© OECD/IEA 2011

Energy for all will not cost the earth

Dr Fatih BIROL IEA Chief Economist

13 March 2012

© OECD/IEA 2011

The context: fresh challenges add to already worrying trends

Economic concerns have diverted attention from energy policy and limited the means of intervention

Post-Fukushima, nuclear is facing uncertainty

MENA turmoil raised questions about region’s investment plans

Some key trends are pointing in worrying directions:

CO2 emissions rebounded to a record high

energy efficiency of global economy worsened for 2nd straight year

spending on oil imports is near record highs

© OECD/IEA 2011

Emerging economies continue to drive global energy demand

Growth in primary energy demand

Global energy demand increases by one-third from 2010 to 2035, with China & India accounting for 50% of the growth

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

2010 2015 2020 2025 2030 2035

Mto

e

China

India

Other developing Asia

Russia

Middle East

Rest of world

OECD

© OECD/IEA 2011

Energy poverty is widespread

31

8

85

653

836

423

661

Latin America

Sub-Saharan Africa China

India

Rest of developing

Asia

289 379

585

1.3 billion people in the world live without electricityand 2.7 billion live without clean cooking facilities

Million people without electricity

Million people without clean cooking facilities

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Investment today is far from enough

Current investment relies heavily on overseas development aid

$9.1 billion was invested in energy access in 2009

Bilateral Official Development Assistance

Multilateral organisations

Developing country governments

14%

34%

31%

22%

Private sector finance

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Giving modern energy to the world will not cost the earth

Investment needs to grow by more than five-times to $48 billion a year – half of which in sub-Saharan Africa

0 10 20 30 40 50

Energy for All Case2010-2030

2009

Billion dollars (2010)

5.3 x more

Other Countries Sub- Saharan Africa

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All sources of finance need to grow

Private sector investment needs to grow the most, but public authorities must provide a supportive investment climate

0

10

20

30

40

50

2009 Energy for All Case

Billi

on d

olla

rs (2

010) Private finance

Developing country governments

Multilateral development banks

Bilateral official development assistance

© OECD/IEA 2011

A range of technical solutions using different sources of energy is required

Additional electricity generation by grid solution and fuel in 2030

63%

3%

14%

6%5%

10%Fossil fuels

Nuclear

Hydro

Wind

Solar

Other renewables

On-grid generation368 TWh

36%

8%21%

28%

7%

Solar

Small hydro

Biomass

Wind

Diesel

Mini-grid and off-grid generation370 TWh

All fuels have a role to play

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Implications of modern energy for all

Achieving modern energy for all would only have a negligible impact on energy security and climate change

0

5

10

15

20

World energy demand

2030

Billi

on to

nnes

of o

il eq

uiva

lent

0

10

20

30

40

Gig

aton

nes

World CO2

emissions2030

1.1%0.7% Additional energy demand in the

Energy for All Case

Additional CO2 emissions in theEnergy for All Case

© OECD/IEA 2011

Modern energy brings health benefits

Clean cooking facilities would prevent the majority of deaths attributable to indoor air pollution from burning biomass

Premature annual deaths from household air pollution and selected diseases

0

0.5

1.0

1.5

2.0

2.5

2008 2030Malaria

2008 2030Tuberculosis

2008 2030Smoke from

biomass

2008 2030HIV/AIDS

Mill

ion

© OECD/IEA 2011

Concluding remarks

In a world full of uncertainty, one thing is sure: rising incomes & population will push energy needs higher

Modern energy is critical to social and economic development goals

Affordable and reliable modern energy for all by 2030 is achievable Adopt a clear statement that modern energy access is a political priority

Mobilise additional public and private investment in universal access

National governments need to adopt strong governance and regulatory frameworks and invest in internal capacity building

The public sector should leverage greater private sector investment where the commercial case is marginal

World Energy Outlook has highlighted energy access for a decade and will continue to do so in WEO-2012