Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
THESEUS Summer School 2007 Reconciling Energy Security and Climate Change Mitigation: The Investment Challenge Richard Bradley, PhD Head, Energy Efficiency and Environment Division International Energy Agency 3 July 2007 INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE What is Energy Security? INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE Assessment approach Quantitative framework based on indicators Climate change: CO2 emissions Energy security implications of resource concentration: develop new indicators ♦ Consider price and physical availability risk separately • Price: oil, coal and gas • Physical availability: gas Energy security indicators 88% of world total 86% of world total Stabilisation and equilibrium global mean temperatures • Equilibrium temperatures reached after 2100 • Uncertainty of climate sensitivity important Post-SRES (max) 35 35 Stabilization targets: Post-SRES (max) Stabilization targets: B: 535-590 ppm CO2-eq B: 535-590 CO2-eq 25 ppm A2: 490-535 ppm CO2-eq A2: 490-535 ppm CO2-eq 20 15 10 A1: 445-490 ppm CO2-eq A1: 445-490 ppm CO2-eq 20 15 10 5 5 Post-SRES (min) 0 Equilibrium global mean temperature increase over preindustrial (°C) 25 Post-SRES (min) 0 Equilibrium global mean temperature increase over preindustrial (°C) E: 850-1130 ppm CO2-eq D: 710-850 CO2-eq 30 ppm D: 710-850 ppm CO2-eq C: 590-710 ppm CO2-eq C: 590-710 ppm CO2-eq Wold CO2 Emissions (GtC) Wold CO2 Emissions (GtC) E: 850-1130 ppm CO2-eq 30 -5 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 -5 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 Multigas and CO2 only studies combined GHG concentration stabilization level (ppmv CO2-eq) GHG concentration stabilization level ( IPCC Long term mitigation (after 2030) •Mitigation efforts over the next two to three decades will have a large impact on opportunities to achieve lower stabilization levels Stab level (ppm CO2-eq) Global Mean temp. increase at equilibrium (ºC) Year global CO2 needs to peak Year global CO2 emissions back at 2000 level Reduction in 2050 global CO2 emissions compared to 2000 445 – 490 2.0 – 2.4 2000 - 2015 2000- 2030 -85 to -50 490 – 535 2.4 – 2.8 2000 - 2020 2000- 2040 -60 to -30 535 – 590 2.8 – 3.2 2010 - 2030 2020- 2060 -30 to +5 590 – 710 3.2 – 4.0 2020 - 2060 2050- 2100 +10 to +60 710 – 855 4.0 – 4.9 2050 - 2080 +25 to +85 855 – 1130 4.9 – 6.1 2060 - 2090 +90 to +140 IPCC Other Objectives Economic Growth Energy Security 12000 Africa Tankers 11000 10000 Other Asia 9000 Transition economies 8000 Latin America 7000 OECD 6000 0 10 20 30 40 50 GDP per capita in thousand $(2000) using PPPs 5000 2030 2002 1971 4000 Environmental Protection 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Bridging the Welfare Gap Year 40 000 35 000 9 8 30 000 TPES - toe per capita 25 000 20 000 15 000 6 5 4 3 2 10 000 1 di a In As ia ric a Af in a Ch Br az il er ic a in a Am La tin Ea st le Ar ge nt FS U M id d Ja pa n O St at es ite d 0 1971 EC D 0 5 000 Un Mt of CO2 7 1980 1990 2000 2010 2020 2030 Coal Oil Gas INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE FOSSIL FUEL RESOURCES Atmosphere 750PgC PgC Atmosphere 790 Vegetation 610 PgC Oil 130 Gas 120 PgC PgC Coal 5,000 to 8,000 PgC Unconventional Liquids and Gases INTERNATIONAL ENERGY AGENCY 40,000 PgC AGENCE INTERNATIONALE DE L’ENERGIE Mitigation Policy & Technology Capital Stock Turnover Rates • Capital stock turnover—You don’t kill the “cash cow.” Thus, the margin for learning is the new capital stock market. • Increasing marginal cost of rapid deployment. Household Appliances Res. Water Heaters Residential. HVAC Automobiles Commercial Vehc Commercial HVAC Manufacturing Equip Elec. Trans, Telecom, Pipelines Refinery Processes Power Stations Buildings Stock - Res/Comm Transport Links & Urban Development 0 20 40 60 80 100 120 140 160 180 200 Early market signals and technology R&D can work together to assist the market transition – Policies and R&D are inseparable! Source: Adapted from PNL/U of Maryland INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE Tackling Investment Challenges in Power Generation Power plants are ageing In IEA Countries Total capacity 2 397 GW More than 30 years old 638 GW (27%) Coal 323 GW Oil 130 GW Gas 140 GW Nuclear 46 GW INTERNATIONAL ENERGY AGENCY Age of existing plants, technological development, tighter environmental controls, and nuclear phase out policies drives the need for replacements What Needs to Happen National policies to change the emission path in the short to medium term Development of new large technologies International institutional framework providing cost effective incentives for emissions reductions and technology deployment. INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE Are Emissions On Track? INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE Reference Scenario: World Primary Energy Demand 18 000 Other renewables Nuclear Biomass 16 000 14 000 Gas Mtoe 12 000 10 000 Coal 8 000 6 000 4 000 Oil 2 000 0 1970 1980 1990 2000 2010 2020 2030 Global demand grows by more than half over the next quarter of a century, with coal use rising most in absolute terms © OECD/IEA - 2006 Reference Scenario: Primary Energy Demand by Region 10 000 Mtoe 8 000 Developing countries become the biggest energy consumers within a decade 6 000 4 000 2 000 0 1980 OECD 1990 2000 2010 Developing countries 2020 2030 Transition economies World oil demand grows by just over half between 2004 and 2030, with 70% of the increase coming from developing countries © OECD/IEA - 2006 Reference Scenario: World Primary Oil Supply 120 50% 100 45% mb/d 80 60 40% 40 35% 20 0 30% 2000 2005 Middle East OPEC crude* Non-OPEC crude* OPEC market share 2015 2030 Other OPEC crude* Non-conventional oil * Including NGLS OPEC takes the lion’s share of oil market growth as conventional non-OPEC production peaks, but non-conventional oil plays a growing role © OECD/IEA - 2006 Reference Scenario: Will the Investment Come? Cumulative Investment in Energy-Supply Infrastructure, 2005-2030 = $20.2 trillion (in $2005) Exploration & development 73% Refining Other 18% 9% Electricity 56% Oil 21% $4.3 trillion 46% Power generation 54% Transmission & distribution 89% Mining 11% Shipping & ports $11.3 trillion Biofuels 1% $3.9 trillion Exploration & development LNG chain Transmission and distribution 56% Gas 19% Coal 3% 7% 37% Just over half of all investment needs to 2030 are in developing countries, 18% in China alone © OECD/IEA - 2006 Tackling Investment Challenges in Power Generation Investments mostly gas-fired but increased interest in coal In IEA Countries Changes in installed capacity in OECD GW 300 250 200 150 100 50 0 1990-1999 1980-1989 2000-2004 -50 Coal INTERNATIONAL ENERGY AGENCY Oil Gas Nuclear Hydro Construction 2005-2010 Wind Planned 2005-2015 Other Renewables Reference Scenario: Energy-Related CO2 emissions by Region 15 Rest of non-OECD Gigatonnes of CO2 12 China 9 6 Rest of OECD United States 3 0 1990 2000 2010 2020 2030 China overtakes the US as the world’s biggest emitter before 2010, though its per capita emissions reach just 60% of those of the OECD in 2030 © OECD/IEA - 2006 Is Technology Development On Track? INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE 25000 70 RD&D budget vs. Crude Oil Prices all data are in 2004 real USD JAN 06 60 20000 50 15000 40 30 10000 20 5000 10 0 - 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 Conservation Fossil Fuels Renewable Energy Nuclear Fission Nuclear Fusion Power & Storage technologies Other Real Crude Oil Prices INTERNATIONAL ENERGY AGENCY 2006 AGENCE INTERNATIONALE DE L’ENERGIE Asian-Pacific Partnership on Clean Development and Climate Purpose: The partnership will collaborate to promote and create an enabling environment for the development, diffusion, deployment and transfer of existing and emerging cost-effective, cleaner technologies and practices, through concrete and substantial cooperation so as to achieve practical results. Task Forces: Aluminium Buildings and Appliances Cement Cleaner Use of Fossil Energy Coal Mining Power Generation and Transmission Renewable Energy and Distributed Generation Steel INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE Is the Institutional Framework On Track? INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE Global CO2 emissions from energy are growing rapidly Gigatonnes CO2 25 International Bunkers 20 Non-Annex I Parties 15 Non-Participating Annex I Parties 10 5 0 1990 Kyoto Parties 1995 Kyoto target (4) 2000 2004 Copyright IEA What Can Be Done? INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE Alternative Policy Scenario: Global Savings in Energy-Related CO2 Emissions 42 Increased nuclear (10%) Increased renewables (12%) Power sector efficiency & fuel (13%) Electricity end-use efficiency (29%) 38 Gt of CO2 Reference Scenario Fossil-fuel end-use efficiency (36%) 34 Alternative Policy Scenario 30 26 2004 2010 2015 2020 2025 2030 Improved end-use efficiency of electricity & fossil fuels accounts for twothirds of avoided emissions in 2030 © OECD/IEA - 2006 Alternative Policy Scenario: Energy Investment 3 000 Change in Cumulative Energy-Related Investment vs. Reference Scenario, 2005-2030 billion dollars (2005) 2 000 1 000 0 -1 000 -2 000 -3 000 -4 000 Additional demand- Avoided supply-side Net change in side investment investment energy investment Avoided supply-side investment more than outweighs the additional investment by consumers in more expensive end-use capital stock © OECD/IEA - 2006 Alternative Policy Scenario: Change in Energy-Related CO2 Emissions, 2004-2030 United States European Union Japan Rest of OECD Transition economies China India Rest of developing Asia Latin America Africa Middle East Emissions in 2030 are below current levels -1 0 1 2 3 Gt of CO2 Alternative Policy Scenario 4 5 6 Reference Scenario OECD emissions also peak & then decline before 2030, falling below 2004 levels in Europe and Japan © OECD/IEA - 2006 Impact of Concrete 2006 & 2007 IEA Recommendations on World Final Energy Consumption 550 2030 low savings estimate 50 EJ 500 Lighting Buildings Transport 450 WEO 2006 Projection EXAJOULES Equipment 2030 moderate savings estimate 83 EJ 400 350 300 250 200 19 90 19 92 19 94 19 96 19 98 20 00 20 02 20 04 20 06 20 08 20 10 20 INTERNATIONAL ENERGY AGENCY 12 20 14 20 16 20 18 20 20 20 22 20 24 20 26 20 28 20 30 AGENCE INTERNATIONALE DE L’ENERGIE ENERGY TECHNOLOGY PERSPECTIVES 2006 Scenarios & Strategies to 2050 © OECD/IEA, 2006 ENERGY TECHNOLOGY PERSPECTIVES 2006 Scenarios & Strategies to 2050 © OECD/IEA, 2006 Technology • The range of stabilization levels can be achieved by – deployment of a portfolio of technologies that are currently available and – those that are expected to be commercialised in coming decades. • This assumes that appropriate and effective incentives are in place for development, acquisition, deployment and diffusion of technologies and for addressing related barriers IPCC Recent Policy Developments INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE IPCC: What are the macro-economic costs in 2030? •Costs are global average for least cost appoaches from top-down models •Costs do not include co-benefits and avoided climate change damages Trajectories towards stabilization levels (ppm CO2-eq) Median GDP reduction[1] (%) Range of GDP reduction [2] (%) Reduction of average annual GDP growth rates [3] (percentage points) 590-710 0.2 -0.6 – 1.2 < 0.06 535-590 0.6 0.2 – 2.5 <0.1 Not available <3 < 0.12 445-535[4] [1] This is global GDP based market exchange rates. [2] The median and the 10th and 90th percentile range of the analyzed data are given. [3] The calculation of the reduction of the annual growth rate is based on the average reduction during the period till 2030 that would result in the indicated GDP decrease in 2030. [4] The number of studies that report GDP results is relatively small and they generally use low baselines. IPCC European Union Commission recently set a target of a 20% reduction by 2020. Set a long term goal of limiting the temperature change to 2oC EU ETS directive now under review for post2012. ETS to be linked to Norway effective 1 January 2008 Energy Efficiency Action Plan 20% savings by 2020; 20% CO2 reduction; 20% renewables target; 10% biofuels Broad range of policies addressing all major sectors INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE New White House Initiative To convene high-level meeting of 15 largest emitters to develop long term framework by 2008 The participants will develop parallel national commitments to promote key clean energy technologies. The proposal seeks to bring together the world’s top greenhouse gas emitters and energy consumers. In creating a new framework, the major emitters will work together to develop a long-term global goal to reduce greenhouse gasses. Each country will work to achieve this emissions goal by establishing its own ambitious mid-term national targets and programs, based on national circumstances. They will ensure advancement towards the global goal with a review process that assesses each country’s performances. INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE U.S. Legislative Activity INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE Other Developments in the US The formal launch of the Western Regional Climate Action Initiative (WRCAI) - California, Oregon, Washington, Arizona and New Mexico The US CAP initiative Regional Greenhouse Gas Initiative (RGGI) among NE States INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE Australia 10 December 2006, the Prime Minister announced the establishment of a joint government-business taskforce on emissions trading the Task Group has concluded: Australia should not wait until a genuinely global agreement has been negotiated Emissions trading scheme should form the principal mechanism to achieve emissions-reduction goals A workable global emissions trading scheme is likely to evolve slowly through a patchwork of linked national and regional schemes. Australia’s medium term emissions trajectory and its longterm aspirational goal must be set with great care while recognising the need for deeper emissions reductions over time. a ‘safety valve’ emissions fee mixture of free allocation and auctioning of single-year dated emissions permits INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE Conclusions It is not yet possible to discern a human influence on emissions reductions. Policy effort is insufficient Fossil fuels will dominate the energy supply for the foreseeable future Technology development is being focused, but may not be adequate. Investors need an international cost effective framework soon if energy security and climate change objectives are to be met. INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE