World Energy Outlook 2006

Reference Scenario, although they still increase from 4.4 Gt in 2004 to 7.9 Gt
in 2030. In the Alternative Policy Scenario, emissions from power plants in
China and India in 2030 are 1.3 Gt, or 18%, lower than in the Reference
Scenario.
Policy Assumptions and Effects
The policies under consideration that affect the power sector are mainly driven
by concern to increase the use of low-carbon technologies or to reduce
dependence on imported fuels. The most important policies and measures
considered in the Alternative Policy Scenario include:
� Incentives and regulations to boost the use of renewables.
� Programmes to improve the efficiency and reduce the cost of advanced
technologies in power generation.
� Policies to increase the use of nuclear power.
� Incentives to promote the use of CHP.
Many governments, particularly in the OECD, favour the use of renewable
energy as a means of reducing CO 2 emissions and increasing reliance on
domestic energy sources. Typical measures include guaranteed buy-back
tariffs (for example, in several European countries) or renewables portfolio
standards (an approach requiring a stated proportion of generation to come
from renewables, which is now common in the United States, where
19 states have adopted such policies). In the Alternative Policy Scenario, it
is assumed that policies are put in place to ensure that these targets are met.
Policy support for renewables is now spreading to the developing world.
China adopted a renewable energy law in 2005. India has also taken steps to
provide more incentives for renewables and already has a thriving windpower
industry. In Brazil, the federal PROINFA programme provides
incentives for the development of alternative sources of energy (see also
Chapter 16).
Several countries, particularly in the OECD, are assumed to increase incentives
for using CHP. Most new CHP capacity is likely to be used for on-site
generation in industry. CHP also benefits from incentives for renewable energy.
Biomass-fired CHP increases considerably. The share of electricity produced
from CHP plants is in general from one to three percentage points higher in
the Alternative Policy Scenario than in the Reference Scenario.
Advanced power-generation technologies are assumed to become available
earlier than in the Reference Scenario. There is now a strong focus on cleaner
coal technologies. The United States and China, the two largest users of coal in
power generation, are promoting the development of advanced coal
technologies.
Chapter 9 - Deepening the Analysis: Results by Sector 221
© OECD/IEA, 2007
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