1. UNESCO Desire – Net project E-learning course Energy and sustainable development: The global energy framework 2 Giovanna Anselmi Enea – Ufficio di Presidenza ganselmi@sede.enea.itUNESCO Rome, 2006 4 th December

2. GENERAL COURSE OUTLINE MODULE A ENERGY FRAMEWORK2 - GLOBAL ENERGY FW 2 IMPACT OF THE OIL SHOCK 2 - RES ROLE & E. SCENARIOS THE EXTERNALITY OF ENERGY PRODUCTION F.F.F. WITHE CERTIFICATES G I S L C A & APPLICATIONS - GLOBAL CHALLENGES 2 EU FUNDING FOR RES PROMOTION MAIN QUESTIONS 2

3. GENERAL COURSE OUTLINE MODULE B ENERGY, ENVIRONMENT & SUSTAINABLE DEVELOPMENT2 - SUSTAINABLE DEVELOP. 2 ENERGY AND S. D. : ALTER- NATIVE TECHNOLOGIES - S.D. & THE KYOTO PROTOCOL - TRANSBOUNDARY AIR POLL. AND RELATED INTEGRATED ASSESSMENT MODELLING - SUSTAINABLE DEVELOP. 2.1 MAIN QUESTIONS 3

4. TO DAY LECTURE OUTLINE Energy Trends in Reference and Alternative Scenarios Investments in Energy Supply Infrastracture CO2 Emission & RES Role Main Problems 4

5. Global Primary Energy Demand is pejected to Global Primary Energy Demand is pejected to increase by 53% between 2004 and 2030 (average annual rate of 1.6%). Energy Trends in Reference Scenario 5 Over 70% of this increase comes from developing countries. The power generation sector contributes close to one-half of the global increase. Demand grows by one-quarter in the period to 2015 alone. The increase in demand amounts to almost 6 billion toe, or 53% of current demand.

6. TAB: 1 WORLD PRIMARY ENERGY DEMAND (Mtoe) - Source: WEO 2006 Energy Trends in Reference Scenario 6

7. 7 GRAPH: 1 WORLD PRIMARY ENERGY DEMAND - Source: WEO 2006 GRAPH: 1 WORLD PRIMARY ENERGY DEMAND BY FUEL - Source: WEO 2006

8. Energy Trends in Reference Scenario 8 GRAPH: 2WORLDDEMAND- Source: WEO 2006 GRAPH: 2 FUEL SHARES IN WORLD FINAL ENERGY DEMAND - Source: WEO 2006

9. Energy Trends in Alternative Scenario 9 World primary energy demand in 2030 is about 10%, or 1 690 Mtoe, lower in the Alternative Policy Scenario than in the R S § The impact of new policies is felt throughout the period The policies analysed halt the rise in OECD oil imports by 2015 § In 2015, the difference between the two scenarios is 4%, or 534 Mtoe § §

10. Energy Trends in Alternative Scenario 10 OECD countries and developing Asia become more dependent on oil imports in 2030 compared to today, but markedly less so than in the R S § § § Global oil demand reaches 103 mb/d in 2030 in the Alternative Policy Scenario – an increase of 20 mb/d on 2005 levels but a fall of 13 mb/d in the period Gas demand and reliance on gas imports are also reduced below the levels of the Reference Scenario

11. Energy Trends in Alternative Scenario 11 TAB:2 WORLD ENERGY DEMAND IN THE ALTERNATIVE SCENARIO 2005 - 2030 Source WEO 2006

12. Energy-related CO 2 emissions are cut by 6.3 Gt, or 16%, in 2030 relative to the Reference Scenario and already 1.7 Gt, or 5%, by 2015. CO2 EMISSION Energy Trends in Alternative Scenario 12 § OECD emissions peak by around 2015 and then decline. § Emissions in Japan and the European Union in 2030 are lower than 2004 levels. § § Global emissions nonetheless continue to rise, from 26 Gt in 2004 to 32 Gt in 2015 and 34 Gt in 2030.

13. GRAPH 3: CHANGE IN ENERGY RELATED CO 2 EMISSION BY REGION IN REFERENCE & ALTERNATIVE SCENARIO 2004 - 2030 – Source WEO 2006 Energy Trends in Alternative Scenario 13

14. GRAPH 4: CUMULATIVE ENERGY RELATED CO 2 EMISSION IN THE REFERENCE & ALTERNATIVE SCENARIO 2005 - 2030 – Source WEO 2006 Energy Trends in Alternative Scenario 14

15. - to improve efficiency in energy production and use - to increase reliance on non-fossil fuels - to sustain the domestic supply of oil and gas within net energy- importing countries Energy Trends in Alternative Scenario 15 Why an Alternative Policy Scenario? The Alternative Policy Scenario analyses how the global energy market could evolve if countries were to adopt all of the policies related to energy security and energy-related CO2 emissions. The aim is to understand how far those policies could take us in dealing with these challenges and at what cost. THE POLICIES INCLUDE EFFORTS:

16. Energy Trends in Alternative Scenario 16 THE MAIN POLICY MEASURES came into operation in - - January 2005: the EU Greenhouse Gas Emissions Trading Scheme - - February 2005: the Kyoto Protocol - - January 2006: the Asia-Pacific Partnership on Clean Development and Climate (AP6) - - March 2006: the European Commission Green Paper addressing energy security (EC, 2006) - - May 2006/Japan: New National Energy Strategy on energy security

17. TAB: 2 1 SELECTED POLICIES INCLUDED IN A. S. - Source: WEO 2006 Energy Trends in Alternative Scenario 17 ? The

18. TAB: 2 2 SELECTED POLICIES INCLUDED IN A. S. - Source: WEO 2006 Energy Trends in Alternative Scenario 18 ? The

19. TAB: 2 3 SELECTED POLICIES INCLUDED IN A. S. - Source: WEO 2006 Energy Trends in Alternative Scenario 19

20. TAB: 2 4 SELECTED POLICIES INCLUDED IN A. S. - Source: WEO 20006 Energy Trends in Alternative Scenario 20

21. TAB: 2 5 SELECTED POLICIES INCLUDED IN A. S. - Source: WEO 2006 Energy Trends in Alternative Scenario 21

22. TAB: 2 6 SELECTED POLICIES INCLUDED IN A. S. - Source: WEO 2006 Energy Trends in Alternative Scenario 22

23. TAB: 2 7 SELECTED POLICIES INCLUDED IN A. S. - Source: WEO 2006 Energy Trends in Alternative Scenario 23

24. Energy Trends in Alternative Scenario 24 POTENTIAL IMPACT OF BREAKTHROUGHS   Carbon Capture and Storage   Second-generation biofuels Plug-in hybrids and other advanced technologies Technological Developments ENERGY EFFICIENCY ONLY Technologies that have yet been demonstrated on a commercial basis are included in the Alternative Policy Scenario

25. Energy Trends in Alternative Scenario 25 POTENTIAL IMPACT OF BREAKTHROUGHS CARBON CAPTURE AND STORAGE   The introduction of CCS in the power sector would reduce emissions by 2Gt in 2030   3 100 TWh of electricity would then be generated from coal and natural gas plants equipped with CCS   Some 70% of new coal-fired capacity and 35% of new gas-fired plants would be equipped with CCS over the projection period   CCS in coal plants would account for more than 80% of the captured emissions.

26. Energy Trends in Alternative Scenario 26 POTENTIAL IMPACT OF BREAKTHROUGHS SECOND-GENERATION BIOFUELS   Enzymatic hydrolysis   Gasification of woody ligno-cellulosic feedstock   Integration of biomass gasification and combined-cycle technology

27. Biofuels use in road transport would double Energy Trends in Alternative Scenario 27 POTENTIAL IMPACT OF BREAKTHROUGHS PLUG-IN HYBRIDS AND OTHER ADVANCED TECHNOLOGIES Sales of hybrid vehicles would make up 60% of new light-duty vehicles sales Plug-in hybrids would enter the LDV market in comparaison to the Alternative Policy Scenario those measures combined would avoid the combustion of more than 7 mb/d of oil, saving 1 Gt of CO2 in 2030

28. Investments in Energy Supply Infrastracture/EuE 28 ENHANCING THE ROLE OF RENEWABLE ENERGY  feed-in tariff mechanisms  portfolio quota, with or without accompanying tradable certificate  tax incentive  integration of intermittent renewables in the electricity grid  INCREASING PUBLIC FUNDING OF R&D and DEPLOYMENT

29. Investments in Energy Supply Infrastracture/EuE 29   The world’s remaining economically exploitable energy resources are adequate to meet the projected increases in demand through to 2030   Energy exports from non-OECD to OECD regions rise by 47%   Cumulative investment in energy-supply infrastructure amounts to just over $20 trillion (in year-2005 dollars) over 2005-2030   The power sector requires more than $11 trillion, equal to 56% of total energy investment needs   Capital expenditure amounts to $4.3 trillion in the oil sector and $3.9 trillion in the gas sector   Half of all the energy investment needed worldwide is in developing countries In Reference Scenario -1

30. Investments in Energy Supply Infrastracture/EuE 30 In Reference Scenario -2 TAB: 3 CUMULATIVE INVESTMENT IN ENERGY SUPPLY INFRASTRUCT /R.S. 2005-2030. Source: WEO 2006 TAB: 3 CUMULATIVE INVESTMENT IN ENERGY SUPPLY INFRASTRUCT /R.S. 2005-2030 bilion $/year 2005. Source: WEO 2006

31. Investments in Energy Supply Infrastracture/EuE 31 In Reference Scenario -3 GRAPH: 5 CUMULATIVE INVESTMENT IN ENERGY SUPPLY INFRASTRUCT/ R.S. BY FUEL & ACTIVITY 2005- 2030 - Source: WEO 2006

32. Investments in Energy Supply Infrastracture/EuE 32   The stated prices must be high enough to stimulate sufficient investment in new supply infrastructure   Many factors may impede required investments: a worsening of the investment climate changes in government attitudes to foreign investment changes in capacity expansions the adoption of more stringent environmental regulations less favourable licensing and fiscal conditions In Reference Scenario -4

33. Investments in Energy Supply Infrastracture/EuE 33   The reductions in energy demand, energy imports and energy- related CO 2 emissions induce different investment pattern:   Consumers invest more to purchase energy/efficient equipments   Energy suppliers/producers invest less in new energy- production and transport infrastructure   Over 2005-2030, the investment required by the energy sector – ranging from end-use appliances to production and distribution is $560 billion less (in year-2005 dollars) than in Reference Scenario In Alternative Scenario -1

34. Investments in Energy Supply Infrastracture/EuE 34 In Alternative Scenario -2 GRAPH: 6 CHANGE IN CUMULATIVE DEMAND & SUPPLY-SIDE INVESTMENT - AS 2005- 2030 - Source: WEO 2006

35. Investments in Energy Supply Infrastracture/EuE 35 INVESTMENT IN ELECTRICITY CHAIN-1 In Alternative Scenario -3   The avoided investment throughout the electricity chain – from the producer to the consumer – is $1.1 trillion   Savings on the supply side total is $2.1 trillion   An additional $1 invested on demand-side electricity avoids more than $2 in investment on the supply side   In OECD countries, the ratio is $1 invested to $1.6 avoided   In developing countries, at $1 in investment to more than $3 in supply costs avoided

36. Investments in Energy Supply Infrastracture/EuE 36 INVESTMENT IN ELECTRICITY CHAIN-2 In Alternative Scenario -3   Demand-side investment in APS across all regions amounts to about $950 billion more in 2005-2030, as consumers purchase more efficient equipment for the related economic sectors: Industry and agriculture: motors, pumps, compressor systems, irrigation, pumping systems Residential & Services Sectors: heating, ventilation, air- conditioning, lighting home & office appliances (refrigerators, washing machines, televisions), hot water systems   Cumulative network investment is $1 630 billion lower than in R. S

37. Investments in Energy Supply Infrastracture/EuE 37 POLICIES TO PROMOTE RENEWABLE ENERGY AND NUCLEAR POWER In Alternative Scenario -4 - - Additional total investment for generating plants of $600 bilion is foreseen - -Total new fossil-power plant investment is $1 030 billion lower - - In developing countries stay most of the avoided net investment - Their savings amount to some $680 billion

38. Investments in Energy Supply Infrastracture/EuE 38 TAB 4: CHANGE IN CUMULATIVE ELECTRICITY INVESTMENT 2005- 2030 bilion $/year 2005 – Source: WEO 2006 In Alternative Scenario -5

39. Investments in Energy Supply Infrastracture/EuE 39 INVESTMENT DEMAND-SIDE INVESTMENT In Alternative Scenario -6   Additional demand-side investment amounts to $2.4 trillion   Industry invests an extra $360 billion   Investmeent in Transport increases by $1.1 trillion   Investment in the residential and services sectors (including agriculture) is more than $920 billion higher than in RS   In OECD consumers need to invest $1.5 trillion, 2/3 of the additional global investment in end-use equipment   In non-OECD: 33% of 926 bilion for Residencial & Services Sectors 42% of 362 bilion for Industrial Sector

40. Investments in Energy Supply Infrastracture/EuE 40 TAB: 5 ADDITIONAL DEMAND-SIDE INVESTMENT 2005-2030 bilion $/year 2005 – Source: WEO 2006 In Alternative Scenario -7

41. Investments in Energy Supply Infrastracture/EuE 41 GRAPH: 6 DEMAND-SIDE INVESTMENT & FINAL ENERGY CONSUMPTION BY REGION 2005-2030 – Source: WEO 2006 In Alternative Scenario -8

42. Investments in Energy Supply Infrastracture 42 -1 SUPPLY-SIDE INVESTMENT -1 In Alternative Scenario -9 - -The worldwide investment requirement is $17.3 trillion - - In developing countries and transition economies amounts to $1.8 trillion - The reduced investment in OECD countries is $1.1 trillion - - Reduced electricity-supply investment accounts for more than two-thirds of the overall fall - -The capital for transmission and distribution networks is $1.6 trillion lower thanks to lower demand and to the wider use of distributed generation

43. Investments in Energy Supply Infrastracture 43 -2 SUPPLY-SIDE INVESTMENT -2 In Alternative Scenario -9 o o The capital intensity of renewables, nuclear power and some forms of distributed generation remain higher than that of fossil fuels o o Total fossil-fuel investment continues to rise o o Total investment worldwide in oil and gas is $800 billion, or 10%, lower than in the R. S. because there is less demand & less need to expand production

44. Investments in Energy Supply Infrastracture 44 GRAPH:7 CUMULATIVE GLOBAL INV. IN ELECTRICITY SUPPLY INFRASTR. 2005-2030 – Source WEO 2006 In Alternative Scenario -9

45. Investments in Energy Supply Infrastracture/EuE 45 -3 SUPPLY-SIDE INVESTMENT -3 In Alternative Scenario -9   The greatest impact of investment reductions will be in exporting countries   Reduced investment in oil exploration and development in MENA makes up a significant part of the decrease in non-OECD oil investment   Reduced investment for gas-transportation/infrastr. contributes the largest share of the $360 billion global reduction in gas investment   Investment needs in the coal industry are reduced by 22%, from $560 billion in the R.S. to around $440 billion

46. MAIN PROBLEMS 46   Energy consumption trends going up   Energy technology enhancement   Oil price volatility   Energy supply security   Environment harm   Investment needs & Infrastructures

47. 47 THANK YOU FOR YOUR ATTENTION PLEASE DO YOUR QUESTIONS NOW OR SEND THEM AFTERWORDS BY EMAIL TO: SEND THEM AFTERWORDS BY EMAIL TO:ganselmi@sede.enea.it