World Energy Outlook 2013

London, 12 November

OECD/IEA 2013

The world energy scene today

Some long-held tenets of the energy sector are being rewritten

Countries are switching roles: importers are becoming exporters

and exporters are among the major sources of growing demand
New supply options reshape ideas about distribution of resources
But long-term solutions to global challenges remain scarce

Renewed focus on energy efficiency, but CO2 emissions continue to rise

Fossil-fuel subsidies increased to $544 billion in 2012
1.3 billion people lack electricity, 2.6 billion lack clean cooking facilities
Energy prices add to the pressure on policymakers

Sustained period of high oil prices without parallel in market history

Large, persistent regional price differences for gas & electricity
OECD/IEA 2013

The engine of energy demand growth

moves to South Asia
Primary energy demand, 2035 (Mtoe)

Share of global growth

2012-2035

Eurasia

Latin
America

Europe
1 370
United
States

8%

China

1 710

4 060

2 240

Middle 1 050
East
Brazil
480

1 030
Africa

1 540

Eurasia OECD

1 000

Africa
440

Japan

Southeast
Asia

5% 4%

8%

Middle 10%
East

65%

India
Non-OECD
Asia

China is the main driver of increasing energy demand in the current decade,
but India takes over in the 2020s as the principal source of growth
OECD/IEA 2013

A mix that is slow to change

Growth in total primary energy demand
1987-2011
Gas

2011-2035

Coal
Renewables
Oil
Nuclear
500

1 000

1 500

2 000

2 500

3 000
Mtoe

Today's share of fossil fuels in the global mix, at 82%, is the same as it was 25 years
ago; the strong rise of renewables only reduces this to around 75% in 2035
OECD/IEA 2013

Emissions off track in the run-up

to the 2015 climate summit in France
Carbon budget for 2 C

Cumulative energy-related CO2 emissions

Total emissions
1900-2035

Gt 800

Remaining
budget

600
Non-OECD
Non-OECD
49%
OECD

400

1750-2011
Carbon budget
for 2 C
2012-2035

200
OECD
51%
1900
-1929

1930
-1959

1960
-1989

1990
-2012

2013
-2035

Non-OECD countries account for a rising share of emissions, although 2035 per capita
levels are only half of OECD; the
the22CCcarbon
carbonbudget
budget is being spent much too quickly
OECD/IEA 2013

Oil use grows, but in a

narrowing set of markets
Oil demand by sector
region
mb/d 105
100

Other
Gasoline

95

Diesel

90

Other

Middle East
India

85

OECD

China

80

75
2012

Transport

Petrochemicals

Other
sectors

2035

China becomes the largest consumer of oil by 2030, as OECD oil use drops; demand is
concentrated in transport, where diesel use surges by 5.5 mb/d,, & petrochemicals
OECD/IEA 2013

Turbulent times for the refining sector

Refinery capacity and operation
mb/d 105

Other
Middle East
India
New refinery
capacity
China

100
95
90

Existing
spare &
excess
capacity

85
80

Oil bypassing
refineries

Spare &
excess
capacity
with 10 mb/d
at risk of
closure
by 2035

Oil processed
demand
by refineries

75
70
65
2012

2035

More oil bypassing the refining system and new capacity in growing non-OECD
markets piles pressure on existing refiners, especially in Europe
OECD/IEA 2013

Two chapters to the oil production story

Contributions to global oil production growth
Conventional:
2013-2025

Middle East

2025-2035

Brazil
Rest of the world
Unconventional:
2013-2025

Light tight oil

Oil sands, extra-heavy oil,
coal/gas-to-liquids, & other
-8

-6

-4

-2

8
mb/d

The United States (light tight oil) & Brazil (deepwater) step up until the mid-2020s,
but the Middle East is critical to the longer-term oil outlook
OECD/IEA 2013

Brazil cuts a distinctive profile

Brazil oil production
mb/d 6

Electricity mix by fuel, 2035

100%

Oil production:

Other

80%

Deepwater

4
60%

Electricity generation:

Other renewables
40%

Bioenergy

Hydropower
20%

Nuclear

Fossil fuels
2012

2025

2035

Brazil

World

Complex deepwater projects see Brazil joining the top ranks of global oil producers,
while the domestic power mix remains one of the least carbon-intensive in the world
OECD/IEA 2013

Capacity to change?
Power generation capacity additions and retirements, 2013-2035
United States
Net additions
Additions

European Union

Retirements
Japan
China

India
Middle East
200

400

600

800

1 000

1 200

1 400

1 600
GW

China & India together build almost 40% of the worlds new capacity;
60% of capacity additions in the OECD replace retired plants
OECD/IEA 2013

Renewables power up around the world

Growth in electricity generation from renewable sources, 2011-2035
TWh 2 100

Other
renewables

Other
ASEAN
renewables

Other
United
renewables
States

Solar PV

Solar
PV
Africa

Solar PV
Japan

Wind
China

1 800
1 500
1 200
900
600
300

Wind
European
Union
Hydro
Europe, Japan
and United States

Wind
Latin
America
Hydro
Hydro

India

China

India, Latin America,

ASEAN and Africa

The expansion of non-hydro renewables depends on subsidies that more than double
to 2035; additions of wind & solar have implications for power market design & costs
OECD/IEA 2013

Who has the energy to compete?

Ratio of industrial energy prices relative to the United States
Natural gas

Electricity

5
Reduction
from 2013

2035
2013
2003

2003
2
United States

Japan

European
Union

China

Japan

European
Union

China

Regional differences in natural gas prices narrow from todays very high levels
but remain large through to 2035; electricity price differentials also persist
OECD/IEA 2013

An energy boost to the economy?

Share of global export market for energy-intensive goods
+3%

European Union
+1%

Today

36%

10%

+2%

+2%

7%

3%

2%

China

Middle East

India

Japan
7%

United States
-3%
-10%

The US, together with key emerging economies, increases its export market share
for energy-intensive goods, while the EU and Japan see a sharp decline
OECD/IEA 2013

LNG from the United States

can shake up gas markets
Indicative economics of LNG export from the US Gulf Coast (at current prices)
$/MBtu
18
15
12

$/MBtu
12

3
To Asia

Average import price

Liquefaction, shipping
& regasification
United States price

To Europe

New LNG supplies accelerate movement towards a more interconnected global

market, but high costs of transport between regions mean no single global gas price
OECD/IEA 2013

Orientation for a fast-changing energy world

China, then India, drive the growing dominance of Asia in global

energy demand & trade

Technology is opening up new oil resources, but the Middle East

remains central to the longer-term outlook

Regional price gaps & concerns over competitiveness are here

to stay, but there are ways to react with efficiency first in line
The transition to a more efficient, low-carbon energy sector

is more difficult in tough economic times, but no less urgent

OECD/IEA 2013