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World Energy Outlook 2010World Energy Outlook 2010
© OECD/IEA 2010
Presentation to the pressLondon, 9 November 2010
The context: The context: A time of unprecedented A 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?
International oil price assumptions International oil price assumptions
80
100
120
140ar
s per
bar
rel (
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 pricesthan would otherwise be the case
0
20
40
60
1980 1990 2000 2010 2020 2030 2035
Dol
la
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
Mto
e
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
Emerging economies dominateEmerging economies dominatethe growth in demand for all fuels the growth in demand for all fuels
Incremental primary energy demand in the New Policies Scenario, 2008-2035
Gas
Oil
CoalOECD
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
FossilFossil--fuel subsidies are distortingfuel subsidies are distortingprice signals price signals
Economic value of fossil-fuel consumption subsidies by country, 2009
30
40
50
60
70
Billi
on d
olla
rs Electricity(generated from fossil fuels)
GasOilCoal
© 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
Saud
i Ara
bia
Russ
iaIn
dia
Chin
aEg
ypt
Vene
zuel
aIn
done
sia
UAE
Uzb
ekis
tan
Iraq
Kuw
ait
Paki
stan
Arge
ntin
aU
krai
neAl
geri
aM
alay
sia
Thai
land
Bang
lade
shM
exic
oTu
rkm
enis
tan
Sout
h Af
rica
Qat
arKa
zakh
stan
Liby
a
0
10
20
30
Booming demand for mobility in the Booming demand for mobility in the emerging economies drives up oil use emerging economies drives up oil use
1 000
1 200
1 400
1 600
Mill
ion 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
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 yetto 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 ofnatural 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 – currentlyproducing fields
Total crude oil
More oil from fewer producers More oil from fewer producers
Incremental oil production by key country in the New Policies Scenario, 2009-2035
VenezuelaCanada
KazakhstanBrazil
IraqSaudi 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
AlgeriaLibya
NigeriaQatar
IranKuwait
UAEVenezuela
mb/d
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
Coal remains the backbone of global Coal 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
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
….but only if there is enough ….but only if there is enough government supportgovernment support
Annual global support for renewables in the New Policies Scenarion
dolla
rs (
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
Billi
on
0
30
60
90
120
2007 2008 2009 2015 2020 2025 2030 2035
China becomes the market leaderChina becomes the market leaderin lowin low--carbon technologies carbon technologies
Passenger car sales
Capacity additions
China’s share of cumulative global additions to 2035 for selected technologies
85 GW
335 GW105 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
Caspian energy riches could enhance Caspian 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,while Turkmenistan & 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
The 450 Scenario:The 450 Scenario:AA roadmap from 3.5roadmap from 3.5°°C to 2C to 2°°C C
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
30
32
34
36
38
Gt
New Policies Scenario35.4 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
Achieving the 2Achieving the 2°°C goal will require rapid C 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
A fundamental change is neededA fundamental change is neededin power generation in power generation
Share of world electricity generation by type and scenario
Additional low-carbon generationin 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
… 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
mes
per
kW
h
50
60
70
Mill
ion
© 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
Gra
mm
0
10
20
30
40
2010 2015 2020 2025 2030 2035
Will peak oil be a guest or the Will peak oil be a guest or the spectrespectreat the feast?at the feast?
Oil demand in the 450 Scenario
World demand in450 Scenario
Inter regionalRight 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 plungein 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 203568
72
76
80
84
-16
-12
-8
-4
0
Combating climate change will bring Combating 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% 20092035: New Policies Scenario2035: 450 Scenario
© OECD/IEA 2010
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
0%
1%
2%
Japan IndiaUnitedStates
EuropeanUnion
China
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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