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© OECD/IEA 2011
World Energy Outlook 2011
Presentation to the press
London, 9 November 2011
© 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:
" CO2emissions 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 in the New Policies Scenario
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
Mtoe
China
India
Other developing Asia
Russia
Middle East
Rest of world
OECD
© OECD/IEA 2011
Natural gas & renewables become
increasingly important
Renewables & natural gas collectively meet almost two‐thirds
of incremental energy demand in 2010‐2035
Additional to 2035
2010
World primary energy demand
0
1 000
2 000
3 000
4 000
5 000
Oil Coal Gas Renewables Nuclear
Mtoe
© OECD/IEA 2011
Oil demand is driven higher
by soaring car ownership
Vehicles per 1000 people in selected markets
The passenger vehicle fleet doubles to 1.7 billion in 2035; most cars are sold
outside the OECD by 2020, making non‐OECD policies key to global oil demand
2010
2035
0
100
200
300
400
500
600
700
800
United States EuropeanUnion
China India Middle East
© OECD/IEA 2011
Changing oil import needs are set to
shift concerns about oil security
Net imports of oil
US oil imports drop due to rising domestic output & improved transport efficiency: EU imports
overtake those of the US around 2015; China becomes the largest importer around 2020
0
2
4
6
8
10
12
14
China India EuropeanUnion
UnitedStates
Japan
mb/d
2000
2010
2035
© OECD/IEA 2011
What impact would deferred
investment in MENA have on markets?
! MENA is set to supply the bulk of the growth in oil output
to 2035, requiring investment of over $100 billion/annum
! ‘Deferred Investment Case’ looks at near‐term investment
falling short by one‐third
" possible drivers include new spending priorities, higher perceived risks, etc
! MENA output falls 3.4 mb/d by 2015 and 6.2 mb/d by 2020
! Consumers face a near‐term rise in oil prices to $150/barrel
! MENA earns more initially, but then less as market share is lost
© OECD/IEA 2011
Golden prospects for natural gas
Largest natural gas producers in 2035
Unconventional natural gas supplies 40% of the 1.7 tcm increase in global supply,
but best practices are essential to successfully address environmental challenges
0 200 400 600 800 1 000
Norway
India
Australia
Algeria
Canada
Qatar
Iran
China
United States
Russia
bcm
Conventional
Unconventional
© OECD/IEA 2011
Coal won the energy race in the
first decade of the 21st century
Growth in global energy demand, 2000‐2010
Coal accounted for nearly half of the increase in global energy use over the past decade,
with the bulk of the growth coming from the power sector in emerging economies
Nuclear
0
200
400
600
800
1 000
1 200
1 400
1 600
Coal
Mtoe
Total non‐coal
Natural gas
Oil
Renewables
© OECD/IEA 2011
Asia: the arena of future coal trade
International coal markets & prices become increasingly sensitive to developments in Asia;
India surpasses China as the biggest coal importer soon after 2020
Share of global hard coal trade
0%
10%
20%
30%
40%
50%
60%
70%
2009 2020 2035
India
China
Japan
European Union
© OECD/IEA 2011
Second thoughts on nuclear would
have far‐reaching consequences
! “Low Nuclear Case” examines impact of nuclear component
of future energy supply being cut in half
! Gives a boost to renewables, but increases import bills,
reduces diversity & makes it harder to combat climate change
! By 2035, compared with the New Policies Scenario:
" coal demand increases by twice Australia’s steam coal exports
" natural gas demand increases by two‐thirds Russia’s natural gas net exports
" power‐ sector CO2emissions increase by 6.2%
! Biggest implications are for countries with limited energy
resources that planned to rely on nuclear power
© OECD/IEA 2011
Power investment focuses on
low‐carbon technologies
Share of new power generation and investment, 2011‐2035
Renewables are often capital‐intensive, representing 60% of investment for 30% of
additional generation, but bring environmental benefits & have minimal fuel costs
0%
5%
10%
15%
20%
25%
30%
35%
40%
Coal Gas Nuclear Hydro Wind Solar PV
Generation
Investment
© OECD/IEA 2011
The overall value of subsidies
to renewables is set to rise
Renewable subsidies of $66 billion in 2010 (compared with $409 billion for fossil fuels), need
to climb to $250 billion in 2035 as rising deployment outweighs improved competitiveness
Biofuels
Electricity
0
50
100
150
200
250
2007 2008 2009 2010 2015 2020 2025 2030 2035
Billion
dollars (2
010)
© OECD/IEA 2011
Realising Russia’s potential for energy
savings would have a big impact
Natural gas savings from raising efficiency (to comparable OECD levels)
Russia’s total energy savings potential is close to the primary energy used in a year by the UK;
new efficiency policies bring results, but the savings potential remains large even in 2035
600 400 200 0 200 400 600
2008
2035
180 bcm
130 bcm
Domestic gas demand / potential savings
bcm
Net exports
© OECD/IEA 2011
Russia remains a cornerstone
of the global energy economy
Russian revenue from fossil fuel exports
An increasing share of Russian exports go eastwards to Asia,
providing Russia with diversity of markets and revenues
2010
$255 billion
61%16%
21%
2035
$420 billion
48%
European
Union
17%Other
20%China
15%
Other
Europe
European
UnionOther
Europe
China
2%
Other
© OECD/IEA 2011
Energy is at the heart of
the climate challenge
By 2035, cumulative CO2emissions from today exceed three‐quarters of the total since 1900,
and China’s per‐capita emissions match the OECD average
EuropeanUnion
0
100
200
300
400
500
United States China India Japan
Gigaton
nes
2010‐2035
1900‐2009
Cumulative energy‐related CO2emissions in selected regions
© OECD/IEA 2011
0
5
10
15
20
25
30
35
40
2010 2020 2025 2030 2035
Delay until 2017
Delay until 2015
2015
Emissions from
existing
infrastructure
The door to 2°C is closing,but will we be “locked‐in” ?
Without further action, by 2017 all CO2emissions permitted in the 450 Scenario
will be “locked‐in” by existing power plants, factories, buildings, etc
456°C trajectory
2°C trajectory
CO2em
ission
s (gigaton
nes)
© OECD/IEA 2011
If we don’t change direction soon,
we’ll end up where we’re heading
! In a world full of uncertainty, one thing is sure:
rising incomes & population will push energy needs higher
! Oil supply diversity is diminishing, while new options
are opening up for natural gas
! Coal – the “forgotten fuel” – has underpinned growth, but its
future will be shaped by uptake of efficient power plants & CCS
! Power sector investment will become increasingly
capital intensive with the rising share of renewables
! The world needs Russian energy, while Russia needs to use less
! Despite steps in the right direction, the door to 2°C is closing