Weo2010 london nov9

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Weo2010 london nov9

  1. 1. World Energy Outlook 2010World Energy Outlook 2010 © OECD/IEA 2010 Presentation to the press London, 9 November 2010
  2. 2. The context:The context: A time of unprecedentedA time of unprecedented uncertaintyuncertainty  The worst of the global economic crisis appears to be over – but is the recovery sustainable?  Oil demand & supply are becoming less sensitive to price – what does this mean for future price movements?  Natural gas markets are in the midst of a revolution © OECD/IEA 2010  Natural gas markets are in the midst of a revolution – will it herald a golden era for gas?  Copenhagen Accord & G-20 subsidy reforms are key advances – but do they go far enough & will they be fully implemented?  China & other emerging economies will shape the global energy future – where will their policy decisions lead us?
  3. 3. International oil price assumptionsInternational oil price assumptions 80 100 120 140 arsperbarrel(2009) Current Policies Scenario New Policies Scenario 450 Scenario © OECD/IEA 2010 The age of cheap oil is over, though policy action could bring lower international prices than would otherwise be the case 0 20 40 60 1980 1990 2000 2010 2020 2030 2035 Dolla
  4. 4. Recent policy commitments,Recent policy commitments, if implemented, would make a differenceif implemented, would make a difference World primary energy demand by region in the New Policies Scenario 12 000 14 000 16 000 18 000 Mtoe Rest of world China OECD WEO-2009: Reference Scenario © OECD/IEA 2010 Global energy use grows by 36%, with non-OECD countries – led by China, where demand surges by 75% – accounting for almost all of the increase 0 2 000 4 000 6 000 8 000 10 000 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 Reference Scenario
  5. 5. Emerging economies dominateEmerging economies dominate the growth in demand for all fuelsthe growth in demand for all fuels Incremental primary energy demand in the New Policies Scenario, 2008-2035 Gas Oil Coal OECD China Rest of world © OECD/IEA 2010 Demand for all types of energy increases in non-OECD countries, while demand for coal & oil declines in the OECD - 600 - 300 0 300 600 900 1 200 1 500 Other renewables Hydro Nuclear Mtoe
  6. 6. FossilFossil--fuel subsidies are distortingfuel subsidies are distorting price signalsprice signals Economic value of fossil-fuel consumption subsidies by country, 2009 30 40 50 60 70 Billiondollars Electricity (generated from fossil fuels) Gas Oil Coal © OECD/IEA 2010 Fossil-fuel consumption subsidies amounted to $312 billion in 2009, down from $558 billion in 2008, with the bulk of the fall due to lower international prices Iran SaudiArabia Russia India China Egypt Venezuela Indonesia UAE Uzbekistan Iraq Kuwait Pakistan Argentina Ukraine Algeria Malaysia Thailand Bangladesh Mexico Turkmenistan SouthAfrica Qatar Kazakhstan Libya 0 10 20 30
  7. 7. Booming demand for mobility in theBooming demand for mobility in the emerging economies drives up oil useemerging economies drives up oil use 1 000 1 200 1 400 1 600 Million China Other non-OECD United States Other OECD Passenger vehicles in the New Policies Scenario © OECD/IEA 2010 The global car fleet will continue to surge as more & more people in China & other emerging economies buy a car, overshadowing modest growth in the OECD 0 200 400 600 800 1980 1990 2000 2008 2020 2035
  8. 8. Oil production becomes less crudeOil production becomes less crude World oil production by type in the New Policies Scenario 60 80 100 mb/d Crude oil - fields yet to be developed or found Unconventional oil Natural gas liquids © OECD/IEA 2010 Global oil production reaches 96 mb/d in 2035 on the back of rising output of natural gas liquids & unconventional oil, as crude oil production plateaus 0 20 40 60 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 to be developed or found Crude oil – currently producing fields Total crude oil
  9. 9. More oil from fewer producersMore oil from fewer producers Incremental oil production by key country in the New Policies Scenario, 2009-2035 Venezuela Canada Kazakhstan Brazil Iraq Saudi Arabia OPEC Non-OPEC © OECD/IEA 2010 Production rises most in Saudi Arabia & Iraq, helping to push OPEC’s market share from 41% today to 52% by 2035, a level last seen prior to the first oil shock of 1973-1974 0 1 2 3 4 5 6 Algeria Libya Nigeria Qatar Iran Kuwait UAE Venezuela mb/d
  10. 10. A golden age for gas?A golden age for gas?  Gas is set to play a key role in meeting the world’s energy needs > demand rises by 44%, led by China & Middle East  Unconventional gas accounts for 35% of the increase in global supply to 2035, with new non-US producers emerging © OECD/IEA 2010  Gas glut will peak soon, but may dissipate only very slowly  The glut will keep pressure on gas exporters to move away from oil-price indexation, notably in Europe  Lower prices could lead to stronger demand for gas, backing out renewables & coal in power generation
  11. 11. Coal remains the backbone of globalCoal remains the backbone of global electricity generationelectricity generation 8 000 10 000 12 000 TWh China India Other non-OECD OECD Coal-fired electricity generation by region in the New Policies Scenario © OECD/IEA 2010 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 0 2 000 4 000 6 000 1990 2000 2010 2020 2030 2035 OECD
  12. 12. Renewables enter the mainstream….Renewables enter the mainstream…. Renewable primary energy demand in the New Policies Scenario India Africa OECD Pacific 2008 2035 © OECD/IEA 2010 The use of renewable energy triples between 2008 & 2035, driven by the power sector where their share in electricity supply rises from 19% in 2008 to 32% in 2035 0 100 200 300 400 500 European Union United States China Brazil Mtoe
  13. 13. ….but only if there is enough….but only if there is enough government supportgovernment support Annual global support for renewables in the New Policies Scenariondollars(2009) Biofuels Renewables-based electricity 120 150 180 210 © OECD/IEA 2010 Government support remains the key driver – rising from $57 billion in 2009 to $205 billion in 2035 – but higher fossil-fuel prices & declining investment costs also spur growth Billion 0 30 60 90 120 2007 2008 2009 2015 2020 2025 2030 2035
  14. 14. China becomes the market leaderChina becomes the market leader in lowin low--carbon technologiescarbon technologies Passenger car sales Capacity additions China’s share of cumulative global additions to 2035 for selected technologies 85 GW 335 GW 105 GW 20% 30% 8.5 million h l © OECD/IEA 2010 Given the sheer scale of China’s market, its push to expand the role of low-carbon energy technologies is poised to play a key role in driving down costs, to the benefit of all countries 85 GW 0% 10% Solar PV Wind Nuclear Electric & plug-in hybrids vehicles
  15. 15. Caspian energy riches could enhanceCaspian energy riches could enhance global energy securityglobal energy security Caspian oil & gas outlook in the New Policies Scenario 3 4 5 6 mb/d 200 250 300 350 bcm © OECD/IEA 2010 Kazakhstan drives an increase in Caspian oil production to 5.2 mb/d by 2035, whileTurkmenistan & Azerbaijan push up gas production to over 310 bcm 0 1 2 3 2000 2009 2020 2035 Oil net exports Inland oil consumption 0 50 100 150 2000 2009 2020 2035 Gas net exports Inland gas consumption
  16. 16. The 450 Scenario:The 450 Scenario: AA roadmap from 3.5roadmap from 3.5°°C to 2C to 2°°CC  The 450 Scenario sets out an energy pathway consistent with limiting the increase in temperature to 2°C  Assumes vigorous implementation of Copenhagen Accord pledges to 2020 & much stronger action thereafter  The failure of the Copenhagen Accord pledges © OECD/IEA 2010  The failure of the Copenhagen Accord pledges: > As many lack transparency, there is 3.9 Gt of uncertainty over the level of abatement pledged to 2020 > As many lack ambition, the cost of achieving the 2° C goal has increased by $1 trillion in 2010-2030 compared with WEO-2009
  17. 17. 30 32 34 36 38 Gt New Policies Scenario 35.4 Gt The 450 Scenario:The 450 Scenario: How do we get there now?How do we get there now? World energy-related CO2 emission savings by country in the 450 Scenario China 32% United States 18% Share of cumulative abatement between 2010-2035 © OECD/IEA 2010 20 22 24 26 28 30 2008 2015 2020 2025 2030 2035 In the 450 Scenario, China & the US together account for 50% of the cumulative emission abatement that is needed in 2010-2035 450 Scenario 21.7 Gt European Union 8% India 7% Middle East 4% Russia 4% Rest of world 27% 13.7 Gt
  18. 18. Achieving the 2Achieving the 2°°C goal will require rapidC goal will require rapid decarbonisation of global energydecarbonisation of global energy Average annual change in CO2 intensity in the 450 scenario 3% 4% 5% 6% A four-fold increase needed © OECD/IEA 2010 Carbon intensity would have to fall at twice the rate of 1990-2008 in the period 2008-2020 & almost four times faster in 2020-2035 0% 1% 2% 3% 1990-2008 2008-2020 2020-2035
  19. 19. A fundamental change is neededA fundamental change is needed in power generationin power generation Share of world electricity generation by type and scenario Additional low-carbon generation in the 450 Scenario Low-carbon generation in the NPS Fossil-fuel fired generation60% 80% 100% © OECD/IEA 2010 Low-carbon technologies account for over three-quarters of global power generation by 2035 in the 450 Scenario, a four-fold increase on today g 0% 20% 40% 2010 2015 2020 2025 2030 2035 in the 450 Scenario
  20. 20. … and also in transport… and also in transport Sales of plug-in hybrid and electric vehicles in the 450 Scenario CO2 intensity in power generation Electric vehicles Plug-in hybrids & CO2 intensity of the power sector 500 600 700 mesperkWh 50 60 70 Million © OECD/IEA 2010 Plug-in hybrids & electric vehicles reach 39% of new sales by 2035, making a big contribution to emissions abatement, thanks to a major decarbonisation of the power sector power generation (right axis) 0 100 200 300 400 Gramm 0 10 20 30 40 2010 2015 2020 2025 2030 2035
  21. 21. Will peak oil be a guest or theWill peak oil be a guest or the spectrespectre at the feast?at the feast? Oil demand in the 450 Scenario World demand in 450 Scenario Inter regional Right axis: mb/d 88 92 96 100 mb/d 4 8 12 16 © OECD/IEA 2010 Oil demand peaks at 88 mb/d before 2020 & falls to 81 mb/d in 2035, with a plunge in OECD demand more than offsetting continuing growth in non-OECD demand Inter-regional (bunkers) Other non-OECD India China OECD 2009 2015 2020 2025 2030 2035 68 72 76 80 84 -16 -12 -8 -4 0
  22. 22. Combating climate change will bringCombating climate change will bring economic benefits as well as costseconomic benefits as well as costs Oil-import bills as share of GDP in selected countries 3% 4% 5% 2009 2035: New Policies Scenario 2035: 450 Scenario © OECD/IEA 2010 In the 450 Scenario, annual spending on oil imports in 2035 by the five largest importers is around $560 billion, or one-third, lower than in the New Policies Scenario 0% 1% 2% Japan IndiaUnited States European Union China
  23. 23. Summary & conclusionsSummary & conclusions  Recently announced policies can make a difference, but fall well short of what is needed for a secure & sustainable energy future  Lack of ambition in Copenhagen has increased the cost of achieving the 2°C goal & made it less likely to happen > Unless commitments are fully implemented by 2020, it will be all but impossible to achieve the goal © OECD/IEA 2010 but impossible to achieve the goal  The age of cheap oil is over, though policy action could bring lower international prices than would otherwise be the case  Renewables are entering the mainstream, but long-term support is needed to boost their competitiveness  Getting the prices right, by phasing-out fossil-fuel subsidies, is the single most effective measure to cut energy demand

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