World Energy Outlook - Parliamentary Days 2014

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A new global energy landscape is emerging, resetting long-held expectations for our energy future. Bringing together the latest data and policy developments, the World Energy Outlook 2013 presents up to date, projections of energy trends through to 2035, fuel by fuel, sector by sector, region by region and scenario by scenario. Oil is analysed in-depth: resources, production, demand, refining and international trade. Energy efficiency is treated in much the same way as conventional fuels: Its prospects and contribution are presented in a dedicated chapter. The report examines the outlook for Brazil's energy sector and provides updates on three key areas of critical importance to energy and climate trends: (i) achieving universal energy access; (ii) developments in subsidies to fossil fuels and renewables; and (iii) the impact of energy use on climate change. Oil supply, demand and trade: a fresh look at the economics and decline rates of different types of oil production around the world, the prospects for light tight oil inside and outside North America, along with new analysis of oil products and the refining sector. By Fatih Birol, Chief Economist, International Energy Agency

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World Energy Outlook - Parliamentary Days 2014

  1. 1. World Energy Outlook Dr. Fatih Birol IEA Chief Economist OECD Parliamentary Days Paris, 5 February 2014 © OECD/IEA 2014
  2. 2. The world energy scene today  Some long-held tenets of the energy sector are being rewritten  Countries are switching roles: importers are becoming exporters…  … and exporters are among the major sources of growing demand  New supply options reshape ideas about distribution of resources  But long-term solutions to global challenges remain scarce  Renewed focus on energy efficiency, but CO2 emissions continue to rise  Fossil-fuel subsidies increased to $544 billion in 2012  1.3 billion people still lack electricity – in Africa and South Asia  Energy prices add to the pressure on policymakers  Sustained period of high oil prices without parallel in market history  Large, persistent regional price differences for gas & electricity © OECD/IEA 2014
  3. 3. The engine of energy demand growth moves to South Asia Primary energy demand, 2035 (Mtoe) Share of global growth 2012-2035 Eurasia Latin America Europe 1 370 United States 8% China 1 710 4 060 2 240 Middle 1 050 East Brazil 480 1 030 Africa 1 540 Eurasia OECD 1 000 Africa 440 Japan Southeast Asia 5% 4% 8% Middle 10% East 65% India Non-OECD Asia China is the main driver of increasing energy demand in the current decade, but India takes over in the 2020s as the principal source of growth © OECD/IEA 2014
  4. 4. A mix that is slow to change Growth in total primary energy demand 1987-2011 Gas 2011-2035 Coal Renewables Oil Nuclear 500 1 000 1 500 2 000 2 500 3 000 Mtoe 25 years ago the share of fossil fuels in the global mix was 82%; it is the same today & the strong rise of renewables in the future only reduces this to around 75% in 2035 © OECD/IEA 2014
  5. 5. Emissions off track in the run-up to the 2015 climate summit in France Cumulative energy-related CO2 emissions Total emissions 1900-2035 Gt 800 600 Non-OECD Non-OECD 49% OECD 400 200 OECD 51% 1900 -1929 1930 -1959 1960 -1989 1990 -2012 2013 -2035 Non-OECD countries account for a rising share of emissions, although 2035 per capita levels are only half of OECD © OECD/IEA 2014
  6. 6. Renewables power up around the world Growth in electricity generation from renewable sources, 2011-2035 TWh 2 100 Other renewables 1 800 1 500 1 200 900 600 300 Other United renewables States Solar PV Japan Wind European Union Hydro Europe, Japan & United States Other ASEAN renewables Solar PV Solar PV Africa Wind Wind China Latin America Hydro Hydro India China India, Latin America, ASEAN & Africa The expansion of non-hydro renewables depends on subsidies that more than double to 2035; additions of wind & solar have implications for power market design & costs © OECD/IEA 2014
  7. 7. Increasing subsidies for increasing renewables Renewable-energy subsidies by region in 2012 Rest of the world 13% India 2% China 7% $101 billion 57% European Union 21% United States Renewables subsidies increased to $101 billion in 2012, more than half of which are Renewables subsidies increased to $101 billion in 2012, in the European Union; renewables subsidies are set to more than double by 2035. renewables subsidies are set to more than double by 2035 © OECD/IEA 2014
  8. 8. Who has the energy to compete? Ratio of industrial energy prices relative to the United States Natural gas Electricity 5 Reduction from 2013 4 2035 2013 2003 3 2003 2 United States Japan European Union China Japan European Union China Regional differences in natural gas prices narrow from today’s very high levels but remain large through to 2035; electricity price differentials also persist © OECD/IEA 2014
  9. 9. Energy-intensive industries need to count their costs Share of energy in total production costs for selected industries 10% 20% 30% 40% 50% 60% 70% 80% 90% Petrochemicals Fertilisers Aluminium Cement Iron & steel Pulp & paper Glass Energy-intensive sectors worldwide account for around one-fifth of industrial value added, one-quarter of industrial employment and 70% of industrial energy use. © OECD/IEA 2014
  10. 10. An energy boost to the economy? Share of global export market for energy-intensive goods +3% European Union +1% Today 36% 10% +2% +2% 7% 3% 2% China Middle East India Japan 7% United States -3% -10% The US, together with key emerging economies, increases its export market share for energy-intensive goods, while the EU & Japan see a sharp decline and Japan see a sharp decline © OECD/IEA 2014
  11. 11. LNG from the United States can shake up gas markets Indicative economics of LNG export from the US Gulf Coast (at current prices) $/MBtu 18 15 12 $/MBtu 12 9 9 6 6 3 3 To Asia Average import price Liquefaction, shipping & regasification United States price To Europe New LNG supplies accelerate movement towards a more interconnected global market, but high costs of transport between regions mean no single global gas price © OECD/IEA 2014
  12. 12. Orientation for a fast-changing energy world  China, then India, drive the growing dominance of Asia in global energy demand  Technology is opening up new oil resources, but the Middle East remains central to the longer-term outlook  Regional price gaps & concerns over competitiveness are here to stay, but there are ways to react – with efficiency first in line  The shift in the balance of global energy trade towards Asia will have profound implications for energy security cooperation © OECD/IEA 2014

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