ENERGY [R]EVOLUTION A GLOBAL SUSTAINABLE WORLD ENERGY OUTLOOK

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1 ENERGY [R]EVOLUTION A GLOBAL SUSTAINABLE WORLD ENERGY OUTLOOK Wolfram Krewitt 1), Sonja Simon 1), Wina Graus 2), Sven Teske 3), Arthouros Zervos 4) 1) German Aerospace Center (DLR) Institute of Technical Thermodynamics Department of Systems Analysis and Technology Assessment Pfaffenwaldring Stuttgart Germany 2) Ecofys Kanaalweg 16G 3526 KL Utrecht The Netherlands 3) Greenpeace International Ottho Heldringstraat AZ Amsterdam The Netherlands 4) European Renewable Energy Council 63-65, rue d'arlon 1040 Brussels Belgium Corresponding author: Wolfram Krewitt German Aerospace Center (DLR) Institute of Technical Thermodynamics Department of Systems Analysis and Technology Assessment Pfaffenwaldring Stuttgart Germany Phone: Fax: wolfram.krewitt@dlr.de Abstract A target oriented scenario of future energy demand and supply is developed in a backcasting process. The main target is to reduce global CO 2 emissions to around 10 Gt/a in 2050, thus limiting global average temperature increase to 2 C and preventing dangerous anthropogenic interference with the climate system. A 10-region energy system model is used for simulating global energy supply strategies. A review of sector and region specific energy efficiency measures resulted in the specification of a global energy demand scenario under strong energy efficiency measures. The corresponding supply scenario has been developed in an iterative process in close cooperation with stakeholders and regional counterparts from academia, NGOs and the renewable energy industry. The 2 C Scenario shows that renewable energy could provide as much as half of the world s energy needs by Developing countries can virtually stabilise their CO 2 emissions, whilst at the same time increasing energy consumption through economic growth. OECD countries will be able to reduce their emissions by up to 80%. 1

2 Key words: Global energy scenario, renewable energies, energy efficiency Taken over by reality? The scope of the climate challenge ahead is enormous, and similarly enormous seem to be the efforts required to get around. Based on IPCC results, the European Council reached political consensus that an increase of 2 C of the earth s average temperature above pre-industrial levels is the maximum safe level that can be envisaged (European Commission 2005, European Commission 2007). Although uncertainties are still large, current knowledge indicates that the probability of keeping within the 2 C target is rather low with greenhouse gas concentration levels beyond 450 ppm (Hare and Meinshausen 2004). From various modelling studies (e.g. WBGU 2003) we know that for achieving CO 2 stabilisation at this level, global CO 2 emissions need to be cut down to around 10 Gt/a in 2050, which is a reduction of around 60% compared to today s emission levels. To make the challenge more explicit: an expected world population of 9 billion people in 2050, together with an emission target of ~ 10 Gt CO 2 per year, leaves us with per capita emission rights of around 1 t CO2 per year. From Figure 1, which shows current annual per capita CO 2 emissions for selected regions, we learn that Africa is our benchmark for a sustainable global per capita CO 2 emission level. Significant innovations, not only in the technical field, but in particular in the social and institutional context, are necessary to make this go together with the strive for better global living conditions and increased living standards. Future development projections like e.g. those published by the International Energy Agency (IEA) however do not offer much comfort. Under the IEA s Alternative Policy Scenario, introduced as mapping a new energy future in the latest World Energy Outlook (IEA 2006a), CO 2 emissions in 2030 are reduced by 15% compared to the IEA s Reference Scenario, but continue to grow to 34 Gt in 2030 and thus dramatically fail to contribute to a stabilisation of global CO 2 concentration. Even the IEA s most ambitious Accelerated Technology Scenario (IEA 2006b), which assumes massive exploitation of carbon capture and sequestration technologies as well as the expansion of nuclear power generation, results in CO 2 emissions which in 2050 are still 6% higher than today (2003). The only IEA scenario which actually achieves a reduction of CO 2 emissions compared to the current level is the TECH Plus scenario. While the TECH Plus Scenario because of its optimistic perspective on technology development is characterised as being to some extent speculative (IEA 2006b), the expected reduction in CO 2 emissions (16% in 2050, compared to 2003) is small. There is a remarkable gap between the well established policy targets, which aim at limiting the adverse effects from climate change to an acceptable level, and the even most visionary views of a body like the IEA on the future development of our global energy system. Can we at all still win the battle against global climate change (European Commission, 2005) if the IEA s most speculative scenarios suggest that what is achievable by 2050 is to bring down global CO 2 emissions to what we emit today? The present paper describes a backcasting process which explores development options that comply with the 2 C temperature target. Results from a discussion process including stakeholders from academia, Non-Governmental Organisations and representatives from the renewable energy industries offer insights into what is considered to be achievable from a technical point of view (see also GPI/EREC 2007). The paper does not address policy measures that are required to steer the system towards such a sustainable development pathway. But we make a strong claim that such a target oriented scenario shall be used as a benchmark for future policy decisions instead of a hypothetical business-as-usual based Reference Scenario which as we know from scientific evidence is likely to move us towards a global environmental collapse. Approach 2

3 A target oriented scenario of future energy demand and supply is developed in a backcasting process. The main target is to reduce global CO 2 emissions to around 10 Gt/a in 2050, thus limiting global average temperature increase to 2 C and preventing dangerous anthropogenic interference with the climate system. The scenario developed to match this overall development target is thus called the 2 C Scenario. As a second constraint, we do not allow any new nuclear capacity to be built, and assume a global phasing out of nuclear energy by While this assumption might not necessarily be globally shared, it provides a bottom line for the range of energy system development options, as it sets aside a CO 2 -free electricity supply technology because of potential non-compliance with other sustainability targets. A 10-region energy system model implemented in the MESAP/PlaNet environment (MESAP 2006) is used for simulating global energy supply strategies. The ten regions correspond to the world regions as specified by the IEA World Energy Outlook (OECD Europe, OECD North America, OECD Pacific, Transition Economies, China, East Asia, South Asia, Latin America, Africa, Middle East). The model is calibrated against the regional energy balances derived from the IEA 2003 energy statistics (IEA 2005a, b). Projection of gross domestic product (GDP) and population development as the key drivers for energy demand are taken from the IEA-WEO 2004 (IEA 2004a) (the 2006 WEO was not yet published during model setup) and extrapolated to 2050 (see below). For illustrative purposes, we adopt the WEO 2004 Reference Scenario as the business-as-usual projection, which we also extrapolated to A thorough review of sector and region specific energy efficiency measures resulted in the specification of an alternative energy demand scenario. The corresponding supply scenario has been developed in an iterative process in close cooperation with regional counterparts, representing research organisations and NGOs from the respective world regions, and the renewable energy industry represented by the European Renewable Energy Council (EREC). The regional counterparts played a key role in the critical review of assumptions on the renewable energy potentials available in the different world regions. The key assumptions related to the various steps of scenario development are summarised in the following sections. More details in particular on region specific data are given in (GPI/EREC 2007). All costs and prices given below are in $ Key system drivers population and GDP development Population growth affects the size and composition of energy demand. Population growth rates for the ten world regions are taken from the IEA-WEO 2004 (IEA 2004a) up to the end of its projection period in From 2030 to 2050, data is taken from the 2004 revision of the United Nations World Population Prospects (UN 2004). The world s population is expected to grow from today 6.3 to almost 8.9 billion in The developing regions will continue to grow most rapidly, whilst the transition economies are expected to undergo a continuous decline. The OECD s share of the world population will decrease, as will China s. Africa will remain the region with the highest population growth, leading to a share of 21% of world population in Satisfying the energy needs of a growing population in the developing regions of the world in an environmentally friendly manner is a key challenge for achieving a global sustainable energy supply. Economic growth is the second key driver for energy demand. The main challenge for a sustainable development pathway is the further decoupling of energy demand and the growth of the Gross Domestic Product (GDP). Regional GDP growth rates are again taken from the IEA-WEO 2004 for the period 2003 to For the extrapolation to 2050, we take the IPCC B2 scenario (IPCC 2000) as a guidance, which describes a world in which the emphasis is on local solutions to economic, social and environmental sustainability combined with an intermediate level of economic development. It is expected that GDP growth in all regions will slow gradually over the coming decades. We assume that world GDP on average grows by 2.7% per year over the period 2003 to 2050, which is slightly lower than the IEA long term projections under the Energy Technology perspectives (IEA 2006b). China and other Asian countries are expected to grow fastest, followed by Africa and the Transition Economies 3

4 (Figure 2). The Chinese economy will slow as it becomes more mature, but in purchase power parity terms will become the largest in the world, although per capita GDP in 2050 will still be about half of OECD North America s per capita GDP. GDP in the OECD regions is expected to grow around 2% over the projection period. The OECD share of global purchase power parity adjusted GDP will decrease from 58% to 38% in Future energy prices and power plant investment costs The recent dramatic increase in global oil prices has resulted in much higher forward price projections. Under the 2004 high oil and gas price scenario by the European Commission (2004), for example, an oil price of just $34/bbl in 2030 was assumed, and under a soaring oil and gas prices scenario the oil price reached $50/bbl in Only two years later, the IEA-WEO expects the oil price to be at $52/bbl (55 $ 2005 /bbl) in 2030 (IEA 2006a), and in the high projections of the US Department of Energy s Annual Energy Outlook the oil price reaches $90/bbl in 2030 ($54 in the reference case) (US DoE 2006). Considering the IEA s continuous underestimation of oil prices in the past and the growing global oil and gas demand, which goes along with the expected passing of the global oil mid depletion point, we assume a price development path in which the price of oil reaches $85/bbl by 2030 and $100/bbl in 2050 (Table 1). Gas prices are assumed to increase to $9-10/GJ by Compared to fossil fuels, biomass prices are highly variable, ranging from no or low costs for residues or traditional biomass in Africa or Asia to comparatively high costs for biofuels from energy crops, competing with food crops. Despite this variability, we assume an aggregated price for biomass in Europe and in other regions as shown in Table 1. The increasing biomass prices reflect the link between biofuel and a rising share of energy crops. For other regions prices are assumed to be lower, considering the large amount of traditional biomass use in developing countries and the high potential of yet unused residues in North America and the Transition Economies (GEMIS 2005). Projections of CO 2 emission costs are even more uncertain than energy prices. IEA (2006b) assumes a CO 2 reduction incentive of 25 $/t CO2 in A study commissioned by the German Advisory Council on Global Change (WBGU 2003) suggest that under a 450 ppm CO 2 stabilisation scenario the price for global CO 2 emission allowances will rise to around 50 $/t CO2 in 2030, and depending on the scenario to more than 100 $/t CO2 in We assume that CO 2 costs rise linearly from 10 $/t CO2 in 2010 to 50 $/t CO2 in 2050, which is twice as high as the IEA s projection, but still conservative compared with other studies. We assume that CO 2 emission costs will be accounted for in Non-Annex B countries only after Besides the conventional fossil based technologies, which still show a significant potential for cost reduction and improvement of efficiencies, there is a broad range of renewable energy technologies available today, which differ in terms of their technical maturity, costs, and development potentials. Most of the renewable technologies employed today are at an early stage of market development. Accordingly, their costs are generally higher than for competing conventional systems. By stimulating the market introduction, these technologies will run through their learning curves, thus exploiting the large potential for cost reduction. Table 2 exemplarily shows the expected development of specific investment costs for key electricity generation technologies. Prerequisite for this cost development is the further dynamic market uptake of renewable energy technologies to facilitate the technical learning. A business-as-usual projection useful as a reference? Any scenario work specifies development pathways which span a range of alternative options. In most cases a reference scenario is defined representing a business-as-usual trajectory which assumes a world developing along the frozen framing conditions set by today s policy. The impacts of alternative 4

5 policy options and development strategies are then compared against this reference. Following this approach, we developed a Reference Scenario based on the IEA-WEO 2004 Reference Scenario, which we extrapolated to 2050 based on the above assumptions on population and GDP development and on the development of energy intensities. Under such a scenario the global final energy consumption will continue to grow up to PJ/a in 2050 (Figure 3), and CO 2 emissions will nearly double, reaching more than 45 Gt/a by Such a Reference scenario however is a purely hypothetical development option. Increasing pressure due to constraints on the availability of resources, the absorption capacity of the environment (climate change, but also other problem areas), and potential social and geo-political disruption will either lead to adaptive policy measures (solid line in Figure 3), or to an at least regional collapse of economic and social systems (dotted line) (see e.g. Meadows et al. 2004). Using a business-as-usual projection which freezes current policy measures as a reference in a long term scenario analysis is thus of limited use, as in the worst case we take the system collapse as the benchmark, and in the best case we ignore the policy measures which are needed for system stabilisation. CO 2 reductions compared to a business-as-usual scenario might appear as a remarkable achievement, but do not at all give an indication of the remaining distance from the target we need to achieve. In spite of this general reluctance towards the usefulness of a business-asusual based Reference Scenario, for illustrative purposes we here continue to compare our alternative 2 C Scenario also against our IEA-WEO 2004 based Reference Scenario. Exploiting the efficiency potentials a global low energy demand trajectory A low energy demand scenario has been developed in a two-step process. As a first step, the energy demand as characterised by the IEA-WEO 2004 Reference Scenario is extrapolated to 2050, based on the assumptions on population and GDP development discussed above, and an assumed autonomous decrease of energy intensity. The energy intensity decrease, or increase in energy productivity, differs by region and is based on the development of final energy intensity per region as set out by the IEA- WEO We assume that the relative growth trends per sector in the period continue in the period In a second step, a detailed inventory of possible energy saving measures in the industry sector, the transport sector and other sectors (residential, commercial, public services) is developed based on Hendriks et al. (2001) and Ecofys (2003). For each energy saving measure, the energy saving potential over time is estimated for each region and demand sector. The energy saving potential of a measure is based on the estimated energy savings in comparison to the Reference Scenario, so that the energy savings are additional to energy-efficiency improvements already occurring in the Reference Scenario. Two basic energy efficiency scenarios are defined: an ambitious one, which assumes continuous innovation in the field of energy efficiency. The resulting energy savings potential in this scenario reflects the total energy saving potential of the measures that is considered technically feasible, while taking into account stock turnover rates and life span of equipment and installations. A second scenario results in more moderate energy savings, taking into account several financial and institutional barriers affecting the implementation of energy efficiency measures. Figure 4 shows the globally aggregated potential for energy savings in 2050 compared to the Reference Scenario from a set of energy efficiency measures. Efficient passenger cars, efficient freight vehicles and improved heat insulation account for more than one third of the energy saving potential. The energy demand trajectory used for the 2 C Scenario is a synthesis of the ambitious and the moderate efficiency scenarios: the electricity demand basically follows the moderate scenario, as the exploitation of efficiency potentials is assumed to be more difficult, while the heat demand trajectory is based on the ambitious scenario. The exploitation of energy savings potentials can limit the increase in energy consumption, reaching 350,000 PJ/a in 2050, which is a 14% increase compared to the energy demand in On the regional level there is of course large variation in the energy demand pattern: while the OECD regions can achieve a reduction in final energy consumption by 2050, developing regions like China or South Asia will experience a significant increase in energy demand. On the world level, energy productivity 5

6 is assumed to increase from today 110 Mill $ ppp /PJ to 435 Mill $ ppp /PJ in 2050 (Figure 5). The long term average annual increase in energy productivity of 3% definitively needs strong policy incentives and societal support, but is well within the range which is considered to be realistically achievable (Blok 2005). Note that the doubling of energy productivity by 2020 is e.g. also a key energy policy target of the German government. Table 3 summarises the development of final electricity consumption and heat demand under the Reference and the 2 C Scenario by region. Even under the strong energy savings efforts of the 2 C Scenario, global electricity consumption is expected to nearly double by 2050, reaching 26,020 TWh, with households and the service sector being the main source of growing consumption. While in the OECD regions a stabilisation of electricity consumption is achievable, developing regions like Africa, China or South Asia are facing a substantial growth even under the 2 C Scenario. In contrast to the electricity sector, the full exploitation of efficiency measures leads to a slight reduction of global heat demand. The potential for energy savings again is particularly high in the OECD regions, while heat demand will continuously grow in some developing regions also under the 2 C Scenario. Shifting towards renewables a global energy supply perspective The development of the electricity supply sector under the 2 C Scenario is characterised by a dynamically growing renewable energy market and an increasing share of renewable electricity (Table 4). While this goes along with a corresponding reduction of the share of fossil and nuclear electricity, the electricity generation from fossil fuels remains nearly constant over time, with a strong shift however from coal to gas. The phasing out of nuclear is compensated for by the growing capacity of renewables, and by bringing new natural gas fired power plants into operation. Due to efficiency measures in the heat sector and the substitution of natural gas for heat production by renewables such a strategy leads to an only moderate peak in gas demand around 2030, beyond which the demand for natural gas starts to decline. The electricity generation from renewables in the 2 C Scenario reaches 21,450 TWh/a in 2050, which is nearly 70% of the total electricity generation. Wind, solar (both concentrating solar power plants and PV) and hydro are the main sources for renewable electricity generation. Depending on the respective world-region, fluctuating energy sources (PV, wind) contribute between 25 to 40% of total electricity generation. The installed capacity of renewable energy technologies will grow from 820 GW to 7,100 GW in Growing electricity generation in Combined Heat and Power (CHP) applications (2003: 1,670 TWh/a; 2050: 5,000 TWh/a) helps to improve the overall efficiency of the energy supply sector, with biomass being the main fuel for CHP applications in The structure of electricity generation varies significantly by region (Table 5). Latin America, which due to its large hydroelectric capacity already today has a renewable share of 70%, reaches 90% renewable electricity generation in 2050 under the 2 C Scenario. The share of renewables in OECD North America and OECD Europe is 80% in 2050, while in the regions with rapidly growing electricity demand (Africa, China, South Asia) the contribution of renewables reaches between 50% and 60%. In Europe and North America wind is the main source of renewable electricity, while in the sun-belt regions (Africa, Middle East, South Asia) solar energy will be the dominant source. The abundant solar resources in these regions offer new strategic energy partnerships: In 2050, Europe can import around 700 TWh/a from concentrating solar power plants operated in North Africa and the Middle East, providing potential for economic development in these regions as well as environmentally benign electricity for Europe (Trieb et al. 2006). The use of biomass for electricity generation is limited to decentralised combined heat and power production. Electricity generation from hydropower in the 2 C Scenario is even smaller than in the IEA-based Reference Scenario. Because of the environmental concerns towards large hydro installations we envisage an only moderate expansion of hydro capacity, which is largest in China and South Asia. Large uncertainties are related to the development of ocean energy. While the potential seems to be large and demonstration plants today 6

7 yield promising results, knowledge about potential impacts on marine ecosystems and social acceptance of a large scale application is still limited. It is likely that ocean energy technologies can contribute more than anticipated in the 2 C Scenario. Figure 6 shows the development of the global average electricity generation costs under the hypothetical Reference Scenario and the 2 C Scenario. The rapid introduction of renewable energy technologies on the short term increases the average costs of electricity generation. Because of the lower CO 2 intensity, the continuous increase of fossil fuel prices and due to decreasing investment costs of renewable technologies, by 2020 average electricity generation costs will become economically favourable under the 2 C Scenario, and by 2050 generation costs will be significantly below those in the Reference Scenario. Note that the pattern of electricity generation costs varies by region, as it depends on region specific conditions like e.g. the availability of specific renewable energy sources, but the overall trend is similar across all regions. The starting point for renewables in the heat supply sector is different from the power sector. Today, one quarter of global heat demand is covered by renewables, the main contribution coming from the use of biomass. Under the 2 C Scenario solar collectors, biomass and geothermal energy are increasingly substituting for fossil fuel-fired systems, reaching 78,120 PJ/a in 2050, which is 65% of the total heat demand. Heat supply from CHP to an overall shrinking heat market grows from 13,500 PJ/a to 18,900 PJ in 2050, thus increasing its share to 16%. In the transport sector, the increasing use of biofuels helps to curb CO 2 emissions and to substitute conventional fossil fuels. On the global level, we assume that under the 2 C Scenario in 2050 about one quarter (27,100 PJ) of transportation fuels are biofuels. Due to the regional availability of biomass resources, Latin America (64%), the Transition Economies (40%) and OECD North America (34%) will have the highest biofuel shares. The market uptake of hydrogen as a transportation fuel is expected to start around 2030 mainly in OECD regions, but until 2050 reaches a share of only 5% on the global level. Because of the uncertainties related to the technical development of fuel cell and electric vehicles, there is still some controversy about the long term lead technology in the transportation sector. Any technical breakthrough in fuel cell or electric vehicles will shift renewable fuel supply from biomass towards hydrogen or electricity from solar and wind energy. The resulting global primary energy supply under the 2 C Scenario is summarised in Table 6. Compared to the hypothetical Reference Scenario, the overall primary energy demand will be reduced by almost 50% in 2050, and half of the primary energy demand is covered by renewable energy sources. As discussed above, the level of natural gas consumption in 2050 is similar to today s gas demand, with a shift in the gas use from heat production to electricity generation. We observe a continuous decline in the oil and coal consumption, while renewable energy sources will cover nearly half of total global primary energy demand in Biomass and solar energy will then be the main renewable energy sources (Figure 7). Note that because of the efficiency method used for the calculation of primary energy consumption, which postulates that the amount of electricity generation from hydro, wind, solar and geothermal energy equals the primary energy consumption, the share of renewables appear to be smaller than their actual importance as energy suppliers. Also the decrease in total primary energy consumption partly is a statistical effect resulting from the shift from fossil to renewable fuels and the application of the efficiency method for the calculation of primary energy demand. Development of CO 2 emissions As shown in Figure 8, global CO 2 emissions under the 2 C Scenario will drop from the 23 Gt in 2003 to 12 Gt in 2050, thus complying with the overall target of reducing CO 2 emissions to around 10 Gt 7

8 by 2050, which is the prerequisite for limiting global average temperature rise to 2 C. In spite of phasing out nuclear energy and increasing electricity demand, under the 2 C Scenario CO 2 emissions will decrease in the electricity sector. In the long run efficiency gains and the increased use of biofuels and hydrogen will reduce CO 2 emissions in the transport sector. With a share of 36% of total CO 2 emissions in 2050, the power sector will drop below transport as the largest source of emissions. Discussion Several issues have been critically discussed within the group of stakeholders involved in the review of the scenario development process: (1) Energy demand trajectory: The energy demand trajectory underlying the 2 C Scenario is considered to be a very ambitious one. Current trends in energy demand do not follow the energy demand as outlined in the 2 C Scenario. We nevertheless decided to go for such an ambitious scenario in order to explicitly flag out what seems to be both technically and economically feasible. Comparison with various national energy efficiency targets shows that al least in some parts of the world our scenario assumptions are not that far away from the actual policy targets. A review of global renewable energy potentials and of the performance of the renewable energy industries clearly indicates that renewable energies in absolute terms can definitively deliver significantly more energy than projected in the 2 C Scenario if demand will be higher. In such a case, however, for structural reasons we do not necessarily expect renewables to achieve a higher relative share of total energy supply than in the 2 C Scenario, so that it is most likely that CO 2 reduction targets cannot be achieved because of the corresponding higher consumption of fossil fuels. (2) Renewable energy potentials: The availability of renewable energy resources under stringent environmental constraints is a key issue. While there exists quite detailed assessment of renewable energy potentials for specific regions and countries, information on the regional and global level is still relatively poor. A review of the relevant literature leads to data that in many cases deviate by a factor of 2-3 or even more. For our scenario, we mainly rely on information from the work by Hoogwijk (2004). While there is abundance of solar, wind and ocean energy resources, the availability of biomass seems to be more critical. Depending on different scenario assumptions, Hoogwijk (2004) estimates the potential of global biomass energy to be in the range of 310 to 660 EJ/a in The demand for biomass in the 2 C Scenario reaches 105 EJ/a in 2050, thus leaving a safety margin which seems to be reasonably large even towards the most pessimistic assumptions. Nevertheless, concerns towards a non-sustainable global biomass production remain, calling for further efforts to harmonise assumptions of global and regional biomass potentials under stringent nature conservation constraints. (3) Phasing out of nuclear energy: For various reasons, including the risk of beyond design accidents, the availability of resources, the treatment of radioactive waste, the risk of proliferation and potential geo-political implications, we do not consider nuclear energy being part of the portfolio of energy technologies that support the transition towards a sustainable energy supply system. Our assumption of phasing out nuclear energy on a global level has been critically discussed, in particular as countries like China currently opt for further investment into this technology. Independently from the discussion on the future role of nuclear energy, the 2 C Scenario confirms that ambitious global CO 2 reduction targets can be met without relying on nuclear energy. Although the IEA WEO 2006 considers nuclear energy as a main source for CO 2 reductions, it contributes to only 7% of global primary energy supply in 2030 in the IEA s Alternative Policy Scenario, and thus obviously plays a limited role only in reducing global CO 2 emissions. As discussed above, most of the renewable energy sources can deliver much more than described in the 2 C Scenario, so that in the case energy efficiency shall not grow at the pace assumed in the 2 C Scenario, the phasing out of nuclear energy will not cause a gap in energy supply. 8

9 (4) The role of carbon capture and sequestration: Carbon capture and sequestration (CCS) is a relatively new technology in the power sector. Different CCS concepts are under development, and large scale proof-of-the-art demonstration plants will be put into operation within the next ten years. It is expected that CCS technologies will be commercially available around 2020 (IEA 2004b). Assuming that large scale CO 2 storage will prove its technical and environmental feasibility and can gain public acceptance, the market introduction of CCS technologies will depend on their economic competitiveness. Cost estimates suggest that by 2020 CCS electricity generation costs will be in a similar range as the costs of several renewable energy technologies. Although we acknowledge the potential strong role CCS technologies might play in some regions of the world, because of the current technical and economic uncertainties CCS technologies are not included in our analysis. Our results show that the availability of CCS technologies is not necessarily a prerequisite for achieving the 450 ppm target. Conclusions A global scenario of energy demand and supply was developed in a backcasting process with the involvement of stakeholders from academia, NGOs and the renewable energy industry. Starting point of such a backcasting process is the specification of the targets to be achieved, which by nature is a matter of value choices. The main target we follow in our scenario development, the stabilisation of atmospheric CO 2 concentration at a level which limits the increase of the earth s average temperature to 2 C, is a prominent policy objective of the European Commission and of several EU Member States. Our 2 C Scenario shows that this can be achieved. Renewable energy could provide as much as half of the world s energy needs by 2050, whilst at the same time ensuring the continuous improvement of global average living conditions, in particular in the developing regions. There is no need to freeze in the dark for this to happen, but it requires global efforts to strongly increase energy productivity and to accelerate the market uptake of renewable energy technologies. By choosing renewable energy and efficiency, developing countries can virtually stabilise their CO 2 emissions, whilst at the same time increasing energy consumption through economic growth. OECD countries will reduce their emissions by up to 80%. But the 2 C Scenario not only complies with global CO 2 reduction targets, it also helps to stabilise energy costs and thus relieve the economic pressure on society. Compared to a business-as-usual development, increasing energy efficiency and shifting energy supply to renewable resources on the long term significantly reduces the costs for energy supply. Current trends partly deviate significantly from the development pathway described in the 2 C Scenario, in particular with respect to the continuously growing energy demand. It is obvious that strong policy action is required to close the gap between the well known climate protection policy commitments and the actual development of the world energy system. We strongly suggest to use a target oriented scenario like the 2 C Scenario rather than a business-as-usual based reference as a benchmark to assess future policy options, as it conveys a clear message on the distance-to-target, on the efforts it necessitates and on the opportunities is holds. Acknowledgment The authors would like to thank the many regional partners who provided helpful input during scenario development: J. Sawin, F. Sverrisson, J. Coeguyt, J. Fujii, S. Krauter, M. Furtado, O. Schäfer, V. Tchouprov, N. Grossmann, R. Banerjee, S. Kumar, M. Ohbayashi, J. Inventor, T. Buakamsri, X.L. Zhang, Ailun Yang, M. Ellis, C. Fitzpatrick, M. Wakeham, V. Atkinson, P. Freeman. The sole responsibility for the content of the paper remains with the authors. References 9

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