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IEA forecasts 40% energy demand growth by 2030; mostly fossil fuels

Wednesday, November 11th 2009 - 10:55 UTC
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Nobuo Tanaka, IEA Executive Director optimistic about containing climate change Nobuo Tanaka, IEA Executive Director optimistic about containing climate change

World global demand for energy which has fallen in 2009 because of the recession is forecasted to soar 40% by 2030 and the Copenhagen summit next month will be “crucial” to design an energy sustainable future according to the “World Energy Outlook 2009” released in London by the International Energy Agency.

The report points out that by 2030 the barrel of oil will average 115 inflation-free US dollars, having reached 100 USD in 2020. This means a real 40% increase over the average of 2009, when the barrel dropped to 60 USD after having averaged 97 USD the previous year.

IEA estimates world demand for oil will expand a sustained 1% annually which means 105 million barrels per day by 2030, from the current 85 million.

Fossil fuels will continue to dominate representing three fourths of energy demand and non OPEC countries will be providing 90% of that volume. Among developing countries China and India will continue leading energy consumption growth with a future demand equivalent to 50% of the group of countries outside OECD.

China more specifically is set to become the world’s main consumer of energy, ahead of the US, and by 2025 is forecasted as the principal spender demander of oil and gas.

Regarding climate change the WEO-2009 provides both a caution and grounds for optimism.

Caution, because a continuation of current trends in energy use puts the world on track for a rise in temperature of up to 6°C and poses serious threats to global energy security.

“Optimism, because there are cost-effective solutions to avoid severe climate change while also enhancing energy security – and these are within reach as the new WEO shows” according to Nobuo Tanaka, Executive Director IEA.

WEO demonstrates that containing climate change is possible but will require a profound transformation of the energy sector. A 450 Scenario sets out an aggressive timetable of actions needed to limit the long-term concentration of greenhouse gases in the atmosphere to 450 parts per million of carbon-dioxide equivalent and keep the global temperature rise to around 2°C above pre-industrial levels.

To achieve this scenario, fossil-fuel demand would need to peak by 2020 and energy-related carbon dioxide emissions to fall to 26.4 gigatonnes in 2030 from 28.8 Gt in 2007.

Energy efficiency is the largest contributor, accounting for over half of total abatement by 2030. Low-carbon energy technologies also play a crucial role: around 60% of global electricity production comes from renewables (37%), nuclear (18%) and plants fitted with carbon capture and storage (5%) in 2030.

Furthermore, a dramatic shift in car sales occurs, with hybrids, plug-in hybrids and electric vehicles representing almost 60% of sales in 2030, from around 1% today.

Compared to the Reference Scenario, cumulative incremental investment of 10.5 trillion USD is needed in the 450 Scenario in low-carbon energy technologies and energy efficiency by 2030. In addition to avoiding severe climate change, this cost is largely offset by economic, health and energy-security benefits.

Energy bills in transport, buildings and industry alone are reduced by 8.6 trillion USD globally over the period 2010-2030. “The challenge for climate negotiators is to agree on instruments that will give the right incentives to ensure that the necessary investments are made and on mechanisms to finance those investments in non-OECD countries,” said Mr. Tanaka and added: “In our 450 scenario in OECD countries the carbon price reaches 50 USD per tonne of CO2 in 2020 and 110 in 2030.”

Whatever climate policies are introduced, natural gas – a special focus in WEO-2009 – is also set to continue to play a bridging role in meeting the world’s sustainable energy needs.

In the Reference Scenario, gas demand rises by 41% from 3.0 trillion cubic metres in 2007 to 4.3 tcm in 2030. Gas demand also continues to expand in the 450 Scenario but is 17% lower in 2030 than in the Reference Scenario thanks to more efficient use, lower electricity demand and increased switching to non-fossil energy sources.

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