WORLD ENERGY OUTLOOK 2020

and

Global Electricity InvestmentChallenges

World Energy Outlook SeriesWorld Energy Outlook SeriesWorld Energy Outlook 1998

World Energy Outlook 1999 Insights: Looking at Energy Subsidies: Getting the Prices Right

World Energy Outlook 2000

World Energy Outlook 2001 Insights: AssessingToday’s Supplies to Fuel Tomorrow’s Growth

World Energy Outlook 2002 (2nd edition issued)

World Energy Outlook 2003 Insights: Global Energy Investment Outlook

WEO 2002: Key StrategicWEO 2002: Key StrategicChallengesChallenges

security of energy supplies

investment in energy infrastructure

threat of environmental damage caused byenergy use

uneven access of the world’s population tomodern energy.

Global TrendsGlobal Trends

World Electricity Consumption World Electricity Consumption vsvs. GDP. GDP1971-2000 1971-2000

0

200

400

600

800

1000

1200

15000 20000 25000 30000 35000 40000 45000

GDP (billion $(1995) using PPPs)

Elec

tricit

y con

sum

ptio

n (T

Wh)

1971

2001

World electricity demand is set to increase rapidly

Electricity Demand 2000 to 2030:

OECD: 1.5%Transition Economies: 2.0%Developing Countries: 4.1%

WORLD: 2.4%

World Power-GenerationWorld Power-GenerationCapacity Additions, 2000-2030Capacity Additions, 2000-2030

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

GW

Gas Coal Hydro Other renewables Oil Nuclear Fuel cells

More than 40% of new capacity worldwide is gas-fired

World Installed Power-World Installed Power-Generation CapacityGeneration Capacity

Nearly 5,000 GW of capacity is built in 2000-2030, almost half in developing countries

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1999 2002 2005 2008 2011 2014 2017 2020 2023 2026 2029

GW

Existing capacity New capacity

World Power-GenerationWorld Power-GenerationInvestment, 2000-2030Investment, 2000-2030

Cumulative worldwide investment in new power plants amounts to $ 4.2 trillion, more than half in developing countries

AfricaE. AsiaChinaPacificEuropeNorth America

Middle East

Transition economies

South Asia

Latin America

0

100

200

300

400

500

600

700

800

900

$ bi

llion

(200

0 do

llars

)

World Power Generation CapacityWorld Power Generation CapacityInvestments 2000-2030Investments 2000-2030

0

200

400

600

800

1000

1200

1400

1600

Coal Oil Gas Nuclear Hydro OtherRenewables

Fuel Cells

$bill

ion

(200

0 do

llars

)

OECDOECD

Ordered Power-GenerationCapacity Additions to 2010

0

50

100

150

200

250

US and Canada Japan EU15

GW

Coal Oil Gas Other

EU Capacity Additions and Investment

EU investment needs will increase over time in both GW and $ terms

0

50

100

150

200

250

300

2000/2010 2010/2020 2020/2030

GW

Investment ($ billion)

Installed Capacity in EU-15Installed Capacity in EU-15

Capacity additions over the next 30 years will be largerthan today's installed capacity

901 GWInstalled Capacity - 2030

584 GW 290 GW 618 GWInstalled Capacity

2000Retirements 2000-2030

New Capacity2000 - 2030

====

Age of Installed CapacityAge of Installed Capacityin EU-15in EU-15

0

20

40

60

80

100

120

140

GW

Oil

Gas

Coal

Uranium

< 10 years 10 - 20 years 20 - 30 years > 30 years

Europe's power plants are ageing: half currentcapacity - mostly coal-fired - could be retired by 2030

Share of Renewables inShare of Renewables inElectricity GenerationElectricity Generation

The role of non-hydro renewables is much greater in all OECD regions, especially Europe

0

5

10

15

20

25

30

35

2000 2030Alternative

2000 2030Alternative

2000 2030Alternative

per c

ent

Non-hydro Hydro

US & Canada Europe Japan, Australia& New Zealand

Capacity in EUCapacity in EU7 Major Utilities (2002)7 Major Utilities (2002)

0

10

20

30

40

50

60

70

80

90

100

110

EdF

E.ON

RWE

ENEL

Vatten

fall

Endesa

Electra

bel

GW

Rest of EuropeHome Country

Capacity in EU15Capacity in EU15 7 Major Utilities (2002) 7 Major Utilities (2002)

0

10

20

30

40

50

60

70

80

90

100

110

EdF

E.ON

RWE

ENEL

Vatten

fall

Endesa

Electra

bel

GW

Rest of EU

Sweden

Italy

UK

Germany

Home Country

Developing CountriesDeveloping Countries

Investment Investment vsvs.Saving Balance.Saving Balanceby Regionby Region

Foreign capital flow needs to meet the gap between domesticfinancial resources and investment in most of non-OECD regions.

0

5

10

15

20

25

30

OECD TransitionEconomies

India Brazil Africa

% (R

atio

to G

DP)

Gross domestic savings Gross capital investment

Size and Activity of FinancialSize and Activity of FinancialMarkets by RegionMarkets by Region

Financial markets in non-OECD regions aresmaller, less active,and less efficient.

0

10

20

30

40

50

60

70

80

OECD Russia India Indonesia Brazil Africa

% (R

atio

to G

DP)

Liquid liabilities (size of banking sector)Stock market capitalization (size of stock market)Stock market value traded (activity of stock market)

Investment Flows into Energy ProjectsInvestment Flows into Energy Projectswith Foreign Private Participationwith Foreign Private Participation

0

10

20

30

40

50

60

1997 1998 1999 2000 2001

2001

US$

Bill

ion

Electricity Natural gas transmission and distribution

Sound macroeconomic management and legal/regulatory framework are needed to secure the availability of

foreign capital to energy projects.

Concluding RemarksConcluding Remarks

SummarySummary

World electricity demand is set to growrapidly

Gas is likely to be the preferred fuel

Ageing: a key issue in OECD countries

Developing Countries: higher demandgrowth - scarce resources

Surrounding IssuesSurrounding Issues

What are obstacles to investment?

Is investment climate changing?

What are the (new) risks introduced byliberalisation of electricity markets?

How do challenges vary across energymix / technology?

How will the capital markets beconvinced to invest in DevelopingCountries?

What role for governments?