Please note that this PDF is subject to specific restrictions that limit its use and distribution. The terms and conditions are available online at www.iea.org/Textbase/about/copyright.asp WORLD 2 ENERGY 0 OUTLOOK 1 1 WORLD ENERGY OUTLOOK 2 0 1 1 World Energy Outlook 2011 brings together the latest data, policy developments, and the experience of another year to provide robust analysis and insight into global energy markets, today and for the next 25 years. This edition of the IEA’s flagshipWEO publication gives the latest energy demand and supply projections for different future scenarios, broken down by country, fuel and sector. It also gives special focus to such topical energy sector issues as: Russia’s energy prospects and their implications for global markets. The role of coal in driving economic growth in an emissions-constrained world. The implications of a possible delay in oil and gas sector investment in the Middle East and North Africa. How high-carbon infrastructure “lock-in” is making the 2°C climate change goal more challenging and expensive to meet. The scale of fossil fuel subsidies and support for renewable energy and their impact on energy, economic and environmental trends. A “Low Nuclear Case” to investigate what a rapid slowdown in the use of nuclear power would mean for the global energy landscape. The scale and type of investment needed to provide modern energy to the billions of the world’s poor that do not have it. www.worldenergyoutlook.org €150 (61 2011 24 1P1) ISBN: 978 92 64 12413 4 WORLD 2 ENERGY 0 OUTLOOK 1 1 INTERNATIONAL ENERGY AGENCY The International Energy Agency (IEA), an autonomous agency, was established in November 1974. Its primary mandate was – and is – two-fold: to promote energy security amongst its member countries through collective response to physical disruptions in oil supply, and provide authoritative research and analysis on ways to ensure reliable, affordable and clean energy for its 28 member countries and beyond. The IEA carries out a comprehensive programme of energy co-operation among its member countries, each of which is obliged to hold oil stocks equivalent to 90 days of its net imports. The Agency’s aims include the following objectives: ! Secure member countries’ access to reliable and ample supplies of all forms of energy; in particular, through maintaining effective emergency response capabilities in case of oil supply disruptions. ! Promote sustainable energy policies that spur economic growth and environmental protection in a global context – particularly in terms of reducing greenhouse-gas emissions that contribute to climate change. ! Improve transparency of international markets through collection and analysis of energy data. ! Support global collaboration on energy technology to secure future energy supplies and mitigate their environmental impact, including through improved energy efficiency and development and deployment of low-carbon technologies. ! Find solutions to global energy challenges through engagement and dialogue with non-member countries, industry, international organisations and other stakeholders. IEA member countries: Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Ireland Italy Japan Korea (Republic of) Luxembourg Netherlands New Zealand Norway Poland Portugal © OECD/IEA, 2011 Slovak Republic International Energy Agency Spain 9 rue de la Fédération Sweden 75739 Paris Cedex 15, France Switzerland www.iea.org Turkey United Kingdom Please note that this publication United States is subject to specific restrictions that limit its use and distribution. The European Commission The terms and conditions are available also participates in online at www.iea.org/about/copyright.asp the work of the IEA. FOREWORD It is the job of governments to take the decisions that will deliver a secure and sustainable energy future. They can make wise decisions only if they are well-informed and advised. That is the job of bodies such as the International Energy Agency (IEA), which it has been my privilege to lead since September 2011. The World Energy Outlook (WEO) team, under the Agency’s Chief Economist, Fatih Birol, has again done an outstanding job in WEO-2011 to underpin sound energy decision making. With the invaluable help of many global experts inside and outside the Agency, the team has given us a wealth of current energy information, analysis and perspectives on the future. For example, we find: ! what it will cost to bring modern energy to every citizen of the world by 2030 and how to finance it; ! that, provided governments honour their existing intentions, renewable energy is set to provide half the new power generating capacity required between now and 2035; ! that, by virtue of their size and distribution, natural gas resources contribute encouragingly to future energy security, casting a golden glow over the outlook for natural gas; ! how oil markets will be shaped by increasing demand for mobility and rising upstream costs – and the consequences of any shortfall of investment in the Middle East and North Africa; ! what would have to be done (and whether that is realistic) if the nuclear component of future energy supply were to be halved, or if the availability of carbon capture and storage technology slipped by ten years; ! the extent of the overwhelming dominance of China in global energy in 25 years time and the global significance of the choices China makes to meet its needs; and ! how much energy Russia can save simply by matching the energy efficiency standards of OECD countries and how that would serve both Russia’s national objectives and the interests of global energy supply. As a former minister, my background is that of a politician. My mission at the IEA is to bridge the divide between analysts and politicians so that the right energy policy decisions are made by governments across the world, both members and non-members of the IEA alike. The Agency will not aspire to determine those decisions which lie outside its area of executive responsibility for its members’ energy security. But I will push the remit to identify the decisions which others need, or which would be wise, to adopt. The WEO is an invaluable tool to this end. © OECD/IEA, 2011 © OECD/IEA, Foreword 3 The starkest decisions are those which must be taken without delay. I end by highlighting one area squarely in this category: the energy decisions necessary to contain the rise in the average global temperature to 2° Celsius. We read here of the way carbon emissions are already “locked-in” because of the nature of the plant and equipment which we continue to build. If we do not change course, by 2015 over 90% of the permissible energy sector emissions to 2035 will already be locked in. By 2017, 100%. We can still act in time to preserve a plausible path to a sustainable energy future; but each year the necessary measures get progressively tougher and viciously more expensive. So, let’s not wait any longer! Maria van der Hoeven Executive Director This publication has been produced under the authority of the Executive Director of the International Energy Agency. The views expressed do not necessarily reflect the views or policies of individual IEA member countries © OECD/IEA, 2011 © OECD/IEA, 4 World Energy Outlook 2011 ACKNOWLEDGEMENTS This study was prepared by the Office of the Chief Economist (OCE) of the International Energy Agency in co-operation with other offices of the Agency. It was designed and directed by Fatih Birol, Chief Economist of the IEA. Laura Cozzi co-ordinated the analysis of climate policy and modelling; Amos Bromhead co-ordinated the analysis of subsidies and nuclear; John Corben co-ordinated the analysis of oil and natural gas; Marco Baroni co-ordinated the power-generation analysis; Tim Gould co-ordinated the Russia analysis; Paweł Olejarnik co-ordinated the coal analysis; Dan Dorner contributed to the analysis of global trends and co-ordinated the focus on energy access. Other colleagues in the Office of the Chief Economist contributed to multiple aspects of the analysis and were instrumental in delivering the study: Prasoon Agarwal (transport and buildings), Maria Argiri (natural gas), Christian Besson (oil and Russia), Alessandro Blasi (Russia), Raffaella Centurelli (energy access and buildings), Michel D’Ausilio (power and renewables), Dafydd Elis (power and climate analysis), Matthew Frank (natural gas and subsidies), Timur Gül (transport and climate analysis), Shinichi Kihara (nuclear), Kate Kumaria (climate analysis), Jung Woo Lee (subsidies and nuclear), Katrin Schaber (power and renewables), Tatsuya Tomie (coal and power), Timur Topalgoekceli (oil and natural gas), Brent Wanner (power and subsidies), David Wilkinson (power, climate analysis and nuclear), Peter Wood (oil and natural gas), Akira Yanagisawa (subsidies, industry and natural gas) and Tatiana Zhitenko (Russia). Sandra Mooney provided essential support. Robert Priddle carried editorial responsibility. The study benefitted from input provided by numerous IEA experts in the Energy Statistics Division, the Energy Markets and Security Directorate, the Directorate of Global Energy Dialogue, and the Energy Policy and Technology Directorate. The Communication and Information Office was instrumental in bringing the book to completion. In particular, Christina Hood, Carlos Fernandez Alvarez, Isabel Murray, Moritz Paulus, Johannes Truby, Nathalie Trudeau and Dennis Volk provided valuable contributions. Experts from several directorates