Transcript World Energy Outlook

INTERNATIONAL ENERGY AGENCY
Euroheat & Power Conference
Brussels, 22 June 2006
Electricity Markets Outlook to 2030:
Challenges and Opportunities
Francois Nguyen
Senior Policy Advisor
Office of Long-Term Co-operation and Policy Analysis
World Energy Investment
2004-2030
Total investment: 17 trillion dollars
Gas 18%
46%
Power
Generation
54%
T&D
Electricity 61%
Oil 19%
Coal 2%
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The power sector will need $10 trillion, over 60% of total
energy-related investment
Electricity Market Context
 Market reforms at varying stages of implementation
worldwide
 Most advanced in OECD countries
 Pace slow but steady
 Surging fossil-fuel prices make investment climate
uncertain
 Blackouts in some OECD countries have
heightened concerns about system reliability and
generation adequacy
 Governments increasingly looking to energy
efficiency and renewables to promote sustainability
 Current market instability and uncertainties
complicate preparation of long-term strategies
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Generating Capacity Requirements
2004-2030
China
OECD North America
OECD Europe
Other Asia
Transition economies
OECD Pacific
Africa
India
Other Latin America
Middle East
Brazil
Indonesia
0
100 200 300 400 500 600 700 800 900
GW
Under construction
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Planned
Additions needed by 2030
Some regions need to speed up investment to prevent the
‘lights going out’
World Electricity Generation
14 000
12 000
TWh
10 000
8 000
6 000
4 000
2 000
0
2004
Coal
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Oil
Gas
2030
Nuclear
Hydro
Other renewables
Gas-based electricity production will triple, but coal will remain
the dominant fuel worldwide
Power Sector CO2 Emissions
Coal
2004
Gas
Oil
Coal
2030
Gas
Oil
0
2 000
4 000
6 000
8 000
10 000
12 000
Mt of CO 2
OECD
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Developing countries
Transition economies
In 2030, coal plants in developing countries will produce more
CO2 than the entire power sector in the OECD
Age of Installed Capacity
in Europe
140
120
100
80
GW
Oil
Gas
Coal
60
Nuclear
40
20
0
< 10 years
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10 - 20 years
20 - 30 years
> 30 years
Europe's power plants are ageing: more than half the
current capacity could be retired by 2030
EU-25 Capacity Increases, 2005-2030
1200
1000
GW
800
600
400
200
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0
2005
2010
2015
Existing
2020
New
2025
2030
EU-25 Electricity Generation, 1990-2030
4500
4000
3500
3000
2500
2000
1500
1000
500
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0
1990
1995
Coal
2000
Oil
Gas
2005
Nuclear
2010
Hydro
2015
Wind
2020
2025
Other renewables
2030
Share of Natural Gas in Electricity
Generation in EU
5000
4000
TWh
3000
2000
1000
0
1992
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2002
2010
Natural gas
2020
Other fuels
2030
The share of gas in power generation increases
from 19% today to 34% in 2030
Key Policies in Alternative Scenario for
European Union
Power generation
Renewable energy directive
CHP directive
Transport sector
Prolongation and tightening of Voluntary Agreement
with car manufacturers
Biofuels target
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Residential and commercial sectors
Energy performance in buildings directive
Energy labelling
Share of Non-Hydro Renewables in
Electricity Generation, 2030
European Union
OECD North America
OECD Pacific
East Asia
Latin America
China
South Asia
Middle East
Africa
Transition economies
0%
5%
10%
Reference Scenario
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15%
20%
Alternative Scenario
25%
RS
New policies would boost the share of non-hydro-renewables in
EU power generation – already the highest in the world
Share of CHP Electricity
25%
2030 AS
20%
2030 RS
15%
10%
5%
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0%
2004
EU CO2 Emissions in the Reference &
Alternative Scenarios
5 000
Mt of CO 2
4 500
4 000
3 500
Kyoto Target
3 000
2 500
2 000
1990
2000
Reference Scenario
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2010
2020
2030
Alternative Scenario
With new policies, EU CO2 emissions stabilise by 2010 and fall
after 2020
Comparison of Various Electricity
Generating Options (1)
Gas CCGT
 Main choice in 1990s and continuing (significant increases







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by 2010)
Lowest capital cost (~$550/kW), quick cost recovery, low
risk in liberalised markets
Low CO2 emissions per kWh (less than half the emissions
of a coal plant)
Very low or zero emissions of SO2, NOx, particulates
Flexibility (can be operated at different load factors)
Short construction time (~2 years now)
Fuel costs 70% to 80% of total costs – sensitive to fuel
price changes (high and volatile gas prices)
Security of supply in gas-importing countries
Comparison of Various Electricity
Generating Options (2)
On site CHP
 Saves fuel
 Saves emissions
 Saves investment in network
 Heat load required for efficient operations
 Main options: gas and biomass
 Regulatory issues
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Comparison of Various Electricity
Generating Options (3)
Coal
 High initial investment (twice the cost of
CCGT, $1000 to $1200 per kW)
 High CO2 emissions per kWh
 Additional costs for scrubbers
 Longer construction time (4-5 years)
 Low and relatively stable fuel costs
 Coal: abundant reserves, stable supply
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Comparison of Various Electricity
Generating Options (4)
Wind
 High initial investment ($1000 per kW)
 No fuel costs
 No emissions
 Economics fairly good at windy locations
 Variable output- additional costs for
backup and grid reinforcement (additional
cost $5 to $15 per MWh)
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Comparison of Various Electricity
Generating Options (5)
Nuclear
 Large initial investment ($1700 to $2000
per kW)
 Low fuel costs – stable generating costs
 No CO2 emissions, no SO2, NOx,
particulates
 Public acceptance (waste, proliferation)
 Secure, sustained power
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WEO 2006: Main Themes
 World Alternative Policy Scenario
 Beyond the Alternative Scenario
 Impact of high energy prices
 Energy Investment Prospects
 Outlook for Biofuels
 Sustainable Use of Biomass
 Outlook for Nuclear Power
 Country in focus: Brazil
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Summary & Conclusions
 Electricity sector will dominate global energy
investment needs
 About 5 000 GW of new capacity will be needed to
meet rising electricity demand and plant
retirements
 Generation mix will change over the next two
decades
 More vigorous policies would curb rate of increase
in energy demand and emission significantly
 Energy efficiency (including CHP), renewables and
nuclear can play a role in promoting sustainability
 CHP has the potential to increase its share and can
benefit from government and regulatory policies
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