Tanaka EU seminar on security · By 20352035, comparedcompared withwith thethe NewNew...

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Energy Security in the Uncertain Energy Security in the Uncertain Energy World Energy World Implications of IEA’s WEO 2011 December 2 , 2011 EU Energy Security Seminar EU Energy Security Seminar Nobuo TANAKA Former Executive Director of the IEA Global Associate of Energy Security and Sustainability IEEJ © OECD/IEA 2011 Global Associate of Energy Security and Sustainability, IEEJ

Transcript of Tanaka EU seminar on security · By 20352035, comparedcompared withwith thethe NewNew...

Page 1: Tanaka EU seminar on security · By 20352035, comparedcompared withwith thethe NewNew PoliciesPolicies Scenario:Scenario: ¾ coal demand increases by twice Australia’s steam coal

Energy Security in the UncertainEnergy Security in the Uncertain Energy WorldEnergy WorldImplications of IEA’s WEO 2011

December 2 , 2011

EU Energy Security SeminarEU Energy Security SeminarNobuo TANAKAFormer Executive Director of the IEAGlobal Associate of Energy Security and Sustainability IEEJ

© OECD/IEA 2011 

Global Associate of Energy Security and Sustainability, IEEJ

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The context: A time of unprecedented uncertainty…u ce a y

Is Euro zone crisis becoming  global crisis ? 

Growing Asian economies will shape the global energy future –where will their policy decisions lead us ? 

More volatile Oil market? – MENA turmoil raised questions about region’s investment plans.

Natural gas markets are in the midst of a revolution – a golden era for gas? 

Climate Change Mitigation, Fossil Fuel Subsidy Phase Out by G20–do they go far enough & will they be implemented ? 

What is the implication of Fukushima Nuclear accident to the global energy landscape?

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Emerging economies continue t d i l b l d dto drive global energy demand

IEA WEO 2011Growth in primary energy demand 

4 000

4 500

Mtoe

China

IEA WEO 2011

3 000

3 500

4 000M China

India

Other developing Asia

1 500

2 000

2 500 Russia

Middle East

Rest of world

500

1 000

1 500OECD

02010 2015 2020 2025 2030 2035

Global energy demand increases by one‐third from 2010 to 2035, with China & India accounting for 50% of the growth 

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Primary Energy Demand by Region (World) Reference

7 000

8,000Mtoe

AAGR*’80 ’09

200911.2 bil. toe

World7.6 bil. toe

IEEJ Outlook 2011

6,000

7,000

Asia

’80-’09

’09-’35

World 1.8% 1.7%

↓2035

17.3 bil. toe(1.5-fold increase)

4,000

5,000 Asia 4.6% 2.6%

N. America 0.7% 0.4%

(1.5 fold increase)

Asia2009

3 9 bil toe3.9 bil. toe

3,000 N.Amerca

OECD E

3.9 bil. toe↓

20357.6 bil. toe

(1 9 f ld i )

*Average annual growth rate

1,000

2,000 OECD Europe

Non-OECD Europe L. AmericaMiddle EastAfrica

(1.9-fold increase)

0

1971

1980

1990

2000

2009

2020

2030

2035

Africa

Oceania

1 1 1 2 2 2 2 2

By 2035, primary energy demand of Asia will double from the current level, reflecting high economic growth; 3.9 billion toe(2009) → 7.6 billion toe(2035).

Non-OECD will represent 90% of incremental growth of global energy demand toward 2035. 4

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Oil demand is driven higher b i hiby soaring car ownership

IEA WEO 2011Vehicles per 1000 people in selected markets

2010800

2035

500

600

700

300

400

500

100

200

0United States European

UnionChina India Middle East

The passenger vehicle fleet doubles to 1.7 billion in 2035; most cars are sold outside the OECD by 2020, making non‐OECD policies key to global oil demand

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Changing oil import needs are set toChanging oil import needs are set tohift b t il ithift b t il itshift concerns about oil securityshift concerns about oil security

IEA WEO 2011Net imports of oil

14

mb/d

2000

IEA WEO 2011

10

12m

2010

2035

6

82035

2

4

0

China India EuropeanUnion

UnitedStates

Japan

US oil imports drop due to rising domestic output & improved transport efficiency: EU imports overtake those of the US around 2015; China becomes the largest importer around 2020

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What impact would dWhat impact would deferred eferred investment in MENA have on markets?investment in MENA have on markets?investment in MENA have on markets?  investment in MENA have on markets?  

i l h b lk f h h i il

IEA WEO 2011

MENA is set to supply the bulk of the growth in oil outputto 2035, requiring investment of over $100 billion/annum

‘Deferred Investment Case’ looks at near‐term investment falling short by one‐third

possible drivers include new spending priorities, higher perceived risks

MENA t t f ll 3 4 b/d b 2015 d 6 2 b/d b 2020MENA output falls 3.4 mb/d by 2015 and 6.2 mb/d by 2020

Consumers face a near‐term rise in oil prices to $150/barrel

MENA earns more initially, but then less as market share is lost

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d f i d i il l di id f i d i il l di iPetroleum Supply Security as Energy Security of the 20 C

Need for cooperation during oil supply disruptionsNeed for cooperation during oil supply disruptions

IEA stockholding cover of global oil demandIEA stockholding cover of global oil demand

35 

40 

50%

60%

20

25 

30 

30%

40%

l dem

and cover

rld oil d

emand

10 

15 

20 

20%

30%

days of world oi

% sh

are of w

or

0%

10%

IEA 90 days of stockholding, share of world demand with Chinawith Indiawith ASEAN

Growing share of non‐OECD oil demand results in declining global demand cover from IEA oil stocks

Share of non‐OECD  in global oil demand

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Natural gas & renewables become i i l i t tincreasingly important

IEA WEO 2011World primary energy demand

Additional 5 000

toe

IEA WEO 2011

to 2035

20104 000

Mt

2 000

3 000

1 000

0Oil Coal Gas Renewables Nuclear

Renewables & natural gas collectively meet almost two‐thirds of incremental energy demand in 2010‐2035

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Golden prospects for natural gasGolden prospects for natural gasGolden prospects for natural gasGolden prospects for natural gasIEA WEO 2011

Largest natural gas producers in 2035

U it d St t

Russia Conventional

IEA WEO 2011

Iran

China

United States Unconventional

Algeria

Canada

Qatar

Norway

India

Australia

g

0 200 400 600 800 1 000

Norway

bcm

Unconventional natural gas supplies 40% of the 1.7 tcm increase in global supply,but best practices are essential to successfully address environmental challenges

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Coal won the energy race in the Coal won the energy race in the fi t d d f th 21 t tfi t d d f th 21 t tfirst decade of the 21st centuryfirst decade of the 21st century

IEA WEO 2011Growth in global energy demand, 2000‐2010

1 600

toe

Nuclear

1 000

1 200

1 400Mt

Renewables

600

800

1 000

Oil

200

400 Natural gas

0

CoalTotal non‐coal

Coal accounted for nearly half of the increase in global energy use over the past decade,with the bulk of the growth coming from the power sector in emerging economies 

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Power investment focuses on l b t h l ilow‐carbon technologies

IEA WEO 2011Share of new power generation and investment, 2011‐2035

40%Generation

25%

30%

35% Investment

15%

20%

25%

5%

10%

15%

0%Coal Gas Nuclear Hydro Wind Solar PV

Renewables are often capital‐intensive, representing 60% of investment for 30% of additional generation, but bring environmental benefits & have minimal fuel costs

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The overall value of subsidiesThe overall value of subsidiest bl i t t it bl i t t ito renewables is set to riseto renewables is set to rise

IEA WEO 2011

Biofuels250

2010)

IEA WEO 2011

Electricity200

on dollars (2

100

150

Billio

50

0

2007 2008 2009 2010 2015 2020 2025 2030 2035

Renewable subsidies of $66 billion in 2010 (compared with $409 billion for fossil fuels), need to climb to $250 billion in 2035 as rising deployment outweighs improved competitiveness

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Russia remains a cornerstone Russia remains a cornerstone f th l b lf th l b lof the global energy economyof the global energy economy

IEA WEO 2011Russian revenue from fossil fuel exports

2010$255 billion

2035$420 billion

Other

21% EuropeanUnion

17%

ChinaEuropeanUnionOther

China2%

Other

61%16%

48%20%

OtherEurope

UnionOtherEurope

15%Europe

An increasing share of Russian exports go eastwards to Asia,providing Russia with diversity of markets and revenues

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Sustainability Constraint IEA WEO 2010

IEA IEA 450 450 Scenario: Scenario: Abatement by technologyAbatement by technologyWorld energy‐related CO2 emission savings by technology in the gy g y gy

450 Scenario relative to the New Policies Scenario

45

Gt

Share of cumulative abatement 42 6 GtCurrent Policies

35

40Efficiency 50%Renewables 18%

Share of cumulative abatement between 2010-2035

42.6 Gt

35 4 Gt

Current Policies Scenario

New Policies Scenario

7.1 Gt

30

35Biofuels 4%Nuclear 9%CCS 20%

35.4 Gt

13.7 Gt

20

25

21.7 Gt450 Scenario

In moving from the New Policies Scenario to the 450 Scenario more expensive

2008 2015 2020 2025 2030 2035

In moving from the New Policies Scenario to the 450 Scenario, more expensive abatement options such as CCS play a growing role 

15

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The door to 2The door to 2°°C is closing,C is closing,but will we be “lockedbut will we be “locked‐‐in” ?in” ?but will we be  lockedbut will we be  locked‐‐in  ?in  ?

45) IEA WEO 2011

35

40

456°C trajectory

ggaton

nes IEA WEO 2011

25

30

35

2°C trajectory

mission

s (gig

15

20

5

Delay until 2017Delay until 2015CO

2em

5

10 Emissions from existinginfrastructure 

02010 2020 2025 2030 20352015

Without further action, by 2017 all CO2 emissions permitted in the 450 Scenariowill be “locked‐in” by existing power plants, factories, buildings, etc

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Page 17: Tanaka EU seminar on security · By 20352035, comparedcompared withwith thethe NewNew PoliciesPolicies Scenario:Scenario: ¾ coal demand increases by twice Australia’s steam coal

Second thoughts on nuclear would Second thoughts on nuclear would have farhave far reaching consequencesreaching consequences IEA WEO 2011have farhave far‐‐reaching consequencesreaching consequences

“Low Nuclear Case” examines impact of nuclear component f f l b i i h lf

IEA WEO 2011

of future energy supply being cut in half 

Gives a boost to renewables, but increases import bills by $90B , p y $pa, reduces diversity & makes it harder to combat climate change

By 2035 compared with the New Policies Scenario:By 2035, compared with the New Policies Scenario:coal demand increases by twice Australia’s steam coal exports

natural gas demand increases by two thirds Russia’s natural gas net exportsnatural gas demand increases by two‐thirds Russia’s natural gas net exports

Renewables power increases by 550TWh = 5 times of RE in Germany

i i i bpower‐ sector CO2 emissions increase by 6.2% or 0.9 Gton.

Biggest implications for countries with limited energy resources that planned to rely on nuclear power

17

Page 18: Tanaka EU seminar on security · By 20352035, comparedcompared withwith thethe NewNew PoliciesPolicies Scenario:Scenario: ¾ coal demand increases by twice Australia’s steam coal

Low Nuclear 450 CaseLow Nuclear 450 CaseLow Nuclear 450 CaseLow Nuclear 450 Case

Fi 12 7 W ld l d CO i i b i h L

IEA WEO 2011

Figure 12.7 World energy-related CO2 emissions abatement in the LowNuclear 450 Case relative to the New Policies Scenario

38Gt

34

36NewPolicies Scenario

G

2020 2035

Efficiency 72% 42%

Abatement

28

30

32 Renewables

Biofuels

CCS

21%

2%

4%

29%

4%

25%

24

26

Low Nuclear 450 Case

Total (Gt CO2) 2.4 15.0

20

22

2010 2015 2020 2025 2030 2035

the cost of achieving the same cumulative emissions increases by some $1.5 trillion in real

2010 dollars, compared with the 450 Scenario (or 10%) over the period 2011 to 2035 18

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Low Nuclear Case: implications for  Low Nuclear Case: implications for  di idi iFigure 12.5 Global primary coal and gas demand and annual spending

i i h L N l C

spending on energy imports spending on energy imports  IEA WEO 2011

on imports in the Low Nuclear Case

750

rs(2010) 2009

2035:

5 000

Mtoe

450

600

Billio

ndo

llar

New PoliciesScenario

2035:Low Nuclear

3 000

4 000

300

Low NuclearCase

2 000

S di l S di0

150

0

1 000

C l G Spending on coalimports

Spending on gasimports

Coaldemand

Gasdemand

Note: Calculated as the value of net imports at prevailing average international prices.

In the Low Nuclear Case , global gas import bill rises by $67 billion than New Policies Scenario in 2035 . Japan shares more than 20% of this rise ($14billion) . 

19

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l di i ? lGas Glut disappearing?  Nuclear Outages See Japan’s Power Sector Turn to Thermalp

25

TWh Japan: Nuclear Power Generation Scenarios

500

k b/d Japan: Forecast Incremental Oil Demand For Power vs Normal

10

15

20

25

Shortfall to be filled by oil and gas 300

400

500

0

5

10

100

200

Apr 11 Aug 11 Dec 11 Apr 12 Aug 12 Dec 12No nuclear restart Some nuclear restartNormal nuclear power

-Sep 11 Feb 12 Jul 12 Dec 12

Fuel Oil Crude Oil

“Some nuclear restart” case suggests additional annual 230 kb/d of oil and 10 bcm of LNG demand in 2011 and an extra 270 kb/d and 18 bcm in 2012 versus an outlook of normal nuclear generation.  f g

Under “No nuclear restart” case, requirements for additional oil and gas would stand at 460 kb/d and 30 bcm respectively.    

20

Page 21: Tanaka EU seminar on security · By 20352035, comparedcompared withwith thethe NewNew PoliciesPolicies Scenario:Scenario: ¾ coal demand increases by twice Australia’s steam coal

ll b d d d l dll b d d d l dGas will be needed to deliver CO2 reductionsGas will be needed to deliver CO2 reductions

600

700twh

500

600others

Renewables

300

400 nuclear

Gas

100

200 Coal

0

100

Current Policy 2022IEA estimate

y

German electricity mix with 10% demand reduction, no nuclear, 35% renewables and CO2 at the target level  21

Page 22: Tanaka EU seminar on security · By 20352035, comparedcompared withwith thethe NewNew PoliciesPolicies Scenario:Scenario: ¾ coal demand increases by twice Australia’s steam coal

Power grid in EuropePower grid in EuropePower grid in EuropePower grid in Europeノルウェー

オランダ3.6 GW最大発電容量

29 8GWNetherlands

Norway

スウェーデン

イギリス

ベルギ2 GW

2.4 GW

2.4 GW

3GW

3.6 GW

3.9 GW

最大発電容量

19.8GW

29.8GW

最大発電容量

75.5GW

UK

SwedenBelgium

フランス ドイツ

ベルギー2 GW

2GW

2.7 GW

0.6 GW

0.6 GW

最大発電容量

32.6GW最大発電容量

15.8GW

France Germany

Belgium

:Generation capacityスペイン

0.5 GW

1.3 GW

3.2 GW3.2 GW

スイス

最大発電容量

110.9GW最大発電容量

129.1GW3.5GW

1.5 GW

y

Spain S i :maximum powerflowス イン 1.3 GW

1 GW1.8 GW

1.1 GW1.2 GW

0.5 GW

2.2 GW

2 GW

スイス最大発電容量

93.5GW最大発電容量

17.9GW

1.5 GW

2.6 GW

Spain Swiss

オーストリア4.2 GW0.3 GW

0.2 GW

イタリア最大発電容量

93.1GW最大発電容量

18.9GW

Italy Austria

出典:IEA 「Electricity Information 2010」Indicative value for Net Transfer Capacities (NTC) in Continental Europe

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Harnessing Variable Renewablesg

23

Page 24: Tanaka EU seminar on security · By 20352035, comparedcompared withwith thethe NewNew PoliciesPolicies Scenario:Scenario: ¾ coal demand increases by twice Australia’s steam coal

Power grid in Japang pHokkaido

Hydro Gas CoalGenerating company

Tohoku

Oil Nuclear OtherPower utility company

In‐house generation

HokurikuKansaiChugoku

60 hz <-------

Tokyo

KyushuShikoku29GW Shikoku

ChubuOkinawa --- 50 hz

Source: 資源エネルギー庁、電気事業連合会、電力系統利用協議会、 IEA算定

Chubu 40GW

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Page 25: Tanaka EU seminar on security · By 20352035, comparedcompared withwith thethe NewNew PoliciesPolicies Scenario:Scenario: ¾ coal demand increases by twice Australia’s steam coal

Energy mix as Energy Security MixEnergy mix as Energy Security Mixgy gy ygy gy y

96% 30% 0%ASEAN

6%

51%

%

8%

%

11%

EU 27

IEA

lf ffi i

26% 10% 14%

0% 20% 40% 60% 80% 100% 120% 140%

EU 27

Self sufficiency =inland production / tpes (2010 estimates)

Nuclear is an important option for countries with limited indigenous energy resources (low energy sustainability). 25

Page 26: Tanaka EU seminar on security · By 20352035, comparedcompared withwith thethe NewNew PoliciesPolicies Scenario:Scenario: ¾ coal demand increases by twice Australia’s steam coal

Low Nuclear Case: implications Low Nuclear Case: implications foforrititenergy security energy security 

Self sufficiency rates in selected regionsSelf sufficiency rates in selected regions

100% Nuclear

60%

80% Fossil fuel

Renewablesx

20%

40% NPS

LNC

0%2009 2035 2009 2035 2009 2035 2009 2035 2009 2035

L l ld f h d J d K ’ lf ffi i i if i

Japan United States EU Korea China

Less nuclear would further reduce Japan and Korea’s  energy self sufficiency, intensifying concerns about energy security 

26

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Connecting MENA and Europe“Energy for Peace"

Source: DESRETEC Foundation27

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Existing and proposed ASEAN Power Grid InterconnectionsInterconnections

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Page 29: Tanaka EU seminar on security · By 20352035, comparedcompared withwith thethe NewNew PoliciesPolicies Scenario:Scenario: ¾ coal demand increases by twice Australia’s steam coal

Demand Leveling (Ti Z & Cli t Diff )

Vl di t k

Demand Leveling

(Time Zone & Climate Difference)

Stable Supply (through regional interdependence)

Fair Electricity Price

Gobi DesertGobi DesertVladivostokVladivostok

BeijingBeijing SeoulSeoul Phase 3

BhutanBhutanShanghaiShanghaiDelhiDelhi

ChengduChengdu

Beijingj g Seoul

AsiaTokyoTokyo

TaipeiTaipei

M il

DaccaDacca

s aSuper Grid

BangkokBangkok

Hong KongHong Kong

MumbaiMumbai ManilaManilap

BangkokBangkok

SingaporeSingaporeTotal 36,000kmKuala LumpurKuala Lumpur

Presentation by Mr. Masayoshi SON29

Page 30: Tanaka EU seminar on security · By 20352035, comparedcompared withwith thethe NewNew PoliciesPolicies Scenario:Scenario: ¾ coal demand increases by twice Australia’s steam coal

One cannot enhance energy security by risking someone else‘s

EU Model of Collective Energy Security for growing AsiaFocus on “Comprehensive Energy Security “

Enlarge IEA’s oil emergency preparedness Develop Regional Power Grid interconnection & Gas Pipelines 

Adopt a green growth paradigm by Efficiency, Renewables, Nuclear, EVs, Smart Grids etc.Develop unconventional gas resources and infrastructureFor coal to remain the backbone of power supply, CCS & 

hi h   ffi i   l     d d higher efficiency plants are needed Energy access can be improved via decentralised solutions

’ l f k h h h l l dJapan’s role after Fukushima: share the lessons learned.

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AnnexAnnex

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Energy is at the heart ofEnergy is at the heart ofthe climate challengethe climate challengethe climate challengethe climate challenge

IEA WEO 2011Cumulative energy‐related CO2 emissions in selected regions

500

onne

s

2010‐2035

1900 2009

300

400

Gigato 1900‐2009

200

300

100

EuropeanUnion

0

United States China India Japan

By 2035, cumulative CO2 emissions from today exceed three‐quarters of the total since 1900, and China’s per‐capita emissions match the OECD average

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Low Nuclear CaseLow Nuclear CaseIEA WEO 2011

Table 12.3 Key projections for nuclear power in the New Policies Scenariod h L N l C

IEA WEO 2011

and the Low Nuclear Case

Low Nuclear Case New Policies Scenario

OECD Non OECD World OECD Non OECD WorldOECD Non‐OECD World OECD Non‐OECD World

Gross installed capacity (GW)in 2010 326 68 393 326 68 393

in 2035 171 164 335 380 252 633

Share in electricity generationin 2010 21% 4% 13% 21% 4% 13%in 2010 21% 4% 13% 21% 4% 13%

in 2035 9% 5% 7% 21% 8% 13%

Gross capacity under construction (GW)* 14 54 69 14 54 69G oss capac ty u de co st uct o (G ) 5 69 5 69

New additions in 2011‐2035 (GW)** 6 84 91 111 167 277

Retirements in 2011‐2035 (GW) 176 42 218 71 36 107

*At the start of 2011. **Includes new plants and uprates, but excludes capacity currently under construction.

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