© World Energy Council 2014 World Energy Scenarios Composing Energy Futures to 2050 Prof. Karl Rose, Senior Director, WEC London

© World Energy Council 2014 The scenarios are designed to help a range of stakeholders to address the “energy trilemma” – of achieving environmental sustainability, energy security and energy equity. WEC’s latest scenarios study: ► Comprises of two scenarios Stories quantified by Paul Scherrer Institute (project partner)

© World Energy Council 2014 What are scenarios? ►portray a range of conceivable outcomes and aid the understanding of how different factors can interact and shape the future. ►identify robust trends; ‘what-if’ assumptions about future. Scenarios are not forecast. - Plausible, pertinent, alternative stories of the future which: Figure: The uncertainty funnel: WEC Scenarios are explorative, rather than normative

© World Energy Council Scenario Building Process

© World Energy Council 2014  Two Scenarios stories, exploratory, different and equally probable rather than good and bad  Jazz: Trade based, consumer driven, focussed on access and affordability. achieving growth through low cost energy. Governments facilitate GHG actions.  Symphony: Government led, voter driven, focussed on environmental goals and energy security, national and regional measures to increase share of renewables in energy mix. Binding international agreement on GHG emissions WEC Scenarios Deriving the scenario stories 5

© World Energy Council Jazz Highlighted results: The share of fossils fuels in the total primary energy supply: In Jazz in 2050: 77% In Symphony in 2050: 59% (cf. share of fossils in 2010: 80%) Global final energy demand: Jazz 2050: 629 EJ Symphony 2050: 491 EJ (cf. the demand in 2010: 373 EJ) Per capita electricity consumption will roughly double: In Jazz by 2050: 5440kWh/y In Symphony by 2050: 4600kWh/y (cf. consumption in 2010: 2580kWh/y) The cumulative CO ₂ emissions are for 2010 to 2050: Jazz: 2000Gt Symphony: 1400Gt (cf. roughly 1000Gt from the period , source:

© World Energy Council Global total primary energy supply JAZZ: Upstream liberalized; technology development, supply surge/more producers Coal remains dominant in some regions SYMPHONY: Tighter supply (lower E&P) Higher infrastructure costs Energy security drives reduced fossil use

© World Energy Council Electricity production by primary energy JAZZ: coal: expected to remain dominant gas: share increases (esp. N. America), nuclear: mainly non- OECD SYMPHONY: coal: share drops, CCS increasingly required nuclear: increasing; led by governments Renewables: stable & quicker transition

© World Energy Council Renewable electricity production Jazz Symphony Renewables undergo rapid development, accounting for almost 50% of total electricity generation in 2050 (cf. 20% in 2010) Hydro and wind electricity are competitive. Renewables account for roughly 30% of total electricity generation by 2050.

© World Energy Council The global economy will be challenged to meet the 450 ppm target without enormous economic costs Resulting CO ₂ emissions (black lines)

© World Energy Council 2014 Results for Latin America & the Caribbean

© World Energy Council Total primary energy supply: Latin America & The Caribbean JAZZ: Region is well suited to develop biomass to a large extent, reaching 32% of total primary energy in the region by 2050 compared to 22% in SYMPHONY: Biomass will play a dominant role, accounting for 44% of the total primary energy supply in 2050.

© World Energy Council Electricity production by primary energy: Latin America & The Caribbean JAZZ: Hydro-based electricity is the dominant source gas emerges as a fuel for power generation (Brazil) SYMPHONY: Development of hydropower facilitated by improvements in grid infrastructure (LAC-wide grid) gas is used mainly for peak load generation

© World Energy Council Investment in Electricity Generation in L. America & The Caribbean (Cumulative in GW) JAZZ: Investment needs predominantly in gas fired generation, followed by solar and wind SYMPHONY: Investment in solar, gas and hydropower is biggest

© World Energy Council Investment needs (GW)

© World Energy Council We are in a challenging place 1.2 billion people have no access to electricity 2.6 billion people have no access to clean cooking facilities Global population grows from 7 to 9,3 billion people until 2050 Demand for energy will grow by 30-60% until 2050 CO2 emissions will continue to grow Investment needs until 2050 : between US$ 20,000 und 27,000 billion in infrastructure costs We are far away from achieving a sustainable energy system:

© World Energy Council China India Rest of the world Global primary energy demand: Source: BP Statistical Review of World Energy June 2013 Nuclear 11% billion t coal equivalent 4,1 Billion t coal equivalent increase ─ 46 % of which are coal Billion: 10 9

© World Energy Council In “Business as usual” world, direct CO 2 from energy could rise dramatically And environmental stresses will increasingly be at the forefront 28 Gt/yr Increasing environmental stress Source: IEA

© World Energy Council Global developments in energy 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 patterns of trade But long-term solutions to global challenges remain scarce  Renewed focus on energy efficiency, but CO 2 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 Source: World Energy Outlook 2013; IEA

© World Energy Council 2014 Shale gas revolution in North America

© World Energy Council Global gas prices Source: World Bank

© World Energy Council North-western European merit order that decides power-plant dispatch HydroWindPVGas/oil €/ MWh Installed renewable capacity GW Feed-in fluctuating as a function of supply BK Other REN Nuclear (NC) NC Germany Austria FranceSwitzerland Netherlands Belgium Technology Country Hard coal Lignite (LG) LG

© World Energy Council 2014 Utilization of the gas-fired Gersteinwerk power plant June 2009July 2009 Gersteinwerk unit F (427MW)

© World Energy Council Utilization of the gas-fired Gersteinwerk power plant June 2011July 2011 Gersteinwerk unit F (427MW)

© World Energy Council 2014 Ultra High Voltage (UHV) in China

© World Energy Council 2014 Storage technologies – phases of development

© World Energy Council 2014 Battery storage - Japan

© World Energy Council 2014 Fly wheel storage – New York © 2011 Karl Rose © 2012 Karl Rose

© World Energy Council 2014 Key Messages 1/2 Global energy demand will continue to rise significantly Fossil fuels will play an important role for decades to come – we need technologies to decarbonize them during the energy transition (Unconventional) Gas (and LNG) will play a crucial role going forward Future of nuclear and coal are strongly linked to government policies Without CCS technology and nuclear, climate goals look very challenging to achieve We need innovative financing mechanisms to cover large investment needs for new energy infrastructure

© World Energy Council 2014 Key Messages 2/2 Access to affordable energy a more important priority in many developing countries than climate change Energy poverty will be a rising challenge Renewables will grow significantly, but will need very large investments in grids and storage Urgent need for politicians to address demand side policies and end-user technologies Transforming the energy system will require large scale societal change and needs to be properly understood and managed Countries need to balance their “energy trilemma”