1. © OECD/IEA - 2010 Do we have the technology to secure energy supply and CO 2 neutrality? Insights from Energy Technology Perspectives 2010 Copenhagen, 1 October 2010 Dr Peter Taylor Head, Energy Technology Policy Division

2. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 The context Need a global energy technology revolution to meet climate change and energy security challenges. Some early signs of progress, but much more needs to be done.  Which technologies can play a role?  What are the costs and benefits?  What policies are needed?

3. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Global energy-related CO 2 emissions in the Baseline and BLUE Map scenarios Global CO 2 emissions double in the Baseline, but in the BLUE Map scenario abatement across all sectors reduces emissions to half 2005 levels by 2050.

4. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Key technologies for reducing global CO 2 emissions A wide range of technologies will be necessary to reduce energy-related CO 2 emissions substantially.

5. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Primary energy demand by fuel and by scenario By 2050, coal, oil and gas demand are all lower than today under the BLUE Map scenario.

6. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Crude oil price Impact of OECD CO 2 price on costs for crude oil: 2020 ( 50 USD/t): 90+21 =111 USD/bbl 2030 (110 USD/t): 90+43 =133 USD/bbl 2050 (175 USD/t): 70+73 =143 USD/bbl

7. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Decarbonising the power sector – a new age of electrification? A mix of renewables, nuclear and fossil-fuels with CCS will be needed to decarbonise the electricity sector.

8. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Average annual electricity capacity additions to 2050, BLUE Map scenario Annual rates of investment in many low-carbon technologies must be massively increased from today’s levels.

9. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Environmental co-impacts of electricity generation technologies Most renewable technologies have positive environmental co-impacts.

10. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Smart grid CO 2 reductions in 2050 Smart grids allow better management of the grid and can facilitate the deployment of low-carbon technologies, such as renewables and electric vehicles.

11. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Additional investment and fuel savings, 2010-2050 Even using a 10% discount rate, fuel savings in the BLUE Map scenario more than offset the additional investment required.

12. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 OECD and non-OECD primary energy demand in the Baseline scenario Primary energy demand in non-OECD countries is projected to increase much faster than in OECD countries in the Baseline scenario.

13. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 World energy-related CO 2 emissions abatement by region In the BLUE Map scenario, most of the reductions in energy-related CO 2 emissions are in non-OECD countries.

14. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Regional Implications OECD Europe

15. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 CO 2 emissions trends by region/country Regions/countries have very different CO 2 trends under both Baseline and BLUE Map scenarios. Per capita CO 2 emissions converge substantially under BLUE Map.

16. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Contributions to emissions reductions in OECD Europe End-use sector measures contribute nearly two- thirds of the emissions reductions between the Baseline and BLUE scenarios in 2050.

17. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Primary energy demand by fuel and by scenario in OECD Europe Fossil fuel demand is reduced to one half under the BLUE Map scenario.

18. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Decarbonisation of power generation in OECD Europe A mix of nuclear, renewables and fossil-fuels with CCS will be needed to decarbonise the electricity sector.

19. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Additional investment needs and fuel cost savings for OECD Europe Large investment needs in transport and the building sectors may be compensated by fuel savings.

20. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Passenger light-duty vehicles sales by technology in OECD Europe Baseline scenario BLUE Map scenario A wide range of new LDV technologies contribute to emissions reductions under the BLUE scenario.

21. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 CO 2 emissions reductions in the buildings sector in OECD Europe Decarbonisation of the electricity sector contributes over half of emissions reduction in the buildings sector.

22. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Direct energy and process CO 2 emissions in industry in OECD Europe CO 2 emissions savings CO 2 emissions Energy efficiency and CCS are the two most important abatement options in industry.

23. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Contributions to CO 2 emissions reductions in OECD Europe in 2050 Reductions in the buildings and power sector represent the largest savings

24. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Technology policies Carbon pricing is important, but should be complemented by other policies Policies must be tailored to the technology’s stage of development and reflect good design principles Public RD&D spending must at least double Governments need to implement best practices in energy RD&D A number of enabling actions are also needed: Private sector leadership Expanded human capacity Greater government outreach and planning on infrastructure needs Expanded, more effective international collaboration

25. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Policies for supporting low-carbon technologies Government support policies need to be appropriately tailored to the stage(s) of technological development.

26. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Technology choices and behaviour ETP 2010 looks at behavioural issues for the first time: focus is on technology choices. Influencing consumers’ technology choices and behaviour will be key to realising deep CO 2 cuts. Current approaches focus on technological and economic barriers; little attention paid to social and behavioural factors. More work needed to better understand the human dimensions of energy consumption. A few successful programmes address such factors and use strategies that target, inform, motivate and empower energy consumers.

27. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Wind Roadmap Wind has the potential to provide more than 12% of global electricity production in 2050

28. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 International Low-carbon Energy Technology Platform

29. Plans for 7 million hybrid and electric vehicles by 2020 The first green shoots of an energy technology revolution… …much more needs to be done 6 GW of PV installed in 2009 1/3 funding increase between 2005 and 2008 80 large scale integrated plants being developed I n v e s t m e n t s 46 GW of PV per year until 2050 Over 1 billion plug-in and electric vehicles in 2050 Increase funding by 2 to 5 times current levels Over 3 000 plants operational by 2050 RenewablesTransportEnergy efficiency Research and development Carbon capture and storage © OECD/IEA - 2010 Global sales of CFLs @ 3500 million/yr Lighting market dominated by LEDs in 2050

30. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Thank You www.iea.org/techno/etp/index.asp

31. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 ANNEX

32. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 GDP projections (% per year based on purchasing power parity)

33. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Oil, gas and coal price assumptions Baseline Scenarios (in USD per unit) BLUE Scenarios (in USD per unit)

34. 2 0 1 0 ENERGY TECHNOLOGY PERSPECTIVES Scenarios & Strategies to 2050 © OECD/IEA - 2010 Carbon prices in the BLUE Map scenario USD / t CO 2 202020302050 OECD50110175 Non-OECD065175