World Energy Outlook 2007

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Environmental Implications Local Air Pollution 20 The energy trends contained in the Reference Scenario have unsustainable environmental consequences, in several respects. International observers are keenly aware of greenhouse-gas emissions, whereas many rural Chinese are more worried about indoor air pollution (Box 9.5). Perhaps the most immediately striking environmental phenomenon is local ambient air pollution, which carries a high social and economic cost. Twenty of the world’s thirty most polluted cities, as ranked by the World Bank, are in China (World Bank, 2007). The cost of health damage alone from air pollution is predicted to rise to the equivalent of 13% of Chinese GDP by 2020 under a business-asusual scenario (OECD, 2007). Coal contributes most to air pollution in China. In 2005, coal-fired power plants supplied 78% of China’s electricity supply. Rapidly rising coal consumption in the power sector and in industry in China has had a profound environmental impact. Yet coal will continue to play a large part in China’s energy future, especially in the Reference Scenario, because most new power generating capacity over the Outlook period will be coal-fired (see Chapter 10). Coal combustion accounts for most of China’s sulphur dioxide (SO 2 ) emissions. All coal contains some sulphur, which is released as SO 2 when the coal is burnt. In the absence of sulphur-control technologies or flue-gas desulphurisation (FGD), this noxious gas can cause breathing difficulties and acid rain and precipitation. Air pollution generally, and particularly the adverse impact of coal-fired generation on the environment, is a major force behind China’s drive to reduce energy intensity and wish to accelerate the use of nuclear, hydro, other renewables and combined heat and power (CHP) technologies. 21 Measures such as flue-gas desulphurisation at power plants have the same aim of mitigating air pollution. The Chinese government had already set an ambitious SO 2 reduction target in its 10 th Five-Year Plan – a 10% reduction in 2005 compared to 2000 levels. This target was not met (OECD, 2007). China did not meet its target of washing 50% of the coal it burns, and the implementation of FGD has been slow to date. In 2005 only 45 GW out of 389 GW of installed thermal capacity had an FGD unit installed. In the Reference Scenario, China’s SO 2 emissions are projected to increase from 26 Mt in 2005 to 31 Mt in 2015 before levelling off to 30 Mt by 2030 (Figure 9.11). The increasing number of 20. The projections in this section are based on analysis carried out by the International Institute for Applied Systems Analysis (IIASA) on behalf of the IEA. 21. The successful installation of CHP and combined cooling, heating and power (CCHP) systems can reduce fuel consumption by approximately 25% compared with conventional power plants, bringing about a proportional reduction of pollutant emissions. When fuelled with natural gas rather than coal or oil, SO 2 emissions can be reduced to zero. 310 World Energy Outlook 2007 - CHINA’S ENERGY PROSPECTS
FGD units installed, along with the diversification of the power sector, explains the levelling-off of emissions around 2015. Increased availability of natural gas in medium and small cities and replacing coal in coal-fired boilers, will reduce air pollution and price reforms will discourage wasteful consumption, but it is likely to prove difficult to control the SO 2 emissions from dispersed and varied industrial plants. Moreover, the level of fuel diversification seen in the Reference Scenario will not be sufficient to limit SO 2 growth in the short term. China’s current ambient air quality trends are inconsistent with its emissions reduction targets, total emissions of major pollutants including SO 2 are targeted to fall by 10%, or 8.4 million tonnes, under the 11 th Five-Year Plan for Energy. Much greater emissions reductions will be needed to achieve the targets (OECD, 2007). 35 30 Figure 9.11: SO 2 Emissions by Sector in the Reference Scenario 9 million tonnes of SO 2 25 20 15 10 5 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 Power generation Industry Residential, services and agriculture Transport Oxides of nitrogen (NO x ) are also formed during combustion; its release into the atmosphere is linked to environmental impacts including acidification, eutrophication and ozone formation. Transport is the fastest growing sector and rising vehicle ownership does not bode well for local air quality. Slowing or reversing the rise of NO x emissions from the transport sector presents difficulties because of the large number of individual sources. NO x emissions rise over the Outlook period, from 15 Mt in 2005 to 21 Mt in 2030 (Table 9.8). Emissions of PM 2.5 continue the declining trend seen since the mid-1990s, reaching 9 Mt in 2030 compared to 14 Mt in 2005. Chapter 9 - Reference Scenario Demand Projections 311
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INTERNATIONAL ENERGY AGENCY WORLD E
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INTERNATIONAL ENERGY AGENCY WORLD E
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FOREWORD World leaders have pledged
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ACKNOWLEDGEMENTS This study was pre
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Helen Dickinson Carmen Difiglio Sim
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Tarhan Feyzioğlu John Fu Hu Gao We
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Comments and questions are welcome
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GLOBAL ENERGY TRENDS ENERGY TRENDS
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Explaining China’s and India’s
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Oil Resources and Reserves 318 Oil
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16 17 Reference Scenario Demand Pro
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List of Figures Introduction 1. Sha
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3.9 Share of Energy in World Intern
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9.7 International Comparison of Fle
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13.5 Contribution of the Coastal Re
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18.4 India’s CO 2 Emissions in th
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2.2 Sectoral Shares in Final Energy
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11.6 Key Policy Assumptions in Chin
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List of Boxes Introduction 1. Model
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16.5 Kerosene Use in Rural Areas of
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World Energy Outlook Series World E
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above current levels in 2030. To ac
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Reference Scenario. In the High Gro
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Reference Scenario, primary energy
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By contrast, faster implementation
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of this increase. China is by far t
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There are large potential gains to
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India are now so big that they are
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of the two giants in international
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second trading period (2008-2012) o
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Table 1: World Population Growth (a
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high (see below). In the longer ter
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Table 3: Fossil-Fuel Price Assumpti
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$41 per tonne to $63 in 2006 (in ye
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In line with last year’s Outlook,
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equilibrium for international trade
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CHAPTER 1 GLOBAL ENERGY TRENDS
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standards for vehicles and new meas
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Figure 1.2: Increase in World Prima
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Global primary energy intensity, me
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Figure 1.6: Share of Transport in P
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Russia, Central Asia, Latin America
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It is certainly possible that decli
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Table 1.5: World Primary Natural Ga
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developments in clean coal technolo
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in the form of coking coal, grow st
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(Table 1.8). India and China experi
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Table 1.9: Cumulative Investment in
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policy implementation is critical:
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transition economies, because there
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15.1% in 2030, compared with 11.7%
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Table 1.12: World Primary Natural G
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Figure 1.19: Incremental Non-Fossil
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Figure 1.20: Fuel Mix in World Powe
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Table 1.14: World Primary Energy De
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The regional effect on oil imports
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in the Reference Scenario to 1 481
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The High Growth Scenario projection
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Reference Scenario Energy Demand Th
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having rebounded in the early part
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80% Figure 2.3: Fuel Mix in Power G
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SPOTLIGHT Are China and India Follo
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For both China and India, the story
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imports are projected to rise furth
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equires $956 billion of capital spe
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Table 2.4: Primary Energy Demand in
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Figure 2.9: Primary Energy Demand i
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China and India in the Global Econo
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production and exports of manufactu
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International Trade and Financial F
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total coal use in 2005, and the sec
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total stock of Chinese ODI amounted
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fear that Chinese and Indian export
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SPOTLIGHT (continued) In general, e
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Box 3.2: Modelling Economic and Ene
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Table 3.2: Fossil-Fuel Prices in th
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etween 5% and 8% in the High Growth
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Table 3.3: World Real GDP Growth in
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The results presented here should b
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Energy Security in a Global Market
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■ Adequate investment in producti
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efined products are global commodit
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Figure 4.1: Share of China and Indi
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Figure 4.3: Share of China and Indi
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Figure 4.4: Oil Export Flows from t
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Table 4.3: Net Natural Gas Imports
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Coal Coal dominates energy use in C
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Energy savings Diversification of f
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In China, oil security has emerged
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deprive the companies of profits an
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western markets. Any disruption to
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2015 and 20% higher in 2030. The ri
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Figure 4.10: Major World Oil Supply
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imports is demonstrated by the Alte
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prices to all consuming countries m
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Energy-Related CO 2 Emissions Globa
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In the past two-and-a-half decades,
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Transport contributes roughly a fif
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Box 5.1: Regional Air Quality (Cont
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Box 5.2: Which Countries Emit the M
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egion (Table 5.3 and Figure 5.10).
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Figure 5.11: Change in Carbon Inten
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Table 5.4: CO 2 Concentrations and
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illustrate the magnitude and urgenc
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Energy Demand by Sector CO 2 emissi
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Figure 5.13: Electricity Generation
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The capital costs involved in stabi
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Focus on Prospects for Clean Coal T
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Technologies involving the absorpti
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There are a number of barriers to t
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scheduled to operate in the first h
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CHAPTER 6 ENERGY POLICY RAMIFICATIO
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■ Conserving energy: Conservation
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The results of our Alternative Poli
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increasing need for oil and gas. Th
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Co-operation is a two-way street; I
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Technology Co-operation and Collabo
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continue to make an important contr
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een registered, are being validated
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PART B CHINA’S ENERGY PROSPECTS
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The Political Context 1 Established
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percentage points over 2001. 3 In 2
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education. However, the government
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Capital accumulation was boosted by
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several times since the beginning o
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Yet pockets of extreme poverty rema
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year over the projection period, re
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infrastructure, housing and service
Page 263 and 264: CHAPTER 8 OVERVIEW OF THE ENERGY SE
Page 265 and 266: In the 1980s and 1990s, energy dema
Page 267 and 268: Industry has long been the largest
Page 269 and 270: Figure 8.3: China’s Energy Produc
Page 271 and 272: Figure 8.4: Organisation of Energy
Page 273 and 274: Box 8.2: Energy Goals in China’s
Page 275 and 276: Box 8.3: Coal-Based Alternative Fue
Page 277 and 278: projects are still the largest alte
Page 279 and 280: of these businesses. In its early s
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Page 283 and 284: Access to Modern Energy China has a
Page 285 and 286: CHAPTER 9 REFERENCE SCENARIO DEMAND
Page 287 and 288: growth (Table 9.1). It is possible
Page 289 and 290: Table 9.3: China’s Primary Energy
Page 291 and 292: with an 89% share in 2005. By 2030,
Page 293 and 294: exported goods was only 197 Mtoe, o
Page 295 and 296: energy intensity of 9% in steel pro
Page 297 and 298: Non-Metallic Minerals The non-metal
Page 299 and 300: to 7.0% in 2005-2015 and 4.4% in 20
Page 301 and 302: Box 9.2: Prospects for Alternative
Page 303 and 304: develop their own-brand vehicles in
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Page 307 and 308: nearly one-fifth of the increase in
Page 309 and 310: in cities is assumed to grow steadi
Page 311: Appliance efficiency improvements w
Page 315 and 316: Table 9.8: Emissions of Major Pollu
Page 317 and 318: generate almost 1.2 billion CERs by
Page 319 and 320: CHAPTER 10 REFERENCE SCENARIO SUPPL
Page 321 and 322: Figure 10.1: China’s Oil and Gas
Page 323 and 324: Table 10.2: China’s Oil Productio
Page 325 and 326: Oil Refining China’s refining cap
Page 327 and 328: Saudi Aramco taking combined stakes
Page 329 and 330: Box 10.2: China’s Emergency Oil S
Page 331 and 332: which close to 90% are onshore (Tab
Page 333 and 334: Table 10.5: China’s Natural Gas P
Page 335 and 336: e built, because of concerns about
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Page 339 and 340: Table 10.7: China’s Coal Producti
Page 341 and 342: of 829 Mt of coal each year by the
Page 343 and 344: An outside-plan spot market has exi
Page 345 and 346: Figure 10.13: China’s Hard Coal T
Page 347 and 348: Figure 10.14: Electricity Generatio
Page 349 and 350: China is pursuing a dual objective
Page 351 and 352: Capacity Requirements In the past t
Page 353 and 354: to consumers approximately 70% of a
Page 355 and 356: 8 Figure 10.17: Plant Generating Co
Page 357 and 358: undertaken because of its economic
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Background and Assumptions China’
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and consumption technologies. By 20
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Reference Scenario. More than two-t
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The most striking difference concer
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The slow-down in the growth of CO 2
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power generation and improving the
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of nuclear power reaches 6% of tota
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educing industrial consumption, eit
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towards gas-based ammonia productio
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Summary of Results In the Alternati
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Table 11.8: Policy Assumptions in C
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improve and appliance ownership inc
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Box 11.2: Cost-Effectiveness of Imp
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Investment in fossil-fuel supply is
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On the other hand, higher economic
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two-thirds of incremental oil deman
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Of the main final sectors, the tran
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Higher international prices also bo
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128 bcm to 216 bcm in 2030. In orde
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generation reaches 7.4 MWh, close t
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Though higher economic growth would
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The magnitude of the region’s imp
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Table 13.1: Economic Indicators by
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Figure 13.2: Share of the Coastal R
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Figure 13.3: Provincial Energy Inte
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incremental final energy demand. Fo
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Industry Industry is today the main
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the population in Beijing having ac
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The coastal provinces, with a deman
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APPENDIX TO CHAPTER 13: CHINA COAST
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PART C INDIA’S ENERGY PROSPECTS
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The Political Context India is a fe
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up from 9% in 2005 and 8.3% in 2004
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Assam are on average poorer than ma
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in manufacturing productivity was t
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Economic Challenges Continuation of
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South Asia is the least integrated
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Box 14.2: Special Economic Zones in
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ecently extended into petrochemical
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CHAPTER 15 OVERVIEW OF THE ENERGY S
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after China and the United States.
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Box 15.1: India's Energy Statistics
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which was created in 1984 to reduce
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■ Electricity Regulatory Commissi
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and production, and in liquefied na
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(because of the captive restriction
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Table 15.3: India's Integrated Ener
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of Finance's Economic Survey 2006-2
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Box 15.3: Public-Private Partnershi
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CHAPTER 16 REFERENCE SCENARIO DEMAN
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Most energy prices in India are con
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Energy demand in the residential se
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Iron and Steel Industry India’s i
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80%. Past subsidies eliminated ince
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The transport sector currently cons
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Box 16.3: Upside Potential of Trans
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Figure 16.6: Residential Fuel Mix i
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Biomass use in urban households 14
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Kerosene and LPG supply 83% of the
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Other Sectors The services sector a
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from other sources - mainly industr
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Despite improvements in thermal eff
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Oil Supply Resources and Reserves I
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and decline to just under 400 kb/d
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expansions of cracking units. Betwe
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For crude oil alone, India's import
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Figure 17.5: Main Oil and Gas Infra
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come from offshore non-associated g
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Figure 17.7: India's Natural Gas Ba
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98 billion tonnes, principally in J
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Table 17.8: Coal Production in Indi
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15 000 Figure 17.9: Coal-Mining Pro
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Figure 17.10: India's Coal Producti
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India's coal-fired power plants are
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Box 17.4: CO 2 Capture and Storage
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Box 17.5: India's Nuclear Power Gen
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8 Figure 17.13: Electricity Generat
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India receives abundant solar radia
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in power generation alone is estima
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In 2005, revenues from electricity
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Figure 17.17: Electricity Losses by
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were shut down. Despite past proble
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CHAPTER 18 ALTERNATIVE POLICY SCENA
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Key Results Energy Demand Primary e
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energy demand in the Alternative Po
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18 Figure 18.3: Local Air Pollutant
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Box 18.1: The Impacts of Climate Ch
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Summary of Results Total electricit
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Box 18.2: Performance of India's Co
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1970s hydropower accounted for arou
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35 Figure 18.8: India's Energy Savi
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to compressed natural gas (CNG), wh
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Delhi has encountered problems rela
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Policy Scenario, it is assumed that
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Figure 18.11: Change in Investment
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tariffs in the services and industr
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Background and Assumptions There ar
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period by passenger cars, is the ma
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Box 19.1: The Vehicle Stock in the
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Oil and Gas The production profile
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Electricity Electricity generation
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in 2030 will still be low, at 2.7 t
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and rising emissions of CO 2 , NO x
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Outlook for Clean Cooking Fuel and
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focus of government policy is to ex
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The government has focused many pro
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Expanding Access to Electricity in
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stoves. According to the World Heal
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Subsidies on Kerosene and LPG, and
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Uttar Pradesh (4.4 million) and Wes
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ANNEXES
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Reference Scenario: World Energy de
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Alternative Policy Scenario: World
Page 598 and 599:
Reference Scenario: China Energy de
Page 600 and 601:
Alternative Policy Scenario: China
Page 602 and 603:
Reference Scenario: India Energy de
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Alternative Policy Scenario: India
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Reference Scenario: OECD Energy dem
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Reference Scenario: OECD North Amer
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Reference Scenario: United States E
Page 612 and 613:
Reference Scenario: OECD Pacific En
Page 614 and 615:
Reference Scenario: Japan Energy de
Page 616 and 617:
Reference Scenario: OECD Europe Ene
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Reference Scenario: European Union
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Reference Scenario: Transition econ
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Reference Scenario: Russia Energy d
Page 624 and 625:
Reference Scenario: Developing coun
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Reference Scenario: Developing Asia
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Reference Scenario: Latin America E
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Reference Scenario: Middle East Ene
Page 632 and 633:
Reference Scenario: Africa Energy d
Page 635 and 636:
ANNEX B ABBREVIATIONS, DEFINITIONS
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Coal-bed Methane Methane found in c
Page 639 and 640:
Other Renewables Includes geotherma
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international marine bunkers, excep
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Rest of Developing Asia Developing
Page 646 and 647:
IAEA IEA IGCC IMF IOC IPCC IPP LDV
Page 649 and 650:
ANNEX D REFERENCES Introduction Int
Page 651 and 652:
Stevens, C. and J. Kennan (2006), H
Page 653 and 654:
— (2004), World Energy Outlook 20
Page 655 and 656:
International Energy Agency (IEA, 2
Page 657 and 658:
Chew Chong Siang (2006), Current St
Page 659 and 660:
Williams, R. O., A. McKane et al. (
Page 661 and 662:
Garg, A. et al. (2006), “The sect
Page 663 and 664:
Malti, G. (2007), Carbon Capture an
Page 665:
Pachauri, S. (2007), An Energy Anal
Page 674:
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