30 KEY ENERGY TRENDS
in the IEA & Worldwide
30 KEY ENERGY TRENDS
in the IEA & Worldwide
30th ANNIVERSARY OF THE INTERNATIONAL
ENERGY AGENCY
30 KEY ENERGY TRENDS
in the IEA & Worldwide
30th ANNIVERSARY OF THE INTERNATIONAL
ENERGY AGENCY
Since the creation of the International Energy Agency thirty years ago, the world energy scene has changed significantly. Energy production is more diverse by type and geographically, demand growth is shifting outside the IEA countries, technology has made tremendous progress and environmental concerns have emerged as a driver for energy policies.
For the Agency’s 25th Anniversary, we produced 25 graphs and tables to capture the high points of a quarter century of change – first at world level, then among our Member countries. The brochure was well received.
On the occasion of the IEA’s 30thAnniversary we have produced a similar brochure, adding five new graphs for our thirty years.
As this rapid survey shows, our Members’ energy policies have been guided by the concepts laid down in the International Energy Program of 1974, the 1977 IEA Principles for Energy Policy and the 1993 Shared Goals.
They have evolved with the challenges to promote the IEA’s “Three E’s” of energy security, economic growth and environmental protection.
But new factors bring new challenges. The need to ensure adequate financing of energy investment in liberalised markets, the dramatic emergence of new large consumers outside of the OECD and the recognition of a shameful degree of energy poverty for more than a quarter of the world’s population, add new concerns for policymakers.
To understand and respond effectively, OECD countries need accurate and timely data, detailed analysis, and exchanges of expertise – all of which are core activities of the IEA. With these tools and close cooperation with Member countries, the IEA is well-positioned to face these new and evolving challenges.
Looking forward, we believe the IEA will continue to play an important role advising its Members on global energy policy. We will count ourselves fortunate if we can achieve as much in the next thirty years as was achieved in the first.
Claude Mandil Executive Director
Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Ireland Italy Japan Republic of Korea Luxembourg Netherlands New Zealand Norway Portugal Spain Sweden Switzerland Turkey United Kingdom United States
WORLD
1. World Energy Supply 2. Regional Energy Supply 3. Regional Oil Production 4. Regional Gas Production 5. Regional Coal Production
6. Annual Growth of Renewables Supply 7. World Electricity Generation
8. Final Consumption by Sector 9. Selected World Energy Indicators 10. Regional CO2 Emissions
11. Crude Oil Prices 12. Energy and Poverty
IEA
13. IEA Energy Supply
14. IEA Electricity Generation 15. IEA Oil Net Imports by Origin
16. Strategic Stocks of IEA Importing Countries 17. A Sectoral View of IEA Energy Demand 18. Final Energy Demand and Savings 19. Selected IEA Energy Indicators
20. Energy Intensity Effects by End-Use Sector 21. Selected Fuel Price Indices
22. IEA Government Budgets for Energy R&D
OUTLOOK
23. Increase in World Energy Production and Consumption 24. World Primary Energy Demand Outlook
25. Regional Primary Energy Demand Outlook 26. Global Oil Import Dependency
27. CO2 Emissions Outlook
28. Investment Needs in the Energy Sector
INDICATORS
29. Regional Indicators
30. OECD Country Indicators
■ Over the 30-year period of 1971 to 2001, the world’s total primary energy supply increased by 84%, reaching just over 10 000 Mtoe (million tonnes of oil equivalent). This equates to a compound growth rate of about 2.1% per annum.
By comparison, world population grew by 1.6% and Gross Domestic Product by 3% over the same period.
■ Energy supply growth was fairly constant over the period, except in 1974-1975 and in the early 1980s as a consequence of the first two oil shocks, and in the early 1990s following the dissolution of the Soviet Union.
■ In 1973, oil was by far the largest component in total primary energy supply, with 45.1%. This share has fallen to only 35% in 2001.
■ The share of coal dropped slightly, from around 25% to just over 23% in 2001.
The share of combustible renewables and waste - mainly wood and charcoal, often referred to as traditional biomass, used for cooking in developing countries – has remained stable over the past 30 years, at around 11%.
■ Natural gas and nuclear have experienced a significant increase from 16.2% and 0.9% respectively in 1973 to 21.2% and 6.9% in 2001.
World Energy Supply*
* Total Primary Energy Supply (TPES). Excludes international marine bunkers and electricity trade.
** Other includes geothermal, solar, wind and heat, etc.
Sources: Energy Balances of OECD Countries; Energy Statistics and Balances of Non-OECD Countries.
Other**
Natural gas Oil
Combustible renewables & waste
Coal Nuclear
Hydro
Mtoe
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000 11 000
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001
*Total Primary Energy Supply (TPES). Excludes international marine bunkers and electricity trade.
**Does not include China.
Sources: Energy Balances of OECD Countries; Energy Statistics and Balances of Non-OECD Countries.
Figure 2
WORLD
Middle East
1.1% Middle East
3.9%
OECD 62.3%
OECD 53.2%
Africa 3.5%
Latin America
3.7%
Latin America Asia** 6.2% 4.5%
Asia** 11.5%
China 7.2%
China 11.5%
Non-OECD Europe 1.6%
Non-OECD Europe 1.0%
Former USSR 14.4%
Former USSR 9.3%
Africa 5.1%
■ Although the OECD is still the largest energy user, its share of total primary energy supply declined significantly from 62.3% in 1973 to 53.2% in 2001.
■ In absolute values, total primary energy supply in the OECD increased from 3 757 Mtoe in 1973 to 5 332 Mtoe in 2001. This corresponds to an annual growth rate of 1.3%, compared with a global rate of 1.8% for the same period.
■ Strong economic development in Asia led to a large increase in the share of Asia (including China) in world energy supply, from 13.4% in 1973 to 23% in 2001.
■ By contrast, the combined share of the former USSR and non-OECD Europe decreased significantly following the dissolution of the Soviet Union in the late 1980s.
Regional Energy Supply*
1973 2001
■ World oil production increased by 44% over the same 30-year period from 1971 to 2001, which experienced 84% growth in world total primary energy supply.
In 2002, the production reached nearly 3 550 million tonnes or about 77 million barrels per day.
■ Growth was not constant over the period as production declined in the aftermath of two oil shocks.
■ In 2002, the Middle East region’s share of supply was 28.5% of the world total.
However, both production and share varied significantly over the period, with the Middle East representing 37% in 1973 falling to less than 19% in 1985.
■ The OECD share increased from roughly 24% in 1973 to nearly 28.5% in 2002, on par with the Middle East as the largest oil-producing regions in the world. The development of oil production in both the North Sea and Mexico contributed to this increase.
■ Meanwhile the share of the former Soviet Union fell from 15% in 1973 to 13%
in 2002.
Regional Oil Production
0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001
Mt
*Does not include China.
Sources: Energy Statistics and Balances of Non-OECD Countries; Oil Information.
OECD Total Middle East Former USSR Non-OECD Europe China Asia* Latin America Africa
* Does not include China.
Source: Natural Gas Information.
Figure4
WORLD
■ World natural gas production in the 30 years from 1971 to 2001 increased at an annual average of 2.7%, compared to 2.1% growth in global TPES over the same period. In 2002, global production exceeded 2 600 billion cubic meters (BCM), representing an increase of 136% over the 1971 level.
■ While OECD production over the period has risen in absolute terms, its share of world production has decreased from nearly 73% in 1971 to just under 43%
in 2002.
■ The former USSR and non-OECD Europe have provided the second largest share of global natural gas production over the entire period, accounting for 22% in the early 1970s and for 29% in 2002.
■ The main increase in the use of natural gas has been for power generation, which with an average annual increase of 4.3%, more than tripled over the period.
Regional Gas Production
0 500 1 000 1 500 2 000 2 500 3 000
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001
Billion Cubic Metres
OECD Total Middle East Former USSR Non-OECD Europe China Asia* Latin America Africa
■ World hard coal production increased annually by 1.9% over the 30-year period to 2001, and reached over 3.8 billion tonnes in 2002.
■ The most dramatic driver of hard coal production in the past decade has been the restructuring and subsequent expansion of China’s coal production.
■ Rapid growth in Asia has been largely due to increased production in India for power generation and in Indonesia for export.
■ Coal production in former USSR countries stabilized in early 2000, after declining throughout the 1980s and 1990s, and is now increasing.
■ While OECD production over the past 30 years has risen in absolute terms, its share of world production has decreased from 51% in 1971 to 37% in 2002.
Regional Coal Production
Mt
500 1 000 1 500 2 000 2 500 3 000 3 500 4 000
0
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001
* Does not include China.
Source: Coal Information.
OECD Total Middle East Former USSR Non-OECD Europe China Asia* Latin America Africa
■ Total renewables supply experienced annual growth of 2.1% from 1971 to 2000, almost identical to the annual growth in TPES. However, the “other” category comprising geothermal, solar, wind and tide recorded a much higher annual growth of over 9%.
■ The supply of combustible renewables is concentrated in non-OECD countries where extensive use of wood and other biomass for cooking, heating and small industry is common.
■ Due to a very low 1971 base and to recent rapid development, wind energy generation experienced the highest increase, over 52% per year followed by solar at over 32%.
■ The most rapid growth of non-combustible “other” renewables like solar and wind energy has occurred in OECD member countries where government policies have stimulated expansion of these energy sources.
Annual Growth of Renewables Supply
2.1% 2.1% 1.8%
2.7%
9.4%
0%
2%
4%
6%
8%
10%
12%
TPES Renewables CRW* Hydro Other
annual growth rate
52.1%
8.4%
Wind Tide, other 32.6%
Solar Geothermal
8.8%
WORLD Figure6
* Combustible renewables & waste.
Source:Renewables Information.
Other**
Natural gas Oil
Coal Nuclear Hydro
* Excludes pumped storage.
** Includes geothermal, solar, wind and combustible renewables & waste.
Sources: Energy Balances of OECD Countries; Energy Statistics and Balances of Non-OECD Countries.
■ World electricity generation rose at an average annual rate of 3.7% from 1971 to 2001, greater than the 2.1% growth in total primary energy supply. This increase was largely due to more electrical appliances, development of electrical heating in several developed countries and rural electrification programmes in developing countries.
■ The share of thermal electricity production has gradually fallen, from just under 75% in 1971 to 65% in 2001. This decrease was due to a progressive move away from oil, which fell from over 21% to 7.5%.
■ Oil for power generation has been displaced in particular by dramatic growth in nuclear electricity generation, which rose from 2% in 1971 to just over 17% in 2001.
■ The share of coal remained stable, near 38% while that of natural gas increased from 13% to 18%.
■ The share of hydro-electricity decreased from 23% to 16.6%. The share of new and renewable energies, such as solar, wind and geothermal, grew but remains limited. In 2001, it accounted for only 1.7% of total electricity production.
World Electricity Generation*
0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000
TWh
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001
■ The overall breakdown of world total final consumption by sector did not vary greatly over the 30 years.
■ Industry remains the main energy user. Its share fell, however, from 37.7% in 1973 to 34% in 2001.
■ The share of transport rose from 24.2% in 1973 to just under 30% in 2001.
■ Other sectors (residential, services and agriculture) represent roughly one third of total consumption. Services are a growing component, especially in developed countries.
■ If biomass (which accounts for 11% of world total primary energy supply) were included, the share of household consumption would be much larger, since wood and charcoal are used mainly for cooking in many developing countries.
Transport 29.9%
Non-energy
Use 3.3% Industry 34.0%
Other sectors 32.8%
Transport 24.2%
Non-energy Use 3.6%
Other sectors 34.5%
Industry 37.7%
WORLD Figure8
* Excludes combustible renewables & waste.
Sources: Energy Balances of OECD Countries; Energy Statistics and Balances of Non-OECD Countries.
1973 2001
Final Consumption* by Sector
■ World energy demand has continued to increase even while the efficiency of many vehicles and energy-using appliances has improved. Both developed and developing countries are responsible for the growth.
■ Improvements in energy efficiency in developed countries over the recent past did not lead to decreases in energy demand, because higher living standards have resulted in higher consumer expectations. For example, vehicle efficiency improved but consumers chose to buy larger cars and drive more.
■ In developing countries, rural and urban electrification programmes, together with the development of transport and industrialisation, led to a strong increase in energy demand. The increase in demand was often faster than the growth in population.
■ Energy intensities across countries and regions vary dramatically according to factors such as geography and climate, population density and growth, economic situation and growth, the energy mix and the country-specific factors.
1971=100
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 60
80 100 120 140 160 180 200
* Total Primary Energy Supply.
** Total Final Consumption.
Sources: Energy Statistics and Balances of Non-OECD Countries.
TPES* TPES Per Capita TPES/GDP TFC**/GDP
Selected World Energy Indicators
*Emissions from fuel combustion only. Emissions are estimated using the IEA energy balances and the default methods and emission factors from the Revised 1996 IPCC Guidelines.
** Does not include China.
Source: CO2Emissions from Fuel Combustion.
Figure10
WORLD
■ Global emissions of carbon dioxide have risen by 68% since 1971. At the beginning of this period, the current OECD countries were responsible for 66% of the total.
As a consequence of rapidly increasing emissions in the developing world, the OECD contributed 53% to the total in 2001.
■ Two significant downturns can be seen in OECD CO2 emissions, following the oil shocks of the mid-1970s and early 1980s. Emissions from the economies in transition declined over the last decade, helping to offset the OECD increases between 1990 and the present. This decline did not stabilise global emissions as emissions in developing countries grew.
■ Disaggregating the emissions data shows substantial variations within individual sectors. In the early part of the period, electricity generation accounted for the majority of the increase. More recently, transport has been the fastest growing sector in terms of emissions.
■ Fossil fuel shares in overall emissions changed slightly during the period. The relative weight of coal in global emissions has remained at approximately 40% since the early 1970s. The share of natural gas has increased from 14% in 1973 to 20% in 2001.
Oil’s share decreased from 51% to 42%. Fuel switching and the increasing use of non- fossil energy sources reduced the CO2/TPES ratio by almost 9% over the past 30 years.
0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000 22 000 24 000 26 000
Million tonnes of CO2
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001
Bunkers OECD Total Middle East Former USSR Non-OECD Europe China Asia** Latin America Africa
Regional CO
2Emissions*
■ The 1973 OPEC oil embargo had a major price impact as Arabian Light prices surged from $1.84/bbl in 1972 to $10.77 in 1974. The only other experience of this kind of dramatic rise in prices was during the period of the Iranian revolution and the Iran-Iraq conflict.
■ The first spike after 1973 came in 1981, in the wake of the Iranian revolution, when prices rose to an all-time high of nearly $40. Prices declined gradually after this crisis. They dropped considerably in 1986 when Saudi Arabia increased its oil production substantially.
■ The first Gulf crisis in 1990 brought a new peak. In 1997, crude oil prices started to decline due to the impact of the Asian financial crisis.
■ Prices started to increase again in 1999 with OPEC target reductions and tightening stocks. A dip occurred in 2001 and 2002, but the expectation of war in Iraq raised prices to over $30 in the first quarter of 2003. Prices remained high in the latter part of 2003 and early 2004.
■ After the 1986 oil price decrease, the real price of crude oil has remained relatively stable.
Crude Oil Prices
0 5 10 15 20 25 30 35 40
1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003
Iran-Iraq War Iranian Revolution
OPEC Oil Embargo
Invasion of Kuwait
Second Gulf Crisis
OPEC Target Reductions Asian Financial Crisis
End of Administrative
Pricing
USD/bbl
Sources: Energy Prices and Taxes.1970 - 1984 Arabian Light prices from theOil Economists' Handbook. 1985 - 2003 Dubai M1 (Adj) prices from Platts. Crude oil prices refer to the simple average of daily prices. Real prices are calculated using the GDP deflator for GDP at market prices from OECD Economic Outlook N°74that was rebased with base year 1970 = 100.
Nominal Price Real Price
■ Some 1.6 billion people – one-quarter of world population - have no access to electricity. About 80% of these people are located in India and sub-Saharan Africa.
■ Four out of five people lacking access to electricity live in rural areas of the developing world.
■ In the absence of radical new policies, 1.4 billion people will still have no access to electricity in 2030.
■ The additional investment cost to achieve 100% electrification is $665 billion over the three decades, a 7% increase to investment needs in the electricity sector. If this investment can be mobilized – largely a matter of government priorities and good governance in recipient countries – a substantial contribution will be made to poverty alleviation.
■ Some 2.4 billion people rely on traditional biomass for cooking and heating. That number will increase to 2.6 billion by 2030. In developing countries, biomass use will still represent over half of residential energy consumption in 30 years.
Energy and Poverty
28 8
575 509
96 56
801 713 18 706
292 223
WORLD Figure12
Source: World Energy Outlook, 2002.
Millions of people without electricity Millions of people relying on biomass
■ Except during the two oil shocks in 1973 and the early 1980s, IEA energy supply constantly increased over the 30 years. IEA supply went up by 56%, lower than the 84% observed globally.
■ Oil remains by far the major contributor to supply, even though its share fell from 54% in 1973 to 41% in 2001. Oil supply peaked in 1978, and then fell by 19%
from 1979 to 1983. Since then it has increased steadily. In 2001, it reached the highest level yet, at over 2 060 Mtoe.
■ Since 1995, natural gas has become the second largest contributor, overtaking coal in the supply mix. In 2001, natural gas accounted for 21.4% and coal for 20.5%.
■ Nuclear energy experienced the largest growth both in absolute and relative terms:
2001 nuclear production was twelve times larger than in 1973, and nuclear represented 11.6% of total supply in 2001.
■ The share of renewable energies (including hydro) remained around 6%.
IEA Energy Supply*
Mtoe
0 1 000 2 000 3 000 4 000 5 000 6 000
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001
*Total Primary Energy Supply (TPES).
**Includes geothermal, solar, wind and combustible renewables & waste, etc.
Source:Energy Balances of OECD Countries.
Other**
Natural gas Oil
Coal Nuclear Hydro
■ Electricity generation in IEA countries more than doubled over the 30 years, growing at an annual rate of 3%. Several reasons explain this dramatic increase, in particular the substitution of electricity for oil in high energy-consuming end-uses, such as space heating and water heating, as well as the use of more electrical appliances.
■ Coal remains the main fuel used for electricity production. Its share in total production did not vary significantly over the period, staying around 38%.
■ Oil, which was once the second largest contributor to the electricity mix (26% in 1973) represented only 5% in 2001, far behind hydro (13%), natural gas (17%) and nuclear (25%).
■ The growth of nuclear power generation was dramatic – especially from 1975 to 1988 – as a consequence of the energy diversification policy of several IEA countries. In 2001, nuclear production was more than 12 times larger than the 1973 production. Nuclear accounted for 77% of French electricity production, 31%
of Japanese production and 21% of US production.
IEA Electricity Generation
TWh
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001
IEA Figure14
*Includes geothermal, solar, wind and combustible renewables & waste, etc.
Sources:Energy Statistics of OECD Countries; Electricity Information.
Other*
Natural gas Oil
Coal Hydro Nuclear
■ Net oil imports of IEA member countries in 2001 reached 1300 million tons (Mt), nearly the same level as in the late 1970s. In 1978, net imports accounted for 69%
of IEA countries’ total oil supply, compared to 62% in 2002.
■ Net oil imports declined significantly in the late 1970s and early 1980s falling from over 1 300 Mt in 1978 to a low of 847 Mt in 1985. Development of the oil fields in the North Sea and the substitution of other fuels for oil in electricity generation contributed to this decline.
■ In 2002, IEA countries received 42% of their net imports from the Middle East, compared to 58% in 1978. The share of Africa remained fairly stable over the period, at just under 20%. Former USSR, as the third largest supplier in 2002, provided some 200 Mt, with its share increasing from 4.5% to over 15% over the period.
■ OPEC supplied the IEA with roughly 42% of its total oil imports in 2002, compared to its high point of 70% in 1978.
IEA Oil Net Imports by Origin*
0 200 400 600 800 1 000 1 200 1 400
Million metric tonnes
1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
* Oil is defined as crude oil, NGLs, feedstocks, and all finished petroleum products. Net imports are total IEA imports from a specific region less IEA exports to the specific region.
Source: Oil Information.
Non-IEA OECD
Latin America Africa
Asia
Non-OECD Europe Non specified/other
Former USSR Middle East
■ Between 1974 and 1980, the IEA’s minimum requirement for strategic oil stocks rose from the initial level of 60 days of net imports to 90 days for all net importing member countries. Strategic stocks include both crude oil and refined petroleum products.
■ Stocks peaked in the mid-1980s at around 150 days of net imports. Since then, they have been falling steadily.
■ Total strategic stocks are comprised of both public (government and agency) and industry stocks. Currently, about one third is public and two thirds are industry stocks.
■ With net imports likely to increase through the next decade, compliance with stock requirements will result in additional stock building; closer work with non- member countries on emergency response issues will also be necessary.
Strategic Stocks of IEA Importing Countries
0 20 40 60 80 100 120 140 160
1975 1979 1983 1987 1991 1995 1999 2002
Days of Net Imports
Minimum IEA requirements
IEA Figure16
* Public stocks include stockholding agency and government stocks.
Sources: Monthly Oil Statistics. IEA Emergency Reserve Issues, and regular reports to the IEA Standing Group on Emergency Questions (SEQ) on the emergency reserve situation.
Industry Public*
■ Historically, growth in energy demand relative to Gross Domestic Product in IEA countries has differed according to sector.
■ Electricity demand has grown along with GDP. Energy input in electricity generation grew in line with electricity demand.
■ Energy consumption in the transport sector has also increased as economies expanded.
■ In the case of stationary fossil fuel end uses, however, there were two periods of decline in energy consumption relative to GDP. These followed the 1973 and 1979 oil shocks. Demand for stationary fossil fuel end uses was affected by the oil price increases, whereas electricity demand was not.
A Sectoral View of IEA Energy Demand
Mtoe
0 500 1 000 1 500 2 000
9 000 11 000 13 000 15 000 17 000 19 000 21 000 23 000 Transport
Electricity demand Energy in electricity
generation*
Stationary fossil fuel end uses
1971 2001
Gross domestic product in billion 1995 US dollars (purchasing power parities)
* Excludes autoproducers for the United States.
Source: Energy Balances of OECD Countries.
■ IEA countries have achieved significant energy savings since the first oil price shock.
These savings came as energy efficiency improved across most sectors and end uses.
A recent IEA study estimates that without these savings final energy consumption in 1998 in a group of eleven IEA countries* would have been 50% higher than it actually was.
■ Actual energy use, including the effect of energy savings grew only a modest 20%
between 1973 and 1998, while without the savings the growth would have been more than 80% over the period.
■ However, the rates of energy savings have slowed significantly since the late 1980s.
Both energy demand and CO2 emissions grew much faster after 1990 than before.
■ The slowing rates of energy savings indicate that the oil price shocks in the 1970s and the resulting energy policies did more to control growth in energy demand and CO2emissions than energy efficiency and climate policies implemented in the 1990s.
Final Energy Demand and Savings
Actual energy use Additional energy use without savings
0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000
1973 1976 1979 1982 1985 1988 1991 1994 1997
Mtoe
50%
IEA Figure18
* Australia, Denmark, Finland, France, Germany, Italy, Japan, Norway, Sweden, the UK and the US, together denoted IEA-11. The methodology used for the IEA study requires time series going back to 1973 with detailed energy and activity data. IEA-11 represents the countries for which these data were available. Together IEA-11 accounts for more than 80% of IEA total energy demand and thus the results shown for this group well represent the overall IEA development.
Source: Oil Crises and Climate Challenges: 30 Years of Energy Use in IEA Countries, IEA/OECD 2004.
■ Sharp improvements in the efficiency of key end uses, shifts to electricity, and some shifts in manufacturing output and consumer behaviour occurred in many IEA countries between 1971 and 2001. As a consequence, energy consumption (TFC) per unit of GDP fell significantly, particularly in the 1979-1990 period.
■ Contributing to the trend were higher fuel prices, long-term technological progress, government energy efficiency programmes and regulations. Overall growth in per capita GDP, combined with higher living standards and slow population growth, produced steadily rising demand after 1985.
■ The ratio of energy supply to economic growth (TPES/GDP) fell less than the ratio of energy consumption to economic growth (TFC/GDP), because of increased use of electricity. The main reason for this is that electricity generating losses outweighed intensity improvements achieved in end uses such as household appliances.
■ Among IEA countries, the ratio of energy consumption to GDP varies by as much as a factor of two. Apart from energy prices, winter weather is a key element in these variations, as are raw materials processing techniques, the distance goods must be shipped, home size and other lifestyle factors.
Selected IEA Energy Indicators
50 60 70 80 90 100 110 120 130 140 150 160
1971=100
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001
*TPES: Total Primary Energy Supply.
** TFC: Total Final Consumption.
Source: Energy Balances of OECD Countries.
TPES* TPES per capita TPES/GDP TFC**/GDP
■ For the group of 11 IEA countries (IEA-11), energy intensities** fell in all sectors since 1973, but at different rates. The strongest decline came in manufacturing where the intensity fell by 41% over the 1973 to 1998 period. Generally the manufacturing output mix in most IEA countries shifted moderately towards less energy intensive products. Together the energy intensity effect and the effect of structural changes reduced IEA-11 manufacturing energy use per value-added by 50% between 1973 and 1998.
■ The service and household sectors trailed manufacturing in terms of total intensity reductions, with slightly stronger reductions than the average for the whole economy.
■ Freight and passenger transport have pulled up the average economy-wide intensity effect. Although individual trucks have become more efficient, the energy intensity decline per tonne-km is modest due to a trend towards trucks carrying lighter goods.
Similarly, major improvements were made to engines and other car components, but these were largely offset by heavier and more powerful cars for passenger travel.
■ The rate of intensity decline has slowed in all sectors since the late 1980s. The intensity effect for the whole economy declined by as much as 2.0% per year on average between 1973 and 1990. After 1990, the decline rate was down to only 0.7% per year. This tendency of slowing energy savings rates is confirmed across most sectors when more recent data are available.
Energy Intensity Effects by End-Use Sector*
50%
60%
70%
80%
90%
100%
110%
1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997
1973 Energy intensity effects = 100%
IEA Figure20
* For IEA-11: Australia, Denmark, Finland, France, Germany, Italy, Japan, Norway, Sweden, the UK and the US.
** The energy intensities in the figure represent the weighted sums of disaggregated intensities for each sector.
Source: Oil Crises and Climate Challenges: 30 Years of Energy Use in IEA Countries, IEA/OECD 2004.
Freight transport Passenger travel Total economy
Service Households Manufacturing
■ Common patterns exist in the evolution of the prices of oil, natural gas and coal since 1982 (when the price of crude oil was at its peak).
■ The price of crude oil represents a benchmark for the other fuel prices, although it seems that this is less the case in recent years.
■ The trends since 1982 are similar, although the decreases in prices for gas and coal have been slightly more than for oil. Short-term variations in oil prices, such as the Gulf crisis peak in 1991, have repercussions on the other fuels but are less marked.
■ In recent years, prices of oil and gas increased to levels that were close to those of 20 years ago, although during a large portion of this period they were much lower.
Coal prices were also significantly lower during most of the last 20 years; however, they have increased in 2003 and 2004.
Selected Fuel Price Indices*
0 50 100 150 200 250
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
1995 = 100
* Real indices of fuel prices. The oil index is based on the average IEA crude oil import cost in USD/bbl, the coal index is based on the average OECD steam coal import costs in USD/tonne, the natural gas index is based on average OECD gaseous natural gas and LNG import prices in USD/MBtu.
Source: Energy Prices and Taxes.
Steam coal Crude oil Natural gas
■ The curve of IEA R&D budgets follows the general trend of crude oil prices, with a peak in the early 1980s, when the barrel of crude oil was at a high of nearly $40, and a constant decline since then.
■ In 1980, because of the search for alternatives to oil as a source of energy, R&D budgets reached $15 billion. By 1985, budgets had decreased 20% and by 1990 another 25%. The decrease continues; in 1998, total budgets were back to 1975 levels.
■ Nuclear fission still accounts for the largest proportion of energy R&D expenditure, although its share has declined most since 1985. Currently, about 40% of total IEA spending on R&D is committed to nuclear fission and about 10% to nuclear fusion.
■ Although the share of expenditure on energy conservation has increased over the last 15 years, investments in this area remain limited.
IEA Government Budgets for Energy R&D*
0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000
1975 1980 1985 1990 1995 1998
Million USD, 2002 prices and exchange rates
IEA Figure22
* Yearly totals are not always comparable due to missing data for some countries.
Source: IEA Energy Technology R&D Statistics.
Conservation Oil & natural gas Coal Renewable energy Nuclear fission/fusion Power & storage tech. Other tech./research
■ Unless governments introduce new energy policies, growth in world energy production and consumption in the next three decades is projected to be 65%
higher than the growth in the past 30 years.
■ There will be a pronounced shift in the geographical sources of incremental energy supplies over the next three decades in response to a combination of cost, geological and technical factors.
■ Almost all growth in energy production over the next 30 years will come from non- OECD countries.
■ More than 70% of energy demand growth over the next three decades will come from outside the OECD.
Production and Consumption
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000
Production Consumption Production Consumption
Mtoe
1971-2000 2001-2030
Source: World Energy Investment Outlook, 2003 Insights.
OECD Transition economies Developing countries
OUTLOOK Figure24
* Total Primary Energy Supply (TPES).
** Includes bunkers.
Source: World Energy Outlook, 2002.
■ Without policy changes, world energy demand is projected to increase steadily at 1.7% per year through 2030, less than the 2.1% annual growth over the past 30 years.
■ In that event, fossil fuels will remain the primary sources of energy and will meet 90% of the increase in demand to 2030.
■ Among fossil fuels, natural gas will grow fastest, but oil will remain the most important energy source. Oil demand will increase from 75 mb/d in 2000 to 120 mb/d in 2030. Coal, which remains important in power generation because of its low cost, will still account for 24% of TPES.
■ Renewables will grow in importance, while the share of nuclear power in world energy supply will drop.
0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000
2000 2005 2010 2015 2020 2025 2030
Mtoe
Other renewables Natural gas
Oil**
Coal Nuclear Hydro
World Primary Energy
Demand* Outlook
■ A structural shift in the shares of different regions in world energy demand is likely to occur between now and 2030 with the OECD share of world energy demand falling from 58% in 2000 to 47% in 2030.
■ More than 62% of the increase in world primary energy demand between 2000 and 2030 will come from the developing countries, particularly Asia.
■ The increase in demand for China represents about a fifth of the total increase in worldwide demand from 2000 to 2030. As an example, demand for oil in China will be double that of Japan by 2030. The total share of Asia – including China – will amount to 27% in 2030.
■ The increase in the share of the developing regions in world energy demand results from their rapid economic and population growth, industrialisation and urbanisation. The replacement of non-commercial biomass by commercial fuels will also help to boost demand.
Demand* Outlook
0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000
2000 2010 2020 2030
Mtoe
* Total Primary Energy Supply (TPES).
** Includes Former USSR and Non-OECD Europe.
Source: World Energy Outlook, 2002.
OECD Transition economies** Middle East
Bunkers Latin America Africa
Other Asia
China
■ A significant regional shift is likely to occur between now and 2030 in world oil demand with the majority of the growth in developing countries, particularly Asia.
■ Oil import dependence is expected to increase in all major oil consuming regions. OECD increases will come from a combination of oil consumption growth and depletion of indigenous oil reserves in the United Kingdom, Norway and North America.
■ Concerning natural gas import dependency, the biggest markets - particularly North America and Europe - will become much more dependent on imports between now and 2030.
■ Asia will see the largest growth in import dependence. India and China will import around 90% of their oil requirements by 2030.
■ Oil supply security is becoming an important political issue in Asia. Governments in both India and China have agreed to establish strategic oil reserves.
■ OECD’s share of global oil demand will decline significantly from 60% in 2000 to 48% in 2030.
OUTLOOK Figure26
Source: World Energy Outlook, 2002.
Global Oil Import Dependency
0 20 40 60 80 100
OECD Pacific
OECD Europe
OECD N. America
South Asia
China East Asia
Net Imports as % of Oil Supply
2010
2000 2030
■ Projections through the year 2030 show a continuing increase in global carbon dioxide emissions, if no new policies and measures are put in place. Under this scenario, emissions are projected to grow by 69%, slightly more than the growth of 66% in energy supply. The most rapid increases are seen as occurring in Non-OECD countries, where emissions will more than double over the period.
■ The share of OECD emissions in total emissions will decrease from 54% in 2000 to 42% in 2030. Meanwhile, China’s share alone will increase from 13% to 17%.
■ Power generation, which currently accounts for around 40% of the emissions will contribute almost half the increase (or 8 billion tonnes) in global emissions between 2000 and 2030. Transport will account for more than a quarter, residential, commercial and industrial sectors for the rest.
■ The average carbon content of energy – CO2 emissions per unit of aggregate primary energy consumption – will increase over the next 30 years. The main cause of this reversal will be the declining share of nuclear and hydro power in the global energy mix.
Source: World Energy Outlook, 2002.
CO
2Emissions Outlook
0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 45 000
Million tonnes of CO2
2000 2005 2010 2015 2020 2025 2030
OECD
Bunkers Latin America Africa
Other Asia
China Transition economies
Middle East
■ More than $16 trillion, or $550 billion a year, needs to be invested in energy-supply infrastructure worldwide over the three decades to 2030, an amount equal to 1% of projected gross domestic product.
■ The electricity sector alone will need to spend almost $10 trillion to meet a projected doubling of world electricity demand, accounting for 60% of total energy investment.
If the investments in the oil, gas and coal industries that are needed to supply fuel to power stations are included, this share reaches more than 70%. Transmission and distribution will account for more than power production.
■ Total investments in the oil and gas sectors will each amount to more than
$3 trillion, or around 19% of global energy investment. Coal investment will be almost
$400 billion, or 2%.
■ For the energy sector as a whole, 51% of investment in production will be simply to replace existing and future capacity. The rest will be needed to meet the increase in demand.
■ Almost half of total energy investment will take place in developing countries, where production and demand are expected to increase most.
■ In today’s liberalised energy markets – in which financing energy projects is increasingly the role of the private sector – governments must act to create the right enabling conditions.
OUTLOOK Figure28
* Exploration and development.
** Transmission and distribution.
Source: World Energy Investment Outlook, 2003 Insights.
Investment Needs in the Energy Sector
Total investment: 16 trillion dollars
Oil 19%
Electricity 60%
Coal 2%
Gas 19%
E&D*
LNG Chain T&D** and Storage
55%
37%
8%
Power generation
T&D**
54%
46%
Mining
Shipping and ports 12%
88%
Refining E&D* 72%
13%
15%
Other
