WEO Presentation to the press - World Energy Outlook

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WEO Presentation to the press - World Energy Outlook

World Energy Outlook 2012

Presentation to the press

London, 12 November 2012

© OECD/IEA 2012


The context

Foundations of global energy system shifting

© OECD/IEA 2012

Resurgence in oil & gas production in some countries

Retreat from nuclear in some others

Signs of increasing policy focus on energy efficiency

All-time high oil prices acting as brake on global economy

Divergence in natural gas prices affecting Europe (with prices

5-times US levels) and Asia (8-times)

Symptoms of an unsustainable energy system persist

Fossil fuel subsidies up almost 30% to $523 billion in 2011, led by MENA

CO 2 emissions at record high, while renewables industry under strain

Despite new international efforts, 1.3 billion people still lack electricity


Emerging economies steer energy markets

© OECD/IEA 2012

100%

80%

60%

40%

20%

Share of global energy demand

6 030 Mtoe 12 380 Mtoe 16 730 Mtoe

1975 2010 2035

Non-OECD Rest of non-OECD

Middle East

India

China

OECD

Global energy demand rises by over one-third in the period to 2035,

underpinned by rising living standards in China, India & the Middle East


A United States oil & gas transformation

mboe/d

© OECD/IEA 2012

25

20

15

10

5

US oil and gas production

1980 1990 2000 2010 2020 2030 2035

Unconventional gas

Conventional gas

Unconventional oil

Conventional oil

The surge in unconventional oil & gas production has implications

well beyond the United States


Iraq oil poised for a major expansion

© OECD/IEA 2012

7

6

5

4

3

2

1

Iraq oil production

mb/d 9

North

8

Centre

2012 2020 2035

South

Iraq oil exports

mb/d 9

Other

8

Asia

Iraq accounts for 45% of the growth in global production to 2035;

by the 2030s it becomes the second-largest global oil exporter, overtaking Russia

7

6

5

4

3

2

1

2012 2020 2035


Middle East oil to Asia: a new silk road

© OECD/IEA 2012

Middle East oil export by destination

mb/d 7

2000

6

5

4

3

2

1

China India

Japan & Korea Europe

United States

2011

2035

By 2035, almost 90% of Middle Eastern oil exports go to Asia; North America’s

emergence as a net exporter accelerates the eastward shift in trade


Natural gas: towards a globalised market

© OECD/IEA 2012

Major global gas trade flows, 2010 2035

Rising supplies of unconventional gas & LNG help to diversify trade flows,

putting pressure on conventional gas suppliers & oil-linked pricing mechanisms


Different trends in oil & gas

import dependency

Gas Imports

Gas Exports

© OECD/IEA 2012

100%

80%

60%

40%

20%

0%

Net oil & gas import dependency in selected countries

China

European Union

United States

India

Japan

20%

20% 40% 60% 80% 100%

Oil imports

While dependence on imported oil & gas rises in many countries,

the United States swims against the tide

2010

2035


A power shift to emerging economies

© OECD/IEA 2012

China

India

United States

European Union

Japan

-1 000 0

TWh

1 000

Change in power generation, 2010-2035

Coal Gas Nuclear Renewables

2 000

3 000 4 000 5 000 6 000

TWh

The need for electricity in emerging economies drives a 70% increase in worldwide

demand, with renewables accounting for half of new global capacity


The multiple benefits of renewables

come at a cost

Billion

Renewable subsidies were $88 billion in 2011; over half the $4.8 trillion required to

2035 has been committed to existing projects or is needed to meet 2020 targets

© OECD/IEA 2012

$250

$200

$150

$100

$50

Global renewable energy subsidies

$960 billion

$2 600 billion

$1 200 billion

2011 2015 2020 2025 2030 2035

Biofuels:

2011-2035

Electricity:

2012-2035

Existing capacity


Wide variations in the price of power

cents/kWh

© OECD/IEA 2012

25

20

15

10

5

Average household electricity prices, 2035

China United States European Union Japan

2011

OECD average

2011

Non-OECD

average

Electricity prices are set to increase with the highest prices persisting in the

European Union & Japan, well above those in China & the United States


Energy is becoming thirstier in the

face of growing water constraints

© OECD/IEA 2012

100%

80%

60%

40%

20%

Global water use Water for energy

Energy

2010

Power

Other

Nuclear

The energy sector’s water needs are set to grow, making water an increasingly

important criterion for assessing the viability of energy projects

Coal

2010

Biofuels

Fossil fuels


Energy efficiency: a huge opportunity

going unrealised

© OECD/IEA 2012

Energy efficiency potential used by sector in the New Policies Scenario

100%

80%

60%

40%

20%

Industry Transport Power

generation

Buildings

Unrealised energy

efficiency potential

Realised energy

efficiency potential

Two-thirds of the economic potential to improve energy efficiency

remains untapped in the period to 2035


The Efficient World Scenario:

a blueprint for an efficient world

Mtoe

Economically viable efficiency measures can halve energy demand growth to 2035;

oil demand savings equal the current production of Russia & Norway

© OECD/IEA 2012

18 000

17 000

16 000

15 000

14 000

13 000

Total primary energy demand

New Policies

Scenario

Efficient

World Scenario

12 000

2010 2015 2020 2025 2030 2035

Reduction in 2035

Coal 1 350 Mtce

Oil 12.7 mb/d

Gas 680 bcm

Others 250 Mtoe


Energy efficiency brings economic gains

Trillion

In addition to cutting energy expenditures by an average of 20%, improved efficiency

brings wider economic gains, particularly for India, China, the United States & Europe

© OECD/IEA 2012

$1.5

$1.2

$0.9

$0.6

$0.3

$0

-$0.3

Energy expenditure in 2035 compared with 2010

China India European

Union

United

States

Japan

New Additional Policies in the

Scenario New Policies

Scenario

Efficient World

Scenario


The Efficient World Scenario

delays carbon lock-in

Gt

© OECD/IEA 2012

35

30

25

20

15

10

5

2017

2022

2 °C trajectory

2011 2015 2020 2025 2030 2035

Lock-in of infrastructure

in New Efficient Room Policies to World manoeuvre Scenario

in 2017 2022

Lock-in of existing

infrastructure

Energy efficiency can delay “lock-in” of CO 2 emissions permitted under a 2 °C

trajectory – which is set to happen in 2017 – until 2022, buying five extra years


Foundations of energy system shifting

Policy makers face critical choices in reconciling energy,

environmental & economic objectives

Changing outlook for energy production & use may redefine

global economic & geopolitical balances

Iraq set to play a pivotal role in global oil markets

As climate change slips off policy radar, the “lock-in” point

moves closer & the costs of inaction rise

The gains promised by energy efficiency are within reach & are

essential to underpin a more secure & sustainable energy system

© OECD/IEA 2012

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