© oecd/iea 2014 dr. fatih birol iea chief economist prague, 11 december 2014
TRANSCRIPT
© OECD/IEA 2014
Dr. Fatih BIROLDr. Fatih BIROLIEA Chief EconomistIEA Chief Economist
Prague, 11 December 2014Prague, 11 December 2014
© OECD/IEA 2014
Signs of stress in the global energy systemSigns of stress in the global energy system
Current calm in markets should not disguise difficult road ahead Turmoil in the Middle East raises doubts over future oil balance
Resurgent debate over the security of gas supply to Europe
Mixed signals in run-up to crucial climate summit in Paris in 2015
Global CO2 emissions still rising, with most emitters on an upward path
Increasing emphasis on energy efficiency starting to bring results
Will change in global energy be led by policies, or driven by events?
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Changing dynamics of global demandChanging dynamics of global demand
Energy demand by region
As China slows, then India, Southeast Asia, the Middle East and parts of Africa & Latin America take over as the engines of global energy demand growth.
2 000
4 000
6 000
8 000
10 000
1990 2000 2010 2020 2030 2040
Mtoe
OECD
Rest of world
China
China
Rest of world
OECD
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United States holds a strong position United States holds a strong position on energy costson energy costs
Weighted average cost of energy paid by consumers
Economies face higher costs, but the pace of change varies: China overtakes the US, costs double in India & remain high in the European Union & Japan
UnitedStates
500
1 000
1 500
2 000
EuropeanUnion
Japan China India
$/toe
2008
2013
2040
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2013 2020 2030 20402015
Instability in the Middle EastInstability in the Middle Easta major risk to oil marketsa major risk to oil markets
Oil production growth
The short-term picture of a well-supplied market should not obscure future risks as demand rises to 104 mb/d & reliance grows on Iraq & the rest of the Middle East
+5
+10
+15
-52013 2020 2030 20402015
Net decline in output from other producers
Increase to 2040: 14 mb/d
mb/d
Increase to 2040: 14 mb/d
Middle East
Brazil
CanadaUnited States
& reliance grows on Iraq & the rest of the Middle East
in United States, Canada, Brazil & the Middle East
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Looking ahead on the oil priceLooking ahead on the oil price
Against a backdrop of weaker demand, buoyant supply in North America has brought prices down – but can it keep them down?
Lower prices are starting to curtail upstream spending plans, with implications for future supply
Over time, squeezed cash flow would constrain the capacity of North America & Brazil to act as engines of global supply growth
Current oil price levels could provide some breathing space to major oil importers, boosting demand & GDP
It would also accelerate reliance on low-cost producers in the Middle East, some of which face major investment challenges
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Gas on the way to become first fuel,Gas on the way to become first fuel,with role of LNG on the risewith role of LNG on the rise
Main sources of regional LNG supply
Share of LNG rises in global gas trade, pushed by a near-tripling in liquefaction sites: LNG brings more integrated & secure gas markets, but only limited relief on prices
Middle East
Australia
US & Canada
East Africa
Russia
North AfricaWest Africa
Other
Middle East
Southeast Asia
West AfricaAustralia
North AfricaOther
100
200
300
400
500
600bcm
2012 2040
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India
World
Global coal demandGlobal coal demand leveling off leveling off
Global coal demand by key region
Global coal demand growth slows rapidly due to more stringent environmental policies, underlining the importance of high-efficiency plant & CCS to coal’s future
1 000
2 000
3 000
4 000
5 000
6 000
7 000
1980 1990 2000 2010 2020 2030 2040
Mtce
1987: European coal demand peak2005: US coal demand peak
Chinese coal demand plateau
India: 2nd largest coal consumer by 2020
Other
India
China
United StatesEurope
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Retirements add to the investment Retirements add to the investment challenge in the power sectorchallenge in the power sector
Power capacity by source, 2013-2040
Despite limited demand growth, OECD countries account for one-third of capacity additions – to compensate for retirements & to decarbonise
2013
Retirements Additions
2040
2 000
4 000
6 000
8 000
10 000
12 000GW
Renewables
Nuclear
Oil
Gas
Coal
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Nuclear capacity grows by 60%, but no Nuclear capacity grows by 60%, but no nuclear renaissance in sight nuclear renaissance in sight
Net capacity change in key regions, 2013-2040
By 2040, an expanded nuclear fleet has saved almost 4 years of current CO2 emissions & for some countries has improved energy security & balances of energy trade
-20 0 20 40 60 80 100 120 140
European Union
Japan
United States
Russia
India
China
GW
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50
100
150
200
1990 2000 2010 2020 2030 2040
GW
2013
Nuclear power: public concerns Nuclear power: public concerns must be heard and addressed must be heard and addressed
Retirements of nuclear power capacity 1990-2040
Key public concerns include plant operation, decommissioning & waste management;
Spent nuclear fuel
European Union United States Japan Others
38% of today’s capacity to
retire by 2040
1971-2012
350 thousand tonnes1971-2040
705 thousand tonnes
1971-2040: 705 thousand tonnes
United States EuropeanUnion
JapanChina
Cana
da Russia Korea
Indi
a
Other
By 2040, almost 200 reactors are retired & the amount of spent fuel doubles & the amount of spent fuel doubles
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Nuclear power can play a role in Nuclear power can play a role in COCO2 2 abatement & energy securityabatement & energy security
Share of energy demand met by domestic sources and nuclear power in 2040
0.5
1.0
1.5
2.0
2.5
1971 2020 2040
Gt
1980 2000
CO2 emissions avoided annually by nuclear power1971-2040
20%
40%
60%
80%
100%
China UnitedStates
EuropeanUnion
Japan Korea
Net importsIndigenous production & nuclearNuclear Indigenous production
By 2040, an expanded nuclear fleet has saved almost 4 years of current CO2 emissions
& for some countries has improved energy security & balances of energy trade
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Navigating a stormy energy futureNavigating a stormy energy future
Geopolitical & market uncertainties are set to propel energy security high up the global energy agenda
Volatility in the Middle East raises short-term doubts on investment & spells trouble for future oil supply
Nuclear power can play a role in energy security, carbon abatement and economic goals
Far-sighted government policies are essential to steer the global energy system on to a safer course
Reconciling competitiveness, the imperatives of energy security and climate change will be critical for European policy-makersin 2015
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