OECD/IEA 2013

World Energy Outlook 2013

London, 12 November
OECD/IEA 2013
The world energy scene today
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 ideas about distribution of resources
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
OECD/IEA 2013
The engine of energy demand growth
moves to South Asia
Primary energy demand, 2035 (Mtoe)
China is the main driver of increasing energy demand in the current decade,
but India takes over in the 2020s as the principal source of growth
4%
65%
10%
8%
8%
5%
OECD
Non-OECD
Asia
Middle
East
Africa
Latin
America
Eurasia
Share of global growth
2012-2035
480
Brazil
1 540
India
1 000
Southeast
Asia
4 060
China
1 030
Africa
2 240
United
States
440
Japan
1 710
Europe
1 370
Eurasia
1 050
Middle
East
OECD/IEA 2013
A mix that is slow to change
Growth in total primary energy demand
Today's share of fossil fuels in the global mix, at 82%, is the same as it was 25 years
ago; the strong rise of renewables only reduces this to around 75% in 2035
500 1 000 1 500 2 000 2 500 3 000
Nuclear
Oil
Renewables
Coal
Gas
Mtoe
1987-2011
2011-2035
the strong rise of renewables only reduces this to around 75% in 2035
OECD/IEA 2013
Carbon budget for 2 C 1750-2011
Non-OECD
OECD
Emissions off track in the run-up
to the 2015 climate summit in France
Cumulative energy-related CO
2
emissions
Non-OECD countries account for a rising share of emissions, although 2035 per capita
levels are only half of OECD; the 2 C carbon budget is being spent much too quickly
200
400
600
800 Gt
1900
-1929
1930
-1959
1960
-1989
1990
-2012
2013
-2035
2012-2035
Carbon budget for 2 C
Remaining
budget
OECD
Non-OECD
Total emissions
1900-2035
51%
49%
the 2 C carbon budget is being spent much too quickly
OECD/IEA 2013
China becomes the largest consumer of oil by 2030, as OECD oil use drops; demand is
concentrated in transport, where diesel use surges by 5.5 mb/d, & petrochemicals
China becomes the largest consumer of oil by 2030, as OECD oil use drops;
Oil demand by region sector
Oil use grows, but in a
narrowing set of markets
75
80
85
90
95
100
105
2012 2035
mb/d
China
India
Middle East
Other
Transport Petrochemicals Other
sectors
OECD
Diesel
Gasoline
Other
80
85
90
95
100
105
2012 2035
mb/d
Transport Petrochemicals Other
sectors
Diesel
Gasoline
Other
, & petrochemicals
OECD/IEA 2013
More oil bypassing the refining system and new capacity in growing non-OECD
markets piles pressure on existing refiners, especially in Europe
Oil demand Oil processed
by refineries
New refinery
capacity China
India
Middle East
Other
Turbulent times for the refining sector
Refinery capacity and operation
More oil bypassing the refining system

75
80
85
90
95
100
105
2012 2035
mb/d
Oil bypassing
refineries
Existing
spare &
excess
capacity
Spare &
excess
capacity
with 10 mb/d
at risk of
closure
by 2035
70
65
OECD/IEA 2013
Two chapters to the oil production story
Contributions to global oil production growth
The United States (light tight oil) & Brazil (deepwater) step up until the mid-2020s,

Middle East
-8 -6 -4 -2 0 2 4 6 8
mb/d
2013-2025
Brazil
Rest of the world
Oil sands, extra-heavy oil,
coal/gas-to-liquids, & other
Light tight oil
Conventional:
Unconventional:
2013-2025
2025-2035

but the Middle East is critical to the longer-term oil outlook
OECD/IEA 2013
Brazil cuts a distinctive profile
Brazil oil production
Complex deepwater projects see Brazil joining the top ranks of global oil producers,
while the domestic power mix remains one of the least carbon-intensive in the world
1
2
3
4
5
6
2012 2025 2035
Other
Deepwater
mb/d
Oil production:
Other renewables
Bioenergy
Hydropower
Nuclear
Fossil fuels
Electricity generation:
20%
40%
60%
80%
100%
Brazil World
Electricity mix by fuel, 2035
OECD/IEA 2013
GW
Capacity to change?
Power generation capacity additions and retirements, 2013-2035
China & India together build almost 40% of the worlds new capacity;
60% of capacity additions in the OECD replace retired plants

400 600 800 1 200 1 400 1 600 1 000 200
United States
European Union
Japan
China
India
Middle East
Retirements
Additions Net additions
OECD/IEA 2013
300
600
900
1 200
1 500
1 800
2 100 TWh
India
Latin
America
Africa
ASEAN
Hydro
Other
renewables
Wind
Solar PV
China
Hydro
Other
renewables
Wind
Solar PV
Renewables power up around the world
Growth in electricity generation from renewable sources, 2011-2035
European
Union
United
States
Japan
Europe, Japan
and United States
China India, Latin America,
ASEAN and Africa
Hydro
Other
renewables
Wind
Solar PV
The expansion of non-hydro renewables depends on subsidies that more than double
to 2035; additions of wind & solar have implications for power market design & costs additions of wind & solar have implications for power market design & costs
OECD/IEA 2013
3
4
5
2003
Regional differences in natural gas prices narrow from todays very high levels
but remain large through to 2035; electricity price differentials also persist electricity price differentials also persist
2013 2035
Reduction
from 2013
Who has the energy to compete?
Ratio of industrial energy prices relative to the United States
United States
2
Japan European
Union
China
Electricity Natural gas
2003
Japan European
Union
China
OECD/IEA 2013
An energy boost to the economy?
Share of global export market for energy-intensive goods
The US, together with key emerging economies, increases its export market share
for energy-intensive goods, while the EU and Japan see a sharp decline
Today 36% 10% 7% 7% 3% 2%
European Union
United States
China India Middle East
Japan
-3%
-10%
+3%
+2%
+2%
+1%
while the EU and Japan see a sharp decline
OECD/IEA 2013

LNG from the United States
can shake up gas markets

Indicative economics of LNG export from the US Gulf Coast (at current prices)
New LNG supplies accelerate movement towards a more interconnected global
market, but high costs of transport between regions mean no single global gas price
Average import price
Liquefaction, shipping
& regasification
United States price
3
6
9
12
15
18
To Asia
$/MBtu
3
6
9
12
To Europe
$/MBtu
but high costs of transport between regions mean no single global gas price
OECD/IEA 2013
Orientation for a fast-changing energy world
China, then India, drive the growing dominance of Asia in global
energy demand & trade
Technology is opening up new oil resources, but the Middle East
remains central to the longer-term outlook
Regional price gaps & concerns over competitiveness are here
to stay, but there are ways to react with efficiency first in line
The transition to a more efficient, low-carbon energy sector
is more difficult in tough economic times, but no less urgent