world energy outlook 2010 - unece homepage€¦ · fossil-fuel consumption subsidies amounted to...
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© OECD/IEA 2010
World Energy Outlook 2010
Energy Security Dialogue: Gas Resources and International Energy CooperationGeneva, 24 November 2010
Marco Baroni
Office of the Chief Economist
International Energy Agency
© OECD/IEA 2010
Recent policy commitments,if implemented, would make a difference
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
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
Mto
e
Rest of world
China
OECD
WEO-2009:
Reference Scenario
© OECD/IEA 2010
Emerging economies dominatethe growth in demand for all fuels
Demand for all types of energy increases in non-OECD countries,while demand for coal & oil declines in the OECD
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
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Fossil-fuel subsidies are distortingprice signals
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
Economic value of fossil-fuel consumption subsidies by country, 2009 Ir
an
Saudi Ara
bia
Russ
ia
India
Chin
a
Egypt
Venezuela
Indonesi
a
UAE
Uzbekis
tan
Iraq
Kuw
ait
Pakis
tan
Arg
enti
na
Ukra
ine
Alg
eri
a
Mala
ysi
a
Thailand
Bangla
desh
Mexic
o
Turk
menis
tan
South
Afr
ica
Qata
r
Kazakhst
an
Lib
ya
0
10
20
30
40
50
60
70
Billion d
ollars Electricity
(generated from
fossil fuels)
Gas
Oil
Coal
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More oil from fewer producers
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
Incremental oil production by key country in the New Policies Scenario, 2009-2035
0 1 2 3 4 5 6
Algeria
Libya
Nigeria
Qatar
Iran
Kuwait
UAE
Venezuela
Canada
Kazakhstan
Brazil
Iraq
Saudi Arabia
mb/d
OPEC
Non-OPEC
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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
> LNG accounts for over half of the projected growth in global gas trade
Unconventional gas accounts for 35% of the increase in global supply to 2035, with new non-US producers emerging
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
© OECD/IEA 2010
The future is increasingly unconventional
Over a third of the increase in global gas production comes from unconventional sources, their combined share of production rising from 12% in 2008 to about 19% in 2035
0
1 000
2 000
3 000
4 000
5 000
2008 2015 2020 2025 2030 2035
bcm
0%
4%
8%
12%
16%
20% Shale
Coalbed methane
Tight
Conventional
Share of unconventional
(right axis)
World natural gas production by type in the New Policies Scenario
© OECD/IEA 2010
Coal remains the backbone of global electricity generation
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
8 000
10 000
12 000
1990 2000 2010 2020 2030 2035
TW
h China
India
Other non-OECD
OECD
Coal-fired electricity generation by region in the New Policies Scenario
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Fossil fuel demand and import dependency
Import dependency in the European Union will increase for all fossil fuels, with gas registering growing volumes and the sharpest increase
Fossil fuel demand in the European Union in the New Policies Scenario
2008 2020 2035 2008 2020 2035 2008 2020 2035
Oil Gas Coal
0
100
200
300
400
500
600
700
Mto
e Domestic production
Imports
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Renewables enter the mainstream….
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
Renewable primary energy demand in the New Policies Scenario
0 100 200 300 400 500
European Union
United States
China
Brazil
India
Africa
OECD Pacific
Mtoe
2008
2035
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….but only if there is enough government support
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
Annual global support for renewables in the New Policies Scenario
Billion d
ollars
(2009)
Biofuels
Renewables-based electricity
0
30
60
90
120
150
180
210
2007 2008 2009 2015 2020 2025 2030 2035
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The 450 Scenario:A roadmap from 3.5C to 2C
The 450 Scenario sets out an energy pathway consistent with limiting the increase in temperature to 2C
Assumes vigorous implementation of Copenhagen Accord pledges to 2020 & much stronger action thereafter
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
© OECD/IEA 2010
In the 450 Scenario, compared with the Current Policies Scenario, efficiency measures provide 53% of the necessary abatement, but renewables, CCS & nuclear are also crucial
World energy-related CO2 emission savings by technology in the 450 Scenario relative to the Current Policies Scenario
20
25
30
35
40
45
2008 2015 2020 2025 2030 2035
Gt
Efficiency 53%
Renewables 21%
Biofuels 3%
Nuclear 9%
CCS 15%
Share of cumulative abatement
between 2010-203542.6 Gt
21.7 Gt450 Scenario
20.9 Gt
Current Policies
Scenario
The 450 Scenario: Abatement by technology
© OECD/IEA 2010
Combating climate change will bring economic benefits as well as costs
In the 450 Scenario, annual spending on oil imports in 2035 by the five largest importersis around $560 billion, or one-third, lower than in the New Policies Scenario
Oil-import bills as share of GDP in selected countries
0%
1%
2%
3%
4%
5%
Japan IndiaUnited
States
European
Union
China
2009
2035: New Policies Scenario
2035: 450 Scenario
© OECD/IEA 2010
Summary & 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 2C goal & made it less likely to happen
> Unless commitments are fully implemented by 2020, it will be all 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
Gas has a key role in meeting the world’s energy needs, with rising shares from unconventional gas
Renewables are entering the mainstream, but long-term support is needed to boost their competitiveness