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© OECD/IEA 2012
World Energy Outlook 2012World Energy Outlook 2012Dr. Fatih BIROL
IEA Chief EconomistRome, 14 December 2012
© OECD/IEA 2012
The contextThe context
Foundations of global energy system shifting Resurgence in oil & gas production in some countries Retreat from nuclear in some others Signs of increasing policy focus on energy efficiency
All-time high oil prices acting as brake on global economy Divergence in natural gas prices affecting Europe (with prices
5-times US levels) and Asia (8-times)
Symptoms of an unsustainable energy system persist Fossil fuel subsidies up almost 30% to $523 billion in 2011, led by MENA CO2 emissions at record high, while renewables industry under strain Despite new international efforts, 1.3 billion people still lack electricity Water increasingly crucial for assessing the viability of energy projects
© OECD/IEA 2012
Emerging economies steer energy markets Emerging economies steer energy markets
Share of global energy demand
Global energy demand rises by over one-third in the period to 2035, underpinned by rising living standards in China, India & the Middle East
20%
40%
60%
80%
100%
1975 2010 2035
Middle East
India
China
OECD
Non-OECDRest of non-OECD6 030 Mtoe 12 380 Mtoe 16 730 Mtoe
© OECD/IEA 2012
A United States oil & gas transformation A United States oil & gas transformation
US oil and gas production
The surge in unconventional oil & gas production has implications well beyond the United States
Unconventional gas
Conventional gas
Unconventional oil
Conventional oil
mboe/d
5
10
15
20
25
1980 1990 2000 2010 2020 2030 2035
© OECD/IEA 2012
Middle East oil to Asia: a new silk road Middle East oil to Asia: a new silk road
Middle East oil export by destination
By 2035, almost 90% of Middle Eastern oil exports go to Asia; North America’s emergence as a net exporter accelerates the eastward shift in trade
7
United StatesJapan & Korea EuropeChina India
mb/d 2000
2011
2035
1
2
3
4
5
6
© OECD/IEA 2012
Iraq oil poised for a major expansionIraq oil poised for a major expansion
Iraq oil production
Iraq accounts for 45% of the growth in global production to 2035;by the 2030s it becomes the second-largest global oil exporter, overtaking Russia
1
2
3
4
5
6
7
8
9
2012 2020 2035
mb/d NorthCentreSouth
Iraq oil exports
1
2
3
4
5
6
7
8
9
2012 2020 2035
mb/d OtherAsia
© OECD/IEA 2012
Natural gas: towards a globalised marketNatural gas: towards a globalised market
Major global gas trade flows, 2010
Rising supplies of unconventional gas & LNG help to diversify trade flows,putting pressure on conventional gas suppliers & oil-linked pricing mechanisms
Major global gas trade flows, 2035
© OECD/IEA 2012
Different trends in oil & gasDifferent trends in oil & gasimport dependencyimport dependency
While dependence on imported oil & gas rises in many countries,
Net oil & gas import dependency in selected countries
0%
20%
40%
60%
80%
100%
20% 40% 60% 80% 100%Oil imports
Gas Imports
United States
ChinaIndia
European Union
Japan20102035
20%Gas Exports
the United States swims against the tide
© OECD/IEA 2012
3 000 4 000 5 000 6 000TWh
2 000
A power shift to emerging economiesA power shift to emerging economies
The need for electricity in emerging economies drives a 70% increase in worldwide demand, with renewables accounting for half of new global capacity
Change in power generation, 2010-2035
-1 000 0 1 000
Japan
European Union
United States
China
TWh
Coal Gas Nuclear Renewables
India
© OECD/IEA 2012
The multiple benefits of renewablesThe multiple benefits of renewablescome at a cost come at a cost
Renewable subsidies were $88 billion in 2011; over half the subsidies required to2035 has been committed to existing projects or is needed to meet 2020 targets
Global renewable energy subsidies of $4.8 trillion, 2011-2035
Electricity$3.6 trillion
Biofuels$1.2 trillion
Committed to existing projects
$1.0 trillion
Required to meet targets
2012-2020$1.6 trillion
© OECD/IEA 2012
Wide variations in the price of powerWide variations in the price of power
Electricity prices are set to increase with the highest prices persisting in theEuropean Union & Japan, well above those in China & the United States
Average household electricity prices, 2035
5
10
15
20
25
China United States European Union Japan
cents/kWh
2011 Non-OECD average
2011 OECD average
© OECD/IEA 2012
Energy efficiency: a huge opportunity Energy efficiency: a huge opportunity going unrealised going unrealised
20%
40%
60%
80%
100%
Industry Transport Powergeneration
Buildings
Unrealised energyefficiency potential
Realised energyefficiency potential
Two-thirds of the economic potential to improve energy efficiency remains untapped in the period to 2035
Energy efficiency potential used by sector in the New Policies Scenario
© OECD/IEA 2012
The Efficient World Scenario: The Efficient World Scenario: aa blueprint for an efficient world blueprint for an efficient world
Economically viable efficiency measures can halve energy demand growth to 2035;
Total primary energy demand
12 000
13 000
14 000
15 000
16 000
17 000
18 000
2010 2015 2020 2025 2030 2035
Mtoe
New PoliciesScenario
Efficient World Scenario
Reduction in 2035
Coal 1 350 Mtce
Oil 12.7 mb/d
Gas 680 bcm
Others 250 Mtoe
oil prices are $15 per barrel lower by 2035 due to oil demand savings
© OECD/IEA 2012
Energy efficiency can help driveEnergy efficiency can help driveeconomic prosperity economic prosperity
Cumulative investments in energy efficiency of $12 trillion are more than offsetby fuel savings & trigger economic growth of a cumulative $18 trillion
GDP in Efficient World Scenario versus New Policies Scenario, 2035
0%
1.0%
2.0%
3.0%
4.0%
Japan & Korea OECD Europe United States China India
© OECD/IEA 2012
Power generation
Industry
Transport
Other
Room to manoeuvre
The Efficient World Scenario The Efficient World Scenario delays carbon lock-indelays carbon lock-in
Energy efficiency can delay “lock-in” of CO2 emissions permitted under a 2 °C trajectory – which is set to happen in 2017 – until 2022, buying five extra years
5
10
15
20
25
30
2011 2015 2020 2025 2030 2035
Gt
2 °C trajectory
Lock-in of existinginfrastructure
2017
Lock-in of infrastructure in New Policies Scenario in 2017
202235
Lock-in of infrastructurein Efficient World Scenario in 2022
© OECD/IEA 2012
Foundations of energy system shiftingFoundations of energy system shifting
Policy makers face critical choices in reconciling energy, environmental & economic objectives
Changing outlook for energy production & use may redefineglobal economic & geopolitical balances
Iraq set to play a pivotal role in global oil markets
As climate change slips off policy radar, the “lock-in” point moves closer & the costs of inaction rise
The gains promised by energy efficiency are within reach & are essential to underpin a more secure & sustainable energy system
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