At global level, electricity generation is set to increase at a slightly faster rate than primary energy demand, growing of about 40% by 2035 and reaching more than 35.000TWh. This growth will be lead by non-OECD countries, accounting for 80% of total increase. Non OECD will become the largest electricity producers before 2015. China and India are seen to expand their power generation abruptly over the projection period accounting for 55% of total increase and also Middle East area is projected to register a fast growth with total production doubling by 2035. In OECD countries, electricity generation expands at a slower pace, increasing by 22% over the projection period with increasing contribution from renewables, nuclear and gas, and reduced electricity production from coal and oil.
Before looking in detail to which are our projection for electricity demand in the next quarter of century, I believe it is worthy mentioning what happened in the last decade. The first message is while power from renewables has been growing over this period, in absolute terms this growth pales beside the scale of the increase in fossil-based generation. Globally, electricity from renewable energy sources increased by almost 900 TWh between 2000 and 2008, but at the same time coal-fired generation increased by about 2 300 TWh and gas-fired generation by 1 600 TWh. In the OECD region alone, generation based on renewables increased more than that based on coal over the same period, but much less than that based on gas. In non‑OECD countries, the increase in electricity generation from renewables was slightly lower than the corresponding increase from gas, but much lower than that from coal. Looking more specifically to key regions, we have the European Union that covered the expansion of electricity demand essentially with natural gas and renewables (almost all from wind). From 2000 to 2008 electricity production from natural gas increased of about two-thirds, while renewables power production expanded by 33%). China’s growth in power production is amazing. In only 8 years, total chinese electricity generation is increased of 2.5 times with coal accounting for about 80% of total increase. Just to give an idea, taking only the increase of chinese electricity production from coal, this is equal to about 50% of all EU electricity production in 2008. The country had also a significant increase in renewables contribution in total power generation, more than double in the period from 2000-2008 thanks mainly to the realisation of large hydropower plant.
At world level electricity grows from all energy sources with the exception of oil. Coal increaes over the projection period in absolute terms but its share is expected to decrease from 41% to 32%. Nuclear and natural gas are expected to increase significantly by 2035, in line with world electricity demand; therefore, their share in the elctricity mix do not change and remains stable at 14% and 21% respectively Electricity from renewables surges dramatically, mainly driven by wind energy which increaeses 14-fold times reaching 2900 TWH by 2035 (about three-times of current total electricity generation of Japan). Its share goes from about 1% to 8% in 2035. Also, solar photovoltaics rises exponentially with a total electricity production expected to reach 632 TWh in 2035.
Demand for renewable energy increases substantially in all regions, with remarkable growth in some areas; for example, increasing six‑fold between 2008 and 2035 in China and four‑fold in India. Demand remains highest in the European Union, where the increase is driven by policies to raise the share of renewables to 20% in gross final consumption in 2020, related to the commitment to cut greenhouse gas emissions by 20% relative to 1990. The United States and China follow closely, as a result of large increases in renewables-based electricity generation and in biofuels use (particularly in the US). Concerns over energy security, rising demand and climate change are the key drivers for a resurgence of interest in nuclear power in many countries. Electricity production from nuclear is projected to increase by 80% by 2035, reaching 4900TWh. About 40% of this increase occurs in China alone. Rising production reflects the construction of new capacity in many other regions that are investing in nuclear technologies or have policies in place to support nuclear power.
The potential for renewables is unquestionably large, but how quickly their contribution to meeting the world’s energy needs grows hinges critically on the strength of government support to make renewables cost-competitive. Worldwide government support to renewables for electricity production amounted to $37 billion in 2009 – up from $44 billion in 2008 and $41 billion in 2007. The 29% increase in 2009 was in part due to a sharp drop in reference prices in 2009. In the New Policies Scenario, support grows throughout the period, reaching $140 billion per year in 2035. If we include in this number also the spending needed to support biofuels, the cumulative amount totals $4.6 trillion to 2035. Of this, 63% goes to renewable electricity and 37% to biofuels. While total support grows over time, it decreases on a per unit basis, both for electricity and biofuels, as technology costs come down. NB: For example, renewables support includes feed-in tarriffs, tax credits, etc but excludes R&D.
Currently there are 69 reactors in construction in 16 countries for a total capacity of about 70 GW. Most of them are placed in non – OECD Countries for a total of 52 GW and China accounts for 40% of this share. Furthermore, due to China’s plan to achieve the 15% of total energy use from non-fossil fuel sources by 2020, additional units are expected to be built between 2010-2020. Over the projection period, global nuclear capacity is projected to increase of almost 65%, from 390GW to about 650GW. Most of the expansion of nuclear capacity is expected to come from non- OCED countries which accounts for 60% of additions. Only China is expected to add about 105 GW of nuclear capacity over the projection period. The bulk of this is expected to be commissioned in the next 15 years. In the OECD countries the bulk of the capacity under construction is placed in Korea, Japan, France and Finland, but many OECD countries have expressed interest in nuclear and – in other cases – lifetime of already operating units has been extended as in Usa and currently under discussion in Germany. Over the projection period, OECD countries are expected to converge with the trend in nuclear addition seen for the rest of the world. This is mainly driven by the replacement of old nuclear power plants approaching the end of their lifetime as well as the expansion of nuclear capacity in some key countries like US, Japan ,Korea.
All sectors will have to play their part to achieve emissions intensity improvements, but the sector which sees greatest abatement and has been the major focus of energy-sector climate policy is power generation. Over the projection period, fossil-fuel fired power generation (excluding plants fitted with CCS technology) increases in the New Policies Scenario, going from nearly 14 000 TWh to around 18 800 TWh – but its share in total generation falls from two thirds to just over half, as low-carbon generation (from renewables, nuclear, and CCS-fitted coal and gas plants) more than doubles in absolute terms, from around 7000 TWh currently to around 16 500 TWh in 2035. This shift away from high-emitting power generation technologies is much more pronounced in the 450 Scenario, where total generation from fossil fuels without CCS actually falls – to around 6900 TWh in 2035, or half its current level. At the same time, low-carbon generation grows to 25 000 TWh, giving low-carbon power sources a share of nearly 80% of total generation in the 450 Scenario by 2035. The role of nuclear in power generation increases significantly. In the 450 Scenario. Nuclear electrical capacity more than double – from about 400 GW in 2008 to 850 GW in 2035 - and its share in world electricity generation increases from 14% in 2008 to 20% by 2035. Nuclear energy becomes the 1 st primary energy source for electricity production followed by hydro, coal and wind respectively.
1. World Energy Outlook 2010 <ul><li>Dr. Fatih Birol </li></ul><ul><li>IEA Chief Economist 10 December 2010 </li></ul>
2. The context: a time of unprecedented uncertainty <ul><ul><li>The worst of the global economic crisis appears to be over – but is the recovery sustainable? </li></ul></ul><ul><ul><li>Oil demand & supply are becoming less sensitive to price – what does this mean for future price movements? </li></ul></ul><ul><ul><li>Natural gas markets are in the midst of a revolution – will it herald a golden era for gas? </li></ul></ul><ul><ul><li>Copenhagen Accord & G-20 subsidy reforms are key advances – but do they go far enough & will they be fully implemented? </li></ul></ul><ul><ul><li>China & other emerging economies will shape the global energy future – where will their policy decisions lead us? </li></ul></ul>
3. Recent policy commitments, if implemented, would make a difference <ul><li>Global energy use grows by 36%, with n on-OECD countries – led by China, </li></ul><ul><li>where demand surges by 75% – accounting for almost all of the increase </li></ul>World primary energy demand by region in the New Policies Scenario 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 Mtoe Rest of world China OECD
4. Emerging economies dominate the growth in demand for all fuels <ul><li>Demand for all types of energy increases in non-OECD countries, </li></ul><ul><li>while demand for coal & oil declines in the OECD </li></ul>Incremental primary energy demand in the New Policies Scenario, 2008-2035 - 600 - 300 0 300 600 900 1 200 1 500 Other renewables Hydro Nuclear Gas Oil Coal Mtoe OECD China Rest of world
5. And also the electricity demand World electricity demand by country in the New Policies Scenario Global electricity generation grows by 40%, with n on-OECD countries accounting for 80% of the increase.
6. Fossil-fuels still lead the way <ul><li>Power from renewables has been growing fast, but over the past decade, the increase was smaller than in fossil-fuel based generation </li></ul>World incremental electricity generation by fuel and region, 2000-2008
7. A profound change in the way we generate electricity is at hand <ul><li>A gradual decarbonisation in global energy sector increase – </li></ul><ul><li>thanks to renewables and nuclear. </li></ul>World electricity generation by type in the New Policies Scenario
8. Coal remains the backbone of global electricity generation <ul><li>A drop in coal-fired generation in the OECD is offset by big increases elsewhere, especially China, where 600 GW of new capacity exceeds the current capacity of the US, EU & Japan </li></ul>0 2 000 4 000 6 000 8 000 10 000 12 000 1990 2000 2010 2020 2030 2035 TWh India Other non-OECD OECD Coal-fired electricity generation by region in the New Policies Scenario China
9. A golden age for gas? <ul><ul><li>Gas is set to play a key role in meeting the world’s energy needs </li></ul></ul><ul><ul><ul><li>demand rises by 44% to 2035, led by China & Middle East </li></ul></ul></ul><ul><ul><li>Unconventional gas accounts for 35% of the increase in global supply to 2035, with new non-US producers emerging </li></ul></ul><ul><ul><li>Gas glut will peak soon, but may dissipate only very slowly </li></ul></ul><ul><ul><li>The glut will keep pressure on gas exporters to move away from oil-price indexation, notably in Europe </li></ul></ul><ul><ul><li>Lower prices could lead to stronger demand for gas, backing out renewables, nuclear & coal in power generation </li></ul></ul>
10. Low-carbon technologies increasingly penetrate the electricity mix in the New Policies Scenario <ul><li>Renewable sources (including hydro) and nuclear power are projected to </li></ul><ul><li>account for 45% of total global generation by 2035, up from 32% today </li></ul>Share of nuclear and renewable energy in total electricity generation by region in the New Policies Scenario
11. Renewables need government support to deliver <ul><li>Global government support for renewables reached $37 billion in 2009 and grows to $140 billion in 2035; support costs per unit of electricity fall over time as technologies mature </li></ul>Global government support for renewables-based electricity generation in the New Policies Scenario 0 20 40 60 80 100 120 140 2007 2008 2009 2015 2020 2025 2030 2035 Billion dollars (2009) Other renewables Wind CSP Solar PV Biomass
12. <ul><li>Global nuclear capacity increases 65% from 2008 to 2035, with non-OECD countries accounting for 60% of additions </li></ul>Most growth in nuclear capacity comes from non-OECD Nuclear capacity under construction and additions by region in the New Policies Scenario
13. The 450 Scenario: a roadmap from 3.5 C to 2 C <ul><ul><li>The 450 Scenario sets out an energy pathway consistent with limiting the increase in temperature to 2 C </li></ul></ul><ul><ul><li>Assumes vigorous implementation of Copenhagen Accord pledges to 2020 & much stronger action thereafter </li></ul></ul><ul><ul><li>The failure of the Copenhagen Accord pledges: </li></ul></ul><ul><ul><ul><li>As many lack transparency, there is 3.9 Gt of uncertainty over the level of abatement pledged to 2020 </li></ul></ul></ul><ul><ul><ul><li>As many lack ambition, the cost of achieving the 2 C goal has increased by $1 trillion in 2010-2030 compared with WEO-2009 </li></ul></ul></ul>
14. Nuclear share in electricity mix increases in the 450 Scenario <ul><li>In the 450 Scenario, nuclear electrical capacity more than double – from about 400 GW in 2008 to 850 GW in 2035. Nuclear energy becomes the 1 st primary energy source for electricity production. </li></ul>Nuclear energy as a share of total electricity generation by scenario * Includes Japan and Korea
15. Concluding remarks <ul><ul><li>Recently announced policies can make a difference, but fall well short of what is needed for a secure & sustainable energy future </li></ul></ul><ul><ul><ul><li>Lack of ambition in Copenhagen has increased the cost of achieving the 2 C goal & made it less likely to happen </li></ul></ul></ul><ul><ul><li>The age of cheap oil is over, though policy action could bring lower international prices than would otherwise be the case </li></ul></ul><ul><ul><li>Stronger penetration of natural gas can have profound implications for energy markets, environment and electricity production </li></ul></ul><ul><ul><li>Nuclear is set to play a key role for addressing energy security and climate challenges </li></ul></ul>