Tapping technology’s potential to secure a clean energy future

Ms. Maria van der Hoeven Executive Director International Energy Agency Helsinki, 31 August 2012 © OECD/IEA 2012

Key messages

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Sustainable energy future is still feasible and technologies exist to take us there Despite potential of technologies, progress is too slow at the moment A clean energy future requires systemic thinking and deployment of a variety of technologies It even makes financial sense to do it!

Government policy is decisive in unlocking the potential

Energy demand and emissions have doubled in the past 40 years

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From 6000 Mtoe to 12 000 Mtoe Rapid demand growth outside OECD

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CO 2 emissions from 14Gt to 30Gt Since 2005, non-OECD countries emit more than OECD

Source: IEA statistics

ETP 2012 – Choice of 3 Futures

2DS

a vision of a sustainable energy system of reduced Greenhouse Gas (GHG) and CO 2 emissions

The 2°C Scenario 4DS

reflecting pledges by countries to cut emissions and boost energy efficiency

The 4°C Scenario 6DS

where the world is now heading with potentially devastating results

The 6°C Scenario

© OECD/IEA 2012

ETP2012: need to cut CO 2 by 50% by 2050

  To achieve ambitious climate goals, the world needs to cut energy related CO 2 emissions by 50% from today’s levels… …but as populations grow and growth in energy consumption is inevitable, the reduction challenge is even higher: gap of 24-42 Gt in

2050

© OECD/IEA 2012

Clean energy: slow lane to fast track

Cleaner coal power Nuclear power Renewable power CCS in power CCS in industry Industry Buildings

Progress is too slow in almost all technology areas Significant action is required to get back on track

Fuel economy Electric vehicles Biofuels for transport © OECD/IEA 2012

Energy RD&D has slipped in priority

25 12% 10% 20 15 10 5 8% 6% 4% 2% 0 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 0% Energy efficiency Renewable energy Hydrogen and fuel cells Other cross cutting technologies/research Fossil fuels Nuclear Other power and storage technologies Share of energy RD&D in total R&D 2008 non-IEA country spending 4 1 0 3 2 © OECD/IEA 2012

A smart, sustainable energy system

Co-generation Renewable energy resources Centralised fuel production, power and storage Distributed energy resources Smart energy system control Surplus heat EV

A sustainable energy system is a smarter, more unified and integrated energy system

Renewables need to dominate EU electricity

5 000 4 500 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 0 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 4% 4% 10% 13% 17% 21% 28% 28% 7% 9% 10% 22% 13% 53% 2009 4DS 1% 23% 27% 4DS 7% 2% 2DS 2DS 2050 Other renewables Wind Hydro Nuclear Fossil w/o CCS Fossil w/o CCS

Renewables cover two-thirds of the electricity mix in 2050 in the 2DS, with wind power alone reaching a share of 30% in the mix.

© OECD/IEA 2012

Two very different profiles for power generation

  Power generation from natural gas increases to 2030 in the 2DS and the 4DS.

From 2030 to 2050, generation differs markedly.

10 000 7 500 5 000

4DS

2 500 0 2009 2020 10 000 7 500 5 000

2DS

2050 2 500 0 2009 2020 2030 OECD 2040 2030 2040

Natural gas-fired power generation must decrease after 2030 to meet the CO 2 emissions projected in the 2DS scenario.

2050 © OECD/IEA 2012

Finland: bio-energy and nuclear

  Bio-energy and nuclear dominate Finland’s low-carbon energy sector after 2030 Contribution of fossil fuels is halved during the next four decades © OECD/IEA 2012

Industry must become more efficient

12 6DS 10 Other industries 8 Chemicals and petrochemicals Aluminium 6 4 Pulp and paper Iron and steel 2 0 2010 2020 2030 2040 2050

Significant potential for enhanced energy efficiency can be achieved through best available technologies.

Cement

Clean energy investment pays off USD trillion

Every additional dollar invested in clean energy can generate 3 dollars in return .

Recommendations to Governments

1. Create an investment climate of confidence in clean energy 2. Unlock the incredible potential of energy efficiency – “the hidden” fuel of the future 3. Accelerate innovation and public research, development and demonstration (RD&D) © OECD/IEA 2012

For much more, please visit

www.iea.org/etp

© OECD/IEA 2012