Overview of the current global energy market Although the trend of Asia as leading the global energy market remains unchanged, developments in the US

Transcription

1 The 427th Forum on Research Work IEEJ Outlook 218 Prospects and challenges until 25 Energy, Environment and Economy Tokyo, 12 October 217 The Institute of Energy Economics, Japan

2 Overview of the current global energy market Although the trend of Asia as leading the global energy market remains unchanged, developments in the US and China, which accounts for 4% of the energy market, must be carefully monitored. World coal demand dropped for two years in a row (US and China largely) while oil and gas grew. China s coal consumption declined for the third consecutive year (216, BP). Discussions on Peak Oil (supply) of the 2s are now changing to Peak Demand. Note the recent movements that aim to ban the sale of internal combustion engine vehicles. CO 2 emissions dropped in 215 but increased again in 216. India and ASEAN showed big increases despite the declined observed in the US and China. Paris Agreement calls for Long-term low greenhouse gas emission development strategies by 22. This Outlook expands its estimation period to 25. 2

3 Scenarios in this Outlook <Energy Model Analysis> #Reference Scenario Reflects past trends with current energy and environment policies. Does not reflect any aggressive policies for low-carbon measures. #Advanced Technologies Scenario Assumes the introduction of powerful policies to enhance energy security and address climate change issues. It promotes utmost penetration of lowcarbon technologies. #Oil Demand Peak Case Assumes a more rapid introduction of electric drive vehicles than in the reference scenario, to analyze the possibilities of oil demand peak. Examples for Technology Reference *1 ZEV: battery electric vehicles, plug-in hybrid electric vehicles and fuel cell battery vehicles *2 CCT: ultra super critical, advanced-usc and integrated coal gasification combined cycle <Climate Model Analysis> #Reference: Emissions path with continuing past trends #Minimizing Cost: Emissions path with minimizing total cost #Halving Emissions by 25: Emissions path reflected RCP2.6 in AR5 by IPCC Energy efficiency Carbon free technology Vehicle technology (ZEV *1 sales share) Coal-fired power generation (CCT *2 share in newly installed capacity) Installed capacity Solar PV Wind Nuclear Thermal power generation with CCS (Only countries and regions with CO 2 storage potential excluding aquifers) 9% in 23 2% in 25 3% in 23 9% in 25 (215 to 25).2 to 1.5 TW.4 to 1.9 TW.4 to.6 TW none Advanced Technologies 21% 43% 7% 1% (25) 2.5 TW 3. TW 1. TW Newly installed after 23 Peak Oil Demand 3% 1% Same as Reference 3

4 Energy Outlook up to 25

5 <Reference> Energy market shifting to southern Asia Global Population, GDP and Energy 25 GDP 255 Y215=1 2 Energy Population Non-OECD Growth in Primary Energy China India ASEAN Other Asia *MENA **SS Africa Latin America Europe Intl. bunkers OECD * Middle East and North Africa, **Sub-Saharan Africa Despite large improvements in energy efficiency/intensity, global energy demand continues to increase. Two thirds of the energy growth comes from non-oecd Asia. As China peaks during the 24s, the center of gravity of the market shifts within Asia towards the south. 5

6 <Reference> Demand led by fuels for Generation & Transport Electricity Oil fuels for vehicles PWh 4 Electricity demand per capita Growth in MWh/p Mb/d 4 Vehicle ownership per capita Growth in unit/p China India ASEAN Other Asia Other Non-OECD OECD -1-8 China India ASEAN Other Asia Other Non-OECD OECD -1.2 Three quarters of the growth until 25 are for fuels for power generation and transportation. The economic development and improvements in living standards of the relatively poor and populous areas non-oecd Asia contribute to the global energy expansion. 6

7 <Reference> High dependence on fossil fuels continues Growth in Primary Energy Energy Mix Energy-related CO 2 Renewables Nuclear Natural Gas Oil Asia* RoW** 2 Gtoe % % 5 GtCO Coal Gtoe * Non-OECD Asia, **Rest of the world Sixty percent of the growth in electricity demand will be met by thermal power generation, especially natural gas. Asia leads the large global increase in fossil fuels required for power generation as well as for transportation. The high dependence on fossil fuels remains unchanged and energy related CO 2 emissions increase by 34% by 25. 7

8 2 IEEJ:October <Advanced Technologies> Drawing another path Advanced Technologies Scenario Global Primary Energy Reduction Effects by ATS in Gtoe 19.8 Industry Gtoe other fuels elec. Up-to-date Technologies 15 1 Cumulative Reduction 4 Gt 17.2 Transport Building other fuels other fuels elec. elec. Efficiency Improvement Efficiency Improvement 5 Reference Advanced Technology Power Generation transmission losses* generation loss Efficiency Improvement and Zero-emission Generation * Including station service power With the maximum installation of low-carbon technologies, the Advanced Technologies Scenario can reduce energy consumption by 13% in 25. Energy efficiency in power supply/demand technologies would account for 3% of the total reduction. The energy conservation in the transport sector is quite large due introduction of HEVs, EVs, etc. 8

9 <Advanced Technologies> Zero-emission Generation occupies two thirds Global Power Generation 5 PWh % 66% 38% 62% Reference ATS 6% 6% 34% Nonfossil Fossil with CCS Fossil Global Power Capacity TW 1% 28% Reference % ATS VRE* Other RE Hydro Nuclear ATS slows the growth in electricity demand from 1.8 times in the reference, down to 1.6 times. In ATS, non-fossil power generation accounts for 6% and zero-emission generation, including thermal generation with CCS represents two thirds (that s half today s CO 2 emissions per unit of generation). Half of the total power capacity will be comprised of intermittent renewable energy, which needs to further reduce costs and enhance grid stability. 9 Gas Oil Coal * Variable Renewable Energy includes solar PV, CSP, wind and marine.

10 <Advanced Technologies> Coal falls significantly and below renewables 6 Gtoe 5 Primary Energy Effects by ATS in 25 (solid line: ATS, dotted line: Reference) Coal Generation Gtoe 4 Oil Oil Transport Coal Gas Renewables Gas Nuclear Generation Generation Nuclear Renewables Generation In ATS, coal starts to decline from now and is surpassed by renewables around 24, due mainly to energy efficiency and the elimination of emissions in the power supply/demand sectors. Despite large decline in transportation fuels, oil does not reach a peak. Fossil fuels share of the total in 25 is reduced to 68%, from 79% in the reference case. It is still a high level of dependence. 1

11 <Advanced Technologies> CO 2 emissions peak in the middle of 22s Energy-related CO 2 Emissions Reductions by technology 5 GtCO 2 44 Energy Efficiency Biofuels -6.2 Gt -.4 Gt 4 Wind, Solar, etc Gt 33 Nuclear -2.2 Gt 3 3 Fuel Switching CCS -.5 Gt -1.5 Gt 2 Reference ATS Gt Halve Energy-related CO 2 emissions in ATS decline after 22s but are still very far from reaching half of current levels by 25. Efficiency is the most contributor for CO 2 reductions from the reference. Two thirds of the total reductions are electricity-related technologies, including non-fossil power, thermal power with CCS and energy efficiency in power supply/demand. 11

12 Ultra-long-term Climate Analysis

13 Rule for ultra long-term: Reduce the total cost Mitigation+Adaptation+Damage=Total Cost Mitigation Adaptation Damage Typical measures are GHG emissions reduction via energy efficiency and non-fossil energy use. Includes reduction of GHG release to the atmosphere via CCS These measures mitigate climate change. Temperature rise may cause sea-level rise, agricultural crop drought, disease pandemic, etc. Adaptation includes counter measures such as building banks/reservoir, agricultural research and disease preventive actions. If mitigation and adaptation cannot reduce the climate change effects enough to stop sea-level rise, draught and pandemics, damage will take place. Illustration of Total Cost for Each Path Total 総合コスト Cost Mitigation Cost Adaptation Cost Damage Value 緩和費用 適応費用 被害額 Path パス11 緩和 Too Small 過小適応 Big 大被害 Big 大 Path パス22 緩和 Reasonable 中庸適応 Medium 中被害 Medium 中 パス Path 33 緩和 Too 過大 Big 適応 Small 小被害 Small 小 Mitigation Adaptation Damage Without measures against climate change, the mitigation cost is small, while the adaptation and damage costs become substantial. Aggressive mitigation measures on the other hand, would reduce the adaptation and damage costs but the mitigation costs would be notably colossal. The climate change issue is a long-term challenge influencing vast areas over many generations. As such, and from a sustainability point of view, the combination (or the mix) of different approaches to reduce the total cost of mitigation, adaptation and damage is important. 13

14 Minimizing Total Cost in IAM* *Integrated Assessment Model GHG Emissions 8 GtCO2eq GHG Concentrations (incl. aerosol etc.) 1, ppm CO2eq 4. C Temperature Rise (vs ) Total Cost (cumulative present value * ) 1 Tril. $ *cumulating 215 to Mitigation Adaptation&Damage Reference Minimizing Cost Halving Emissions by 25* Total cost of Minimizing Cost is half of the reference. In 215, GHG emissions decrease by 8% from now and temperature rises by 2.6 centigrade from the late 19 th century. In Halving Emissions by 25, temperature peaks at 21, resulting in 1.7 C in 215. However, total cost is 2% higher than the reference and double of the Minimizing Cost path. *Emissions path reflected RCP 2.6 in the 5th Assessment Report (AR5) by the Intergovernmental Panel on Climate Change (IPCC). 14

15 Still large uncertainties in the climate analysis GHG emissions and temperature rise using different discount rates (minimizing cost) 6 GtCO2-eq reference high discount low discount C C difference reference high discount low discount Discount rate This model uses 2.5%. There are a range of 1.1 to 4.1% summarized by AR5. Note: The value used when converting future value (income and expenditure) into current value. The lower discount rate tends to raise emphasis of adaptation and damage, and strengthen the latest GHG reduction. The higher discount rate raises emphasis of mitigation costs and delays GHG reduction efforts. Although it changes every year in the model analysis, it is represented by the average value in 215 to 23 here. GHG emissions and temperature rise using different ECS (minimizing cost) 6 GtCO2-eq C 3.5 Equilibrium Climate Sensitivity (ECS) This model uses 3 degree. According to AR5, high possibility that ECS is between 1.9 and 4.5 degree. Note: A parameter indicating how many degrees centigrade the temperature will rise when the atmospheric greenhouse gas concentration (CO2 equivalent concentration) doubles reference high ECS low ECS C difference reference high ECS low ECS 15

16 Another path to 2 C target GHG Emissions GHG Concentrations (incl. aerosol etc.) Temperature Rise (vs ) Total Cost (cumulative present value * ) 8 GtCO2eq 1, ppm CO2eq 4. C 1 Tril. $ *cumulating 215 to Mitigation Adaptation&Damage Reference Minimizing Cost 2 C Minimizing Cost Halving Emissions by 25* 2 C Minimizing Cost, for example, is a path that minimize total cost under the condition of 2 C temperature rise in 215. Its total cost is 2% higher than Minimizing Cost without the temperature limit. GHG emissions decrease by 3% in 25 and needs almost zeroemissions after 21. Temperature rises to just over 2 C in 21 and then declines to 2 C. *Emissions path reflected RCP 2.6 in the 5th Assessment Report (AR5) by the Intergovernmental Panel on Climate Change (IPCC). 16

17 Technology development for ultra long-term Technologies Description Challenges Technologies to reduce CO 2 emissions Next Generation Nuclear Reactors Nuclear fusion reactor Fourth-generation nuclear reactors such as ultrahigh-temperature gas-cooled reactors(htgr) and fast reactors, and small- and medium-sized reactors are now being developed internationally. Technology to extract energy just like the sun by nuclear fusion of small mass number such as hydrogen. Deuterium as fuel exists abundantly and universally. Spent nuclear fuel as high-level radioactive waste is not produced. Expansion of R&D support for next generation reactors Technologies for continuously nuclear fusion and confining them in a certain space, energy balance, cost reduction, financing for large-scale development and establishment of international cooperation system, etc. Technologies to sequestrate CO 2 or to remove CO 2 from the atmosphere Space Photovoltaic Satellite (SPS) Hydrogen production and usage CO2 sequestration and usage (CCU) Technologies for solar PV power generation in space where sunlight rings abundantly above than on the ground and transmitting generated electricity to the earth wirelessly via microwave, etc. Production of carbon-free hydrogen by steam reforming of fossil fuels and by CCS implementation of CO 2 generated. Produce carbon compounds to be chemical raw materials, etc. using CO 2 as feedstocks by electrochemical method, photochemical method, biochemical method, or thermochemical method. CO 2 can be removed from the atmosphere. Establishment of wireless energy transfer technology, reduction of cost of carrying construction materials to space, etc. Cost reduction of hydrogen production, efficiency improvement, infrastructure development, etc. Dramatic improvement in quantity and efficiency, etc. Bio-energy with carbon capture and storage (BECCS) Absorption of carbon from the atmosphere by photosynthesis with biological process and CCS. It requires large-scale land and may affect land area available for the production of food etc. 17

18 Lower cost is key for innovative technologies CO 2 Reduction Cost by Innovative Technology 6 prospects target SPS 2 C Minimizing Cost 4 $/tco2 2 IGCC (high) Hydrogen power BECCS (225) HTGR FCV -2 IGCC (low) Note: Cost (=carbon price) for 2 C Minimizing Cost is the highest cost of the technology adopted at each year. Refer to the main report for detail. Implicit carbon price for 2 C Minimizing Cost is $85/tCO 2 in 25. The target costs for innovative technologies, such as BECCS, hydrogen power, FCV, HTGR, SPS, are within the range of the carbon price. The 2 C target can be reached with using these technologies. It is important to enhance R&D from the long term view and international collaboration is dispensable. 18

19 Further CO 2 reductions from ATS Energy-related CO 2 Emissions Examples of technologies needing further reductions GtCO2 4 Reference ATS 44 1) CO 2 Free Hydrogen (refer to previous Outlook) Hydrogen power 1 GW x 3 units Fuel cell vehicles 1 billion units (H 2 demand of 8 Mt/yr corresponds 3 times of today s LNG) 3 2 <Climate Analysis> Minimizing Cost 2 C Minimizing Cost Halving Emissions by 25 * 3 11Gt ) Negative-emission Technology BECCS: Biomass power.5 GW x 28 units (Fuel supply of 2 /yr needs land of 2.85 million km 2 ) 3) Zero-emission Power and Factories with CCS -1 GtCO 2 (Maximum reduction volume by substituting thermal power generation without CCS) SPS: 1.3 GW x 23 units or HTGR:.275 GW x 87 units or Fusion reactor:.5 GW x 45 units or Thermal power with CCS: 28 GW (Estimated CO 2 storage potential is over 7Gt) + -1 GtCO 2 CCS: Installed in 2% of factories and plants (iron & steel, cement, chemicals, pulp & paper, refinery and GTL/CTL) *Emissions path reflected RCP 2.6 in the 5th Assessment Report (AR5) by the Intergovernmental Panel on Climate Change (IPCC). 19

20 Peak Oil Demand Case

21 Transport, especially cars, drives oil demand Oil consumption [Reference Scenario] Mb/d Road 48 Other transport Nonenergy use Others Oil for Road [Reference Scenario] Mb/d Non- OECD OECD About 7% of the increases in oil consumption until 25 is for transport or petrochemical feedstocks. Road transport, in particular, may decide where the consumption will go. Oil consumption by cars in OECD countries is decreasing and will be surpassed by non-oecd around 22. Non-OECD accounts for all future consumption increases. 21

22 The time for car electrification has come? Selected recent movements by governments/assemblies and car makers Germany Norway France United Kingdom India China A resolution to ban conventional car sales in the European Union by 23 was passed by the Bundesrat of Germany (216) The ruling and opposition parties proposed the abolition of conventional vehicles by 225 (216) The Government announced that it would ban conventional car sales by 24 (217) The Government announced that it would ban conventional car sales by 24 (217) Minister said that all new car sales after 23 would be electric vehicles (217) Deputy Minister mentioned that the ban on the sale of conventional vehicles was under investigation (217) Toyota Volkswagen Renault-Nissan Hyundai Ford Honda The target for FCV sales is more than 3,/year in 22 (215). Reported of full-scale entry into EVs in 22 (216) Announced the strategy to increase EV share in its total sales to 25% with more than 3 models of EVs by 225 (217) Introducing 12 models of EVs by 222. The target of 3% of its total sales as EVs (217) The plan to prepare EVs at all line up by 22 (215) Announced that eco-cars combined with EVs and HEVs will be raised to 7% by 225 (217). In 23, two-thirds of automobile sales will be electrified. EVs will be released in China in 218 (217). 22

23 Oil peaks around 23 with a rapid penetration of ZEVs Oil consumption Oil for Road [Peak Oil Demand Case] 12 Reference Mb/d Advanced Technologies Peak Oil Demand Mb/d Non- OECD OECD Note: Dotted lines are the Reference Scenario In the Peak Oil Demand Case, oil consumption hits a peak of 98 Mb/d around 23 before declining. The reduction from the Reference Scenario is 7 Mb/d and 33 Mb/d in 23 and in 25, respectively. Oil consumption by cars in Non-OECD, which continues to increase rapidly in the Reference Scenario, also declines from around 23. It is as much as one third of the Reference Scenario in

24 While natural gas and coal increase, the petroleum product composition changes Changes in consumption (from the Reference Scenario) Composition of petroleum products consumption Primary consumption Road CO2 Electricity Biomass Oil Natural gas Coal Oil (Mt) ,596-1,846-1, , -1, % 8% 6% 4% 2% % Gasoline 27% 25% 23% Diesel oil 35% Note: Excluding own use 34% 33% 23% 1% 34% 27% Reference Peak Oil Demand LPG Naphtha Jet fuel Kerosene Heavy fuel oil Others As ZEVs demand for oil declines and electricity increases, the fuel required for power generation also increases. Both natural gas and coal exceeds oil by the late 23s. Natural gas becomes the largest energy source thereafter. Gasoline reduces its share from 27% to 1% in 25. The share of diesel oil is not reduced as much because diesel oil has other uses. Diesel share in 25 is 8 points lower than today. 24

25 Crude oil production shifts towards lowcost regions... Crude oil production [Peak Oil Demand Case] Mb/d Middle East Others North America Former Soviet Union Reference Latin America Asia OPEC Non-OPEC Oil price falls due to the change in supply and demand pressure and market perception. Relative to the Reference Scenario (in $216), prices drop from $95/bbl to $65/bbl in 23 and from $125/bbl to $5/bbl in 25. Given such drastic price decreases, regions with low production costs would be the only ones with potential for increases. Only the Middle East is expected to produce more in 25 than today. North America production decreases by 4% from the Reference Scenario to 13 Mb/d. 25

26 ...but the economic downturn will affect the Middle East Changes in net oil exports/imports and ratios to nominal GDP [25] Net imports Net exports Peak Oil Demand Middle East Reference Former USSR Quantity effect Latin America Price effect India China OECD Europe Japan United States $ trillion Changes in net oil export ratio to nominal GDPGDP 5% % -5% -1% -15% India Japan ASEAN Other Asia Europe Africa Oceania China Canada United States Latin America Real GDP ($21 trillion) Former USSR Middle East Note: Europe excludes the former Soviet Union Although the Middle East achieves a relative gain, the decrease in net oil export revenues is $1.6 trillion; a significant drop of 13% of nominal GDP. At the other end of the spectrum, India which is the second largest oil consumer, benefits the most with a decrease in net oil import costs. It is followed by China, in which more cars are on road than in any other countries. Despite its consumption scale, the United States faces little impact since it is almost oil self-sufficient. 26

27 Impact of less oil consumption diverges Changes in emissions (from the Reference Scenario) NOx (Mt) Excise taxes on gasoline and diesel oil for automobiles in OECD $ billion PM2.5 (Mt) Note: Automobile origin. Does not include effect on improvement of conventional automobile emission control performance 215 Reference Peak Oil Demand Emission reductions in NO x and PM 2.5, the major drivers behind car electrification, are 27% and 3%, respectively, compared to total emissions in 21. Contribution to air quality in urban areas are expected. Revenues from excise taxes on automotive gasoline and diesel oil will be reduced significantly, unless tax regime changes. They may become financial issues similar to the subsidies for ZEVs at their promotion stage. 27

28 How do we recognise the rapid de-oiling? The Peak Oil Demand Case shows that, under some circumstances, oil consumption can turn into a decline in the not too distant future,. However, the feasibility of this Case can be said to be extremely challenging because the penetration of ZEVs is far greater than that in the Advanced Technologies Scenario, in which a bottom-up approach to the maximum implementation of advanced technologies is adopted. It can be said that oil consumption may not be so easily reduced, so quickly....and then It should not be overlooked that in the Peak Oil Demand Case, oil remains required in 25 on a scale that does not differ from today. If the supply investment becomes insufficient due to excessive pessimism in the future, it can trigger the switching from oil to other energies threatening energy security. The rising dependence on the Middle East crude oil will increase geopolitical risk for stable supply. Although it is reasonable to expect that Governments in the Middle East would cut public investment and subsidies to reduce budget deficits while coping with low oil prices, it is difficult to deny the possibility of increasing social anxiety and of a worsening situation in the region. The role of consuming countries as well as producing countries own efforts continue to be important. Support to the efforts represented by Saudi Arabia Saudi Vision 23 is needed. 28

29 Reference materials

30 Geological coverage The world is geographically aggregated into 42 regions. Especially the Asian energy supply/demand structure is considered in detail, aggregating the area into 15 regions. OECD Europe - United Kingdom - Germany - France - Italy - Other OECD Europe Middle East -Saudi Arabia - Iran - Iraq - UAE - Kuwait - Qatar - Oman - Other Middle East Africa - South Africa (Rep. of) - North Africa - Other Africa Non-OECD Europe - Russia - Other FSU - Other Non-OECD Europe Asia - Japan - China - India - Chinese Taipei - Korea - Hong Kong - Indonesia - Malaysia - Philippines - Thailand - Viet Nam - Singapore - Myanmar - Brunei Darussalam - Other Asia Oceania - Australia - New Zealand North America - United States - Canada Latin America - Mexico - Brazil - Chile - Other Latin America 3

31 Modelling framework Major assumptions Macroeconomic model Calculate GDP-related indices, price indices, activity indices including material production, etc. consistently. Technology assessment model Use a bottom-up approach to calculate future efficiencies of appliances, vehicles, etc. Optimal power generation planning model Calculate the cost-optimal power generation mix to meet the projected future electricity demand. GDP, population, energy prices, exchange rates, international trade, etc. Energy supply-demand model Econometric model to project future energy supply and demand by regression analysis of historical trends based on the energy balance tables data of the International Energy Agency (IEA). This model calculates energy demand, supply and transformation as well as related indices including CO 2 emissions, CO 2 intensities and energy self sufficiency ratios. Experts opinions World trade model Use the linear programming (LP) method to calculate the future international trade flows of crude oil, petroleum products, etc. Computable general equilibrium model Estimate the economic impacts induced by the changes in energy supply and demand, based on input-output data. Climate change model Calculate future GHG concentration in the atmosphere, temperature rise, damage caused by climate change, etc. 31

32 Major assumption: Population 25 China 1,34 India 1,662 ASEAN 761 Latin America 777 Africa 2,59 9, ,371 1, ,185 7, ,436 2, 4, 6, 8, 1, Million Japan Other Asia North America OECD Europe Non-OECD Europe Middle East Oceania 32

33 Major assumption: Real GDP China India ASEAN Japan Other Asia North America Latin America OECD Europe Non-OECD Europe Africa Middle East Oceania OECD Non-OECD Asia World Compound annual growth rate (%) $21 Trillion OECD Europe 32 North America China Oceania Middle East Africa Non-OECD Europe Latin America Other Asia Japan ASEAN India 33

34 Major assumption: International energy prices Crude oil Natural gas $/bbl $/MBtu Japan Europe (UK) United States $/t Steam coal * Historical prices are nominal price. Assumed future prices are real price in $216. 1, CIF import prices for Japan $/toe Crude oil Natural gas Steam coal

35 Energy outlook in the world and Asia Reference Scenario

36 World population, GDP, primary energy consumption and CO 2 emissions Reference Scenario 3 215=1 25 Real GDP Population Primary energy consumption CO 2 emissions

37 Primary energy consumption by region 1, 8, 6, 4, North America Latin America Asia Middle East OECD Europe Non-OECD Europe Africa Oceania World , ,8 ( 1.5) Asia Africa Middle East Latin America Non-OECD Europe Reference Scenario Changes (215-25) CAGR (215-25) 3, % % % % 345.8% 2, Oceania OECD Europe % -.3% North America % 37

38 Primary energy consumption by region (Asia) 4,5 4, 3,5 3, 2,5 China India ASEAN Japan Korea Others Asia 215 5,5 25 9,4 ( 1.7) India China ASEAN Reference Scenario Changes (215-25) 1, ,693 CAGR (215-25) 3.2%.9% 2.6% 2, 1,5 1, Others Korea % -.1% Japan % 38

39 Primary energy consumption by source 7, 6, 5, World ,7 25 Coal 19,8 ( 1.5) Oil Natural gas Nuclear Hydro Other renewables Natural gas Oil Reference Scenario Changes (215-25) 1,515 2,25 CAGR (215-25) 1.6%.9% 4, 3, 2, Other renewables Coal 695 1, %.5% 1, Nuclear % Hydro % 39

40 Primary energy consumption by source (Asia) 4, 3,5 3, 2,5 Asia 215 5,5 25 9,4 ( 1.7) Coal Oil Natural gas Nuclear Hydro Other renewables Natural gas Coal Reference Scenario Changes (215-25) 1,2 1,15 CAGR (215-25) 3.1%.9% 2, Oil % 1,5 1, 5 Other renewables Nuclear % 4.% Hydro 9 1.5% 4

41 Final energy consumption by sector 6, 5, Industry Transpor t World 215 9, ,7 ( 1.5) Buildings, etc. Reference Scenario Changes (215-25) 1,646 CAGR (215-25) 1.2% 4, Buildings, etc. Non-energy use Industry 1,66 1.% 3, 2, Transport 1,62 1.% 1, Non-energy use % 41

42 Final energy consumption by sector (Asia) Reference Scenario 2,5 2, Industry Transpor t Asia 215 3,6 25 6,1 ( 1.7) Buildings, etc. Changes (215-25) 1,3 CAGR (215-25) 1.8% Buildings, etc. 1,5 Non-energy use Transport % 1, Industry % Non-energy use % 42

43 Final energy consumption by source 6, 5, 4, Coal Oil Natural gas Electricity Others World 215 9, ,7 ( 1.5) Electricity Oil Reference Scenario Changes (215-25) 1,586 1,483 CAGR (215-25) 1.9%.9% 3, Natural gas % 2, Others 329.6% 1, Coal 64.2% 43

44 Final energy consumption by source (Asia) Reference Scenario 2,5 2, 1,5 Coal Oil Natural gas Electricity Others Asia 215 3,6 25 6,1 ( 1.7) Oil Electricity Changes (215-25) CAGR (215-25) 1.7% 2.4% 1, Natural gas % 5 Others 92.4% Coal 6.2% 44

45 Oil consumption Reference Scenario By region By sector 7, 6, 5, 4, 3, International bunkers Oceania Africa Non-OECD Europe/Central Asia OECD Europe Middle East Asia Latin America North America 7, 6, 5, 4, 3, Transformation Non-energy use Buildings, etc. Transport 4,334 Industry 3,66 3,12 3,235 5,24 5,471 5,849 2, 2, 1, 1,

46 Oil consumption (Asia) Reference Scenario By region By sector 2,5 Others 2,5 Transformation 2,323 2, 1,5 Korea Japan ASEAN India China 2, 1,5 Non-energy use Buildings, etc. Transport Industry 1,33 1,82 2,89 1, 1,

47 Oil production Reference Scenario Mb/d OPEC share 47% 43% 44% % 118 5% 4% Asia/Oceania Non-OECD Europe/Central Asia 8 3% Other Latin America North America % 1% Other Africa Other Middle East OPEC non-middle East OPEC Middle East % 47

48 Oil net imports Reference Scenario Mb/d Net exporters in 25 Net importers in Middle East Non- North Latin OECD America America Europe/ Central Asia Africa Oceania Other Asia Japan/ Korea/ Chinese Taipei OECD Europe ASEAN China India 48

49 Major crude oil trade flows (216) Unit: Mb/d.7 OECD Europe 1.9 Africa 2. Middle East Non-OECD Europe/ Central Asia South Asia China 6. ASEAN Oceania Japan/Korea/ Chinese Taipei 1..6 North America 2.2 Latin America

50 Major crude oil trade flows (23) Reference Scenario Unit: Mb/d OECD Europe 1.4 Africa.8 Middle East Non-OECD Europe/ Central Asia South Asia China 4.9 ASEAN.5 Oceania 1..8 Japan/Korea/ Chinese Taipei.6.8 North America Latin America 5

51 Natural gas consumption Reference Scenario By region By sector 6, 5, 4, 3, 2, International bunkers Oceania Africa Non-OECD Europe/Central Asia OECD Europe Middle East Asia Latin America North America 6, 5, 4, 3, 2, Transformation Non-energy use Buildings, etc. Transport Industry 2,944 2,71 1,663 1,232 3,845 4,55 5,194 1, 1,

52 Natural gas consumption (Asia) Reference Scenario By region By sector 1,8 1,6 1,4 Others Korea Japan ASEAN 1,8 1,6 1,4 Transformation Non-energy use Buildings, etc. 1,285 1,567 1,2 1, India China 1,2 1, Transpor t Industry

53 Natural gas production Reference Scenario Bcm 7, 6,3 6, 5,521 5, 4,668 Asia/Oceania 4, 3,493 Non-OECD Europe/Central Asia Latin America 3, North America Africa 2, Middle East 1,

54 Natural gas net imports Reference Scenario Bcm Net exporters in 25 Net importers in North America Non- OECD Europe/ Central Asia -246 Middle East Oceania Africa Latin ASEAN America Other Asia India Japan/ Korea/ Chinese Taipei China OECD Europe 54

55 LNG imports Reference Scenario Mt Bcm Asia Europe Middle East Latin America Africa North America

56 Major natural gas trade flows (216) Unit: Bcm OECD Europe Africa Middle East Non-OECD Europe/ Central Asia South Asia China 1 ASEAN Japan/Korea/ Chinese Taipei North America Latin America Oceania Pipeline Gas LNG 56

57 Major natural gas trade flows (23) Reference Scenario Unit: Bcm OECD Europe Africa Non-OECD Europe/ Central Asia Middle China 25 East 3 South Asia 13 ASEAN Japan/Korea/ Chinese Taipei North America Latin America Oceania Pipeline Gas LNG 57

58 Coal consumption Reference Scenario By region By sector 5, 4, 3, Oceania Africa Non-OECD Europe/Central Asia OECD Europe Middle East Asia Latin America North America 5, 4, 3, Transformation Non-energy use Buildings, etc. 3,836 Transport Industry 2,22 2,311 4,254 4,486 4,531 2, 2, 1,783 1, 1,

59 Coal consumption (Asia) Reference Scenario By region By sector 4, 3,5 Others Korea Japan 4, 3,5 Transformation Non-energy use 3,32 3,632 3,754 3, 2,5 ASEAN India China 3, 2,5 Buildings, etc. Transport 2,739 2, 2, Industry 1,5 1, 5 1,5 1, ,

60 Coal production Reference Scenario 5, 4, 3,866 4,246 4,479 4,526 Oceania 3, Asia Non-OECD Europe/Central Asia Latin America 2, North America Africa 1, Middle East

61 Coal net imports Reference Scenario Net exporters in 25 Net importers in Oceania Non- OECD Europe/ Central Asia Africa North Latin America America Middle East Other Asia ASEAN OECD Europe China India Japan/ Korea/ Chinese Taipei 61

62 Major steam coal trade flows (216) Unit: Mt OECD Europe Africa 9 22 Non-OECD Europe /Central Asia Middle East India Mongolia 6 China South-East Asia 5 Russia 6 Indonesia Japan/Korea/ Chinese Taipei North America 3 8 Colombia Latin America South Africa 6 Australia

63 Major steam coal trade flows (23) Reference Scenario Unit: Mt OECD Europe Africa Non-OECD Europe /Central Asia Middle East Mongolia China India South-East Asia Russia Indonesia Japan/Korea/ Chinese Taipei North America 4 5 Colombia Latin America 2 South Africa 5 Australia

64 Major coking coal trade flows (216) Unit: Mt Russia OECD Europe Non-OECD Europe 5 /Central Asia Mongolia Africa Middle East 2 India 4 China South-East Asia 1 Indonesia Japan/Korea/ Chinese Taipei North America 13 8 Colombia Latin America Mozambique 1 Australia 7 64

65 Major coking coal trade flows (23) Reference Scenario Unit: Mt OECD Non-OECD Europe Europe 4 /Central Asia Mongolia Middle 1 China Japan/Korea/ East 1 Chinese Taipei 1 India 16 3 Africa South-East Asia Russia Indonesia 3 66 North America 6 Colombia Latin America Mozambique 2 Australia

66 Fossil fuel supply/demand balances (Asia) Reference Scenario Oil Natural gas Coal 4, 4, 4, 3, 2, 1, 941 1,489 2,6 3, 2, 1, , 2, 1, , Production -1, -1, -2, Demand -2, -2, -3, Net imports -3, -3, -4, , ,

67 Electricity final consumption Reference Scenario By region By sector 3,5 3, 2,5 2, Oceania Africa Non-OECD Europe/Central Asia OECD Europe Middle East Asia Latin America North America 3,5 3, 2,5 2, Buildings, etc. Transport Industry 1,737 2,373 2,852 3,324 1,5 1, 1,5 1, ,

68 Electricity final consumption (Asia) Reference Scenario By region By sector 1,8 1,6 1,4 1,2 1, Others Korea Japan ASEAN India China 1,8 1,6 1,4 1,2 1, Buildings, etc. Transport Industry 1,152 1,441 1,

69 Power generation mix Reference Scenario Electricity generated Share TWh 5, 4, Other renewables Hydro Nuclear Natural gas 32,965 39,11 44,838 1% 8% 3, Oil Coal 24,255 6% 2, 1, 15,471 11,864 8,283 4% 2% %

70 Power generation mix (Asia) Reference Scenario Electricity generated Share TWh 25, 2, Other renewables Hydro Nuclear 19,641 22,874 1% 8% Natural gas 15,895 15, Oil 6% 1, Coal 1,24 4% 5, 1,196 2,252 4,13 2% %

71 CO 2 emissions Reference Scenario 25 2 GtCO 2 North America Latin America Asia World Gt Gt ( 1.3) Asia Africa Changes (215-25) GtCO CAGR 2 (215-25) % % 15 Middle East Non-OECD Europe OECD Europe Middle East Latin America % 1.2% 1 5 Africa Oceania Non-OECD Europe Oceania OECD Europe % -.4% -.9% North America % 71

72 CO 2 emissions (Asia) Reference Scenario 12 1 Asia GtCO 2 China India Gt Gt ( 1.6) India GtCO 2 Changes (215-25) 4.7 CAGR (215-25) 3.4% 8 ASEAN Japan ASEAN % 6 Korea Others China 1.2.3% 4 Others.6 2.% 2 Korea..1% Japan % 72

73 Advanced Technologies Scenario

74 Advanced Technologies Scenario assumptions In this Scenario, each country further enhances policies on energy security and address climate change. Technology developments and international technology transfers are promoted to further expand the penetration of innovative technologies. Introducing and enhancing environmental regulations and national targets Environment tax, emissions trading, RPS, subsidy, FIT, efficiency standards, automobile fuel efficiency standard, low carbon fuel standard, energy efficiency labeling, national targets, etc. Promoting technology development and international technology cooperation R&D investment expansion, international cooperation on energy efficient technology (steelmaking, cement and other areas), support for establishing energy efficiency standards, etc. Demand side technologies Industry Under sectoral and other approaches, best available technologies on industrial processes (for steelmaking, cement, paper-pulp and oil refining) will be deployed globally Transport Clean energy vehicles (highly fuel efficient vehicles, hybrid vehicles, plug-in hybrid vehicles, electric vehicles, fuel cell vehicles) will diffuse further. Buildings Efficient electric appliances (refrigerators, TVs, etc.), highly efficient water-heating systems (heat pumps, etc.), efficient air conditioning systems and efficient lighting will diffuse further, with heat insulation enhanced. *SC: Super Critical, USC: Ultra Super Critical, A-USC: Advanced Ultra Super Critical Supply side technologies Renewable energies Wind power generation, photovoltaic power generation, CSP (concentrated solar power) generation, biomass-fired power generation and biofuel will penetrate further. Nuclear Nuclear power plant construction will be accelerated with capacity factor improved. Highly efficient fossil fuel-fired power generation technologies Coal-fired power plants (SC,USC, A-USC, IGCC) and natural gas fired more advanced combined cycle (MACC) plants will penetrate further. Technologies for next-generation transmission and distribution networks Lower loss type of transformation and voltage regulator will penerate further Carbon capture and storage 74

75 Major assumption: Energy and environmental technologies Advanced Technologies Scenario OECD Non-OECD (Reference, 25) Thermal power plant Maintenance of financial scheme for initial investment. Share of IGCC in install % 6% (2%) Installing CCS after 23 (Countries which have storage potential except for aquifer) [Thermal efficiency (stock basis)] Natural gas: 48.5% 55.7% (56.9%) Natural gas: 36.7% 47.3% (44.9%) Coal: 37.3% 44.4% (45.%) Coal: 36.5% 4.2% (41.4%) Nuclear Maintenance of appropriate price in Maintenance of framework for financing wholesale electricity market initial investment [Capacity] 215: 39 GW 327 (241) 215: 9 GW 629 (337) Renewables System cost reduction System cost reduction Cost reduction of power system Low cost investment Efficient operation of power system Improvement of power system [Capacity] Wind: 237 GW 1,91 (718) Wind: 178 GW 1,912 (1,152) Solar: 165 GW 99 (573) Solar: 6 GW 1,588 (946) Biofuels Development of next generation biofuel Cost reduction of biofuel Higher diffusion of FFV Relating to agricultural policy [Consumption] 5 17 (68) (56) Industry Transportation Best available technology diffuses 1% in 25 Cost reduction of high fuel efficiency of vehicles. Twice of travel distance of ZEV [Average fuel efficiency of new vehicle sales] 14.5 km/l 41.1 (27.8) 12.9 km/l 28.6 (2.2) [Share in annual vehicle sales of ZEV].8% 66% (35%).5% 41% (17%) Buildings The pace of improvement of efficiency of newly installed appliance, equipment and insulation is twice. 2% improvement in 25 in ratio of the Reference Scenario Electrification and clean cooking in space heating, water heater and cooking 75

76 Nuclear power generation capacities Advanced Technologies Scenario GW 1,2 1, Middle East/Africa Latin America FSU/Non-OECD Europe OECD Europe North America 2 Asia Reference Advanced Technologies 76

77 Renewables power generation capacities Advanced Technologies Scenario Wind Solar PV GW 3,5 3, 2,5 3,2 GW 3,5 3, 2,5 2,497 Oceania Asia Middle East 2, 1,5 1, 1,865 1,37 2, 1,5 1, 1, Africa FSU/Non-OECD Europe OECD Europe Latin America North America Advanced Technologies Reference Reference Advanced Technologies 77

78 Biofuels consumption Advanced Technologies Scenario Others International bunkers China ASEAN Brazil European Union United States Reference Advanced Technologies 78

79 Vehicle stock and sales by type Share of new passenger light-duty vehicle sales Advanced Technologies Scenario Share of passenger light-duty vehicle stocks 1% 8% 6% 4% 2% % 2% 2% 95% % 1% 12% 11% 25% 1% 5% Reference 28% 21% 33% % 17% Advanced Technologies 1% 8% 6% 4% 2% % 1% 2% 97% % % 8% 9% 21% 25% 1% 56% Reference 18% 37% 1% 23% Advanced Technologies ICE (gasoline, diesel) Compressed natural gas Hybrid vehicle Plug-in hybrid vehicle Electric vehicle Fuel cell vehicle 79

80 Fuel efficiency of passenger cars Fuel efficiency (New sales basis) Advanced Technologies Scenario Fuel efficiency (Stock basis) 35 3 km/l 43% up km/l 36% up Reference Advanced Technologies Reference Advanced Technologies

81 Energy consumption per unit of output in industry Advanced Technologies Scenario 215= % down 12% down 12% down 11% down 11% down Reference Advanced Technologies Reference Advanced Technologies Reference Advanced Technologies Reference Advanced Technologies Reference Advanced Technologies Iron and steel 25 Non-metallic minerals 25 Chemical 25 Paper and pulp 25 Other industries 81

82 Total efficiency in buildings Advanced Technologies Scenario 215= % down % down Reference Advanced Technologies Reference Advanced Technologies , Household 25, Commercial 82

83 Power generation mix Advanced Technologies Scenario Electricity generated Capacity 5, 4, 3, 2, TWh 24,255 44,838 31,482 39,733 14, 12, 1, 8, 6, GW 6,169 12,547 8,567 12,488 1, 4, 2, Reference Advanced Technologies Reference Advanced Technologies Coal Natural gas Oil Nuclear Hydro Other renewables 83

84 Power generation mix (Asia) Advanced Technologies Scenario Electricity generated Capacity 25, TWh 2, 15, 1,24 1, 22,874 15,136 2,32 7, GW 6, 5, 4, 3, 2,53 6,178 4,94 6,421 5, 2, 1, Reference Advanced Technologies Reference Advanced Technologies Coal Natural gas Oil Nuclear Hydro Other renewables 84

85 Carbon intensity of electricity Reference & Advanced Technologies Scenarios World Asia gco 2 /kwh Reference 445 gco 2 /kwh Reference Advanced Technologies Advanced Technologies *CO 2 emissions per kwh at generation end

86 Energy savings by region and by sector Advanced Technologies Scenario Final energy consumption Energy savings by region and by sector 16, 14, 12, 13,675 Non-energy use 13,675 Intl. bunkers Other Non-OECD Other Asia Buildings, etc. 1, 8, 6, 9,384 Buildings, etc. Transport India China Other OECD Japan OECD Europe United States Transport Industry 11,831 4, 2, Industry Reference 25 Advanced Technologies 25 Reference 25 Advanced Technologies 86

87 Primary energy consumption reduction Advanced Technologies Scenario 2, 18,374 19,789 18, 16, 14, 12, 1, 8,774 1,28 13,647 12,873 16,562 15,717 16,693 17,219 International bunkers Non-OECD OECD Reference Advanced Technologies 8,

88 Primary energy consumption reduction (Asia) Advanced Technologies Scenario 1, 8,548 9,351 8, 7,434 7,794 8,156 6, 5,459 7,78 Other Asia ASEAN 4,818 India China 4, Reference 2,887 Advanced Technologies 2,18 2,

89 Primary energy consumption by source Reference & Advanced Technologies Scenarios World Asia 6, 5, 4, Fossil fuel share 81% (215) 79% (Reference) 68% (Advanced Technologies) Coal Oil 4, 3,5 3, 2,5 Fossil fuel share 85% (215) 82% (Reference) 71% (Advanced Technologies) Coal 3, 2, Natural gas Other renewables 2, 1,5 Oil 1, Nuclear Hydro Reference Scenario (solid) Advanced Technologies Scenario (dotted) 1, Other renewables 5 Natural gas Nuclear Hydro

90 Energy self-sufficiency ratio Reference & Advanced Technologies Scenarios Asia China India 1% 12% 1% 8% 6% 4% 2% % 7% 89% 87% 29% Coal Natural gas Oil 83% 52% 49% 14% 13% % 8% 6% 4% 2% % Reference Scenario (solid) Advanced Technologies Scenario (dotted) Coal 94% 95% 94% Narural gas 65% 71% 42% Oil 6% 22% 22% % 6% 4% 2% % 2% 7% 61% Coal Natural Gas 4% 39% Oil 81% 81% 4% 4%

91 CO 2 emission reduction by region Advanced Technologies Scenario GtCO 2 5 United States Japan Other OECD China India Other Asia Other non-oecd International bunkers Reference Advanced Technologies 91

92 CO 2 emission reduction by region (Asia) Advanced Technologies Scenario GtCO China India Other Asia ASEAN Reference Advanced Technologies

93 CO 2 emission reduction by technology Advanced Technologies Scenario 5 GtCO Efficiency Biofuels Wind, solar, etc Nuclear Fuel switching CCS Reference Advanced Technologies

94 CO 2 emission reduction by technology (Asia) Advanced Technologies Scenario 3 GtCO Efficiency Biofuels Wind, solar, etc. Nuclear Fuel switching CCS Reference Advanced Technologies

95 Energy outlook in China, India and ASEAN

96 Primary energy consumption in China Reference & Advanced Technologies Scenarios 4, 3, 2,973 3,695 4,5 4,21 3,416 Other renewables Hydro 2, 1, 871 1,13 Nuclear Natural gas Oil Reference Advanced Technologies Coal 96

97 Final energy consumption in China Reference & Advanced Technologies Scenarios 3, 2,5 2, 1,96 2,346 2,532 2,555 2,215 Non-energy use 1,5 Buildings, etc. 1, Transport Industry Reference Advanced Technologies 97

98 Fossil fuel supply/demand balances in China Reference Scenario Oil Natural gas Coal 2,5 2, Production Demand Net imports 2,5 2, Production Demand Net imports 2,5 2, Production Demand Net imports 1,5 1,5 1,5 1, , , , -1, -1, -1,5-1,5-1,5-2, -2, -2, -2, , ,

99 Power generation mix in China Reference & Advanced Technologies Scenarios Electricity generated Capacity 12, TWh 1, 8, 6, 5,844 8,441 1,763 9,298 4, GW 3, 2, 1,511 2,387 3,354 3,421 4, 2, 1, Reference Advanced Technologies Reference Advanced Technologies Coal Natural gas Oil Nuclear Hydro Other renewables 99

100 Primary energy consumption in India Reference & Advanced Technologies Scenarios 3, 2,5 2, 1,5 1, 5 2,545 2,61 2,158 1, Other renewables Hydro Nuclear Natural gas Oil Coal Reference Advanced Technologies 1

101 Final energy consumption in India Reference & Advanced Technologies Scenarios 2, 1,729 1,5 1,383 1,494 1, ,56 Non-energy use Buildings, etc. Transport Industry Reference Advanced Technologies 11