© OECD/IEA INTERNATIONAL ENERGY AGENCY Energy and Climate Outlook Dr. Fatih Birol Chief Economist International Energy Agency

© OECD/IEA The Reference Scenario: World Primary Energy Demand Global demand grows by more than half over the next quarter of a century, with coal use rising most in absolute terms Oil Coal Gas Biomass Nuclear Other renewables Mtoe

© OECD/IEA Reference Scenario: Increase in World Oil Supply, The share of OPEC in world oil supply increases sharply as conventional non-OPEC production peaks towards the middle of next decade S.Arabia Iraq Iran Other OPEC conventionalNon-conventionalNon-OPEC conventional mb/d

© OECD/IEA Proven Natural Gas Reserves Gas reserves are concentrated in FSU and MENA regions – Russia and Iran together account almost half of global gas reserves

© OECD/IEA Annual Increase in Coal Demand Global coal demand in the recent years has grown much faster than previously – mainly driven by China million tonnes ChinaRest of the world

© OECD/IEA Reference Scenario: Increase in Power Sector CO 2 Emissions by Fuel, China and India account for almost 60% of the increase in power sector CO 2 emissions to OECDTransition economies ChinaIndiaRest of developing countries million tonnes CoalOilGas

© OECD/IEA Reference Scenario: Energy-Related CO 2 emissions by Region China to overtake US as the world’s biggest emitter, though OECD countries bear a major responsibility as to cumulative carbon concentration Gigatonnes of CO 2 United States China Rest of non-OECD Rest of OECD

© OECD/IEA CO 2 Emissions Growth ChinaIndiaOECD million tonnes tonnes per capita Emissions growth in China is twice as large as in the OECD, but in 2030 per capita emissions will still be lower than current OECD ones

© OECD/IEA The Next Ten Years Will Determine Our Energy Future Investment over the next decade will lock in technology for up to 60 years  China and India - growing at breakneck speed fueled by energy  OECD power plants – significant portion reaching to retirement Security of supply is under threat because the balance of power is shifting  Oil production in non-OPEC countries is set to peak,  Gas production to peak in OECD

© OECD/IEA INTERNATIONAL ENERGY AGENCY Alternative Policy Scenario

© OECD/IEA Improved end-use efficiency accounts for over two-thirds of avoided emissions in 2030 in the APS Alternative Policy Scenario Reference Scenario Increased nuclear (10%) Increased renewables (12%) Power sector efficiency & fuel (13%) Electricity end-use efficiency (29%) Fossil-fuel end-use efficiency (36%) Gt of CO 2 The Alternative Policy Scenario: Key Policies for Global CO 2 Reduction

© OECD/IEA The Alternative Policy Scenario : Key policies that Make a Global Difference A dozen policies in the US, EU & China account for around 40% of the global emissions reduction in 2030 in the Alternative Policy Scenario Energy efficiencyPower generation US Tighter CAFE standards Improved efficiency in residential & commercial sectors Increased use of renewables EU Increased vehicle fuel economy Improved efficiency in electricity use in the commercial sector Increased use of renewables Nuclear plant lifetime extensions China Improved efficiency in electricity use in industry Improved efficiency in electricity use in the residential sector Increased efficiency of coal-fired plants Increased use of renewables Increased reliance on nuclear

© OECD/IEA Focus on European Union: Electricity Investment, Investment needs are $139 billion lower over the projection period billion dollars (2005) Additional demand-side investmentAvoided supply-side investment Net change in electricity investment

© OECD/IEA Reference Scenario Gt of CO 2 Alternative Policy Scenario Efficiency of electricity use CCS and efficiency in industry Biofuels and hybrids Efficiency of power plants Nuclear power-plants Renewables-based generation CCS in power generation 2015 Going Beyond the Alternative Policy Scenario: BAPS CO 2 Emissions Savings BAPS additional reduction goal of 8 Gt of CO 2

© OECD/IEA Some concluding thoughts… The Reference Scenario projects a vulnerable, dirty and expensive global energy system Demand side efficiency – “ easier “ with large potential Large-hydro and nuclear - important parts of the solution Numbers speak for themselves : no sustainable/meaningful solution to climate change problem without having China and India on board Strong political will and urgent government action is needed to create clear incentives to change existing investment patterns