The Global Energy Situation: Tendencies and Challenges Santiago, Chile, May 5, 2008

Transcription

1 The Global Energy Situation: Tendencies and Challenges Santiago, Chile, May 5, 2008 Ambassador William C. Ramsay Deputy Executive Director International Energy Agency

2 World Energy Outlook 2007: China and India Insights

3 Approach Co-operation with China s NDRC & ERI, India s TERI Workshops / meetings in Beijing, Delhi Chinese and Indian experts joined the IEA More than 50 Chinese and Indian peer reviewers Scenario approach Reference Scenario Alternative Policy Scenario & 450 Stabilisation Case High Growth Scenario (China/India) Full global update of projections (all scenarios) Analysis of the impact of China & India on global economy, energy markets & environment

4 Reference Scenario

5 Reference Scenario: World Primary Energy Demand billion tonnes of oil equivalent Other renewables Biomass Hydro Nuclear Gas Oil Coal Global demand grows by more than half over the next quarter of a century, with coal use rising most in absolute terms

6 Reference Scenario: The Emerging Giants of World Energy 100% 80% Increase in Primary Energy Demand & Investment Between 2005 & 2030 as Share of World Total Rest of the world India China 60% 40% 20% 0% Total energy Coal Oil Nuclear Hydro Power sector investments China & India will contribute more than 40% of the increase in global energy demand to 2030 on current

7 China s coal imports and exports, with forecast to IMPORTS (mainly into the south) net imports of >50 Mt in 2010? coal imports and (exports), million tonnes EXPORTS (mainly from the north) coking coal imports steam coal imports coking coal exports steam coal exports net hard coal trade -100 imports include HK ref: IEA Coal Information 2007 & IEA estimates

8 Delivered Coal prices Have Risen Sharply in McCloskey NWE CIF McCloskey Asian CIF Richards Bay FOB Newcastle FOB 80 USD/t Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Free on Board prices at major export ports are above $80 per tonne

9 What is driving high oil prices. The IEA views current prices as too high, especially for developing countries and considering threats to economic growth worldwide Little doubt that the oil market has been affected by financial crisis Weaker dollar explains some of the higher price But oil prices are higher in all currencies Analysis of fund flows gives different results we really do not have enough data financial and fundamental. Source: Oil Market Report 2008

10 Global Oil Supply Prospects to 2015 Oil supply/demand balance is set to remain tight In total, 37.5 mb/d of gross capacity additions needed in mb/d to meet demand & rest to replace decline in existing fields OPEC & non-opec producers have announced plans to add 25 mb/d through to 2015 Thus, a further 12.5 mb/d of gross capacity would need to be added or demand growth curbed Otherwise, a supply crunch cannot be ruled out

11 The Dire Straits : Oil Export Flows from the Middle East Rising reliance on Middle East oil will increase flows through vulnerable chokepoints heightening the risk of a supply disruption

12 Some Big Fish Still Lurking Offshore Buzzard Bonga Dalia Thunder Horse (oil & gas) Sakhalin 2 complex Nanpu - 1P (Govt) Nanpu - 3P (Govt) Azeri-Chirag-Guneshli Tupi - recoverable Cantarell - remaining Zakum Kashagan Safaniyah - remaining Selected major offshore fields - recoverable oil, bb Recent offshore discoveries in Brazil and China Circa 10 billion barrel or reserves and 1.5 mb/d of production potential from the combined Tupi (Brazil) and Jidang Nanpu (China) Global uptick in exploration can make a difference although, notably, these are NOC discoveries Neither field is a quick fix; further appraisal to confirm reserves and development may be costly

13 Reference Scenario: Global Energy-Related CO 2 Emissions million tonnes United States European Union China Japan India Rest of the world China and India accounted for 10% of emissions from 1900 to 2005 by 2030 their share will grow to 20%, compared to 50% for OECD

14 World s Top Five CO 2 Emitters Gt rank Gt rank Gt rank US China Russia Japan India China becomes the largest emitter in 2007 & India the 3rd largest by 2015

15 Reference Scenario: Average Coal-Fired Power Plant Gross Efficiency 45% 40% OECD China India 35% 30% 25% China s coal power plant fleet s gross efficiency is quickly narrowing the gap to the OECD average

16 Reference Scenario: Cumulative Investment in Energy- Supply Infrastructure, Exploration and development Refining Other 73% 22% 5% Oil 24% $5.4 trillion $11.6 trillion Electricity 53% 49% 51% Power generation Transmission and distribution Exploration and development LNG chain Transmission and distribution 55% 8% 37% Biofuels 1% Gas 19% $4.2 trillion $0.6 trillion Coal 3% Total investment = $21.9 trillion (in $2006) 90% 10% Mining Shipping and ports Just over half of all investment needs to 2030 of $22 trillion are in developing countries, 17% in China & another 6% in

17 Alternative Policy Scenario

18 Mapping an Alternative Energy Future Reference Scenario trends are not set in stone The Alternative Policy Scenario analyses impact of government policies under consideration Responds to call to IEA from G8 & IEA ministers To advise on alternative energy scenarios and strategies aimed at a clean, clever and competitive energy future" > different policies worldwide to Improve efficiency in energy production & use Increase reliance on non-fossil fuels Bolster output of oil & gas in net importing countries Macroeconomic, population & international oil/gas price assumptions are as per the Reference Scenario

19 Increase in Net Oil Imports, Reference Scenario Alternative Policy Scenario 6 mb/d OECD North America OECD Europe OECD Pacific China India Other Asia New policies reduce global oil demand by 14 mb/d by 2030, cutting sharply the need for imports

20 Effectiveness of Policies to Promote Energy Efficiency in China Electricity Savings from More Efficient Air Conditioners & Refrigerators in the Alternative Policy Scenario TWh per year Three Gorges Dam (85 TWh) Air conditioner savings Refrigerator savings Tougher efficiency standards for air conditioners & refrigerators alone would save the need to build a Three Gorges Dam by 2020

21 India s Local Pollution Reference Scenario Alternative Policy Scenario SO 2 million tonnes NO x New policies reduce substantially emissions of SO 2 and NO x largely from coal-fired power plants, cars & trucks

22 Energy efficiency: IEA recommendations to G8 5.7 billion tons of CO 2 saved in 2030

23 Alternative Policy Scenario: Global Energy-Related CO 2 Emissions 50 billion tonnes (Gt) Gt Reference Scenario Alternative Policy Scenario 42 Gt 34 Gt 19% Global emissions grow less than half as fast as in the Reference Scenario, stabilising in the 2020s

24 High Growth Scenario

25 China & India Oil Demand China in Reference Scenario India in Reference Scenario Additional demand in High Growth Scenario mb/d Faster economic growth in China & India would have major implications for energy security & climate

26 Energy Technology Perspectives 2008 (Forthcoming) A study on the role of technology How to achieve dramatic emission reduction targets Short and medium term technology policy needs Special attention for technology roadmaps Scenario analysis, including Emission stabilization Emission halving A key deliverable to the G8 Hokkaido Summit

27 A New Energy Revolution. Cutting Energy Related CO 2 emissions

28 A new energy revolution? To bring emissions back to current levels by 2050 a CO 2 incentive of $50/t is needed. Reducing emissions by 50% would require a $200/t incentive.

29 Average Annual Power Generation Capacity Additions in the BLUE Case, (DRAFT) Coal-fired with CCS Gas-fired with CCS Nuclear Hydropower Biomass Wind Geothermal PV CSP 38 CCS coal-fired plants (500 MW) 20 CCS gas-fired plants (500 MW) 26 nuclear plants (1000 MW) 1/3 Canadian hydropower capacity 222 CHP Plants (50 MW) 17,500 Turbines (4 MW) 132 Geothermal Units (100 MW) 175 million m 2 80 CSP plants (250 MW) [GW/yr]

30 Conclusions

31 Conclusions The world is facing twin energy-related challenges: ensuring secure, affordable energy; and managing the associated environmental consequences These challenges can be overcome through: Boosting energy sector investment Improving energy efficiency and promoting new energy technologies China and India are transforming the global energy system by their sheer size Challenge for all countries is to achieve transition to a more secure, lower carbon energy system Next 10 years are critical The pace of capacity additions will be most rapid Technology will be locked-in for decades Growing tightness in oil & gas markets Challenge is global so solutions must be global

32 THANK YOU! http//

33 WEO 2007 Reference Scenario: Transport Energy Demand by Fuel billion tonnes of oil equivalent Other fuels Biofuels Oil Oil continues to dominate energy use for transport, while the contribution of biofuels remains marginal

34 Breakdown of emission reductions in the transport sector

35 Medium-term outlook for biofuels supply mb/d US Ethanol Brazil Ethanol Other Ethanol Other Biodiesel Source: IEA Medium-Term Oil Market Report OECD EUR Ethanol Asia Ethanol OECD EUR Biodiesel Potential Capacity Capacity & production are expected to continue to grow strongly to 2012, with most of the increase coming from the US, EU and Brazil