World Energy Outlook 2006

Figure 1.2: Growth in Real GDP Per Capita by Region
OECD
Middle East
Africa
Latin America
Rest of developing Asia
India
Transition economies
China
– 2% 0% 2% 4% 6% 8% 10%
1990-2004
average annual growth rate
2004-2015
2015-2030
controlled by the government, they generally move in line with international
prices. But the percentage change in the retail price of a fuel is usually much
less than that in the international price because of distribution costs (which
tend to fluctuate much less), taxes and, in some cases, subsidies. Chapter 11
analyses in detail price elasticities, the impact of taxes and subsidies on actual
retail prices, and recent trends in international and retail prices.
The Reference Scenario projections are based on the average retail prices of
each fuel used in final uses, power generation and other transformation sectors.
These prices are derived from assumptions about the international prices of
fossil fuels (Table 1.3). Tax rates and excise duties are assumed to remain
constant over the projection period. Final electricity prices are derived from
marginal power-generation costs (which reflect the price of primary fossil-fuel
inputs to generation, and the cost of hydropower, nuclear energy and
renewables-based generation), and non-generation costs of supply. The fossilfuel-price
assumptions reflect our judgment of the prices that will be needed to
stimulate sufficient investment in supply to meet projected demand over the
projection period. Although the price paths follow smooth trends, prices are
likely, in reality, to remain volatile. 4
4. Some energy prices are assumed to change in the Alternative Policy Scenario. The impact of lower
investment on oil prices, demand and supply is analysed in Chapter 3. The impact of higher oil prices
on energy demand is analysed in Chapter 11.
60 World Energy Outlook 2006 - THE REFERENCE SCENARIO
© OECD/IEA, 2007