Energy Technology Perspectives 2012: Tapping technology's potential to secure a clean energy future

© OECD/IEA 2012

Tapping technology’s potential to secure a clean energy future

Richard H. JonesDeputy Executive DirectorKorea, Seoul June 18, 2012

ETP 2012 – Choice of 3 Futures

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6DSwhere the world is now heading with potentially devastating results

The 6°C Scenario

4DSreflecting pledges by countries to cut emissions and boost energy efficiency

The 4°C Scenario

2DSa vision of a sustainable energy system of reduced Greenhouse Gas (GHG) and CO2 emissions

The 2°C Scenario

Sustainable future still in reach

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Are we on track to reach a clean

energy future?

NO ✗

Can we get on track?

YES ✓

Is a clean energy transition urgent?

YES ✓

Recommendations to Governments

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1. Create an investment climate of confidencein clean energy

2. Unlock the incredible potential of energy efficiency – “the hidden” fuel of the future

3. Accelerate innovation and public research, development and demonstration (RD&D)

A smart, sustainable energy system

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A sustainable energy system is a smarter, more unified and integrated energy system

Clean energy: slow lane to fast track

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Progress is too slow in almost all technology areas

Significant action is required to get back on track

2009 2015 2020 2025 2030 2035 2040 2045 2050 0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

45 000 OtherWindSolarHydroNuclearBiomass and wasteOilGas with CCSGasCoal with CCSCoal

Low-carbon electricity: a clean core

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Renewables will generate more than half the world’s electricity in the 2DS

TW

h

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Nuclear and Renewables need to dominate OECD Asia Oceania electricity

Whereas today around two thirds of electricity are based on fossil fuels, nuclear and renewables play an important role to decarbonise electricity supply under the 2DS.

0

500

1 000

1 500

2 000

2 500

4DS 2DS

2009 2050

TWh

Other renewables

Wind

Solar

Hydro

Nuclear

Fossil w CCS

Fossil w/o CCS

67%

34%

11%

3%

6%

24%

35%

47%

6%

8%

11%

6%11%

0.5%

6% 5%

2%6% 8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

4DS 2DS

2009 2050

Gen

erati

on s

hare

Other renewables

Wind

Solar

Hydro

Nuclear

Fossil w CCS

Fossil w/o CCS

© OECD/IEA 2012

Acceleration of nuclear, wind and PV needed

Massive deployment of low-carbon technologies needed, especially of nuclear and renewable technologies.

0 1 2 3 4 5 6

Coal with CCS

Gas with CCS

Biomass

Wind, onshore

Wind, offshore

PV

CSP

Nuclear

Hydro

GW per year

2021-50

2011-20

2001-2010

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All flexibility sources will be needed

Dispatchablepower plants

Energy storage facilities

Interconnection with adjacent

markets

Biomass-firedpower plant

Pumped hydro facility

Scandinavian interconnections

Demand side Response

(via smart grid)

Industrial

residential

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Total benefits of smart-grid investments outweigh costs – but direct benefits of investment may be found in other sectors.

Smart grids offer net benefits

2009 2015 2020 2025 2030 2035 2040 2045 2050 0

2 500

5 000

7 500

OECD China India Other non-OECD

Po

we

r G

en

era

tion

fro

m N

atu

ral G

as

TW

hNatural Gas: a transitional fuel

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Around 2030, natural gas becomes ‘high carbon’

The CCS infant must grow quickly

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Note: Capture rates in MtCO2 /year

Mt CO2

Mt CO2

Mt CO2

Mt CO2

Mt CO2

Mt C

O2

2010 2015 2020 2025 2030 2035 2040 2045 2050 0

2 000

4 000

6 000

8 000

10 000

12 000Other industries

Chemicals and petrochemicals

Aluminium

Pulp and paper

Iron and steel

Cement

2 DS

Industry must become more efficient

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Significant potential for enhanced energy efficiency can be achieved through best available technologies.

GtC

O2

Electric vehicles need to come of age

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2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 0

50

100

150

200FCEV

Electricity

Plug-in hybrid diesel

Plug-in hybrid gasoline

Diesel hybrid

Gasoline hybrid

CNG/LPG

Diesel

Gasoline

Fuel Cell Electric Vehicles

More than 90% of light duty vehicles need to be propelled by an electric motor in 2050

Pas

seng

er L

DV

sal

es (

mill

ion)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20200

1

2

3

4

5

6

7

8

Manufacturers production/sales

Projection (Es-timated from each country's target)

mill

ion

sa

les/

yea

r

0

1

2

3

4

5

6

7

8

Projection (Es-timated from each country's target)

mill

ion

sa

les/

yea

rTranslating targets into action

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Government targets need to be backed by policy action

2010 2012 2014 2016 2018 2020

Space heating22%

Water heating12%

Cooking15%

Cooling and ventilation5%Lighting

5%

Appliances10%

Space heating, 7%

Water heating, 2%

Cooling and ventilation, 3%

Lighting, 3%

Other15%

Total energy savings 33 EJ

Building Blocks of a Cleaner Future

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Services

Residential

About 70% of buildings’ potential energy savings between the 4DS and 2DS are in the residential sector

2010 2020 2030 2040 20500.0

500,000.0

1,000,000.0

1,500,000.0

2,000,000.0

2,500,000.0

Billi

on h

ouse

hold

s Building sector challenges differ

OECD Non OECD

75% of current buildings in OECD will still be standing in 2050

Heating & Cooling: huge potential

© OECD/IEA 2012

Heating and cooling account for 46% of global energy use.Their huge potential for cutting CO2 emissions is often neglected.

Emissions must be eliminated by 2075

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A zero-carbon future looks possible but will be very challenging, even if 2050 targets are met in the 2DS.

Increase public spending on RD&D

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0%

2%

4%

6%

8%

10%

12%

0

5

10

15

20

25

1974 1978 1982 1986 1990 1994 1998 2002 2006 2010

Shar

e of

ene

rgy

RD&

D in

tota

l R&

D

USD

bill

ion

Energy efficiency Fossil fuels

Renewable energy Nuclear

Hydrogen and fuel cells Other power and storage technologies

Other cross cutting technologies/research Share of energy RD&D in total R&D

0

1

2

3

4

Braz

il

Chin

a

Indi

a

Mex

ico

Russ

ia

Sout

h A

fric

a

USD

bill

ion

2008 non-IEA country spending

10%

3%

Undiscounted

Without _x000d_price effect

With _x000d_price effect

Additional_x000d_investment

Tota

l sav

ings

Fuel

savi

ngs

- 160 - 120 - 80 - 40 0 40

Power

Industry

Transport

Residential

Commercial

Biomass

Coal

Oil

Gas

Fuel savings

Additional invest-ment

10%

3%

Undiscounted

Without _x000d_price effect

With _x000d_price effect

Additional_x000d_investment

Tota

l sav

ings

Fuel

savi

ngs

- 160 - 120 - 80 - 40 0 40

Industry

Transport

Residential

Commercial

Biomass

Coal

Oil

Gas

Total

Fuel savings

Additional invest-ment

10%

3%

Undiscounted

Without _x000d_price effect

With _x000d_price effect

Additional_x000d_investment

Tota

l sav

ings

Fuel

savi

ngs

- 160 - 120 - 80 - 40 0 40

Power

Industry

Transport

Residential

Commercial

Additional invest-ment

Clean energy investment pays off

© OECD/IEA 2012

Every additional dollar invested in clean energy can generate 3 dollars in return.

USD trillion

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