World Energy Outlook - Parliamentary Days 2014
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© OECD/IEA 2014 World Energy Outlook Dr. Fatih Birol IEA Chief Economist OECD Parliamentary Days Paris, 5 February 2014
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A new global energy landscape is emerging, resetting long-held expectations for our energy future. Bringing together the latest data and policy developments, the World Energy Outlook 2013 presents up to date, projections of energy trends through to 2035, fuel by fuel, sector by sector, region by region and scenario by scenario. Oil is analysed in-depth: resources, production, demand, refining and international trade. Energy efficiency is treated in much the same way as conventional fuels: Its prospects and contribution are presented in a dedicated chapter. The report examines the outlook for Brazil's energy sector and provides updates on three key areas of critical importance to energy and climate trends: (i) achieving universal energy access; (ii) developments in subsidies to fossil fuels and renewables; and (iii) the impact of energy use on climate change. Oil supply, demand and trade: a fresh look at the economics and decline rates of different types of oil production around the world, the prospects for light tight oil inside and outside North America, along with new analysis of oil products and the refining sector. By Fatih Birol, Chief Economist, International Energy Agency
Transcript of World Energy Outlook - Parliamentary Days 2014
© OECD/IEA 2014
World Energy Outlook Dr. Fatih Birol
IEA Chief EconomistOECD Parliamentary Days
Paris, 5 February 2014
© OECD/IEA 2014
The world energy scene today
Some long-held tenets of the energy sector are being rewritten Countries are switching roles: importers are becoming exporters… … and exporters are among the major sources of growing demand New supply options reshape ideas about distribution of resources
But long-term solutions to global challenges remain scarce Renewed focus on energy efficiency, but CO2 emissions continue to rise
Fossil-fuel subsidies increased to $544 billion in 2012 1.3 billion people still lack electricity – in Africa and South Asia
Energy prices add to the pressure on policymakers Sustained period of high oil prices without parallel in market history Large, persistent regional price differences for gas & electricity
© OECD/IEA 2014
The engine of energy demand growth moves to South Asia
Primary energy demand, 2035 (Mtoe)
China is the main driver of increasing energy demand in the current decade, but India takes over in the 2020s as the principal source of growth
4%
65%
10%
8%
8%5%
OECD
Non-OECDAsia
MiddleEast
Africa
Latin America
Eurasia
Share of global growth2012-2035
480
Brazil 1 540
India
1 000 SoutheastAsia
4 060China
1 030
Africa
2 240UnitedStates 440
Japan1 710
Europe1 370
Eurasia
1 050MiddleEast
© OECD/IEA 2014
25 years ago the share of fossil fuels in the global mix was 82%;
it is the same today& the strong rise of renewables in the future only reduces this to around 75% in 2035
A mix that is slow to change
Growth in total primary energy demand
500 1 000 1 500 2 000 2 500 3 000
Nuclear
Oil
Renewables
Coal
Gas
Mtoe
1987-2011
2011-2035
© OECD/IEA 2014
Non-OECDOECD
Emissions off track in the run-up to the 2015 climate summit in France
Cumulative energy-related CO2 emissions
Non-OECD countries account for a rising share of emissions, although 2035 per capita levels are only half of OECD
200
400
600
800Gt
1900-1929
1930-1959
1960-1989
1990-2012
2013-2035
OECD
Non-OECD
Total emissions1900-2035
51%
49%
© OECD/IEA 2014
300
600
900
1 200
1 500
1 800
2 100TWh
India
LatinAmerica
Africa
ASEAN
Hydro
Other renewables
Wind
Solar PV
China
Hydro
Other renewables
Wind
Solar PV
Renewables power up around the world
Growth in electricity generation from renewable sources, 2011-2035
EuropeanUnion
UnitedStates
Japan
Europe, Japan & United States
China India, Latin America, ASEAN & Africa
Hydro
Otherrenewables
Wind
Solar PV
The expansion of non-hydro renewables depends on subsidies that more than double to 2035; additions of wind & solar have implications for power market design & costsadditions of wind & solar have implications for power market design & costs
© OECD/IEA 2014
Renewables subsidies increased to $101 billion in 2012, more than half of which are in the European Union; renewables subsidies are set to more than double by 2035.
$101 billion
Renewables subsidies increased to $101 billion in 2012,
Renewable-energy subsidies by region in 2012
Increasing subsidies for increasing renewables
European Union
United States
China
India
Rest of the world
57%
21%
7%
13%2%
renewables subsidies are set to more than double by 2035
© OECD/IEA 2014
3×
4×
5×
2003
Regional differences in natural gas prices narrow from today’s very high levels but remain large through to 2035; electricity price differentials also persistelectricity price differentials also persist
20132035
Reductionfrom 2013
Who has the energy to compete?
Ratio of industrial energy prices relative to the United States
United States
2×
Japan EuropeanUnion
China
ElectricityNatural gas
2003
Japan EuropeanUnion
China
© OECD/IEA 2014
Energy-intensive industries need to count their costs
Share of energy in total production costs for selected industries
Energy-intensive sectors worldwide account for around one-fifth of industrial value added, one-quarter of industrial employment and 70% of industrial energy use.
10% 20% 30% 40% 50% 60% 70% 80% 90%
Glass
Pulp & paper
Iron & steel
Cement
Aluminium
Fertilisers
Petrochemicals
© OECD/IEA 2014
An energy boost to the economy?
Share of global export market for energy-intensive goods
The US, together with key emerging economies, increases its export market share for energy-intensive goods, while the EU and Japan see a sharp decline
Today 36% 10% 7% 7% 3% 2%
European Union
United StatesChina IndiaMiddle East
Japan
-3%
-10%
+3%+2% +2%+1%
while the EU & Japan see a sharp decline
© OECD/IEA 2014
LNG from the United Statescan shake up gas markets
Indicative economics of LNG export from the US Gulf Coast (at current prices)
New LNG supplies accelerate movement towards a more interconnected global market, but high costs of transport between regions mean no single global gas price
Average import price
Liquefaction, shipping& regasification
United States price3
6
9
12
15
18
To Asia
$/MBtu
3
6
9
12
To Europe
$/MBtu
but high costs of transport between regions mean no single global gas price
© OECD/IEA 2014
Orientation for a fast-changing energy world
China, then India, drive the growing dominance of Asiain global energy demand
Technology is opening up new oil resources, but the Middle East remains central to the longer-term outlook
Regional price gaps & concerns over competitiveness are hereto stay, but there are ways to react – with efficiency first in line
The shift in the balance of global energy trade towards Asiawill have profound implications for energy security cooperation
