IEA - World Energy Outlook 2010

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World Energy Outlook 2010World Energy Outlook 2010

© OECD/IEA 2010

Presentation to the pressLondon, 9 November 2010



The context:The context: A time of unprecedented A time of unprecedented uncertainty uncertainty

The worst of the global economic crisis appears to be over –but is the recovery sustainable?

Oil demand & supply are becoming less sensitive to price – what does this mean for future price movements?

© OECD/IEA 2010

–will it herald a golden era for gas?

Copenhagen Accord & G-20 subsidy reforms are key advances –

but do they go far enough & will they be fully implemented?

China & other emerging economies will shape the global energyfuture – where will their policy decisions lead us?



International oil price assumptionsInternational oil price assumptions

80

100

120

140

r s p e r b a r r e l ( 2

0 0 9 )

Current Policies Scenario

New Policies Scenario

450 Scenario

© OECD/IEA 2010

The age of cheap oil is over, though policy action could bring lower international prices

than would otherwise be the case

0

20

40

60

1980 1990 2000 2010 2020 2030 2035

D o l l



Recent policy commitments,Recent policy commitments,if implemented, would make a differenceif implemented, would make a difference

World primary energy demand by region in the New Policies Scenario

12 000

14 000

16 000

18 000

M

t o e

Rest of world

China

OECD

WEO-2009:

© OECD/IEA 2010

Global energy use grows by 36%, with non-OECD countries – led by China,where demand surges by 75% – accounting for almost all of the increase

0

2 000

4 000

6 000

8 000

10 000

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035



Emerging economies dominateEmerging economies dominatethe growth in demand for all fuelsthe growth in demand for all fuels

Incremental primary energy demand in the New Policies Scenario, 2008-2035

Gas

Oil

Coal

OECD

China

Rest of world

© OECD/IEA 2010

Demand for all types of energy increases in non-OECD countries,while demand for coal & oil declines in the OECD

- 600 - 300 0 300 600 900 1 200 1 500

Other renewables

Hydro

Nuclear

Mtoe



FossilFossil--fuel subsidies are distortingfuel subsidies are distortingprice signalsprice signals

Economic value of fossil-fuel consumption subsidies by country, 2009

40

50

60

70

B i l l i o

n d o l l a r s Electricity

(generated from

fossil fuels)

Gas

Oil

Coal

© OECD/IEA 2010

Fossil-fuel consumption subsidies amounted to $312 billion in 2009, down from$558 billion in 2008, with the bulk of the fall due to lower international prices

I r a n

S a u d i A r a b i a

R u s s i a

I n d i a

C h i n a

E g y p t

V e n e z u e l a

I n d o n e s i a

U A E

U z b e k i s t a n

I r a q

K u w a i t

P a k i s t a n

A r g e n t i n a

U k r a i n e

A l g e r i a

M a l a y s i a

T h a i l a n d

B a n g l a d e s h

M e x i c o

T u r k m e n i s t a n

S o u t h A f r i c a

Q a t a r

K a z a k h s t a n

L i b y a

0

10

20



Booming demand for mobility in theBooming demand for mobility in theemerging economies drives up oil useemerging economies drives up oil use

1 000

1 200

1 400

1 600

M i l l i

o n

China

Other non-OECD

United States

Other OECD

Passenger vehicles in the New Policies Scenario

© OECD/IEA 2010

The global car fleet will continue to surge as more & more people in China & other emerging economies buy a car, overshadowing modest growth in the OECD

0

200

400

600

800

1980 1990 2000 2008 2020 2035



Oil production becomes less crudeOil production becomes less crude

World oil production by type in the New Policies Scenario

80

100

m b / d

Crude oil - fields yet

Unconventional oil

Natural gas liquids

© OECD/IEA 2010

Global oil production reaches 96 mb/d in 2035 on the back of rising output of natural gas liquids & unconventional oil, as crude oil production plateaus

0

20

40

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Crude oil – currently

producing fields

Total crude oil



More oil from fewer producersMore oil from fewer producers

Incremental oil production by key country in the New Policies Scenario, 2009-2035

Venezuela

Canada

Kazakhstan

Brazil

IraqSaudi Arabia OPEC

Non-OPEC

© OECD/IEA 2010

Production rises most in Saudi Arabia & Iraq, helping to push OPEC’s market share from41% today to 52% by 2035, a level last seen prior to the first oil shock of 1973-1974

0 1 2 3 4 5 6

Algeria

Libya

Nigeria

Qatar

Iran

KuwaitUAE

mb/d



A golden age for gas?A golden age for gas?

Gas is set to play a key role in meeting the world’s energy needs

> demand rises by 44%, led by China & Middle East

Unconventional gas accounts for 35% of the increase in globalsupply to 2035, with new non-US producers emerging

© OECD/IEA 2010

Gas glut will peak soon, but may dissipate only very slowly

The glut will keep pressure on gas exporters to move away from

oil-price indexation, notably in Europe

Lower prices could lead to stronger demand for gas, backing outrenewables & coal in power generation



Coal remains the backbone of globalCoal remains the backbone of globalelectricity generationelectricity generation

8 000

10 000

12 000

T W h China

India

Other non-OECD

Coal-fired electricity generation by region in the New Policies Scenario

© OECD/IEA 2010

A drop in coal-fired generation in the OECD is offset by big increases elsewhere, especially

China, where 600 GW of new capacity exceeds the current capacity of the US, EU & Japan

0

2 000

4 000

6 000

1990 2000 2010 2020 2030 2035



Renewables enter the mainstream….Renewables enter the mainstream….

Renewable primary energy demand in the New Policies Scenario

India

Africa

OECD Pacific 2008

2035

© OECD/IEA 2010

The use of renewable energy triples between 2008 & 2035, driven by the power sector where their share in electricity supply rises from 19% in 2008 to 32% in 2035

0 100 200 300 400 500

European Union

United States

China

Brazil

Mtoe



….but only if there is enough….but only if there is enoughgovernment supportgovernment support

Annual global support for renewables in the New Policies Scenario

n d o l l a r s ( 2 0 0 9

)

Biofuels

Renewables-based electricity

150

180

210

© OECD/IEA 2010

Government support remains the key driver – rising from $57 billion in 2009 to $205 billionin 2035 – but higher fossil-fuel prices & declining investment costs also spur growth

B i l l i o

0

30

60

90

2007 2008 2009 2015 2020 2025 2030 2035



China becomes the market leaderChina becomes the market leaderin lowin low--carbon technologiescarbon technologies

Passenger car sales

Capacity additions

China’s share of cumulative global additions to 2035 for selected technologies

335 GW

105 GW

20%

30%

8.5 million

© OECD/IEA 2010

Given the sheer scale of China’s market, its push to expand the role of low-carbon energy technologies is poised to play a key role in driving down costs, to the benefit of all countries

0%

10%

Solar PV Wind Nuclear Electric &plug-in hybrids

vehicles



Caspian energy riches could enhanceCaspian energy riches could enhanceglobal energy securityglobal energy security

Caspian oil & gas outlook in the New Policies Scenario

4

5

6

m b

/ d

200

250

300

350

b

c m

© OECD/IEA 2010

Kazakhstan drives an increase in Caspian oil production to 5.2 mb/d by 2035,while Turkmenistan & Azerbaijan push up gas production to over 310 bcm

0

1

2

2000 2009 2020 2035

Oil net exports Inland oil consumption

0

50

100

150

2000 2009 2020 2035

Gas net exports Inland gas consumption



The 450 Scenario:The 450 Scenario:AA roadmap from 3.5roadmap from 3.5°C to 2C to 2°C C

The 450 Scenario sets out an energy pathway consistent with

limiting the increase in temperature to 2°C

Assumes vigorous implementation of Copenhagen Accordpledges to 2020 & much stronger action thereafter

© OECD/IEA 2010

:

> As many lack transparency, there is 3.9 Gt of uncertainty over the

level of abatement pledged to 2020

> As many lack ambition, the cost of achieving the 2° C goal hasincreased by $1 trillion in 2010-2030 compared with WEO-2009



32

34

3638 G t

New Policies Scenario35.4 Gt

The 450 Scenario:The 450 Scenario:How do we get there now? How do we get there now?

World energy-related CO2 emission savings by country in the 450 Scenario

China 32%

United States 18%

Share of cumulative abatement

between 2010-2035

© OECD/IEA 2010

20

22

24

26

28

2008 2015 2020 2025 2030 2035

In the 450 Scenario, China & the US together account for 50% of the cumulative emissionabatement that is needed in 2010-2035

450 Scenario

21.7 Gt

European Union 8%India 7%

Middle East 4%

Russia 4%

Rest of world 27%

13.7 Gt



Achieving the 2Achieving the 2°°C goal will require rapidC goal will require rapiddecarbonisation of global energydecarbonisation of global energy

Average annual change in CO2 intensity in the 450 scenario

4%

5%

6%

A four-fold

increase needed

© OECD/IEA 2010

Carbon intensity would have to fall at twice the rate of 1990-2008 in the period 2008-2020& almost four times faster in 2020-2035

0%

1%

2%

1990-2008 2008-2020 2020-2035



A fundamental change is neededA fundamental change is neededin power generationin power generation

Share of world electricity generation by type and scenario

Additional low-carbon generation

in the 450 Scenario

Low-carbon generation in the NPS

Fossil-fuel fired eneration60%

80%

100%

© OECD/IEA 2010

Low-carbon technologies account for over three-quarters of global power generation by 2035in the 450 Scenario, a four-fold increase on today

0%

20%

40%

2010 2015 2020 2025 2030 2035

in the 450 Scenario



… and also in transport… and also in transport

Sales of plug-in hybrid and electric vehicles in the 450 Scenario

CO2 intensity in

Electric vehicles

Plug-in hybrids

& CO2 intensity of the power sector

500

600

700

e s p e r k W h

50

60

70

M i l l i o n

© OECD/IEA 2010

Plug-in hybrids & electric vehicles reach 39% of new sales by 2035, making a big contributionto emissions abatement, thanks to a major decarbonisation of the power sector

(right axis)

0

100

200

300400

G r a m

0

10

20

3040

2010 2015 2020 2025 2030 2035



Will peak oil be a guest or theWill peak oil be a guest or the spectrespectreat the feast?at the feast?

Oil demand in the 450 Scenario

World demand in

450 Scenario

Right axis:

m b

/ d

88

92

96

100

m b

/ d

4

8

12

16

© OECD/IEA 2010

Oil demand peaks at 88 mb/d before 2020 & falls to 81 mb/d in 2035, with a plungein OECD demand more than offsetting continuing growth in non-OECD demand

-

(bunkers)Other non-OECD

India

China

OECD

2009 2015 2020 2025 2030 2035

68

72

76

80

84

-16

-12

-8

-4

0



Summary & conclusionsSummary & conclusions

Recently announced policies can make a difference, but fall wellshort of what is needed for a secure & sustainable energy future

Lack of ambition in Copenhagen has increased the cost of achieving the 2°C goal & made it less likely to happen

> Unless commitments are fully implemented by 2020, it will be all

© OECD/IEA 2010

The age of cheap oil is over, though policy action could bringlower international prices than would otherwise be the case

Renewables are entering the mainstream, but long-term

support is needed to boost their competitiveness

Getting the prices right, by phasing-out fossil-fuel subsidies,

is the single most effective measure to cut energy demand

IEA - World Energy Outlook 2010

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