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IEA World Energy Outlook 2011

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Launch presentation of the IEA\’s World Energy Outlook

Launch presentation of the IEA\’s World Energy Outlook


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  • 1. World Energy Outlook 2011 Presentation to the press London, 9 November 2011© OECD/IEA 2011
  • 2. The context: fresh challenges add to already worrying trends  Economic concerns have diverted attention from energy policy and limited the means of intervention  Post-Fukushima, nuclear is facing uncertainty  MENA turmoil raised questions about region’s investment plans  Some key trends are pointing in worrying directions:  CO2 emissions rebounded to a record high  energy efficiency of global economy worsened for 2nd straight year  spending on oil imports is near record highs© OECD/IEA 2011
  • 3. Emerging economies continue to drive global energy demand Growth in primary energy demand in the New Policies Scenario 4 500 Mtoe 4 000 China 3 500 India 3 000 Other developing Asia 2 500 Russia Middle East 2 000 Rest of world 1 500 OECD 1 000 500 0 2010 2015 2020 2025 2030 2035 Global energy demand increases by one-third from 2010 to 2035, with China & India accounting for 50% of the growth© OECD/IEA 2011
  • 4. Natural gas & renewables become increasingly important World primary energy demand 5 000 Additional Mtoe to 2035 4 000 2010 3 000 2 000 1 000 0 Oil Coal Gas Renewables Nuclear Renewables & natural gas collectively meet almost two-thirds of incremental energy demand in 2010-2035© OECD/IEA 2011
  • 5. Oil demand is driven higher by soaring car ownership Vehicles per 1000 people in selected markets 800 2010 700 2035 600 500 400 300 200 100 0 United States European China India Middle East Union The passenger vehicle fleet doubles to 1.7 billion in 2035; most cars are sold outside the OECD by 2020, making non-OECD policies key to global oil demand© OECD/IEA 2011
  • 6. Changing oil import needs are set to shift concerns about oil security Net imports of oil 14 mb/d 2000 12 2010 10 2035 8 6 4 2 0 China India European United Japan Union States US oil imports drop due to rising domestic output & improved transport efficiency: EU imports overtake those of the US around 2015; China becomes the largest importer around 2020© OECD/IEA 2011
  • 7. What impact would deferred investment in MENA have on markets?  MENA is set to supply the bulk of the growth in oil output to 2035, requiring investment of over $100 billion/annum  ‘Deferred Investment Case’ looks at near-term investment falling short by one-third  possible drivers include new spending priorities, higher perceived risks, etc  MENA output falls 3.4 mb/d by 2015 and 6.2 mb/d by 2020  Consumers face a near-term rise in oil prices to $150/barrel  MENA earns more initially, but then less as market share is lost© OECD/IEA 2011
  • 8. Golden prospects for natural gas Largest natural gas producers in 2035 Russia Conventional United States Unconventional China Iran Qatar Canada Algeria Australia India Norway 0 200 400 600 800 1 000 bcm Unconventional natural gas supplies 40% of the 1.7 tcm increase in global supply, but best practices are essential to successfully address environmental challenges© OECD/IEA 2011
  • 9. Coal won the energy race in the first decade of the 21st century Growth in global energy demand, 2000-2010 1 600 Mtoe 1 400 Nuclear 1 200 Renewables 1 000 800 Oil 600 400 Natural gas 200 0 Total non-coal Coal Coal accounted for nearly half of the increase in global energy use over the past decade, with the bulk of the growth coming from the power sector in emerging economies© OECD/IEA 2011
  • 10. Asia: the arena of future coal trade Share of global hard coal trade 70% India 60% China 50% Japan 40% European Union 30% 20% 10% 0% 2009 2020 2035 International coal markets & prices become increasingly sensitive to developments in Asia; India surpasses China as the biggest coal importer soon after 2020© OECD/IEA 2011
  • 11. Second thoughts on nuclear would have far-reaching consequences  “Low Nuclear Case” examines impact of nuclear component of future energy supply being cut in half  Gives a boost to renewables, but increases import bills, reduces diversity & makes it harder to combat climate change  By 2035, compared with the New Policies Scenario:  coal demand increases by twice Australia’s steam coal exports  natural gas demand increases by two-thirds Russia’s natural gas net exports  power- sector CO2 emissions increase by 6.2%  Biggest implications are for countries with limited energy resources that planned to rely on nuclear power© OECD/IEA 2011
  • 12. Power investment focuses on low-carbon technologies Share of new power generation and investment, 2011-2035 40% Generation 35% Investment 30% 25% 20% 15% 10% 5% 0% Coal Gas Nuclear Hydro Wind Solar PV Renewables are often capital-intensive, representing 60% of investment for 30% of additional generation, but bring environmental benefits & have minimal fuel costs© OECD/IEA 2011
  • 13. The overall value of subsidies to renewables is set to rise 250 Billion dollars (2010) Biofuels 200 Electricity 150 100 50 0 2007 2008 2009 2010 2015 2020 2025 2030 2035 Renewable subsidies of $66 billion in 2010 (compared with $409 billion for fossil fuels), need to climb to $250 billion in 2035 as rising deployment outweighs improved competitiveness© OECD/IEA 2011
  • 14. Realising Russia’s potential for energy savings would have a big impact Natural gas savings from raising efficiency (to comparable OECD levels) 2008 180 bcm Domestic gas demand Net exports / potential savings 2035 130 bcm bcm 600 400 200 0 200 400 600Russia’s total energy savings potential is close to the primary energy used in a year by the UK; new efficiency policies bring results, but the savings potential remains large even in 2035© OECD/IEA 2011
  • 15. Russia remains a cornerstone of the global energy economy Russian revenue from fossil fuel exports 2010 2035 $255 billion $420 billion Other Other 17% China 21% European European 2% China Union Other Union Europe 61% 20% 48% 16% Other Europe 15% An increasing share of Russian exports go eastwards to Asia, providing Russia with diversity of markets and revenues© OECD/IEA 2011
  • 16. Energy is at the heart of the climate challenge Cumulative energy-related CO2 emissions in selected regions 500 Gigatonnes 2010-2035 1900-2009 400 300 200 100 0 United States China European India Japan Union By 2035, cumulative CO2 emissions from today exceed three-quarters of the total since 1900, and China’s per-capita emissions match the OECD average© OECD/IEA 2011
  • 17. The door to 2°C is closing, but will we be “locked-in” ? 45 CO2 emissions (gigatonnes) 6°C trajectory 40 35 30 2°C trajectory 25 20 Delay until 2017 Delay until 2015 15 10 Emissions from existing 5 infrastructure 0 2010 2015 2020 2025 2030 2035 Without further action, by 2017 all CO2 emissions permitted in the 450 Scenario will be “locked-in” by existing power plants, factories, buildings, etc© OECD/IEA 2011
  • 18. If we don’t change direction soon, we’ll end up where we’re heading  In a world full of uncertainty, one thing is sure: rising incomes & population will push energy needs higher  Oil supply diversity is diminishing, while new options are opening up for natural gas  Coal – the “forgotten fuel” – has underpinned growth, but its future will be shaped by uptake of efficient power plants & CCS  Power sector investment will become increasingly capital intensive with the rising share of renewables  The world needs Russian energy, while Russia needs to use less  Despite steps in the right direction, the door to 2°C is closing© OECD/IEA 2011