World Energy Outlook 2009 - International Energy Forum · Fossil fuels account for 77% of the increase in world primary energy demand in 2007-2030, with oil demand rising from 85

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World Energy Outlook 2009

Dr. Fatih BirolIEA Chief EconomistRiyadh, 12 January 2010

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Change in primary energy demandin the Reference Scenario, 2007-2030

Fossil fuels account for 77% of the increase in world primary energy demand in 2007-2030, with oil demand rising from 85 mb/d in 2008 to 88 mb/d in 2015 & 105 mb/d in 2030

- 500 0 500 1 000 1 500 2 000

Other renewables

Biomass

Hydro

Nuclear

Gas

Oil

Coal

Mtoe

OECD

Non-OECD

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Electricity generation from combined water and power plants in Middle East and North Africa

By 2030 almost one-third of electricity production and capacity additions in theMiddle East will come from combined water and power plants.

1%

99%

NAFR: 226TWh

Combined water and power Other

Share of total electricity generation

1%

99% 2007226 TWh

6%

94% 2030431 TWh

North Africa Middle East

10%

90% 2007715 TWh

32%

68% 20301 656 TWh

0102030405060708090

2007 2030 2007 2030

North Africa

MiddleEast

GW Oil

Gas

Installed capacity

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Worldwide upstream oil & gas capital expenditures

Global upstream spending (excluding acquisitions) is budgeted to fall by over $90 billion, or 19%, in 2009 – the first fall in a decade

0

100

200

300

400

500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

Billi

on d

olla

rs

* Budgeted spending

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Oil productionin the Reference Scenario

Sustained investment is needed mainly to combat the decline in output at existing fields, which will drop by almost two-thirds by 2030

NGLs

Unconventional oil

Crude oil – fields yet to be developedor foundCrude oil – currently producing fields

0

20

40

60

80

100

120

2000 2008 2030

mb/

d

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Impact of decline on world natural gas productionin the Reference Scenario

Additional capacity of around 2 700 bcm, or 4 times current Russian capacity, is needed by 2030 – half to offset decline at existing fields & half to meet the increase in demand

0

1

2

3

4

5

2007 2015 2020 2025 2030

tcm Fields yet to be developed or found

Currently producing fields

0%

20%

40%

60%

80%

100%

Share from fields not yet producing(right axis)

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US natural gas supply in the Reference Scenario

Mainly as a result of shale gas production growth, US gas output grows gradually through to 2030, outstripping US demand & squeezing US net imports

0

100

200

300

400

500

600

700

1990 1995 2000 2005 2008 2015 2020 2025 2030

bcm Net imports

Conventional

Unconventional

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Natural gas transportation capacity

A glut of gas is developing – reaching 200 bcm by 2015 – due to weaker than expected demand & plentiful US unconventional supply, with far-reaching implications for gas pricing

0

100

200

300

400

500

600

700

800

2007 2015

bcm Unutilised LNG liquefaction

& pipeline capacity

LNG trade

Pipeline trade

73%

% Capacity utilisation rate

88%

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Indicative costs for potential new sources of gas delivered to Europe, 2020 ($/MBtu)

Although indigenous resources are limited & output is declining, Europe isgeographically well placed to secure gas supplies from a variety of external sources

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Number of people without access to electricityin the Reference Scenario (millions)

$35 billion per year more investment than in the Reference Scenario would be needed to 2030 – equivalent to just 5% of global power-sector investment – to ensure universal access

World population withoutaccess to electricity

2008: 1.5 billion people2030: 1.3 billion people

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The policy mechanismsin the 450 Scenario

A combination of policy mechanisms, which best reflects nations’ varied circumstances & negotiating positions

We differentiate on the basis of three country groupings> OECD+: OECD & other non-OECD EU countries> Other Major Economies (OME): Brazil, China, Middle East, Russia & South Africa> Other Countries (OC): all other countries, including India

A graduated approach> Up to 2020, only OECD+ have national emissions caps> After 2020, Other Major Economies are also assumed to adopt emissions caps> Through to 2030, Other Countries continue to focus on national measures

Emissions peaking by 2020 will require> A CO2 price of $50 per tonne for power generation & industry in OECD+> Investment needs in non-OECD countries of $200 billion in 2020, supported by

OECD+ through carbon markets & co-financing

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World primary energy demand by fuel in the 450 Scenario

In the 450 Scenario, demand for fossil fuels peaks by 2020, and by 2030 zero-carbon fuels make up a third of the world's primary sources of energy demand

0

2 000

4 000

6 000

8 000

10 000

12 000

1990 2000 2010 2020 2030

Mto

e

0%

6%

12%

18%

24%

30%

36% Fossil fuels

Zero-carbon fuelsShare of zero- carbon fuels (right axis)

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EU primary natural gas imports by scenario

EU gas imports continue to grow in the 450 Scenario, but plateau by the mid-2020s…

+65% (204 bcm)

+37% (116 bcm)

0

100

200

300

400

500

600

2007 2015 2020 2025 2030

Bcm Reference Scenario

450 Scenario

Chinese gas imports soar to 90 bcm in 2030.

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World abatement of energy-related CO2 emissionsin the 450 Scenario

An additional $10.5 trillion of investment is needed in total in the 450 Scenario, with measures to boost energy efficiency accounting for most of the abatement through to 2030

26

28

30

32

34

36

38

40

42

2007 2010 2015 2020 2025 2030

Gt

450 Scenario

Reference Scenario

OECD+

OME

OCCCS - 10%

Nuclear - 10%

Renewables & biofuels - 23%

Efficiency - 57%

World, abatement by technology, 2030

3.8 Gt

13.8 Gt

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Abatement in the 450 Scenario by key emitters, 2020

China, the United States, the European Union, India, Russia & Japan account for almost three-quarters of the 3.8 Gt reduction in the 450 Scenario

0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

China UnitedStates

EuropeanUnion

India Russia Japan

Gt

International carbon markets

Cap & trade in power& industry sectorsInternational sectoral standardsin transport & industryNational policies

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Incremental world electricity productionin the Reference and 450 Scenarios, 2007-2030

Renewables, nuclear and plants fitted with CCS account for around 60% of electricity generation globally in 2030 in the 450 Scenario, up from less than one-third today

-1 000

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

Coal Gas Oil Nuclear Hydro Wind Biomass Solar Otherrenewables

TWh Reference Scenario

450 Scenario

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World passenger vehicle sales & average new vehicle CO2 intensity in the 450 Scenario

Improvements to the internal combustion engine & the uptake of next-generation vehicles & biofuels lead to a 56% reduction in new-car emission intensity by 2030

0%

20%

40%

60%

80%

100%

2007 2020 2030

Electric vehiclesPlug-in hybridsHybrid vehiclesICE vehicles

Shar

e of

sal

es

205

125

90

0

50

100

150

200

250

Gra

mm

es p

er k

ilom

etre

CO2 intensityof new vehicles(right axis)

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World abatement of energy-related CO2 emissionsin the 450 Scenario

Current pledges point in the right direction but further efforts would be needed to reach the 450 Scenario

26

28

30

32

34

36

38

40

42

2007 2010 2015 2020 2025 2030

Gt

450 Scenario

Reference Scenario

3.8 Gt

13.8 Gt

27

29

31

33

35

2007 2010 2015 2020

Gt

Reference Scenario

450 Scenario

Current Pledges

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Summary & conclusions

The financial crisis has halted the rise in global energy use, but its long-term upward path will resume soon on current policies

Oil investment has fallen sharply, posing questions on medium term supply

A sizable glut of natural gas is looming

A 450 path requires massive investments but would bring substantial benefits

Natural gas can play a key role as a bridge to a cleaner energy future

The challenge is enormous – but it can and must be met