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© OECD/IEA 2011 Secure and Sustainable Energy Future TBLI Conference September 2011 Nobuo TANAKA

Nobuo tanaka keynote1

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Page 1: Nobuo tanaka keynote1

© OECD/IEA 2011

Secure and Sustainable Energy Future

TBLI ConferenceSeptember 2011Nobuo TANAKA

Page 2: Nobuo tanaka keynote1

The context: A time of unprecedented uncertainty…The context: A time of unprecedented uncertainty… 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 – 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 ? Emerging economies will shape the global energy future – where

will their policy decisions lead us ? Tightening oil market plus political unrest in producing regions –

how vulnerable is the market to even small disruptions? What is the energy landscape post Fukushima nuclear accident?

Page 3: Nobuo tanaka keynote1

Oil prices affect the global economyOil prices affect the global economy

Oil price spikes have preceded each global recession since the early 1970’s

Page 4: Nobuo tanaka keynote1

Annual expenditure on net imports of oilAnnual expenditure on net imports of oil

If oil prices average US$100 a barrel in 2011, spending on oil imports in many countries will reach or surpass the record levels of 2008

* Projections made prior to events of 11 March

0%

2%

4%

6%

8%

10%

0

100

200

300

400

500

US EU J apan China India

Bill

ion

dol

lars

(200

9) 1971-2008 average

2008

2011

Share of GDP (right axis)

Page 5: Nobuo tanaka keynote1

Need for cooperation during oil supply Need for cooperation during oil supply disruptionsdisruptions

IEA stockholding cover of global oil demand

Growing share of non-OECD oil demand results in declining global demand cover from IEA oil stocks

-

5

10

15

20

25

30

35

40

0%

10%

20%

30%

40%

50%

60%

days

of

wor

ld o

il de

man

d co

ver

% sh

are

of w

orld

oil

dem

and

IEA 90 days of stockholding, share of world demand with Chinawith Indiawith ASEANShare of non-OECD in global oil demand

Page 6: Nobuo tanaka keynote1

The Future of Nuclear Power after FukushimaThe Future of Nuclear Power after Fukushima

Recent projections for growth in nuclear capacity may now be viewed as optimistic

An increasing number of plants may be retired early due to more stringent safety regulations

Life extensions for older plants may become less common Investment may be delayed or deferred

> Investment to replace the aging fleet in OECD> Investment in emerging economies to meet rising base-load demand

Costs of new nuclear plants may increase Countries pursuing new nuclear power programs may face

difficulties> Including Indonesia, Thailand & possibly some Middle East countries

Page 7: Nobuo tanaka keynote1

Nuclear construction shifting to developing countriesNuclear construction shifting to developing countriesNuclear reactor construction starts, 1954-2011

Today, 30 countries operate 441 nuclear reactors, 82% being in OECD countries. However, new construction is overwhelmingly in non-OECD countries, where 55 of the 67 new reactors were being built.

Page 8: Nobuo tanaka keynote1

Lower-Nuclear Case: implications for electricity Lower-Nuclear Case: implications for electricity generation from nucleargeneration from nuclear

Lower Nuclear case means 1) Higher Electricity Prices, 2) Less Security and 3) Less Sustainable.

Post Fukushima: New Energy Security of the 21 C

Page 9: Nobuo tanaka keynote1

Lower-Nuclear Case: Lower-Nuclear Case: implications for the fuel miximplications for the fuel mix

The Lower-Nuclear Case would push up demand for coal, natural gas & renewables, and have a corresponding knock-on effect on energy prices

Increase of coal-, gas- and renewables-based electricity generation in 2035 compared with the New Policies Scenario

0%

1%

2%

3%

4%

5%

6%

7%

Coal Gas Renewables

130 Mtce

80 bcm

460 TWh

Page 10: Nobuo tanaka keynote1

Lower-Nuclear Case: Lower-Nuclear Case: implications for CO2 emissionsimplications for CO2 emissions

The growth in emissions from the power sector in 2008-2035 is almost 30% higher in the Lower-Nuclear Case than in the New Policies Scenario

Growth in CO2 emissions from power generation compared to current levels

New Policies Scenario

Lower-Nuclear Case 0.5 Gt

0

0.5

1

1.5

2

2.5

2015 2020 2025 2030 2035

Gt

Page 11: Nobuo tanaka keynote1

Germany: Additional 16BCM of Natural Gas Germany: Additional 16BCM of Natural Gas Import will be needed. It may Compromise Import will be needed. It may Compromise European Energy Security and Susrtainability.European Energy Security and Susrtainability.

German electricity mix with 10% demand reduction, no nuclear, 35% renewables and CO2 at the target level

twh

Page 12: Nobuo tanaka keynote1

Japan : Power Grid Market Reform is neededJapan : Power Grid Market Reform is needed and interconnection to Korea and Russia and interconnection to Korea and Russia

Source:    資源エネルギー庁、電気事業連合会、電力系統利用協議会、 IEA算定

Tokyo

Hokkaido

Tohoku

HokurikuKansaiChugoku

Kyushu

Shikoku

ChubuOkinawa

Hydro

Oil

Gas

Nuclear

Coal

Other

Power utility company

Generating company

In-house generation

Page 13: Nobuo tanaka keynote1

““Golden Age of Gas” ScenarioGolden Age of Gas” Scenario

World primary energy demand by fuel in the GAS Scenario

Gas overtakes coal before 2030 and meets one quarter of global energy demand by 2035 – demand grows by 2% annually, compared with just 1.2% for total energy

Other renewables

0

1 000

2 000

3 000

4 000

5 000

1980 1990 2000 2010 2020 2030

Mto

e

Oil

Gas

Coal

Biomass

Nuclear

Hydro

2035

Growing role of Gas in Energy Security

Page 14: Nobuo tanaka keynote1

Consumption grows most in developing economiesConsumption grows most in developing economies

Increase in natural gas consumption in the GAS scenario, 2010-2035

Non-OECD countries account for 80% of demand growth – China alone makes up nearly 30% of global growth & uses as much gas as the EU by 2035

0 100 200 300 400 500 600

Rest of the world

Africa

Russia

Latin America

India

Middle East

OECD total

China

bcm

Page 15: Nobuo tanaka keynote1

Production of unconventional gas becomes widespread Production of unconventional gas becomes widespread

Largest gas producers in the GAS Scenario, 2035

Unconventional gas supplies 40% of the 1.8 tcm increase in gas demand to 2035, making up nearly one quarter of total production

0 200 400 600 800 1 000

Turkmenistan

Saudi Arabia

Australia

Algeria

Canada

Qatar

Iran

China

United States

Russia Conventional

Unconventional

bcm

Page 16: Nobuo tanaka keynote1

CO2 emissions drop, but only slightlyCO2 emissions drop, but only slightly

CO2 emissions in the GAS Scenario compared with the New Policies Scenario, 2035

CO2 emissions are just 160 Mt lower than in the New Policies Scenario in 2035. Substitution of coal & oil by gas cuts emissions by 740 Mt, but this is largely offset by other effects

34.0

34.5

35.0

35.5

36.0

36.5

NewPolicies

Scenario

GASScenario

Gt

Less nuclear

Less renewables

Higher energy demand

Increase due to:

Reduction due to:

Substitution of coal & oil by gas

Page 17: Nobuo tanaka keynote1

Renewable electricity is vital in all scenariosRenewable electricity is vital in all scenarios

Global electricity from RE increases from 3 800 TWh (2008) to 14 500 TWh (2035) in the 450 Scenario

45% RE share

0

3 000

6 000

9 000

12 000

15 000

2000 2005 2010 2015 2020 2025 2030 2035

450 Scenario

23% RE share Current Policies Scenario

33% RE shareLower Nuclear Case

New Policies Scenario

32% RE share

Page 18: Nobuo tanaka keynote1

Renewables enter the mainstream…. 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

European Union

United States

China

Brazil

India

Africa

OECD Pacific

Mtoe

2008

2035

Page 19: Nobuo tanaka keynote1

Energy mix as Energy Security MixEnergy mix as Energy Security Mix

Nuclear is an important option for countries with limited indigenous energy resources (low energy sustainability).

Self sufficiency =inland production / tpes (2010 estimates)

Energy Self-sufficiency rates of selected countries 

Page 20: Nobuo tanaka keynote1

The 450 Scenario: The 450 Scenario: Abatement by technologyAbatement by technology

In moving from the New Policies Scenario to the 450 Scenario, more expensive abatement options such as CCS play a growing role

World energy-related CO2 emission savings by technology in the 450 Scenario relative to the New

Policies Scenario

20

25

30

35

40

45

2008 2015 2020 2025 2030 2035

Gt

Efficiency 50%

Renewables 18%

Biofuels 4%

Nuclear 9%

CCS 20%

Share of cumulative abatement

between 2010-2035

42.6 Gt

35.4 Gt

21.7 Gt

Current Policies Scenario

450 Scenario

New Policies Scenario

13.7 Gt

7.1 Gt

Sustainability Constraint

Low Nuclear : +0.5GtHigh Gas : -0.2Gt

Page 21: Nobuo tanaka keynote1

Number of people without access to electricity (million)Number of people without access to electricity (million)

Today, there are 1.4 billion people lacking access to electricity. Based on current trends, 1.2 billion people – or 15% of the world’s population – will still lack access in 2030

Energy Poverty ; Another sustainability Problem

Page 22: Nobuo tanaka keynote1

Implications for Japan and Emerging EconomiesImplications for Japan and Emerging Economies Japan

Regional energy security framework is key for future competitiveness

Further develop energy efficiency, renewables, grid interconnection, smart grid and electric vehicles.

Safe nuclear remains important option. Turn lessons in to global asset.

Emerging Economies like India

Ensure energy security while addressing rapid growth and energy access issue.

Develop new energy policy model for emerging economies by promoting energy efficiency while avoiding heavy dependence on coal and phasing out fossil fuel subsidies.

Common challenge

New Comprehensive Energy Security Framework for the 21st Century.

Work together towards low carbon future: Global Financial mechanisms, transparent energy market, and cutting edge technology on energy efficiency, nuclear, renewables, CCS and Advanced Vehicles.