CAI Asia / MoEFBetter Air Quality ConferenceAgra India, 6-8 December 2004

Planning the Energy Scenarios for Asia: How to Minimize Negative Air

Quality Implications

Lew Fulton

Office of Energy Technology and R&DInternational Energy Agency

Talk Outline

Energy use: where are we headed globally and in Asia?

A word on stationary sourcesTransportation, oil and AsiaWhat transport solutions for both

energy use and emissions? Conclusions

What is the IEA?

International Energy Agency is part of OECD

Created in 1975 in response to oil supply disruptions

26 Member countries, mainly in Europe, plus US, Canada, Japan, Korea, Aus/NZ

Secretariat and “think-tank”

www.iea.org

New IEA PublicationsNew IEA PublicationsOil Crises and Climate Challenges: Oil Crises and Climate Challenges: 30 years 30 years

of energy use in IEA countriesof energy use in IEA countries

Biofuels for TransportBiofuels for Transport: An International : An International PerspectivePerspective

World Energy Outlook 2004World Energy Outlook 2004

www.iea.org

Projected Fuel Consumption 2002-2030

0

1000

2000

3000

4000

5000

6000

7000

MTO

E

Growth,2002-2030

2002

0

500

1000

1500

2000

2500

MTO

E

Growth,2002-2030

2002

Source: IEA World Energy Outlook 2004Notes: “Asia” includes East Asia and South Asia except Japan and S. Korea. Excludes Former Soviet Union and Middle East. MTOE = thousand tonnes oil-equivalent; note difference in scaling of the Y axes.

WORLD: fossil energy use increases by 64% by 2030

ASIA: fossil energy use increases by 128% by 2030

Projected Growth in Asian Fuel Consumption, 2002-2030

0

50

100

150

200

250

300

350

400

450

500

MT

OE

2002 Growth, 2002-2030

0

200

400

600

800

1000

1200

1400

1600

MT

OE

2002 Growth, 2002-2030

Source: IEA World Energy Outlook 2004Notes: “East Asia” excludes China; MTOE = thousand tonnes oil-equivalent; note difference in scaling of the Y axes.

East Asia South Asia

0

50

100

150

200

250

300

350

400

MT

OE

2002 Growth, 2002-2030

China

Projected Growth in Fuel Consumption By Sector and Fuel, 2002-2030

Source: IEA World Energy Outlook 2004Notes: “East Asia” excludes China; MTOE = thousand tonnes oil-equivalent; note difference in scaling of the Y axes.

East Asia South AsiaChina

-100

0

100

200

300

400

500

600

700

800

900

MT

OE

Coal Oil N. Gas Other

0

50

100

150

200

250

300

350

MT

OE

Coal Oil N. Gas Other

-50

0

50

100

150

200

250

300

350

MT

OE

Coal Oil N. Gas Other

Coal Use: What Are the Implications?

Clearly a “dirty” and high CO2 fuel, but much cleaner coal use is possible Advanced technologies for coal cleaning/emissions

scrubbing can reduce all pollutants dramatically Carbon capture and storage may eventually offer near-zero

CO2 emission coalUS planning to build a large prototype zero-emission

(for all pollutants) coal plant (“Future Gen”) Will rely on coal gasification to extract hydrogen; technology

has many possible applicationsTrouble is higher costs; China and other Asian

countries are showing interest in these technologies but uptake through 2030 expected to be relatively small.

Strong emissions control regulations and incentives will be needed and could make a huge difference.

Oil Use, 1971-2030Supply to Transportation v. Other Sectors

0

1000

2000

3000

4000

5000

6000

7000

1971 1980 1990 2002 2010 2020 2030

MT

OE

Other

Transport

0

200

400

600

800

1000

1200

1400

1600

1971 1980 1990 2002 2010 2020 2030

MT

OE

Other

Transport

Source: IEA historical data and projection from World Energy Outlook 2004

World Asia

1971 2002 2030Asia Share of World Oil Demand 5% 16% 25%Transport share of Asian Oil Demand 28% 36% 47%

Decomposition of Projected Asian Energy Use by Passenger Mode, 2000-2050

(average annual pct change)

-1%

0%

1%

2%

3%

4%

5%

6%

LDVs Mini-buses

Largebuses

2-wheelers

Vehicle travel

Stock EnergyIntensity

Energy Use

Source: IEA projections for WBCSD Mobility 2030 Study, 2004

Car ownership will continue to rise, especially in the developing world

Source: IEA projections for WBCSD Mobility 2030 Study, 2004

Cars per 1000 people

0

100

200

300

400

500

600

700

800

2000 2010 2020 2030 2040 2050

OECD NorthAmericaOECD Europe

OECD Pacific

FSU

Eastern Europe

China

Other Asia

India

Middle East

Latin America

Africa

2-wheeler growth could also be substantial

Source: IEA projections for WBCSD Mobility 2030 Study, 2004

2-wheelers per 1000 people

0

20

40

60

80

100

120

2000 2010 2020 2030 2040 2050

OECD NorthAmericaOECD Europe

OECD Pacific

FSU

Eastern Europe

China

Other Asia

India

Middle East

Latin America

Africa

IEA/World Energy Outlook 2004Crude Oil Price Projections

Oil prices are assumed to drop back from recent highs over thenext 2 years, but rebound after 2010

0

10

20

30

40

50

60

70

1970 1980 1990 2000 2010 2020 2030

do

llars

pe

r b

arr

el

Real $ (2000) Nominal

1st oil shock

2nd oil shock

Invasion of Kuwait

Invasion of Iraq

Saudi netback deals

Asian economic crisis

0

10

20

30

40

50

60

70

1970 1980 1990 2000 2010 2020 2030

do

llars

pe

r b

arr

el

Real $ (2000) Nominal

1st oil shock

2nd oil shock

Invasion of Kuwait

Invasion of Iraq

Saudi netback deals

Asian economic crisis

A Key Variable: Oil Demand Growth

Annual demand growth

1% annual growth rate

3% annual growth rate

mb/d

0

0.5

1

1.5

2

2.5

3

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

mb/d

65

70

75

80

85

90

95

100

105

110

115

What do the trends mean for emissions?Projected total Non-OECD road transport emissions if

countries eventually adopt euro-type standardsIEA/SMP Projections; Reference case assumes a 10-year lag time; all

scenarios assume fairly strong enforcement

PM-10

0.00

0.50

1.00

1.50

2.00

2.50

2000 2010 2020 2030 2040 2050

Mil

lio

n t

on

nes

per

yea

r Extra five-year lag

ReferenceCase

Five yearsshorter lag

NOx

0.00

5.00

10.00

15.00

20.00

2000 2010 2020 2030 2040 2050

Mill

ion

to

nn

es p

er

yea

r

Extra five-year lag

ReferenceCase

Five yearsshorter lag

VOCs

0

5

10

15

20

25

2000 2010 2020 2030 2040 2050

Mil

lio

n t

on

nes

per

yea

r Extra five-year lag

ReferenceCase

Five yearsshorter lag

CO

0

20

40

60

80

100

120

2000 2010 2020 2030 2040 2050

Mil

lio

n t

on

nes

per

yea

r

Extra five-year lag

ReferenceCase

Five yearsshorter lag

Changing the travel/energy use trends: What are some fuel/vehicle options?

The following slides outline some areas for where we see promise:Vehicle efficiency improvementNear-term alternative fuelsHydrogen / Fuel cell vehiclesGreater attention to travel demand

management and non-motorised modes

Vehicle Efficiency OptionsThere are many technologies available to

improve vehicle efficiency at relatively low cost

IEA estimates that 25% reduction in new car fuel use/km could be achieved by 2020 at fairly low cost Strong policies will be needed; China has

taken an important step in this regardSomewhat lower potential for other

modes, but still significantThis will save fuel but won’t directly

impact pollutant emissions (except hydro carbons to a small degree)

HybridsHybrid-electric vehicles are somewhat

different from other “incremental” technologies

By running the engine at more constant load, significant pollutant emissions reductions can be achieved. Prius is certified SULEV in California

Though still expensive, there may be significant market potential for hybrids in Asia

There is no inherent reason why hybrids can’t run on any fuel specification (e.g. higher sulfur fuels)

Gaseous Fuels and Liquid Biofuels

CNG and LPG are very clean fuels and can provide important emissions reductions Quality of vehicle conversions and availability of fuels is

at issueBiofuels (ethanol from grains, biodiesel from oil

seeds): Provide significant GHG reductions (20-50%) (sugar

cane up to 90%) Can cost 2-3x gasoline before taxes Ethanol provides some emissions benefits (PM,CO) but

also higher volatility (evaporative HC) Biodiesel clearly cuts diesel PM, HC; NOx may rise No major vehicle compatibility issues for either fuel,

though slight modifications needed to ensure proper running

Hydrogen / Fuel Cells: Promise, but when?

Potential for zero pollutant emissions and near-GHG-free road vehicle sector by 2050, but: Vehicle costs must come down by at least 10x before

large volume production can begin Large investments in refueling infrastructure will be

needed, perhaps €0.5 trillion across IEA countries Sources for large-scale low-GHG hydrogen production

are neededThus many questions to resolveNew technology appears likely to come first for

cars, then coaches then trucksShould Asia lead or follow?

Travel Demand ManagementAny reduction in travel growth rates

reduces emissionsKey is to provide mobility without

emissionsGrowth in car ownership is

inevitable but it can be slowed and alternatives provided

A model: cars in Europe are driven far less than in the US because of travel alternatives

Travel Demand Management: Promising Options

Many important measures; will mention three here: Get the prices right

Tax vehicles and fuels in line with social costs; Differential taxation based on vehicle emissions is a

powerful tool

Invest in strong transit systemsLearn from Latin America – BRT makes a huge

difference

Encourage cities to be friendly to non-motorized transit and pedestrians

One Possible Alternative Transport Future Worldwide

Average Vehicle Energy Intensity Improves by 10% (beyond improvements expected in reference case); Hybrids reach 40% of LDV and medium-duty truck market share by 2030

Biofuels reach 20% share of all motor fuels worldwide by 2050

Fuel cell vehicles start to be sold in 2020 and reach 35% of global sales market by 2050 for light-duty vehicles and medium-duty trucks

Possible Future: Resulting Reduction in Global Transport Oil Use

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2000 2010 2020 2030

Oil

Us

e I

nd

ex

(2

00

0 =

1.0

)

Reference Case Combination of measures

Conclusions The world is likely to experience strong growth in fossil energy

use over next 50 years, and Asia set to lead the way Coal is inexpensive and will be used; but much cleaner coal is

possible if somewhat higher costs are accepted and investments are made

Though oil use will increase substantially, we may not see oil prices rise much through 2030 (in real terms)

In any case, oil use does not have to mean much higher pollutant emissions over this time frame

Oil will be with us, but the potential exists for significant reductions in oil use in transport even in 2020-2030 time-frame

Some transportation options look especially promising for pollutant emissions reductions Hybrids Gaseous fuels Hydrogen fuel cells (in the very long run) Changes to travel demand and structure