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INTERNATIONAL ENERGY AGENCY © OECD/IEA - 2009 Our Global Energy Future Looking beyond the economic crisis Ministry of Economy Warsaw 12 May 2009 Mr. Nobuo.

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Presentation on theme: "INTERNATIONAL ENERGY AGENCY © OECD/IEA - 2009 Our Global Energy Future Looking beyond the economic crisis Ministry of Economy Warsaw 12 May 2009 Mr. Nobuo."— Presentation transcript:

1 INTERNATIONAL ENERGY AGENCY © OECD/IEA Our Global Energy Future Looking beyond the economic crisis Ministry of Economy Warsaw 12 May 2009 Mr. Nobuo Tanaka Executive Director International Energy Agency

2 © OECD/IEA Weakening economy drives oil demand revisions  Two year demand contraction in 08/09 first since early-1980s  OECD hit hard, but clear signs that non-OECD is slowing now too  Latest GDP estimates suggest -1.4% for 2009, with consensus of gradual recovery in 2010  Prices bottoming-out in the face of OPEC supply cuts, and a degree of post- G20 ‘bounce’ IEA April 2008 Oil Market Report

3 © OECD/IEA Evaluating oil supply-side impacts 3 Supply also affected, on weak demand, low prices, credit crunch & investment slippage 、 2009 forecast already down by 1.7 mb/d since July 2008, excluding 2008 baseline changes Canada & Russia taking a hit in terms of investment & likely output $50/bbl oil unlikely to see extensive shut-ins of current output per se But impact of lower spend on new projects and prevailing decline rates at mature fields

4 © OECD/IEA World Oil Production by Source IEA’s World Energy Outlook 2008 Business as Usual Scenario Around 65 mb/d of gross capacity needs to be installed between 2007 & 2030 – six times the current capacity of Saudi Arabia – to meet demand growth and offset decline 20 mb/d 45 mb/d IEA World Energy Outlook 2008

5 © OECD/IEA Long-term oil-supply cost curve (with $50 per tonne of CO 2 ) A carbon price of $50 per tonne of CO 2 would increase the cost of producing non-conventional oil the most – by as much as $30 per barrel – due to its higher energy intensity

6 © OECD/IEA European Responses to January 2009 Gas Supply Disruption Interconnector UK-BE reversed BBL NL-UK reduced Yamal increase Blue Stream increase Increase Germany -Croatia Increasing Croatian production share off- take Reverse flow Czech to Slovakia Hungary increase to Serbia & Bosnia Reverse flow from Greece to Bulgaria Additional spot LNG to Greece & Turkey 7 Jan (immediate) 10 Jan. 16 Jan. 18 Jan. Timeline of Actions

7 © OECD/IEA Cumulative energy supply investment in Business as Usual, Investment of $26 trillion, or over $1 trillion/year, is needed, but the credit squeeze could delay spending, potentially setting up a supply-crunch once the economy recovers Power generation 50% Transmission & distribution 50% Mining 91% Shipping & ports 9% Exploration and development 80% Refining 16% Shipping 4% Exploration & development 61% LNG chain 8% Transmission & distribution 31% Power 52% $13.6 trillion Oil 24% $6.3 trillion Gas 21% $5.5 trillion Coal 3% $0.7 trillion Biofuels <1% $0.2 trillion

8 © OECD/IEA Energy-related CO 2 emissions Business as Usual Scenario 97% of the projected increase in emissions between 2006 & 2030 comes from non-OECD countries – three-quarters from China, India & the Middle East alone Gigatonnes International marine bunkers and aviation OECD - gas OECD - oil OECD - coal Non-OECD - gas Non-OECD - oil Non-OECD - coal

9 © OECD/IEA Energy-related CO 2 emissions 450 Policy Scenario In the 450 Policy Scenario emissions peak around 2020,and then decline by more than 1/3 to reach 26 Gt in 2030 International marine bunkers and aviation OECD - gas OECD - oil OECD - coal Non-OECD - gas Non-OECD - oil Non-OECD - coal Gigatonnes

10 © OECD/IEA Reductions in energy-related CO 2 emissions in the 450 Policy Scenario Gigatonnes OECD+ Non-OECD Reference Scenario 450 Policy Scenario CCS - 21% Renewables & biofuels - 18% Nuclear - 14% Energy efficiency - 47% CCS - 10% Renewables & biofuels - 25% Nuclear - 6% Energy efficiency - 59% 35% (5.2 Gt reduction) 65% (9.5 Gt reduction) Energy Efficiency 54% CCS 14% Nuclear 9% Renewables & biofuels 23% World total OECD and non-OECD countries must both work towards reducing CO2 emissions Energy efficiency plays a key role for both OECD and non-OECD countries To inform the international climate negotiations, the IEA will release an early excerpt of the WEO 2009 climate change analysis, to coincide with post-Kyoto negotiations this September

11 © OECD/IEA Total power generation capacity today and in 2030 by scenario In the 450 Policy Scenario, the power sector undergoes a dramatic change – with CCS, renewables and nuclear each playing a crucial role Other renewables Wind Hydro Nuclear Coal and gas with CCS Gas Coal GW 1.2 x today 1.5 x today 13.5 x today 2.1 x today 1.8 x today 12.5 x today 15% of today’s coal & gas capacity Today Reference Scenario Policy Scenario 2030

12 © OECD/IEA Roadmaps can accelerate deployment of key clean energy technologies Supply side CCS power generation Coal – IGCC Coal – USCSC Nuclear III + IV Solar – PV Solar – CSP Wind Biomass – IGCC & co- combustion Electricity networks 2nd generation biofuels Demand side Energy efficiency in buildings Energy efficient motor systems Efficient ICEs Heat pumps Plug-ins and electric vehicles Fuel cell vehicles Industrial CCS Solar heating Efficient industry processes (starting with Cement) Work has already begun on technologies shown in green, and these roadmaps will be launched later in 2009.

13 © OECD/IEA Global electricity generation (450 ppm Scenario) Renewables and nuclear power will increase 41% 18% 2% 6% 22% 20% 5% 9% ( 1% ) 21% 16% 1% 4% 18% 40% 15% 18%

14 © OECD/IEA Nuclear power needs to play a larger role in 2050 Energy Technology Perspectives (ETP) 2008 shows that significant increase of nuclear generation in both OECD countries and non-OECD countries is essential to halve the current level of energy related CO2 emission by 2050.

15 © OECD/IEA IEA 25 energy efficiency policy recommendations across 7 priority areas 1. Across sectors 1.1Measures for increasing investment in energy efficiency; 1.2National energy efficiency strategies and goals; 1.3Compliance, monitoring, enforcement and evaluation of energy efficiency measures; 1.4Energy efficiency indicators; 1.5Monitoring and reporting progress with the IEA energy efficiency recommendations themselves. 2. Buildings 2.1Building codes for new buildings; 2.2Passive Energy Houses and Zero Energy Buildings; 2.3Policy packages to promote energy efficiency in existing buildings; 2.4Building certification schemes; 2.5Energy efficiency improvements in glazed areas. 3. Appliances 3.1Mandatory energy performance requirements or labels; 3.2Low-power modes, including standby power, for electronic and networked equipment; 3.3Televisions and “set-top” boxes; 3.4Energy performance test standards and measurement protocols. 4. Lighting 4.1 Best practice lighting and the phase- out of incandescent bulbs; 4.2 Ensuring least-cost lighting in non- residential buildings and the phase-out of inefficient fuel-based lighting. 5. Transport 5.1 Fuel-efficient tyres; 5.2 Mandatory fuel efficiency standards for light-duty vehicles; 5.3 Fuel economy of heavy-duty vehicles; 5.4 Eco-driving. 6. Industry 6.1Collection of high quality energy efficiency data for industry; 6.2Energy performance of electric motors; 6.3Assistance in developing energy management capability; 6.4Policy packages to promote energy efficiency in small and medium-sized enterprises. 7. Utilities 7.1Utility end-use energy efficiency schemes USD 128 Billion in energy efficiency stimulus from IEA Countries USD 128 Billion in energy efficiency stimulus from IEA Countries

16 © OECD/IEA Impact of financial crisis on global investment in renewable energy Renewable energy investment has collapsed due to the financial crisis – which has dried up sources of project finance – and lower fossil-fuel prices …. Source: NEF, IEA analysis Geothermal Marine & small-hydro Biomass Solar Wind Billion dollars -38% … IEA G-8 paper estimates spending in 2009 will drop by 38% relative to 2008

17 © OECD/IEA adapted from VGB 2007; efficiency – HHV,net Average worldwide ~28.4% ~1110 gCO2/kWh ~36% ~880 gCO2/kWh EU average ~42% ~740 gCO2/kWh State-of-the art PC/IGCC CCS <2020 ~48% ~665 gCO2/kWh Advanced R&D but deep cuts only by Carbon Capture and Storage – energy efficiency alone is not enough gCO2/kWh

18 © OECD/IEA Carbon Capture and Storage - only 4 full-scale projects exist today G8 goal: 20 full-scale demonstrations announced by 2010

19 © OECD/IEA CO 2 Storage Prospectivity Source: Bradshaw, J. and Dance, T. (2004): “Mapping geological storage prospectivity of CO2 for the world’s sedimentary basins and regional source to sink matching,” in (E.S. Rubin, D.W. Keith and C.F. Gilboy eds.), GHGT-7, Proc. Seventh International Conference on Greenhouse Gas Control Technologies, Vancouver, B.C., Canada, September 5-9, 2004.

20 © OECD/IEA Shifting to the 450 ppm scenario requires significant investment Huge investment in power plants and energy efficiency is required to shift the world onto a 450 ppm trajectory Power plantsEnergy efficiency Billion dollars (2007) 450 Policy Scenario (additional to 550) 550 Policy Scenario

21 © OECD/IEA Total oil production in 2030 by scenario Curbing CO2 emissions would improve energy security by cutting demand for fossil fuels, but even in the 450 Policy Scenario, OPEC production increases by 12 mb/d from now to Reference Scenario Policy Scenario Policy Scenario 2030 Non-OPEC OPEC mb/d 12 mb/d 9 mb/d 16 mb/d

22 © OECD/IEA Summary For energy security need to diversify oil and gas sources must ensure continued supply-side investment to meet oil demand and address production decline in mature fields and investment throughout the gas supply chain For energy security and climate change mitigation must invest in low carbon technologies: CCS, renewables, nuclear and energy efficiency must all be embraced Economic crisis is an opportunity to place a Clean Energy New Deal at the heart of economic stimulus packages everywhere.

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