World Energy Outlook: Key Strategic Challenges Dr. Fatih Birol Chief Economist Head, Economic Analysis Division
Energy Trends & Strategic Challenges Reference Scenario
World Primary Energy Demand 18 000 16 000 Mtoe 14 000 12 000 10 000 8 000 6 000 4 000 Oil Gas Coal 2 000 0 Other renewables Nuclear Hydro 1970 1971 1980 1990 2000 2010 2020 2030 Oil and gas together account for more than 60% of the growth in energy demand between now and 2030 in the Reference Scenario
World Power Generation from Non-Hydro Renewable Energy Sources 2 000 1 600 1 200 TWh 800 400 0 1990 2002 2030 Biomass Wind onshore Wind offshore Geothermal Solar PV Solar thermal Tide/wave World non-hydro renewable electricity generation increases six-fold to 2030, mainly due to wind & biomass
Challenge 1: Security of Supply
OECD Oil Demand Growth by Sector, 1999-2005 2.5 2 1.5 1 mb/d 0.5 0-0.5-1 -1.5 Power Generation Industry Transport In the OECD, the transport sector accounted for almost all the oil demand growth
World Oil Production Shifts Away from OECD 2.2 mb/d 10.2 mb/d 13.5 mb/d 20.2 mb/d OECD 30.9 mb/d MENA Other NCO 41.2 mb/d 50.5 mb/d 29.0 mb/d 2004 2030 Global oil production climbs from 82 mb/d in 2004 to 115 mb/d in 2030; OECD share falls from 25% to 12%
Saudi Arabia s Oil Production by Source in the Reference Scenario 20 16 12 mb/d 8 4 0 1970 1980 1990 2000 2010 2020 2030 Currently producing fields Reserve additions and new discoveries Fields awaiting development Total production Based on its reserves and global demand trends, Saudi oil production is projected to reach 18 mb/d in 2030
Iran s Oil Balance in the Reference Scenario 8 6 mb/d 4 2 0 1970 1980 1990 2000 2010 2020 2030 Net exports Domestic demand Iran oil production reaches 6.8 mb/d in 2030, but exports increase less rapidly due to strong growth in domestic demand
Oil Production Outlook in Iraq in the Reference Scenario 8 6 mb/d 4 2 0 1970 1980 1990 2000 2010 2020 2030 Currently producing fields Reserve additions and new discoveries Fields awaiting development Total production Oil production in Iraq is expected to reach around 3 mb/d in 2010 and 8 mb/d in 2030, provided that stability and security are restored
Proven Natural Gas Reserves Gas reserves are concentrated in FSU and MENA regions Russia and Iran together account almost half of global gas reserves
Challenge 2: Carbon Dioxide Emissions
Energy-Related CO 2 Emissions by Region 20 000 16 000 Mt of CO2 12 000 8 000 4 000 0 1970 1980 1990 2000 2010 2020 2030 OECD Transition economies Developing countries Global emissions grow more than 50% between now & 2030, with developing countries emissions overtaking OECD s in the 2020s
CO 2 Increase, 2004-2030 4 000 15 million tonnes 3 000 2 000 1 000 2004 2030 2004 Pacific Europe North America 2030 12 9 6 3 tonnes per capita 0 China OECD OECD CO 2 additions equal to only three quarters of Chinese CO 2 rise, but OECD emissions per capita still two times higher in 2030 0
Challenge 3: Energy and Poverty
Per Capita Primary Energy Use, 2030 Per capita energy use remains much lower in developing countries
Electricity Deprivation In 2030, if no new policies are implemented, there will still be 1.4 billion people without electricity
World Alternative Policy Scenario
Examples of Policies included in the Alternative Scenario Power generation Renewable energy (e.g., EU renewables directive) Cleaner coal technology (e.g., China and India) Transport sector Improve vehicle fuel efficiency (e.g. strengthening of US CAFE standards, extension of Chinese standards) Increased sales of alternative fuel vehicles and fuels (e.g., biofuels in Europe, Brazil) Residential and commercial sectors Building codes (e.g., US) Efficiency standards and labelling for appliances (e.g., India)
Oil/Gas Demand in the Reference and Alternative Policy Scenarios 140 6000 120 100 12.1 mb/d 500 bcm 5000 4000 mb/d 80 60 3000 bcm 40 2000 20 1000 0 Oil Gas 0 2004 2030 Reference Scenario 2030 Alternative Scenario Oil & gas demand in the Alternative Scenario are both 10% lower in 2030 due to significant energy savings and a shift in the energy mix
Global Energy-Related CO 2 Emissions in the Reference and Alternative Policy Scenarios 40 000 35 000 million tonnes of CO 2 30 000 25 000 20 000 1990 2000 2010 2020 2030 Coal Oil Gas Alternative Policy Scenario Reference Scenario In 2030, CO 2 emissions are 16% lower than in the Reference Scenario, but are still more than 50% higher than 1990
Share of Non-Hydro Renewables in Electricity Generation, 2030 European Union OECD North America OECD Pacific East Asia Latin America China South Asia Middle East Africa Transition economies 0% 5% 10% 15% 20% 25% Reference Scenario Alternative Scenario RS New policies would boost the share of non-hydro-renewables in global energy mix
Summary & Conclusions Projected market trends raise serious concerns Increased risk for energy security Rising environmental concerns Persistent energy poverty More vigorous policies would curb rate of increase in energy demand and emission significantly Renewables can significantly contribute toward meeting these challenges Urgent and decisive government action needed
WEO 2006: Preliminary plan World Alternative Policy Scenario a tool for change - asked by G-8 Deepening and broadening the analysis for developing countries Impact of high energy prices Impact of high oil, gas and electricity prices on energy demand and macro economy Focus on developing Asia and Africa Energy and Development Focus on unsustainable use of biomass Country in focus: Brazil (ethanol, bagasse in CHP)