World Energy Outlook 2007: China and India Insights

1. World Energy Outlook 2007:China and India Insights Pawel Olejarnik Research Analyst International Energy Agency

2. Increase in World Primary Energy Demand, Imports & Energy-Related CO2 Emissions in the Reference Scenario, 2000-2006 China Energy demand India Rest of the world Coal demand Oil demand Oil imports CO emissions 2 0% 0% 20% 20% 40% 40% 60% 60% 80% 80% 100% 100% Why Focus on China & India? China & India have contributed more than half of the increase in global demand for energy and over 80% for coal since 2000

3. Reference Scenario

4. Other renewables Biomass Hydro Nuclear Gas Oil Coal Reference Scenario:World Primary Energy Demand 18 18 16 16 14 14 12 12 10 10 billion tonnes of oil equivalent billion tonnes of oil equivalent 8 8 6 6 4 4 2 2 0 0 1980 1980 1990 1990 2000 2000 2010 2010 2020 2020 2030 2030 Global demand grows by more than half over the next quarter of a century, with coal use rising most in absolute terms

5. 100% Rest of the world India China 80% 60% 40% 20% 0% Total energy Coal Oil Nuclear Hydro Power sector investments The Emerging Giants of World Energy Increase in Primary Energy Demand & Investment Between 2005 & 2030 as Share of World Total China & India will contribute more than 40% of the increase in global energy demand to 2030 on current trends

6. Global Oil Supply Prospects to 2015 • Oil supply/demand balance is set to remain tight • In total, 37.5 mb/d of gross capacity additions needed in 2006-2015 • 13.6 mb/d to meet demand & rest to replace decline in existing fields • OPEC & non-OPEC producers have announced plans to add 25 mb/d through to 2015 • Thus, a further 12.5 mb/d of gross capacity would need to be added or demand growth curbed • Otherwise, a supply crunch cannot be ruled out

7. 57.9 5.8 8.0 73.9 13.6 14.5 7.0 2.7 Source: Cedigaz World total: 183 tcm as of 1 January 2007 Proven Natural Gas Reserves Gas reserves are also concentrated – Russia and Iran together account for almost half of global gas reserves

8. 50 42 Gt 45 40 +57% tonnes 35 27 Gt 30 billion 25 20 15 10 1980 1990 2000 2010 2020 2030 Global CO2 Emissions and Climate Change Global CO2 emissions rise to 42 gigatonnes in 2030, 57% above current levels and double the 1990 level

9. World’s Top Five CO2 Emitters China becomes the largest emitter in 2007 & India the 3rd largest by 2015

10. 2006-2030 China & India in Global CO2 Emissions Cumulative Energy-Related CO2 Emissions United States European Union Japan China 1900-2005 India 0 100 200 300 400 500 billion tonnes Around 60% of the global increase in emissions in 2005-2030 comes from China & India

11. Power plants built in 2005-2015 CO2 Emissions from Coal-Fired Power Stations built prior to 2015 in China & India 6 000 5 000 4 000 3 000 million tonnes of CO2 2 000 1 000 0 2006 2015 2030 2045 2060 2075 Existing power plants Capacity additions in the next decade will lock-in technology & largely determine emissions through 2050 & beyond

12. Alternative Policy Scenario

13. Alternative Policy Scenario Increase in Net Oil Imports, 2006-2030 10 Reference Scenario 8 6 mb/d 4 2 0 -2 OECD OECD OECD China India Other Asia North America Europe Pacific New policies reduce global oil demand by 14 mb/d by 2030, cutting sharply the need for imports

14. 19% 34 Gt Global Energy-Related CO2 Emissions 50 45 42 Gt Reference Scenario 40 tonnes (Gt) 35 27 Gt 30 billion Alternative Policy Scenario 25 20 15 10 1980 1990 2000 2010 2020 2030 Global emissions will increase by 57% in the Reference Scenario, but they level off in the Alternative Policy Scenario

15. Alternative Policy Scenario India’s Local Pollution 18 Reference Scenario 15 SO 2 12 million tonnes 9 NO x 6 3 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 New policies reduce substantially emissions of SO2 and NOx – largely from coal-fired power plants, cars & trucks

16. How to go beyond?

17. 42 Gt 23 Gt CO2 Emissions - 450 Stabilisation Case Energy-Related CO2 Emissions 45 CCS in industry Reference Scenario CCS in power generation 40 Nuclear Renewables 35 Switching from coal to gas 2 End Use electricity efficiency 30 Gt of CO End Use fuel efficiency 25 27 Gt 450 Stabilisation Case 20 15 10 2005 2010 2015 2020 2025 2030 In line with G-8 appeal in Heiligendamm, by 2030 emissions are reduced to some 23 Gt

18. Public Energy Research and Development Funding in IEA Countries 12% 14 10% 12 8% 10 8 6% billion dollars (2006) 6 4% 4 2% 2 0% 0 1986 1991 1996 2001 2006 Efficiency Fossil fuels CCS Renewables Nuclear Hydrogen Storage technologies Other Share of energy R&D in total R&D (right axis) Share of public budgets for energy R&D in total R&D fell over 50% in the last two decades

19. Conclusions • Global energy system is on an increasingly unsustainable path • China and India are engines of global energy demand -- countries putting economic development as top priority • Next 10 years are critical • Road to Copenhagen – a way out ?

20. World Energy Outlook 2008: Outline WorldEnergyOutlook2008 • New set of energy projections to 2030, using improved WEM & coupled with a general equilibrium economic model • In-depth analysis of key topics • Post-2012 climate scenarios • Oil and gas supply prospects • Energy poverty in resource-rich Sub-Saharan Africa • Extensive consultation and co-operation • UNFCCC, US EPA, OPEC, oil companies, ADB, World Bank, IMF… • Informal workshops in April 2008 • First draft ready by 1 August; launch 12 November

21. Thank you pawel.olejarnik@iea.orgwww.worldenergyoutlook.org