Dr. Alexey Gromov Deputy General Director Institute for Energy Strategy Moscow, Russia World Energy - 2050 The 6 TH Civilization Forum within the UN Conference.

Dr. Alexey Gromov Deputy General Director

Institute for Energy StrategyMoscow, Russia

World Energy - 2050

The 6TH Civilization Forum within the UN Conference on Sustainable Development RIO+ 20

Rio de Janeiro, Brazil, June 15, 2012

The goals and tasks of the studyOur goal is comprehensive, long-term and non-inertial forecast of world energy development in the light of revealed today energy and technological trends, the relationship of economy, energy and society, and the likely recurrence of crises before 2050

The probability of breaking up of current trends and profound changes in the global energy mix may have a powerful impact on the Russian economy and energy sector through the situation on foreign markets and energy technologies

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New global challenges and risks

3

Comparison with forecasts of other research organisations

Global primary energy consumption by 2050, bln toe

Consensus forecast ofenergy future forecasts

High uncertainty

World consumption of primary energy

19.5-22.5 billion toe in 2050

Proportions of the consumption of coal and gas

from 2.5:1 by Shell to 1:2.5 by IEA

The share of nuclear energy from 3.7% to 15.1%

Reducing the share of oilfrom 35% to 25%

The growth of biomass consumptionfrom 7.4% to 15%

Increase in the share of RESfrom 6% to 17-22%

4

Methodology

The scenario is the assemblage point of demographic, economic, technological, political, social, cultural, environmental and energy trendsNot just an extrapolation of existing trends, but analysis of conflicts between them and the assessment of the prospects of their breakup

5

0

5

10

15

20

1900 1925 1950 1975 2000 2025 2050

Oil Gas & nuclear

Electric World & Renewables

Coal

Global primary energy consumption, bln toe

Cyclical crises as a point of scenario bifurcation

Continuation of the pre-crisis growth path

Inhibition of growth and stagnationFact

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Crisis of the 2010th

Crisis of the 1930th

Crisis of the 1970th

Key characteristics of the scenariosin the World Energy - 2050

Reference scenario Stagnation scenario Innovative scenario

Energy-intensive Energy-saving Energy-efficient

Carbon-intensive Renewables and gas Renewables and nuclear

Geopolitical rivalry and economic competition

Global climate and energy policy

The innovative competition and technology

Complex regionalization of economy and energy sector

Slowing globalization Resource globalization and technological globalization

High growth of global primary energy consumption

Slowing growth of global primary energy consumption

Shift from commodities market to the services and technologies market

High oil prices and heyday of oil business

The stagnation of oil business

The sunset of oil business

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Key findings

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By 2030 the peak of global industrialization will be passed

Global primary energy consumption, bln toe

Source: WEO 2010, China’s Energy and Carbon Emissions Outlook to 2050, Institute of Energy Strategy

Primary energy consumption in China, bln toe

The gap between the western way of development and the possible way of China

Proximity of scenarios due to compensation of GDP growth by

increasing energy efficiency

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Fact OECD

Reference scenario, OECD

Stagnation scenario, OECD

Innovative scenario, OECD

Fact non-OECD

Reference scenario, non-OECD

Stagnation scenario, non-OECD

Innovative scenario, non-OECD

Innovative scenario

Stagnation scenario

Reference scenario

Fact

0 4 8 12 16 20

2010

2050, инерционный сценарий

2050, стагнационный сценарий

2050, инновационный сценарий Нефть

ГазУгольАтомная энергияБиомассаГидроНВИЭ

By 2050 global primary energy consumption will rise 1.2-1.6 times The share of RES in the structure of the global energy mix will reach 10 - 34% The share of oil will drop to 29-16%, an absolute reduction is possible Gas consumption will grow High uncertainty about nuclear power remains

bln toe

Shift in the global energy mix to local fuels

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2050, Innovative scenario

2050, Stagnation scenario

2050, Reference scenario

Oil

Gas

Coal

Nuclear

Biomass

Large hydro

Renewables

0

10

20

30

40

50

60

70

80

2010 2020 2030 2040 2050

%

Инерционный сценарий, нефть

Инерционный сценарий, природный газ

Стагнационный сценарий, нефть

Стагнационный сценарий, природный газ

Инновационный сценарий, нефть

Инновационный сценарий, природный газ

World energy sector will shift to resource regionalization and technological globalization

Share of international trade share in global consumption The peak of international trade share in global energy consumption will be passed by 2030

In place of the now dominant resource globalization will come resource regionalization

A fundamental factor in the resource regionalization will be the shift in energy mix to local fuels, including renewables

With the resource regionalization will increase the importance of technological and organizational globalization

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Reference scenario, oil

Reference scenario, gas

Stagnation scenario, oil

Stagnation scenario, gas

Innovative scenario, oil

Innovative scenario, gas

Shift from power energy to smart energy

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The shift from energy commodities marketto the energy services and technologies market

Energy commodities

market2010

Energy service market2030

Energy technology

market2050

The end of oil era is possible…

Потребление нефти, млн т The crisis in oil demand

The peak of world oil consumption will not have been passed up to 2050 ONLY in the reference scenario

In the stagnation scenario, the peak will take place around 2040, and in innovation - around 2030

Revolutionary changes in the transport sector are possible: electric and hybrid vehicles, fuel cell vehicles, gas and biogas

0 1000 2000 3000 4000 5000

2010

2050, инерционный сценарий

2050, стагнационный сценарий

2050, инновационный сценарий

ЕС США ОЭСР-другиеРоссия Китай ИндияБлижний Восток Другие РС

0 1000 2000 3000 4000 5000

2010

2050, инерционный сценарий

2050, стагнационный сценарий

2050, инновационный сценарий

Автомобильный транспорт Другие виды транспортаКотельно-печное топливо НефтехимияПрочие сектора

13

2050, Innovative scenario

2050, Stagnation scenario

2050, Reference scenario

Motor vehicleElectricity & heatingOthers

Other transportChemicals

2050, Innovative scenario

2050, Stagnation scenario

2050, Reference scenario

EURussiaMiddle East

US ChinaOther non-OECD

Other OECDIndia

Oil consumption, mln t

Will the Golden Age of Gas come?

Rapid growth of gas consumption, especially in the saturated markets of Asia

Share of unconventional gas will grow, including gas hydrates

The integration of regional gas markets through the LNG flows

The evolution of pricing in the gas market

The shift from the "geopolitics of oil" to the "geopolitics of gas”

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0

1000

2000

3000

4000

5000

2010 2050,инерционный

сценарий

2050,стагнационный

сценарий

2050,инновационный

сценарий

ЕС США ОЭСР-другие Россия

Китай Индия Другие РС

Gas consumption, bcm

Innovative scenario

Stagnation scenario

Reference scenario

EU

China

US

India

Other OECD Russia

Other non-OECD

0 10 20 30 40 50 60

2010

2050, инерционный сценарий

2050, стагнационный сценарий

2050, инновационный сценарий

ЕС США ОЭСР-другие Россия Китай Индия Другие РС

World energy sector will move to the «electric world»

*1000 bln kW-h

0 10 20 30 40 50 60

2010

2050, инерционный сценарий

2050, стагнационный сценарий

2050, инновационный сценарий

Нефть Газ Уголь Атом Большие гидро Новые ВИЭ

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2050, Innovative scenario

2050, Stagnation scenario

2050, Reference scenario

2050, Innovative scenario

2050, Stagnation scenario

2050, Reference scenario

*1000 bln kW-h

EU US Other OECD Russia China

India Other non-OECD

Oil Gas Coal Nuclear Large hydro Renewables

Strategies of key actors in different scenarios

Geopolitical rivalry Three strategies - control over demand (EU), control over supply (OPEC, China, Russia), the control of transit and trade (United States, transit countries)

Different ways of adapting to a new global climate and energy policy The role of resource and geopolitical factors will declineThe role of legal and environmental factors will increase Conflicts in the regulation

Strategies of countries will be determined by different speed of transition to an innovative energy sector World will split into innovative energy zone and traditional fuel energy zoneThe innovative competition

Russia needs to develop its own advanced strategy

taking into account the energy agenda of 205016

Thank you for your attention

www.energystrategy.ru

Alexey GROMOVDeputy General Director

Institute of Energy Strategy, Moscow

The Energy of the Future in our Hands