World Energy Outlook 2004

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1 INTERNATIONAL ENERGY AGENCY World Energy Outlook 2004 Claude Mandil Executive Director International Energy Agency International Energy Symposium, IEEJ Tokyo 16 November 2004

2 Global Energy Trends: Reference Scenario

3 World Primary Energy Demand Oil Mtoe Natural gas Coal Other renewables Nuclear power Hydro power Fossil fuels will continue to dominate the global energy mix, while oil remains the leading fuel

4 Regional Shares in World Primary Energy Demand % 43% 52% 48% 10% 9% Mtoe Mtoe OECD Transition economies Developing countries Two-thirds of the increase in world demand between 2002 and 2030 comes from developing countries, especially in Asia

5 Increase in World Primary Energy Production by Region share of total increase (%) 85% Mtoe % 31% 10% 12% 3% OECD Transition economies Developing countries Almost all the increase in production to 2030 occurs outside the OECD, up from less than 70% in

6 Inter-Regional Trade in World Fossil-Fuel Supply Trade as % of world demand Mtoe % 63% 26% 15% % 14% Oil Gas Coal Domestic consumption Traded between regions Energy trade between regions more than doubles by 2030, most of it still in the form of oil

7 Oil Flows & Major Chokepoints: The Dire Straits The risk of an oil-supply disruption will grow as trade & flows through key maritime & pipeline chokepoints expand

8 Cumulative Energy Investment, OECD North America OECD Europe OECD Pacific Transition economies China Other Asia Middle East Africa Latin America billion $ (2000) Coal Oil Gas Electricity Power sector absorbs 62% of global energy investment in the period

9 Growth in World Energy Demand & CO 2 Emissions 2.5% average annual growth rate 2.0% 1.5% 1.0% 0.5% 0.0% Primary energy demand Emissions Average carbon content of primary energy increases slightly through 2030 in contrast to past trends

10 CO 2 Emissions, Mt of CO OECD Transition economies Developing countries CO 2 emissions will increase fastest in developing countries, overtaking OECD in the 2020s

11 Asia-Pacific Energy Trends: Reference Scenario

12 China s share of Incremental World Production & Energy Demand, GDP Crude steel production Cement production Ethylene production* Primary oil demand Primary coal demand Electricity demand CO2 emissions per cent Booming industrial production in China is driving up energy demand & emissions - and energy prices

13 Share of Developing Asia in World Incremental Energy Demand per cent Primary energy demand Coal Oil Gas Electricity consumption Developing Asia will account for 42% of the increase in demand through 2030, compared with 34% in the last three decades

14 China Oil Supply Balance 15 80% 12 60% mb/d % 20% 3 0% 0-20% Production Demand Imports as % of demand (right axis) China s oil imports will soar from around 2 mb/d now to almost 10 mb/d in 2030 equal to over 74% of domestic demand

15 OECD Asia Energy Trends: Reference Scenario

16 Primary Fuel Mix in Japan & Korea Hydro 1% Nuclear 15% Renewables 2% Coal 20% Nuclear 18% Hydro 1% Renewables 4% Coal 18% Gas 12% Gas 18% Oil 50% 721 Mtoe 956 Mtoe Oil 41% Increased use of gas & nuclear for power generation reduces the share of oil & coal in the primary fuel mix

17 Primary Gas Demand in Japan & Korea bcm Japan Korea Power generation underpins surging gas use in both Japan & Korea

18 Change in Electricity Generation by Fuel in Japan & Korea TWh Coal Oil Gas Nuclear Hydro Other renewables Most new power-generation capacity is gas-fired or nuclear

19 Increase in Energy-Related CO 2 Emissions by Sector in Japan & Korea Mt of CO Power generation Industry Transport Other Most of the projected increase in emissions comes from power generation & transport in almost equal measure

20 Asia-Pacific Energy Trends: Alternative Policy Scenario

21 Japan & Korea CO 2 Emissions in the Reference & Alternative Scenarios Mt of CO Reference Scenario Alternative Scenario With new policies, Japan & Korea stabilise their emissions in the 2010s and drive them back down to 2002 levels by 2030

22 China CO 2 Emissions in the Reference & Alternative Scenarios Mt of CO Reference Scenario Alternative Scenario With new policies, China could curb its CO 2 emissions by 18% in 2030

23 Contributory Factors in CO 2 Reduction Alternative vs Reference Scenario % 80% 60% 5% 10% 20% 7% 8% 12% 21% 10% 21% 15% 1% 5% 4% 17% 7% 40% 20% 58% 49% 63% 67% 0% World OECD Transition economies Developing countries End-use efficiency gains Fuel switching in end uses Increased renewables in power generation Increased nuclear in power generation Changes in the fossil-fuel mix in power generation Improvements in end-use efficiency contribute for more than half of decrease in emissions, and renewables use for 20%

24 Summary & Conclusions

25 Summary & Conclusions (1) On current policies, world energy needs will be almost 60% higher in 2030 than now Energy resources are more than adequate to meet demand until 2030 & well beyond But projected market trends raise serious concerns: Increased vulnerability to supply disruptions Rising CO 2 emissions Huge energy-investment needs Persistent energy poverty More vigorous policies would curb rate of increase in energy demand & emissions significantly But a truly sustainable energy system will call for faster technology development & deployment Urgent & decisive government action is needed

26 Summary & Conclusions (2) Asia s importance to world energy markets and its share in CO 2 emissions - will continue to grow Most of the region s incremental demand & emissions will come from developing Asia notably China & India Energy demand will grow much more slowly in Japan & Korea Net imports of oil & gas and reliance on key chokepoints - will continue to grow New policies would reverse the rising emissions trend in OECD Asia, but not in developing Asia