latin America, this has become the dominant form of capacity addition to the global electricity sector. On the power sector, I think the future is going to be largely renewable.
The issue becomes what happens when you start to look at the future of oil. And of course, renewables cannot compete yet on mobility, transportation, freight and other end-use and industrial sectors. But the advent of electric vehicles is going to be a game-changer because we are now seeing countries like China, India, the United Kingdom, Germany, Scandinavian countries, which are now committing to electric mobility by 2030 or by 2040. When that begins to happen is when you will see real impact in terms of demand for different types of hydrocarbon projects. I believe that, you know, gas will continue to play a very important role because, for the time being, you need some level of stability in systems, and gas provides that quick response capability to balance intermittency from renewables and systems. But, you know, demand for oil is very different from the demand you have for renewables, and there I would never predict what will happen to oil, I leave that to much wiser people to do.
John Fraher: But nevertheless, do you feel there’s still too much complacency?
Adnan Z. Amin: I do, and I think that what we haven’t yet fully grasped is how quick this disruptive force is going to move. When you remember what happened very quickly with IT and mobile telephony, and the fact that the landline became obsolete in very few years. We are now seeing new systems for power generation and distribution that are making the old fixed infrastructure of centralised generation and distribution obsolete. And when you have the advent of storage like in electric vehicles…you know, people normally use an electric, use a car two hours a day. But when you have an electric vehicle you basically have a battery on wheel sitting in your garage, and if it’s connected to the system, you have the storage capability with a one second response time that can help to balance systems. So, I think electric mobility will move much faster than people are expecting, I think that will have very destructive implications for the energy sector overall, and I think that we need to prepare because the advent of new technology and digitalisation and blockchain is going to be transformative in terms of how we generate and distribute energy in the future.
John Fraher: Mr Hossain Adeli, let me turn to you. You are here representing the gas industry, and of course we’ve heard a lot already about the important role that gas will play in the transition from oil to more renewable cleaner energy forms. But yet, there are concerns that we’re about to face a long period of oversupply in the global LNG market, for example. Is it time to make the GEFC a bit more like OPEC in regulating production?
Secretary-General of the Gas Exporting Countries Forum (GECF) Seyed Mohammed Hossein Adeli: Well, let me first say how pleased I am to be on this wonderful panel with His Excellency President Putin. Also, I would like to congratulate the Russian Government under His Excellency’s leadership for this timely conference. Also, I would like to say that today we are organising our 19th ministerial meeting under the presidency of Russia. Minister Novak is the president of the ministerial meeting, and we are discussing among the ministers developments of gas.
But talking about the future of gas, I should say that although gas is now facing some challenges – and the challenges are because of the changing dynamics of the market – it has a promising future. Why? I think that there are four main reasons why gas has a promising future.
The first one, as you rightly mentioned and it was also repeated by President Putin, is the environmental agenda of the world. We have the UN 2030 agenda, we have the sustainable global agenda, I mean the Sustainable Development Goals (STG), and we have the Paris Agreement. And all of these would make the countries and energy policies to mitigate CO2 emissions – and they have only made some commitments…I guess even the United States, practically that is not going to happen. At the state level, there are many authorities over there that will go into mitigating CO2 energy. So, the mitigation of CO2 energy and the advance to a low carbon society is a global movement which is going to advance its own way. This is one factor which is a very important factor.
The second factor is the flexibility of gas. Flexibility of gas – by that I mean that gas has become very competitive. We see that LNG is growing, also it’s giving a lot of competitiveness to the trade of gas, as well as we see that there is lots of flexibility in terms of trade terms and conditions. So, this makes gas flexible and competitive. I think that although we hear about the cost of investment in renewable energy is coming down – and I agree that the technology is helping it really to come down – still they cannot compete with low-cost gas production which is very much found in the Middle East and the CIS countries. Therefore, the second is the flexibility and the competitiveness.
And the third, which is very interesting, is that you know, gas only has a very rich infrastructure. So, if your country would like to invest in that, instead of creating and investing a lot in other fuels…I mean gas has already lots of investments which you can do all these investments on that.
And last but not least, we are talking at the global level. And our solution should be a global solution. Solution for Africa, solution for Asia, it is not a Europe-centric solution. And that comes to the nature of gas which is accessible, affordable and abundant. Not as much as renewable. Renewable is great but to rely for the majority of energy consumption for an African country on renewables, it is impossible: getting the technology, obtaining all of those things. So, this is why, although we say as a motto that gas is a “AAA asset” because it is abundant, accessible and affordable…but because of these four reasons I see that gas is moving forward.
According to all forecasters, including ourselves, the GECF Outlook 2040 forecasts that the gas share in the energy mix is going to grow from what it is now 22.5 to more than 26 percent. This is the fastest fossil fuel growth of any energy. And when we look at the other sources of energy, for example renewable, renewable is going to increase in the next 25 years from what is now – of course, by renewable I exclude the hydro – the renewable is something around 12 or maybe 13 percent, and when I say “maybe” that is according to our outlook, 12 percent. According to the outlook of the other forecasters it is something more than that, one percent more than that. This is going to increase to something around 16 percent. So, I mean, in 25 years we see that even the renewables will be something like 16–17 or even, according to IEA, 19 percent. So, this is why we see that gas is going up.
And there is one other reason, and I would like to use what Adnan said – also as something which would add to the gas – and that is the growth of renewable. You know, the growth of renewable would add to the growth of gas. Why? Because renewables are intermittent. They need the backup of gas. So, this is why wherever you have more renewables, you have to have a backup of gas in order to have the sustainability of the production. So, in general we see it as very promising.