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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
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?
2
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
3
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
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
5
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
6
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
7
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
‐
5
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
8
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
9
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
10
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
11
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
12
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
13
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
14
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
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
16
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
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
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
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
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
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
22
Harnessing Variable Renewablesg
23
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
24
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
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
Connecting MENA and Europe“Energy for Peace"
Source: DESRETEC Foundation27
Existing and proposed ASEAN Power Grid InterconnectionsInterconnections
28
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
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.
30
AnnexAnnex
31
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
32
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.
33