World Energy Outlook 2006

Supply-Side Investment
In the Alternative Policy Scenario, the worldwide investment requirement
for energy-supply infrastructure over the period 2005-2030 is $17.3 trillion –
$2.9 trillion, or 14%, less than in the Reference Scenario. The cumulative reduction
in supply-side investment in developing countries and transition economies
amounts to about $1.8 trillion, a fall of 14% compared with the Reference
Scenario. The reduced investment in OECD countries is $1.1 trillion, or 15%.
Reduced electricity-supply investment accounts for more than two-thirds of
the overall fall. The capital needed for transmission and distribution networks
is almost $1.6 trillion lower, thanks mainly to lower demand but also to the
wider use of distributed generation. The fall in cumulative investment in power
generation, at $420 billion, is proportionately much smaller. This is because
the capital intensity of renewables, nuclear power and some forms of
distributed generation is higher than that of fossil fuels (Figure 8.3).
billion dollars (2005)
Figure 8.3: Cumulative Global Investment in Electricity-Supply
Infrastructure by Scenario, 2005-2030
8 000
7 000
6 000
5 000
4 000
3 000
2 000
1 000
0
+49%
Nuclear
power
plants
+23%
Renewablesbased
generation
Reference Scenario
–35%
Fossilbased
generation
–27%
Transmission
and
distribution
Alternative Policy Scenario
Total fossil-fuel investment in the Alternative Policy Scenario continues to rise
over the Outlook period but falls below the levels projected in the Reference
Scenario: total investment worldwide in oil and gas is $800 billion, or 10%,
lower than in the Reference Scenario, mainly because there is less demand and
consequently less need to expand production (Figure 8.4). Given that many
countries, for reasons of energy security, are seeking to develop domestic
202 World Energy Outlook 2006 - THE ALTERNATIVE POLICY SCENARIO
© OECD/IEA, 2007