1. Our Global Energy Future Looking beyond the economic crisis
Mr. Nobuo Tanaka
Executive Director International Energy Agency
Ministry of Economy
Warsaw
12 May 2009

2. Weakening economy drives oil demand revisions
IEA April 2008 Oil Market Report
Two year demand contraction in 08/09 first since early-1980s
OECD hit hard, but clear signs that non-OECD is slowing now too
Latest GDP estimates suggest -1.4% for 2009, with consensus of gradual recovery in 2010
Prices bottoming-out in the face of OPEC supply cuts, and a degree of post-G20 ‘bounce’

3. Evaluating oil supply-side impacts
Supply also affected, on weak demand, low prices, credit crunch & investment slippage、
2009 forecast already down by 1.7 mb/d since July 2008, excluding 2008 baseline changes
Canada & Russia taking a hit in terms of investment & likely output
$50/bbl oil unlikely to see extensive shut-ins of current output per se
But impact of lower spend on new projects and prevailing decline rates at mature fields 3

4. World Oil Production by Source IEA’s World Energy Outlook 2008 Business as Usual Scenario
20 mb/d
45 mb/d
IEA World Energy Outlook 2008
Around 65 mb/d of gross capacity needs to be installed between 2007 & 2030 – six times the current capacity of Saudi Arabia – to meet demand growth and offset decline

5. Long-term oil-supply cost curve (with $50 per tonne of CO2)
A carbon price of $50 per tonne of CO2 would increase the cost of producing non-conventional oil the most – by as much as $30 per barrel – due to its higher energy intensity

6. European Responses to January 2009 Gas Supply Disruption
Timeline of Actions
7 Jan (immediate)
10 Jan.
16 Jan.
18 Jan.
Yamal increase
BBL NL-UK reduced
Interconnector UK-BE reversed
Reverse flow Czech to Slovakia
Blue Stream increase
Hungary increase to Serbia & Bosnia
Increase Germany -Croatia
Increasing Croatian production share off-take
Reverse flow from Greece to Bulgaria
Additional spot LNG to Greece & Turkey

7. Cumulative energy supply investment in Business as Usual, 2007-2030
Coal 3%
Biofuels
<1%
$0.7 trillion
$0.2 trillion
Power
52%
Oil
24%
Gas
21%
$13.6 trillion
$6.3 trillion
$5.5 trillion
Shipping 4%
Shipping &
Refining
ports
16%
Transmission 9%
Transmission
Power
& distribution
Exploration &
& distribution
generation
31%
development
50%
50%
Exploration and
61%
development
LNG chain
Mining
80% 8%
91%
Investment of $26 trillion, or over $1 trillion/year, is needed, but the credit squeeze could delay spending, potentially setting up a supply-crunch once the economy recovers

8. Energy-related CO2 emissions Business as Usual Scenario5 10 15 20 25 30 35 40 45
1980
1990
2000
2010
2020
2030
Gigatonnes
International
marine bunkers
and aviation
OECD - gas
OECD - oil
OECD - coal
Non-OECD - gas
Non-OECD - oil
Non-OECD - coal
97% of the projected increase in emissions between 2006 & 2030 comes from
non-OECD countries – three-quarters from China, India & the Middle East alone

9. Energy-related CO2 emissions 450 Policy Scenario
International
marine bunkers
Gigatonnes
and aviation 40
OECD - gas
OECD - oil 35
OECD - coal
Non-OECD - gas 30
Non-OECD - oil
Non-OECD - coal 25 20 15 10 5
1980
1990
2000
2010
2020
2030
In the 450 Policy Scenario emissions peak around 2020,and then decline by more than 1/3 to reach 26 Gt in 2030

10. Reductions in energy-related CO2 emissions in the 450 Policy Scenario
World total
Gigatonnes
Reference Scenario 40
CCS - 21%
Energy Efficiency 54%
CCS 14%
Nuclear 9%
Renewables &
biofuels 23%
Nuclear - 14%
35% (5.2 Gt reduction)
Renewables & biofuels - 18%
OECD+
Energy efficiency - 47% 35
CCS - 10%
Nuclear - 6%
Renewables & biofuels - 25%
Non-OECD 30
65% (9.5 Gt reduction)
Energy efficiency - 59%
450 Policy Scenario 25 20
2005
2010
2015
2020
2025
2030
OECD and non-OECD countries must both work towards reducing CO2 emissions
Energy efficiency plays a key role for both OECD and non-OECD countries
To inform the international climate negotiations, the IEA will release an early excerpt of the WEO 2009 climate change analysis, to coincide with post-Kyoto negotiations this September

11. Total power generation capacity today and in 2030 by scenario
Coal
1.2 x today
1.5 x today
Gas
Nuclear
13.5 x today
2.1 x today
1.8 x today
12.5 x today
15% of today’s coal & gas capacity
Hydro
Wind
Other renewables
Coal and gas with CCS
1 000
2 000
3 000 GW
Today
Reference Scenario 2030
450 Policy Scenario 2030
In the 450 Policy Scenario, the power sector undergoes a dramatic change –
with CCS, renewables and nuclear each playing a crucial role

12. Roadmaps can accelerate deployment of key clean energy technologies
Demand side
Energy efficiency in buildings
Energy efficient motor systems
Efficient ICEs
Heat pumps
Plug-ins and electric vehicles
Fuel cell vehicles
Industrial CCS
Solar heating
Efficient industry processes (starting with Cement)
Supply side
CCS power generation
Coal – IGCC
Coal – USCSC
Nuclear III + IV
Solar – PV
Solar – CSP
Wind
Biomass – IGCC & co-combustion
Electricity networks
2nd generation biofuels
Work has already begun on technologies shown in green, and these roadmaps will be launched later in 2009.

13. Global electricity generation (450 ppm Scenario)1% 9% 1%
18%
16%
(1%) 4% 5%
40%
15%
22%
20%
18% 6%
18% 2%
41%
21%
Renewables and nuclear power will increase

14. Nuclear power needs to play a larger role in 2050
Energy Technology Perspectives (ETP) 2008 shows that significant increase of nuclear generation in both OECD countries and non-OECD countries is essential to halve the current level of energy related CO2 emission by 2050.

15. USD 128 Billion in energy efficiency stimulus from IEA Countries
IEA 25 energy efficiency policy recommendations across 7 priority areas
1. Across sectors
1.1 Measures for increasing investment in energy efficiency;
1.2 National energy efficiency strategies and goals;
1.3 Compliance, monitoring, enforcement and evaluation of energy efficiency measures;
1.4 Energy efficiency indicators;
1.5 Monitoring and reporting progress with the IEA energy efficiency recommendations themselves.
2. Buildings
2.1 Building codes for new buildings;
2.2 Passive Energy Houses and Zero Energy Buildings;
2.3 Policy packages to promote energy efficiency in existing buildings;
2.4 Building certification schemes;
2.5 Energy efficiency improvements in glazed areas.
3. Appliances
3.1 Mandatory energy performance requirements or labels;
3.2 Low-power modes, including standby power, for electronic and networked equipment;
3.3 Televisions and “set-top” boxes;
3.4 Energy performance test standards and measurement protocols.
4. Lighting
4.1 Best practice lighting and the phase-out of incandescent bulbs;
4.2 Ensuring least-cost lighting in non-residential buildings and the phase-out of inefficient fuel-based lighting.
5. Transport
5.1 Fuel-efficient tyres;
5.2 Mandatory fuel efficiency standards for light-duty vehicles;
5.3 Fuel economy of heavy-duty vehicles;
5.4 Eco-driving.
6. Industry
6.1 Collection of high quality energy efficiency data for industry;
6.2 Energy performance of electric motors;
6.3 Assistance in developing energy management capability;
6.4 Policy packages to promote energy efficiency in small and medium-sized enterprises.
7. Utilities
7.1 Utility end-use energy efficiency schemes
USD 128 Billion in energy efficiency
stimulus from IEA Countries

16. Impact of financial crisis on global investment in renewable energy90
Geothermal
Billion dollars 80
-38%
Marine & small-hydro
Biomass 70
Solar 60
Wind 50
2009 40 30 20 10
2004
2005
2006
2007
2008
Renewable energy investment has collapsed due to the financial crisis – which has dried up sources of project finance – and lower fossil-fuel prices ….
… IEA G-8 paper estimates spending in 2009 will drop by 38% relative to 2008
Source: NEF, IEA analysis

17. Carbon Capture and Storage – energy efficiency alone is not enough
Average worldwide
~28.4%
~1110 gCO2/kWh
~36%
~880 gCO2/kWh
EU average
~42%
~740 gCO2/kWh
State-of-the art
PC/IGCC
gCO2/kWh
~48%
~665 gCO2/kWh
Advanced R&D
CCS
<2020
but deep cuts only by
adapted from VGB 2007; efficiency – HHV,net 17

18. Carbon Capture and Storage - only 4 full-scale projects exist today
G8 goal: 20 full-scale demonstrations
announced by 2010

19. CO2 Storage Prospectivity
Source: Bradshaw, J. and Dance, T. (2004): “Mapping geological storage prospectivity of CO2 for the world’s sedimentary basins and regional source to sink matching,” in (E.S. Rubin, D.W. Keith and C.F. Gilboy eds.), GHGT-7, Proc. Seventh International Conference on Greenhouse Gas Control Technologies, Vancouver, B.C., Canada, September 5-9, 2004.

20. Shifting to the 450 ppm scenario requires significant investment
5 000
450 Policy Scenario
(additional to 550)
4 000
550 Policy Scenario
3 000
Billion dollars (2007)
2 000
1 000
Power plants
Energy efficiency
Huge investment in power plants and energy efficiency is required to shift the world onto a 450 ppm trajectory

21. Total oil production in 2030 by scenario
120
mb/d
Non-OPEC
OPEC
100
9 mb/d
16 mb/d 80 60
12 mb/d 40 20
2007
Reference Scenario
550 Policy Scenario
2030
450 Policy Scenario
2030
2030
Curbing CO2 emissions would improve energy security by cutting demand for fossil fuels, but even in the 450 Policy Scenario, OPEC production increases by 12 mb/d from now to 2030

22. Summary For energy security need to diversify oil and gas sources
must ensure continued supply-side investment to meet oil demand and address production decline in mature fields and investment throughout the gas supply chain
For energy security and climate change mitigation
must invest in low carbon technologies: CCS, renewables, nuclear and energy efficiency must all be embraced
Economic crisis is an opportunity to place a Clean Energy New Deal at the heart of economic stimulus packages everywhere.