Currently 26 member countries – all members of the OECD Two candidate countries (Poland and Slovakia) Two countries not members (Iceland and Mexico) Also work closely with many countries outside of the membership – especially China, India, Russia Also discussions with OPEC Our member countries tell us what to do Each has delegation that works solely with OECD and its entities – energy delegates assigned to IEA, regular contact Committees (Governing Board, but also Oil Markets, Technology, Policy, Global Dialogue) meet several times a year Programme of Work Ministerial meeting every two years WHAT DOES THE IEA DO? Quite simply, we advise our member countries on energy policy HOW DID WE GET STARTED?
RS takes account of those government policies and measures that were enacted or adopted up to mid-2008, but not new ones, providing a baseline against which we can quantify the extent to which we need to change course. World primary energy demand projected in RS grows by 45% from 2006 to 2030, average annual increase of 1.6% per year – driven by rising population and GDP. Demand reaches 17 billion toe in 2030 up from 11.7 btoe in 2006. Demand grows at a slower rate than projected in WEO-2007, mainly due to higher energy prices and slightly slower economic growth - as well as new government policies to curb demand and emissions growth introduced in the past year. All fuels increase in absolute terms: - Oil remains single largest fuel in the global primary energy mix, growing 1% year. - Coal grows fastest among fossil fuels (2% p.a.). - Demand for gas grows 1.8% p.a. - Modern renewable technologies grow most rapidly, by 7.2% p.a. (excl biomass), overtaking gas to become the second-largest source of electricity, behind coal, soon after 2010. These trends are patently unsustainable – economically, socially and environmentally. Rising oil and gas demand would lead to higher imports and reliance on OPEC, heightening concerns about energy sectuiry, while increased use of fossil fuels would worsen climate change. World GDP is assumed to grow by an average of 3.3% per year over the period 2006-2030. This is lower than assumed in last year’s Outlook (3.6%), in part because of the impact of higher energy prices and weaker prospects for global economic growth in the near term. The average IEA crude oil import price is assumed to average $100 per barrel (in real year-2007 dollars) through to 2015 and then rise again slowly thereafter, reaching $110 in 2020 and $122 in 2030 ($206 in nominal terms)
Let’s begin with oil Where is this oil demand growth occurring? In Asia and Middle east. ____________________ Global primary demand for oil (excl biofuels) rises by 1% per year on average, from 85 million barrels per day in 2007 to 106 mb/d in 2030. Its share of world energy use drops, from 34% to 30%. Oil demand in 2030 has been revised downwards by 10 mb/d since last year’s Outlook. All of the projected increase in world oil demand comes from non-OECD countries: - Over four-fifths of increase comes from China, India & Middle East - OECD oil demand falls slightly, due largely to declining non-transport oil demand. “ In 1980, non-OECD accounted for 35% of world oil demand, today for 43% and by 2030 for 58%. In 2015, non-OECD oil demand surpasses OECD.”
Let’s talk about Peak Oil Our economies currently depend on oil And our growing economies need growing oil supplies But oil production is declining in the currently producing fields – around 6.7% per annum (weighted average) in 2007 What will make up the shortfall? New oil discoveries? But our estimates suggest these will only be enough to maintain current production levels – not enough to meet new demand Nonconventional expensive oil production Or, can we have an energy revolution? Promote energy efficiency and renewables? We’ll look at these later. __________________________ Declines in crude oil production at existing fields (those already in production in 2007) mean that the gross additions to capacity far exceed the net additions needed to meet the growth in demand. In fact, our analysis shows that future capacity needs are far most sensitive to decline rates at existing fields than to the rate of growth in demand. Gross additions between 2007 and 2030 amount to 64 mb/d – or six times the current capacity of Saudi Arabia. Two-thirds are needed just to offset declines at existing fields. By 2030, two-thirds of world production will come from new fields, that are either awaiting development today or are yet to to be found. Worldwide, production of conventional crude oil alone increases only modestly, from 70.2 mb/d to 75.2 mb/d. The shares of natural gas liquids (NGLs) and non-conventional oil (mainly from Canadian oil sands) in total oil production rise substantially.
What about coal? Coal consolidates it position as the world’s 2 nd most important energy source after oil. Since 2000, global coal consumption has grown faster than any other fuel, despite higher prices, by 4.9% per year between 2000 and 2006. Most of this growth occurred in non-OECD countries. [CLICK TO REVEAL RIGHT CHART] In the RS, coal demand advances by 2% a year on average, its share in global energy demand climbing from 26% in 2006 to 29% in 2030. Coal accounts for well over a third of the increase in total energy demand. Non-OECD countries account for 97% of the increase in global coal demand over the Outlook period, with China alone accounting for two-thirds of the increase &India for a further 19%. Most of the increase in demand in all regions comes form power generation. In fact, 85% of the increase in global coal demand comes from the power sector in China & India alone.
The reference scenario looks even more daunting when you consider the huge amount of investment needed to supply the growing energy requirements. Huge inflows of capital are needed to expand supply capacity to meet demand in this scenario rising demand, as well as to replace existing and future supply facilities that will be retired during the projection period. Our Reference Scenario projections call for cumulative investment in energy-supply infrastructure of $26.3 trillion (in year-2007 dollars) over 2007-2030 . This is around $4.4 trillion higher than in WEO-2007, because of an upward revision in assumed unit costs, which have continued to soar in the last year. Of the cumulative investment of $26.3 trillion, 63% is needed in non-OECD countries. More than half of global investment, or $13.6 trillion goes towards the power sector. Oil- and gas-sector investments total $11.7 trillion. Coal-industry investments (not including transportation) are much smaller, totaling less than $730 billion, or 3% of total energy investment. There are major concerns about whether all of this investment will in fact be forthcoming – particularly in the near term in view of the current financial crisis.
So what needs to be done? Lets consider the IPCC’s 4 th Assessment Report - of what is needed to achieve a given climate goal. If we want to achieve CO2 equivalent concentration of 550 ppm 450ppm Our trajectories for energy-related CO2 emissions to 2030 are based both on our own analysis of the energy sector and on other work – such as the IPCC’s 4 th Assessment Report - of what is needed to achieve a given climate goal. Our trajectories are consistent with the corresponding ranges of long-term emissions pathways set out in the IPCC’s report, and imply a need for action in all sectors as well as even more substantial reductions after 2030. The 450 and 550 Policy Scenarios follow a similar trajectory until 2020. This means that the 450 Policy Scenario will initially overshoot the 450 ppm level, before declining – this is necessary, as otherwise emissions would have to peak in 2-3 years. It will take time to agree and implement a global climate change framework – and a substantial proportion of energy emissions are already locked-in. Three quarters of 2020 emissions in the power sector come from plants that already exist today, or are in the process of being built. Both scenarios require a transformation of the energy sector. The 550 Policy Scenario is achieved mainly through the deployment of existing technologies, or incremental improvements to these. There is a change in the energy mix: the power sector sees more renewable energy, nuclear power and carbon capture and storage. In the transport sector, CO2 savings come from enhancement of the internal combustion engine, from more rapid penetration of hybrid cars and lightweight materials and from biofuels. Overall, improved energy efficiency makes the biggest contribution to lowering emissions in both scenarios as shown here. Realising these efficiency gains in the Policy Scenarios is an enormous challenge. This depends on the purchases of efficient technologies, such as clean vehicles, efficient appliances or energy-efficient buildings, by hundreds of millions of households worldwide. As well as even more widespread deployment of existing low-carbon technologies, 450 Policy Scenario can only be achieved through stepped-up research, development and subsequent demonstration and deployment of new technologies, to achieve sharp reductions in emissions after 2020. It assumes extensive deployment of CCS in OECD+ and Major Economies, including retro-fitting. In the transport sector, it requires the introduction of advanced biofuels and the penetration of electric or fuel-cell vehicles.
In WEO 2008 we made detailed global energy demand and CO2 emissions projections through to 2030 for the world’s cities, broken down by fuel and by sector. This work was only possible with the collaboration of a group of experts in the field of energy in cities, some of which are here today, and as far as we know this is the first time a study like this has been made. So what did we find….
Also, the geographic distribution of urban population is set to change: Global urbanisation in the first half of the 20 th century was dominated by European cities, Now, the majority of urban residents today live in Asia,
This increasing global urban population, combined with the increasing wealth of urban residents, and greater access to energy services drives rapidly increasing urban energy demand. In the Reference Scenario, global city energy use is projected to grow by 1.9% per year (compared to an overall global growth rate of 1.6% per year), from 7 900 Mtoe to almost 12 400 Mtoe in 2030. Its share of global energy use rises from 67% to 73%. Non-OECD countries account for 81% of the growth in energy use in cities over the Outlook period.
Urbanisation 2006 ~ 50% 2030 60% 2006 Two thirds energy use (7900 Mtoe) 71% CO2 (developing country city residents switched from CO2 neutral biomass to fossil fuels) 2030 73% energy use (12400 Mtoe) City energy use related to: Population Economic activity Level of income
And this increasing energy demand of course leads to increasing CO2 emissions from cities. In 2006 cities accounted for 19.8 Gt of global CO2 emissions — roughly 71% of global energy-related CO2 emissions The share of global CO2 emissions in cities is higher than that for energy use because as developing countries urbanise, they tend to shift from biomass and waste (assumed to be CO2 neutral) to more CO2-intensive energy sources. In the Reference Scenario, CO2 emissions from cities increase at 1.8% per annum, faster than global CO2 emissions at 1.6%. By 2030, it is projected that almost 30.8 Gt will be emitted in the world’s cities, a 55% increase over 2006 levels by 2030, the equivalent of adding twice the entire emissions of the United States. The share of cities in global CO2-emissions by 2030 is 76%. As is the case for energy use, the vast majority (89%) of CO2-emissions growth in cities through the Outlook period comes from non-OECD countries. Cities in non-OECD countries account for two-thirds of the global CO2 emissions in 2030, up from 53% today.
So what to do? The aim is to build resilient cities I want to draw on work of Buzz Holling and Brian Walker and their notion of ‘Resilience’ Resilience draws attention to tradeoffs between efficiency on the one hand and persistence on the other Four crucial aspects of resilience: Latitude: the maximum amount a system can be changed before losing its ability to recover (before crossing a threshold which, if breached, makes recovery difficult or impossible). Resistance: the ease or difficulty of changing the system; how “resistant” it is to being changed. Precariousness: how close the current state of the system is to a limit or “threshold.” Panarchy: because of cross-scale interactions, the resilience of a system at a particular focal scale will depend on the influences from states and dynamics at scales above and below. For example, external oppressive politics, invasions, market shifts, or global climate change can trigger local surprises and regime shifts.in Resilience in energy systems Anticipate and plan for the future Reduce dependence. – and those on energy in total as well as external energy supplies.
A starting point for local governments needs to be prioritising climate change mitigation actions in their own facilities through energy management and strategic investment. In addition, cities should encourage CCHP, the energy efficiency of buildings, use land-use planning measures such as low-emission zones, congestion charges, and improvements to make public transport more attractive.
Local governments also need to expand the outreach of networks such as ICLEI, Climate Alliance and Energie-Cités. These and other networks can help to pool resources, and know-how. There is an urgent need for national governments to further engage local governments in mitigation action. This engagement can range from providing additional funding to address climate change and providing clear legal requirements to relatively indirect approaches such as guidebooks. Another avenue for enhancing local government action in climate change mitigation is encouraging greater local government participation in international climate change policy processes (Climate Alliance & Energie-Cités 2002). Such involvement can provide cities/local governments with recognition of the value of their on-the-ground policy experience. In the United Nations Framework Convention on Climate Change (UNFCCC) and Kyoto Protocol processes, local governments currently play a minor role, and the visibility of local-government actions is limited. We can identify three key options for involving cities in the UNFCCC process. As a first step, national governments could invite local and regional representatives in their national delegations. Second, a range of topics ranging from local climate policy, options for national governments to promote local action, and models of multi-level arrangements could be considered at thematic workshops on mitigation and adaptation in the UN process. Third, local and regional activities can be included in national communications. Another promising option could be to directly involve large cities in Non-Annex 1 countries in new approaches discussed in the context of future commitments to be adopted at COP15 December 2009 in Copenhagen, such as the sustainable development policies and measures (SD-PAMs) approach.
To assist governments
Green Municipal Fund (Canada) - Encouraging sustainability at the local level in Canada Klimaatconvenant (Netherlands) – voluntary agreements in the Netherlands Finland : Voluntary Energy Conservation Agreement Hungary: Public Sector Energy Efficiency Programme Switzerland – SwissEnergie New Zealand - “ Legislative and policy requirements” in Land Transport New Zealand (2004)
Mostly top-down, national and international governments initiated most programmes. Mostly voluntary – will these programmes evolve into mandatory ones? Mostly governed by provision - participation is not mandatory, but national government provides incentives to take action. Majority of funding comes from the national/intl. government, even when multiple parties are involved. Challenges capacity building sustainability scaling up evaluation voluntary v. regulations Innovations engaging new players financing innovative ideas learning to collaborate across levels increasing capabilities through training, information sharing reaching jurisdictions outside of sphere of influence addressing social issues (not just climate, economic and security issues)
1. Global energy scenarios: strategic priorities and challenges <ul><li>Dr Nigel Jollands </li></ul><ul><li>Head, Energy Efficiency Unit </li></ul><ul><li>International Energy Agency </li></ul><ul><li>To </li></ul><ul><li>ICLEI World Congress 2009, </li></ul><ul><li>17 June, Edmonton </li></ul>
2. Key messages <ul><li>Mick Jagger is wrong </li></ul><ul><li>Global energy trends are unsustainable </li></ul><ul><li>Global city energy trends challenging </li></ul><ul><li>The future city must be resilient </li></ul><ul><li>Achieving resilience – diverse actions </li></ul><ul><li>The IEA – we are here to help! </li></ul>
3. Mick Jagger is wrong
5. “ Current energy trends are patently unsustainable — socially, environmentally, economically”
7. World primary energy demand in t he Reference Scenario: this is unsustainable! 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 1980 1990 2000 2010 2020 2030 Mtoe Other renewables Hydro Nuclear Biomass Gas Coal Oil World energy demand expands by 45% between now and 2030 – an average rate of increase of 1.6% per year – with coal accounting for more than a third of the overall rise
8. Change in oil demand by region in the Reference Scenario, 2007-2030 -2 0 2 4 6 8 10 China Middle East India Other Asia Latin America E. Europe/Eurasia Africa OECD North America OECD Europe OECD Pacific mb/d All of the growth in oil demand comes from non-OECD, with China contributing 43%, the Middle East & India each about 20% & other emerging Asian economies most of the rest
9. World oil production by source in the Reference Scenario 64 mb/d of gross capacity needs to be installed between 2007 & 2030 – six times the current capacity of Saudi Arabia – to meet demand growth & offset decline 0 20 40 60 80 100 120 1990 2000 2010 2020 2030 mb/d Natural gas liquids Non-conventional oil Crude oil - yet to be developed (inc. EOR) or found Crude oil - currently producing fields
10. The continuing importance of coal in world primary energy demand Increase in primary demand, 2000 - 2007 Demand for coal has been growing faster than any other energy source & is projected to account for more than a third of incremental global energy demand to 2030 Mtoe 0% 20% 40% 60% 80% 100% Non-OECD OECD All other fuels Coal Shares of incremental energy demand Reference Scenario, 2006 - 2030 0 100 200 300 400 500 600 700 800 900 1 000 Coal Oil Gas Renewables Nuclear 4.8% 1.6% 2.6% 2.2% 0.8% % = average annual rate of growth
11. Cumulative energy-supply investment in the Reference Scenario , 2007-2030 I nvestment of $26 trillion, or over $1 trillion/year, is needed, but t he credit squeeze could delay spending, potentially setting up a supply-crunch once the economy recovers Power generation 50% Transmission & distribution 50% Mining 91% Shipping & ports 9% Exploration and development 80% Refining 16% Shipping 4% Exploration & development 61% LNG chain 8% Transmission & distribution 31% Power 52% $13.6 trillion Oil 24% $6.3 trillion Gas 21% $5.5 trillion Coal 3% $0.7 trillion Biofuels <1% $0.2 trillion
12. Reductions in energy-related CO 2 emissions in the climate-policy scenarios While technological progress is needed to achieve some emissions reductions, efficiency gains and deployment of existing low-carbon energy accounts for most of the savings 20 25 30 35 40 45 2005 2010 2015 2020 2025 2030 Gigatonnes Reference Scenario 550 Policy Scenario 450 Policy Scenario CCS Renewables & biofuels Nuclear Energy efficiency 550 Policy Scenario 450 Policy Scenario 54% 23% 14% 9%
15. Why focus on cities? <ul><li>Cities – large & growing energy use </li></ul><ul><li>City Authorities: </li></ul><ul><ul><li>important implementing/enforcement agents </li></ul></ul><ul><ul><li>significant energy users in own right </li></ul></ul><ul><ul><li>important role in energy leadership </li></ul></ul><ul><ul><li>influences significant energy-using areas (directly & indirectly) </li></ul></ul><ul><ul><li>often have concerns about local energy security/supply </li></ul></ul><ul><li>City Authorities are looking for assistance with energy policy. </li></ul>
16. Cities are important: The world is becoming more urbanised “… by 2030, cities will house 60% of the world’s population — equivalent to the total global population in 1986” (IEA, 2008) 0% 20% 40% 60% 80% 100% OECD North America Latin America OECD Pacific OECD Europe Middle East E. Europe/ Eurasia Asia Africa Urbanisation rate 1980 2006 2030
17. Cities are important: Cities energy use is growing 81% of projected growth in city energy use from non-OECD countries
18. Cities are important: Cities are large energy users In 2006, cities used around 2/3 of global primary energy By 2030, cities use more than 73% of energy 2006 2006 City as a % of global 2015 City as a % of global 2030 City as a % of global 2006-2030* Total Primary Energy Demand 7 908 67% 9 785 69% 12 374 73% 1.9% Coal 2 330 76% 3 145 78% 3 964 81% 2.2% Oil 2 519 63% 2 873 63% 3 394 66% 1.2% Gas 1 984 82% 2 418 83% 3 176 87% 2.0% Nuclear 551 76% 630 77% 726 81% 1.2% Hydro 195 75% 245 76% 330 79% 2.2% Biomass & Waste 280 24% 358 26% 520 31% 2.6% Other Renewables 48 72% 115 73% 264 75% 7.4% Electricity 1 019 76% 1 367 77% 1 912 79% 2.7%
19. Global C ity CO 2 emissions CO2 emissions from cities were 19.8 Gt in 2006 and rises to 30.8 Gt in 2030, increasing faster than global emissions. 0 5 10 15 20 25 30 35 2006 2020 2030 Gigatonnes 70% 72% 74% 76% 78% 80% Non-OECD cities OECD cities Share of cities in world (right axis)
20. The resilient city <ul><li>What is resilience? </li></ul><ul><ul><li>“ the capacity of a system to absorb disturbance and reorganize while undergoing change so as to still retain essentially the same function, structure, identity, and feedbacks“ </li></ul></ul><ul><li>Walker, B., C. S. Holling, S. R. Carpenter, and A. Kinzig. 2004 </li></ul><ul><li>Ecology and Society 9 (2) </li></ul><ul><li>Resilience in energy systems </li></ul><ul><ul><li>Anticipate and plan for the future </li></ul></ul><ul><ul><li>Reduce dependence. </li></ul></ul>
21. Resilience And her
22. How to achieve resilience in your energy system? <ul><li>Show leadership in your own operations </li></ul><ul><ul><li>Implement local priorities that mitigate CO 2 </li></ul></ul><ul><ul><li>Energy efficiency retrofit own capital </li></ul></ul><ul><ul><li>Procurement of energy efficiency appliances/equipment/fleet </li></ul></ul><ul><ul><li>Purchase green electricity </li></ul></ul><ul><li>Influence your local community </li></ul><ul><ul><li>Exercise land-use planning </li></ul></ul><ul><ul><li>Enforce building codes </li></ul></ul><ul><ul><li>Encourage solar water heater and/or PV installations </li></ul></ul><ul><ul><li>Exercise financial instruments – e.g. property tax relief for energy efficient buildings </li></ul></ul><ul><ul><li>Encourage public passenger transport. </li></ul></ul>
23. Achieving resilience (cont’d) <ul><li>Engage with the wider city community </li></ul><ul><ul><li>Pool resources & know how </li></ul></ul><ul><li>National level </li></ul><ul><ul><li>Funding </li></ul></ul><ul><ul><li>Guidance to local governments (guidebooks; data collection) </li></ul></ul><ul><li>UN Climate process </li></ul><ul><ul><li>Local reps on national delegations to UNFCCC </li></ul></ul><ul><ul><li>Thematic workshops </li></ul></ul><ul><ul><li>Include local/regional activities in national communications </li></ul></ul><ul><ul><li>Participate in Kyoto mechanisms </li></ul></ul><ul><ul><li>SD-PAMS </li></ul></ul>
24. What is the IEA doing to assist cities? <ul><li>Energy efficiency recommendations </li></ul><ul><li>Promoting innovations in multi-level governance </li></ul><ul><li>Promoting best practice energy efficiency </li></ul><ul><li>Renewables in cities </li></ul><ul><li>District heating/cooling </li></ul>
26. Enhancing local government-national government partnerships <ul><li>Aim : </li></ul><ul><ul><li>To enhance local government-national government partnerships to achieve improved energy efficiency. </li></ul></ul><ul><li>Output : </li></ul><ul><ul><li>Documentation of innovative initiatives to enhance national-local government partnerships in energy efficiency. </li></ul></ul>
27. Preliminary findings
28. Questions <ul><li>Is there a correlation between MLG arrangement and government structure (central v. federal)? </li></ul><ul><li>Do voluntary arrangements pave the way to regulation? </li></ul><ul><li>Is there a relationship between funding (asymmetrical/symmetrical) and sustainability? </li></ul>
29. Key messages <ul><li>Global energy trends are unsustainable </li></ul><ul><li>Global city energy trends challenging </li></ul><ul><li>The future city must be resilient </li></ul><ul><li>Achieving resilience – diverse actions </li></ul><ul><li>The IEA – we are here to help! </li></ul><ul><li>Mick Jagger is wrong </li></ul>