Ieea ENERGY OUTLOOK PDF

IEEJ：October 2017 © IEEJ2017
The 427th Forum on Research Work
IEEJ Outlook 2018

– Prospects and challenges until 2050 –
Energy, Environment and Economy
Tokyo, 12 October 2017
The Institute of Energy Economics, Japan

IEEJ © 2017
IEEJ Outlook 2018
Overview of the current global energy market
• Although the trend of Asia as leading the global energy market remains
unchanged, developments in the US and China, which accounts for 40%
of the energy market, must be carefully monitored.
• World coal demand dropped for two years in a row (US and China largely)
while oil and gas grew. China’s coal consumption declined for the third
consecutive year (2016, BP).
• Discussions on Peak Oil (supply) of the 2000s are now changing to Peak
Demand. Note the recent movements that aim to ban the sale of internal
combustion engine vehicles.
• CO2 emissions dropped in 2015 but increased again in 2016. India and
ASEAN showed big increases despite the declined observed in the US and
China.
• Paris Agreement calls for “Long-term low greenhouse gas emission
IEEJ Outlook 2018 IEEJ © 2017
development strategies” by 2020. This Outlook expands its estimation

period to 2050.
2
Scenarios in this Outlook

<Energy Model Analysis> ❖Examples for Technology
#Reference Scenario Advanced Peak Oil
Reference
Reflects past trends with current energy Technologies Demand
and environment policies. Vehicle technology 9% in 2030 21％ 30％
Energy efficiency
Does not reflect any aggressive policies for (ZEV*1 sales share) 20％ in 2050 43％ 100％
low-carbon measures.
Coal-fired power 30％ in 2030 70％
#Advanced Technologies Scenario generation 90％ in 2050 100％
Assumes the introduction of powerful (CCT*2 share in newly
installed capacity)
policies to enhance energy security and
Same as Reference
address climate change issues. Installed capacity (2015 to 2050) (2050)
Carbon free
technology
It promotes utmost penetration of low- Solar PV 0.2 to 1.5 TW 2.5 TW
Wind 0.4 to 1.9 TW 3.0 TW
carbon technologies.
Nuclear 0.4 to 0.6 TW 1.0 TW
#Oil Demand Peak Case Thermal power none Newly

Assumes a more rapid introduction of generation with CCS installed
electric drive vehicles than in the reference (Only countries and regions after 2030
with CO2 storage potential
scenario, to analyze the possibilities of oil excluding aquifers)
demand peak. *1 ZEV: battery electric vehicles, plug-in hybrid electric vehicles and fuel cell battery vehicles
*2 CCT: ultra super critical, advanced-USC and integrated coal gasification combined cycle
<Climate Model Analysis>

#Reference: Emissions path with continuing past trends

#Minimizing Cost: Emissions path with minimizing total cost
#Halving Emissions by 2050: Emissions path reflected RCP2.6 in AR5 by IPCC
3
Energy Outlook up to 2050

<Reference>
Energy market shifting to southern Asia

❖ Global Population, GDP and Energy ❖ Growth in Primary Energy
250 GDP 255 Mtoe -250 250 750
Y2015=100
China
200 India
Energy ASEAN
Non-OECD
150 145 Other Asia
132 *MENA
100 Population **SS Africa
Latin America
50 Europe
Intl. bunkers
2015-2030
0 OECD 2030-2050
1990 2000 2010 2020 2030 2040 2050
* Middle East and North Africa, **Sub-Saharan Africa
Despite large improvements in energy efficiency/intensity, global energy demand

continues to increase. Two thirds of the energy growth comes from non-OECD Asia. As
China peaks during the 2040s, the center of gravity of the market shifts within Asia
towards the south.
5
<Reference>
Demand led by fuels for Generation & Transport

❖ Electricity ❖ Oil fuels for vehicles
12 Electricity demand per capita 8.6 10 20 Vehicle ownership per capita 0.70 0.8
MWh/p unit/p
7.0 8
10 16
6 0.32 0.4
0.26
3.8 0.19
2.8 4 12 0.15
8 2.2 0.07
1.6
2 0.0
8
6 0 Mb/d Growth in 2015-2050
PWh Growth in 2015-2050 4
-2 -0.4
4
-4
0
-6 -0.8
2
-4
-8
0 -10 -8 -1.2
Non-OECD
OECD
India
China
ASEAN
Other Asia
Non-OECD
China
ASEAN
Other Asia
OECD
India
Other
Other
Three quarters of the growth until 2050 are for fuels for power generation and
transportation. The economic development and improvements in living standards of the

relatively poor and populous areas – non-OECD Asia – contribute to the global energy
expansion.
6
<Reference>
High dependence on fossil fuels continues

❖ Growth in Primary Energy ❖ Energy Mix ❖ Energy-related CO2
19.8 50
Renewables Asia* 20 GtCO2 44.1
Gtoe
RoW**
40
Nuclear 15 32.9
13.6
30
Natural Gas
10 21.2
20
79%
Oil
5 81%
10
Coal
Gtoe
0 0
-0.5 0.5 1.5 2.5 2015 2050 1990 2010 2030 2050
* Non-OECD Asia, **Rest of the world
Sixty percent of the growth in electricity demand will be met by thermal power generation,
especially natural gas. Asia leads the large global increase in fossil fuels required for power
generation as well as for transportation. The high dependence on fossil fuels remains
unchanged and energy related CO2 emissions increase by 34% by 2050.
7
<Advanced Technologies>
Drawing another path – Advanced Technologies Scenario

❖ Global Primary Energy ❖ Reduction Effects by ATS in 2050
25 -0.8 -0.6 -0.4 -0.2 0.0
Gtoe Gtoe
19.8 other Up-to-date
elec.
20 Industry
fuels Technologies
15 17.2
other Efficiency
elec.
Transport Improvement
fuels
Cumulative
10 Reduction 40 Gt
other Efficiency
Building elec. Improvement
fuels
5 Reference
Efficiency
transmission
Improvement
losses*
Advanced Technology Power genera-
and
Generation tion loss
Zero-emission
0
Generation
1990 2000 2010 2020 2030 2040 2050
* Including station service power
With the maximum installation of low-carbon technologies, the Advanced Technologies

Scenario can reduce energy consumption by 13% in 2050. Energy efficiency in power
supply/demand technologies would account for 30% of the total reduction. The energy
conservation in the transport sector is quite large due introduction of HEVs, EVs, etc.
8
Zero-emission Generation occupies two thirds

❖ Global Power Generation ❖ Global Power Capacity
50 14
PWh TW
12 VRE*
40
38%
28% Other RE
10
47%
30
Non- 8 Hydro
60%
fossil
6 Nuclear
20 34% 10%
62% Gas
Fossil 4
6%
10 66% with CCS
Oil
2
34% Fossil
0 Coal
0
Reference ATS Reference ATS
2015 2050 2015 2050
* Variable Renewable Energy includes solar PV, CSP, wind and marine.
ATS slows the growth in electricity demand from 1.8 times in the reference, down to 1.6 times.
In ATS, non-fossil power generation accounts for 60% and zero-emission generation, including
thermal generation with CCS represents two thirds (that’s half today’s CO2 emissions per unit
of generation). Half of the total power capacity will be comprised of intermittent renewable
energy, which needs to further reduce costs and enhance grid stability.
9
Coal falls significantly and below renewables

❖ Primary Energy ❖ Effects by ATS in 2050
6 -2 -1 0 1
Gtoe (solid line: ATS, dotted line: Reference)
Gtoe
Genera-
tion
5 Coal
4 Oil
Trans-
port
Oil
Genera-
Coal
tion
Gas
2
Gas
Genera- Genera-
tion
Nuclear
1 Renewables
Nuclear
tion
Renewables
0
1990 2000 2010 2020 2030 2040 2050
In ATS, coal starts to decline from now and is surpassed by renewables around 2040, due
mainly to energy efficiency and the elimination of emissions in the power supply/demand
sectors. Despite large decline in transportation fuels, oil does not reach a peak. Fossil fuels
share of the total in 2050 is reduced to 68%, from 79% in the reference case. It is still a
high level of dependence. 10
CO2 emissions peak in the middle of 2020s

❖ Energy-related CO2 Emissions ❖ Reductions by technology
50
GtCO2 Energy Efficiency …… -6.2 Gt
44
Biofuels
…… -0.4 Gt
40 Wind, Solar, etc.
…… -3.6 Gt
33 Nuclear
…… -2.2 Gt
30 Fuel Switching
…… -0.5 Gt
30
CCS …… -1.5 Gt
Reference
20 -14.4 Gt
ATS
Halve
10
1990 2000 2010 2020 2030 2040 2050
Energy-related CO2 emissions in ATS decline after 2020s but are still very far from reaching
half of current levels by 2050. Efficiency is the most contributor for CO2 reductions from the
reference. Two thirds of the total reductions are electricity-related technologies, including
non-fossil power, thermal power with CCS and energy efficiency in power supply/demand.
11
Ultra-long-term Climate Analysis

Rule for ultra long-term: Reduce the total cost

❖ Mitigation+Adaptation+Damage=Total Cost ❖ Illustration of Total Cost for Each Path
•Typical measures are GHG emissions
reduction via energy efficiency and non-fossil
Mitigation
energy use.
• Includes reduction of GHG release to the
atmosphere via CCS
• These measures mitigate climate change.
総合コスト
Total Cost
•Temperature rise may cause sea-level rise, Mitigation
緩和費用
Adaptation
agricultural crop drought, disease pandemic, Cost

etc. Adaptation
適応費用
Cost
• Adaptation includes counter measures Damage
被害額
such as building banks/reservoir, agricultural Value
research and disease preventive actions.
Path
パス① 1 Path
パス② 2 Path 3
パス③
If mitigation and adaptation cannot reduce
Too Small
緩和過小 Reasonable
緩和中庸 Too 過大
緩和 Big Mitigation
Damage
the climate change effects enough to stop

sea-level rise, draught and pandemics, 適応
Big 大適応中
Medium 適応小
Small Adaptation
damage will take place.
被害
Big 大被害中
Medium 被害小
Small Damage
Without measures against climate change, the mitigation cost is small, while the adaptation and damage
costs become substantial. Aggressive mitigation measures on the other hand, would reduce the
adaptation and damage costs but the mitigation costs would be notably colossal.
The climate change issue is a long-term challenge influencing vast areas over many generations. As
such, and from a sustainability point of view, the combination (or the mix) of different approaches to
reduce the total cost of mitigation, adaptation and damage is important.
13
Minimizing Total Cost in IAM* *Integrated Assessment Model
❖ GHG Emissions ❖ GHG Concentrations ❖ Temperature Rise ❖ Total Cost

(incl. aerosol etc.) (vs. 1850-1900) (cumulative present value*)
80 1,000 4.0 100
*cumulating 2015 to 2500
GtCO2eq ppm CO2eq °C Tril. $
800 80
60 3.0
600 60
40 2.0
400 40
20 1.0
200 20
0 0 0.0 0
2000 2050 2100 2150 2000 2050 2100 2150 2000 2050 2100 2150 Mitigation Adaptation&Damage
Reference Minimizing Cost Halving Emissions by 2050*
Total cost of “Minimizing Cost” is half of the reference. In 2150, GHG emissions decrease by
80% from now and temperature rises by 2.6 °centigrade from the late 19th century. In
“Halving Emissions by 2050“, temperature peaks at 2100, resulting in 1.7°C in 2150. However,
total cost is 20% higher than the reference and double of the “Minimizing Cost“ path.
*Emissions path reflected “RCP 2.6” in the 5th Assessment Report (AR5) by the Intergovernmental Panel on Climate Change (IPCC). 14
Still large uncertainties in the climate analysis

❖ GHG emissions and temperature rise using different discount rates (minimizing cost)
GtCO2-eq °C
60 3.5
Discount rate
50 3.0 This model uses 2.5%. There
are a range of 1.1 to 4.1%
40 2.5
summarized by AR5.
30 2.0 Note: The value used when converting future
value (income and expenditure) into current
20 1.5 value. The lower discount rate tends to raise
10 1.0 1.4 °C emphasis of adaptation and damage, and

strengthen the latest GHG reduction. The higher
0 0.5
difference discount rate raises emphasis of mitigation costs
and delays GHG reduction efforts.
Although it changes every year in the model
-10 0.0 analysis, it is represented by the average value in
2015 to 2300 here.
2000 2050 2100 2150 2200 2000 2050 2100 2150 2200
reference high discount low discount reference high discount low discount
❖ GHG emissions and temperature rise using different ECS (minimizing cost)
GtCO2-eq °C
60 3.5
50 3.0
Equilibrium
Climate Sensitivity (ECS) 40 2.5
This model uses 3 degree. 30 2.0
According to AR5, high
20 1.5
possibility that ECS is between 1.3 °C
1.9 and 4.5 degree. 10 1.0 difference

Note: A parameter indicating how many degrees 0 0.5
centigrade the temperature will rise when the
atmospheric greenhouse gas concentration (CO2 -10 0.0
equivalent concentration) doubles. 2000 2050 2100 2150 2200 2000 2050 2100 2150 2200
reference high ECS low ECS reference high ECS low ECS 15
Another path to “2°C target”

❖ GHG Emissions ❖ GHG Concentrations ❖ Temperature Rise ❖ Total Cost
(incl. aerosol etc.) (vs. 1850-1900) (cumulative present value*)
80 1,000 4.0 *cumulating 2015 to 2500
ppm CO2eq 100
GtCO2eq °C Tril. $
800 80
60 3.0
600 60
40 2.0
400 40
20 1.0
200 20
0 0 0.0 0
2000 2050 2100 2150 2000 2050 2100 2150 2000 2050 2100 2150 Mitigation Adaptation&Damage
Reference Minimizing Cost 2°C Minimizing Cost Halving Emissions by 2050*
“2°C Minimizing Cost”, for example, is a path that minimize total cost under the condition of
2°C temperature rise in 2150. Its total cost is 20% higher than “Minimizing Cost” without
the temperature limit. GHG emissions decrease by 30% in 2050 and needs almost zero-
emissions after 2100. Temperature rises to just over 2°C in 2100 and then declines to 2°C.
Technology development for ultra long-term

Technologies Description Challenges
Technologies Next Generation Fourth-generation nuclear reactors such as ultra- Expansion of R&D support for next generation
to reduce CO2 Nuclear Reactors high-temperature gas-cooled reactors(HTGR) reactors
emissions and fast reactors, and small- and medium-sized
reactors are now being developed internationally.
Nuclear fusion Technology to extract energy just like the sun by Technologies for continuously nuclear fusion and
reactor nuclear fusion of small mass number such as confining them in a certain space, energy
hydrogen. Deuterium as fuel exists abundantly balance, cost reduction, financing for large-scale
and universally. Spent nuclear fuel as high-level development and establishment of international
radioactive waste is not produced. cooperation system, etc.
Space Photovoltaic Technologies for solar PV power generation in Establishment of wireless energy transfer
Satellite space where sunlight rings abundantly above technology, reduction of cost of carrying
(SPS) than on the ground and transmitting generated construction materials to space, etc.
electricity to the earth wirelessly via microwave,
etc.
Technologies Hydrogen Production of carbon-free hydrogen by steam Cost reduction of hydrogen production,
to sequestrate production and reforming of fossil fuels and by CCS efficiency improvement, infrastructure
CO2 or to usage implementation of CO2 generated. development, etc.
remove CO2
from the CO2 sequestration Produce carbon compounds to be chemical raw Dramatic improvement in quantity and efficiency,
atmosphere and usage materials, etc. using CO2 as feedstocks by etc.
(CCU) electrochemical method, photochemical method,
biochemical method, or thermochemical method.
CO2 can be removed from the atmosphere.
Bio-energy with Absorption of carbon from the atmosphere by It requires large-scale land and may affect land
carbon capture and photosynthesis with biological process and CCS. area available for the production of food etc.
storage (BECCS)
17
Lower cost is key for innovative technologies

❖ CO2 Reduction Cost by Innovative Technology
600
2°C Minimizing
○ prospects Cost
SPS
▲ target
400
$/tCO2
200
IGCC (high) Hydrogen power
HTGR
0
BECCS (2025) FCV
-200 IGCC (low)

2030 2050 2100
Note: Cost (=carbon price) for “2 °C Minimizing Cost” is the highest cost of the technology adopted at each year. Refer to the main report for detail.
Implicit carbon price for “2°C Minimizing Cost” is $85/tCO2 in 2050. The target costs for
innovative technologies, such as BECCS, hydrogen power, FCV, HTGR, SPS, are within the
range of the carbon price. The 2°C target can be reached with using these technologies. It
is important to enhance R&D from the long term view and international collaboration is
dispensable. 18
Further CO2 reductions from ATS

❖ Energy-related CO2 Emissions ❖ Examples of technologies needing further reductions
Reference 1) CO2 Free Hydrogen (refer to previous Outlook)

GtCO2 ATS 44 • Hydrogen power 1 GW x 3000 units
• Fuel cell vehicles 1 billion units
40 (H2 demand of 800 Mt/yr corresponds 3 times of today’s LNG)
2) Negative-emission Technology
• BECCS: Biomass power 0.5 GW x 2800 units
(Fuel supply of 2000 Mtoe/yr needs land of 2.85 million km2)
30
30 3) Zero-emission Power and Factories with CCS
-10 GtCO2 (Maximum reduction volume by substituting
▲11Gt thermal power generation without CCS)
• SPS: 1.3 GW x 2300 units
20 19 or • HTGR: 0.275 GW x 8700 units
<Climate Analysis> or • Fusion reactor: 0.5 GW x 4500 units
● Minimizing Cost or • Thermal power with CCS: 2800 GW
● 2°C Minimizing Cost (Estimated CO2 storage potential is over 7000Gt）
◆ Halving Emissions by 2050*
+
-1 GtCO2
10
• CCS: Installed in 20% of factories and plants
1990 2010 2030 2050 (iron & steel, cement, chemicals, pulp & paper, refinery and GTL/CTL)
Peak Oil “Demand” Case

Transport, especially cars, drives oil demand

⛽ Oil consumption [Reference Scenario] ⛽ Oil for Road [Reference Scenario]
122 40
120 114
105 33
100 90 Road
48 30 Non-
47 26
76 OECD
80 45
21
40 Other
Mb/d
Mb/d
60 30 transport 20
OECD
Non- 19
18
energy
40 15
use
10
20 Others
0 0
2000 2015 2030 2040 2050 2000 2010 2020 2030 2040 2050
About 70% of the increases in oil consumption Oil consumption by cars in OECD countries is
until 2050 is for transport or petrochemical decreasing and will be surpassed by non-OECD
feedstocks. Road transport, in particular, may around 2020. Non-OECD accounts for all future
decide where the consumption will go. consumption increases.
21
The time for car electrification has come?

⛽ Selected recent movements by governments/assemblies and car makers
A resolution to ban conventional The target for FCV sales is more than
car sales in the European Union 30,000/year in 2020 (2015). Reported
by 2030 was passed by the of full-scale entry into EVs in 2020
Germany Bundesrat of Germany (2016) Toyota (2016)
The ruling and opposition parties Announced the strategy to increase
proposed the abolition of EV share in its total sales to 25%
conventional vehicles by 2025 with more than 30 models of EVs by
Norway (2016) Volkswagen 2025 (2017)
The Government announced that Introducing 12 models of EVs by
it would ban conventional car 2022. The target of 30% of its total
sales by 2040 (2017) sales as EVs (2017)
France Renault-Nissan
The Government announced that The plan to prepare EVs at all line up
it would ban conventional car by 2020 (2015)
sales by 2040 (2017)
United Kingdom Hyundai
Minister said that all new car Announced that eco-cars combined
sales after 2030 would be electric with EVs and HEVs will be raised to
vehicles (2017) 70% by 2025 (2017).
India Ford
Deputy Minister mentioned that In 2030, two-thirds of automobile

the ban on the sale of sales will be electrified. EVs will be
conventional vehicles was under released in China in 2018 (2017).
China investigation (2017) Honda 22
Oil peaks around 2030 with a rapid
penetration of ZEVs
⛽ Oil consumption ⛽ Oil for Road [Peak Oil Demand Case]
40
Reference
122 33
120
30
105
Advanced
98 21 22
100 Technologies
Mb/d
Mb/d
97
90 20
86 15
89 18
Peak Oil
16 Non-
80 Demand
10 OECD
11
OECD
60 0 5
2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050
Note: Dotted lines are the Reference Scenario
In the Peak Oil Demand Case, oil consumption Oil consumption by cars in Non-OECD, which
hits a peak of 98 Mb/d around 2030 before continues to increase rapidly in the Reference
declining. The reduction from the Reference Scenario, also declines from around 2030. It is as
Scenario is 7 Mb/d and 33 Mb/d in 2030 and in much as one third of the Reference Scenario in
2050, respectively. 2050.
23
While natural gas and coal increase, the
petroleum product composition changes

⛽ Changes in consumption ⛽ Composition of petroleum products
(from the Reference Scenario) consumption
2030 100%
Electricity 409
2050 Gasoline 10% LPG
25% 23% 23%
Road
Biomass 80% 27%

-83
Naphtha
Oil -1,567 60%
Natural gas Jet fuel

CO2 consumption
572 Diesel
40% 27%
Primary
oil 34% 33% 34%

Coal 432 Kerosene
35%
20%
Oil -1,596
Heavy
(Mt) fuel oil
-1,846 0%
2015 2030 2050 2030 2050 Others
-2,000 -1,000 0
Reference Peak Oil
Mtoe
Demand
Note: Excluding own use
As ZEVs demand for oil declines and electricity Gasoline reduces its share from 27% to 10% in
increases, the fuel required for power 2050. The share of diesel oil is not reduced as
generation also increases. Both natural gas and much because diesel oil has other uses. Diesel
coal exceeds oil by the late 2030s. Natural gas share in 2050 is 8 points lower than today.
becomes the largest energy source thereafter.
24
Crude oil production shifts towards low-
cost regions...
⛽ Crude oil production [Peak Oil Demand Case]
42.0
2015 2030 2050 Reference
40
33.7
37.3
32.4
30
28.8 21.6 21.9
Mb/d
20
13.6 14.5 15.0
12.4
11.3 17.1 18.4
8.8
10 13.0 13.8 13.8 7.4 7.2
11.5
9.9 10.7 9.2
7.2 6.9 6.2 8.4
6.9 5.3
0
Middle East Others North America Former Soviet Latin America Asia
Union
OPEC Non-OPEC
Oil price falls due to the change in supply and demand pressure and market perception. Relative to
the Reference Scenario (in $2016), prices drop from $95/bbl to $65/bbl in 2030 and from $125/bbl to
$50/bbl in 2050. Given such drastic price decreases, regions with low production costs would be the
only ones with potential for increases. Only the Middle East is expected to produce more in 2050
than today. North America production decreases by 40% from the Reference Scenario to 13 Mb/d.
25
...but the economic downturn will affect
the Middle East

⛽ Changes in net oil exports/imports and ratios to nominal GDP [2050]
Peak Oil Demand Reference 5% India
Middle East Japan Africa
Net exports
Changes in net oil export ratio to

Oceania
China Canada
Former USSR Quantity effect
0%
Price effect
nominal GDPGDP
Latin America United
ASEAN Europe
States
India Other Latin
-5% America
China Asia
Net imports
OECD Europe
-10% Former
Japan USSR
United States
-15%
Middle
0.0 0.5 1.0 1.5 2.0 2.5 0 50 100 150
East
$ trillion Real GDP ($2010 trillion)
Note: Europe excludes the former Soviet Union
Although the Middle East achieves a relative gain, the decrease in net oil export revenues is
$1.6 trillion; a significant drop of 13% of nominal GDP. At the other end of the spectrum, India which
is the second largest oil consumer, benefits the most with a decrease in net oil import costs. It is
followed by China, in which more cars are on road than in any other countries. Despite its
consumption scale, the United States faces little impact since it is almost oil self-sufficient.
26
Impact of less oil consumption diverges

⛽ Changes in emissions ⛽ Excise taxes on gasoline and
(from the Reference Scenario) diesel oil for automobiles in OECD
400 370
2050 -30.5
NOx (Mt)
313
300 270
2030 -5.4 238
$ billion
200
-40 -30 -20 -10 0
2050 100 79
PM2.5 (Mt)
-1.2
2030 -0.2 0
2030 2050 2030 2050
-1.5 -1.0 -0.5 0.0 2015 Reference Peak Oil
Note: Automobile origin. Does not include effect on improvement of Demand
conventional automobile emission control performance
Emission reductions in NOx and PM2.5, the major Revenues from excise taxes on automotive
drivers behind car electrification, are 27% and gasoline and diesel oil will be reduced
3%, respectively, compared to total emissions in significantly, unless tax regime changes. They
2010. Contribution to air quality in urban areas may become financial issues similar to the
are expected. subsidies for ZEVs at their promotion stage.
27
How do we recognise the rapid de-oiling?
 The Peak Oil Demand Case shows that, under some circumstances, oil consumption can
turn into a decline in the not too distant future,.
 However, the feasibility of this Case can be said to be extremely challenging because
the penetration of ZEVs is far greater than that in the “Advanced Technologies
Scenario,” in which a bottom-up approach to the maximum implementation of
advanced technologies is adopted. It can be said that oil consumption may not be so
easily reduced, so quickly.
...and then  The rising dependence on the Middle East crude

 It should not be overlooked that oil will increase geopolitical risk for stable supply.
in the Peak Oil Demand Case, oil  Although it is reasonable to expect that
remains required in 2050 on a Governments in the Middle East would cut public
scale that does not differ from investment and subsidies to reduce budget
today. deficits while coping with low oil prices, it is
 If the supply investment difficult to deny the possibility of increasing
becomes insufficient due to social anxiety and of a worsening situation in the
excessive pessimism in the region.
future , it can trigger the  The role of consuming countries as well as
switching from oil to other producing countries’ own efforts continue to be

energies threatening energy important. Support to the efforts represented by
security. Saudi Arabia “Saudi Vision 2030“ is needed.
28
Reference materials
Geographical coverage
• The world is geographically aggregated into 42 regions.

• Especially the Asian energy supply/demand structure is considered in detail,
aggregating the area into 15 regions.
Non-OECD Europe
OECD Europe
- Russia
- United Kingdom - Other FSU
- Germany - Other Non-OECD Europe North America
- France
- United States
- Italy
- Other OECD Europe Asia - Canada
- Japan - China - India
Middle East - Chinese Taipei - Korea
-Saudi Arabia - Iran - Hong Kong - Indonesia
- Iraq - UAE - Kuwait - Malaysia - Philippines
- Qatar - Oman - Thailand - Viet Nam Latin America
- Other Middle East - Singapore - Myanmar - Mexico
- Brunei Darussalam - Brazil
Africa - Other Asia - Chile
Oceania - Other Latin America
- South Africa (Rep. of)

- North Africa - Australia
- Other Africa - New Zealand
30
Modelling framework
Major assumptions
GDP, population, energy prices,
exchange rates, international
Macroeconomic model trade, etc. World trade model
Use the linear programming
Calculate GDP-related indices,
(LP) method to calculate the
price indices, activity indices Energy supply-demand future international trade
including material production,
etc. consistently.
model flows of crude oil, petroleum
products, etc.
Econometric model to project
future energy supply and
Technology assessment demand by regression analysis
model of historical trends based on the Computable general
energy balance tables data of equilibrium model
Use a bottom-up approach to the International Energy Agency
calculate future efficiencies of Estimate the economic impacts
(IEA).
appliances, vehicles, etc. induced by the changes in
This model calculates energy
energy supply and demand,
demand, supply and
based on input-output data.
transformation as well as
related indices including CO2
Optimal power emissions, CO2 intensities and
generation planning energy self sufficiency ratios. Climate change model
model Calculate future GHG
Calculate the cost-optimal concentration in the
power generation mix to atmosphere, temperature rise,
meet the projected future damage caused by climate

Experts’ opinions change, etc.
electricity demand.
31
Major assumption: Population
Latin
China India ASEAN Africa
2050 America 9,710
1,340 1,662 761 2,509
777
2015 1,371 1,311 608 629 1,185 7,336
1980 981 697 347 361 477 4,436
0 2,000 4,000 6,000 8,000 10,000

Million
Japan Other Asia North America OECD Europe

Non-OECD Europe Middle East Oceania
32
Major assumption: Real GDP
China 4.4 $2010 Trillion

200 191 Oceania
India 5.7
ASEAN 4.2 Middle East
Japan 0.9
Other Asia OECD
2.8 150 Africa
North America Europe
2.0
Latin America 2.7 32
Non-OECD
OECD Europe 1.4 North Europe
Non-OECD Europe 2.7 Latin America
Africa 100 America
4.4
Middle East 75 36
2.8 Other Asia
Oceania 2.0 1980-2015 8
OECD 1.7 2015-2050 20 Japan
Non-OECD 50 16
4.0
Asia 3.8 18 ASEAN
China
World 2.7 6 40
9 India
0 2 4 6 8 10 0
Compound annual growth rate (%) 2015 2050
33
Major assumption: International energy prices
Crude oil Natural gas

150 $/bbl 20 $/MBtu
Japan
15 Europe (UK)
100
10 United States
50
5
0 0
1980 1990 2000 2010 2020 2030 2040 2050 1980 1990 2000 2010 2020 2030 2040 2050
Steam coal CIF import prices for Japan
150 $/t 1,000 $/toe
800 Crude oil
100 Natural gas
600
Steam coal
400
50
200
0 0
1980 1990 2000 2010 2020 2030 2040 2050 19801990200020102020203020402050
* Historical prices are nominal price. Assumed future prices are real price in $2016.
34
Energy outlook in the world and Asia

2015-2050
Reference Scenario
World population, GDP, primary energy consumption
and CO2 emissions Reference Scenario
300 2015=100
250 255
Real GDP
200
Primary energy
consumption 145
150
134
100 CO2 emissions 132
100 Population
50
0
1980 1990 2000 2010 2015 2020 2030 2040 2050
36
Primary energy consumption by region

Reference Scenario
World
2015 Changes (2015-2050)
13,700 Mtoe

2050
10,000 Mtoe 19,800 Mtoe Mtoe CAGR
North America (×1.5) (2015-2050)
Latin America Asia 3,893 1.5%
8,000 Asia
Africa 847 2.1%
Middle East
OECD Europe Middle East 539 1.6%
6,000
Non-OECD Europe
Africa Latin America 526 1.4%
4,000 Oceania
Non-OECD Europe 345 0.8%
Oceania 4 0.1%
2,000
OECD Europe -145 -0.3%
0 North America -146 -0.2%

1980 1990 2000 2015 2030 2040 2050
37
Primary energy consumption by region (Asia)

Reference Scenario
Asia
2015 Changes (2015-2050)
5,500 Mtoe

2050
Mtoe 9,400 Mtoe Mtoe CAGR
4,500
China (×1.7) (2015-2050)
4,000 India India 1,693 3.2%
3,500 ASEAN
Japan China 1,048 0.9%
3,000
Korea
2,500 Others ASEAN 923 2.6%
2,000
Others 277 1.8%
1,500
Korea -10 -0.1%
1,000
500 Japan -39 -0.3%

0
1980 1990 2000 2015 2030 2040 2050
38
Primary energy consumption by source

Reference Scenario
World
2015 Changes (2015-2050)
13,700 Mtoe

2050
Mtoe Coal 19,800 Mtoe CAGR
(×1.5) Mtoe
7,000 Oil (2015-2050)
Natural gas
6,000 Natural gas 2,250 1.6%
Nuclear
Hydro
5,000 Other renewables Oil 0.9%
1,515
4,000 Other
1,132 1.6%
renewables
3,000
Coal 695 0.5%
2,000
Nuclear 384 1.3%

1,000
0 Hydro 166 1.2%

1980 1990 2000 2015 2030 2040 2050
39
Primary energy consumption by source (Asia)

Reference Scenario
Asia
2015 Changes (2015-2050)
5,500 Mtoe

2050
Mtoe
9,400 Mtoe CAGR
Coal (×1.7) Mtoe
4,000 (2015-2050)
Oil
Natural gas
3,500 Nuclear Natural gas 1,020 3.1%
Hydro
3,000 Other renewables
Coal 1,015 0.9%
2,500
2,000 Oil 993 1.6%
1,500 Other 1.6%

443
renewables
1,000
Nuclear 330 4.0%
500
0 Hydro 90 1.5%
1980 1990 2000 2015 2030 2040 2050
40
Final energy consumption by sector

Reference Scenario
World
2015 Changes (2015-2050)
9,400 Mtoe

2050
Mtoe 13,700 Mtoe CAGR
6,000 (×1.5) Mtoe
(2015-2050)
Industry Buildings,
5,000 1,646 1.2%
Transport etc.
4,000 Buildings, etc.
Non-energy use Industry 1,066 1.0%
3,000
2,000 Transport 1,062 1.0%
1,000
Non-energy 1.4%
516
use
0
1980 1990 2000 2015 2030 2040 2050
41
Final energy consumption by sector (Asia)

Reference Scenario
Asia
2015
Changes (2015-2050)
3,600 Mtoe

2050
Mtoe CAGR
2,500 6,100 Mtoe Mtoe
(2015-2050)
(×1.7)
Industry
Buildings,
1,003 1.8%
2,000 Transport etc.
Buildings, etc.
1,500 Non-energy use 2.0%

Transport 626
1,000
Industry 616 1.0%
500
Non-energy 1.6%
278
use
0
1980 1990 2000 2015 2030 2040 2050
42
Final energy consumption by source

Reference Scenario
World
2015 Changes (2015-2050)
9,400 Mtoe

2050
Mtoe 13,700 Mtoe CAGR
6,000 (×1.5) Mtoe (2015-2050)
Coal
Oil 1.9%
5,000 Electricity 1,586
Natural gas
Electricity
4,000 Others Oil 1,483 0.9%
3,000
Natural gas 829 1.3%
2,000
Others 329 0.6%
1,000
Coal 64 0.2%
0
1980 1990 2000 2015 2030 2040 2050
43
Final energy consumption by source (Asia)

Reference Scenario
Asia
2015
Changes (2015-2050)
3,600 Mtoe

2050
Mtoe CAGR
2,500 6,100 Mtoe Mtoe (2015-2050)
Coal (×1.7)
Oil 1.7%
Oil 971
2,000 Natural gas
Electricity
Others Electricity 965 2.4%
1,500
Natural gas 436 2.9%

1,000
Others 92 0.4%
500
Coal 60 0.2%
0
1980 1990 2000 2015 2030 2040 2050
44
Oil consumption
Reference Scenario
By region By sector
Mtoe International bunkers Mtoe

7,000 Oceania 7,000 Transformation
Africa
Non-energy use 5,849
6,000 Non-OECD Europe/Central Asia 6,000
OECD Europe 5,471
Buildings, etc.
Middle East 5,024
5,000 Asia 5,000 Transport
4,334
Latin America Industry
4,000 North America 4,000 3,660
3,102 3,235
3,000 3,000
2,000 2,000
1,000 1,000
0 0
1980 1990 2000 2015 2030 2040 2050 1980 1990 2000 2015 2030 2040 2050
45
Oil consumption (Asia)

Reference Scenario
By region By sector
Mtoe Mtoe
2,500 Others 2,500 Transformation 2,323
Korea Non-energy use 2,089
2,000 Japan 2,000 Buildings, etc. 1,820
ASEAN Transport
India
1,500 1,500 Industry 1,330
China
1,000 1,000 916
618
477
500 500
0 0
1980 1990 2000 2015 2030 2040 2050 1980 1990 2000 2015 2030 2040 2050
46
Oil production
Reference Scenario
Mb/d OPEC share 48%

140 47% 50%
43% 44%
118
120 111
102 40% Asia/Oceania
100 92 Non-OECD Europe/Central Asia
Other Latin America
30%
80
North America
60 Other Africa
20%
Other Middle East
40 OPEC non-Middle East
10% OPEC Middle East
20
0 0%
2015 2030 2040 2050
47
Oil net imports

Reference Scenario
20 Mb/d
Net exporters in 2050   Net importers in 2050 12 13 14
10 7 6 5 8 7 6 8 7 7
4 3
1 1 0 0 1 1 2 2
0
-2 -3 -2
-10 -5 -5 -4
-7 -7
-9 -9 -9
2015
-20
2030
-23
-30 -25 2050
-33
-40
Middle Non- North Latin Africa Oceania Other Japan/ OECD ASEAN China India
East OECD America America Asia Korea/ Europe
Europe/ Chinese
Central Taipei
Asia
48
Major crude oil trade flows (2016)
Unit: Mb/d
Non-OECD Europe/
OECD Europe Central Asia
4.6
1.1 North America
2.0
3.7 1.9
Middle Japan/Korea/
China Chinese Taipei
East 2.7
1.9 0.5
South
0.7 Asia 1.0
0.6 2.2
Africa ASEAN
1.4 1.8 Latin
0.6 America
6.0
Oceania
49
Major crude oil trade flows (2030)

Reference Scenario
Unit: Mb/d
Non-OECD Europe/
Central Asia
OECD Europe
3.3 0.5
1.0 North America 0.7
1.7
0.8 0.8
7.4
Middle China Japan/Korea/ 0.6
East 6.7 Chinese Taipei
1.4
South
Asia 0.6
0.6 1.5
Africa ASEAN
1.5 3.6 Latin
0.8 America
4.9
Oceania
50
Natural gas consumption

Reference Scenario
By region By sector
Mtoe International bunkers Mtoe

6,000 Oceania 6,000 Transformation
Africa 5,194
Non-energy use
5,000 Non-OECD Europe/Central Asia 5,000 4,550
OECD Europe Buildings, etc.
3,845
4,000 Middle East 4,000 Transport
Asia
Industry 2,944
3,000 Latin America 3,000
North America
2,071
2,000 2,000 1,663
1,232
1,000 1,000
0 0
1980 1990 2000 2015 2030 2040 2050 1980 1990 2000 2015 2030 2040 2050
51
Natural gas consumption (Asia)

Reference Scenario
By region By sector
Mtoe Mtoe
1,800 Others 1,800 Transformation
Korea 1,567
1,600 1,600 Non-energy use
Japan
1,400 ASEAN 1,400 Buildings, etc. 1,285
1,200 India 1,200 Transport
China 965
1,000 1,000 Industry
800 800
600 600 547
400 400
232
200 200 116
51
0 0
1980 1990 2000 2015 2030 2040 2050 1980 1990 2000 2015 2030 2040 2050
52
Natural gas production

Reference Scenario
Bcm
7,000
6,300
6,000 5,521
5,000 4,668 Asia/Oceania

Non-OECD Europe/Central Asia
4,000 3,493 Latin America
North America
3,000
Africa
2,000 Middle East
1,000
0
2015 2030 2040 2050
53
Natural gas net imports

Reference Scenario
300 Bcm
Net exporters in 2050   Net importers in 2050 222
203
186
200 157 152
138 125143
101 106
100 54 48
73 62
32 42
17 26 14
0
-17 -14 -17 2015
-30
-100 -50-54-36
-77 2030
-105 -96
-125 -134
-200 -164 2050
-180
-246
-300 -269 -260
North Non- Middle Oceania Africa Latin ASEAN Other India Japan/ China OECD
America OECD East America Asia Korea/ Europe
Europe/ Chinese
Central Taipei
Asia
54
LNG imports
Reference Scenario
Mt Bcm
400
349 500
300 400
191 300 2016

200
2030
200
96
100
100
39
20 13 24
10 8 5 3 3
0 0
Asia Europe Middle East Latin America Africa North America
55
Major natural gas trade flows (2016)
Unit: Bcm
Non-OECD Europe/
166
North America
34 14
24 Japan/Korea/
Chinese Taipei
Middle 15 China 38
37 7
East
24 South 10 61 36
Asia
Africa ASEAN 16
55
Latin
America
Oceania
Pipeline Gas
LNG
56
Major natural gas trade flows (2030)

Reference Scenario
Unit: Bcm
Non-OECD Europe/
16
148
103 North America
35 25
27
23 Japan/Korea/
Middle China Chinese Taipei
26 25 42
East 23
30 South 49
45 22
Asia
Africa 22 ASEAN
68 Latin
13 22 America
Oceania
Pipeline Gas
LNG
57
Coal consumption
Reference Scenario
By region By sector
Mtoe Oceania Mtoe

5,000 Africa 5,000 Transformation
Non-OECD Europe/Central Asia 4,486 4,531
Non-energy use 4,254
OECD Europe
4,000 Middle East 4,000 Buildings, etc. 3,836
Asia Transport
Latin America
North America
2,220 2,311
2,000 2,000 1,783
1,000 1,000
0 0
1980 1990 2000 2015 2030 2040 2050 1980 1990 2000 2015 2030 2040 2050
58
Coal consumption (Asia)

Reference Scenario
By region By sector
Mtoe Mtoe
4,000 Others 4,000 3,754
Transformation 3,632
Korea
3,500 3,500 3,320
Japan Non-energy use
3,000 ASEAN 3,000 Buildings, etc. 2,739
India
2,500 2,500 Transport
China
1,500 1,500
1,037
1,000 1,000 785
466
500 500
0 0
1980 1990 2000 2015 2030 2040 2050 1980 1990 2000 2015 2030 2040 2050
59
Coal production
Reference Scenario
Mtoe
5,000
4,479 4,526
4,246
3,866
4,000
Oceania
Asia
3,000 Non-OECD Europe/Central Asia
Latin America
2,000 North America
Africa
1,000 Middle East
0
2015 2030 2040 2050
60
Coal net imports

Reference Scenario
300 Mtoe 244252225

221
Net exporters in 2050   Net importers in 2050
200 132112
157
131116 117
105
100 50 70
9 12 15 6 17
0
-24-29 -14
-100 -47-61-59 -51-49-56 -53
-85-96
-117 -128 2015
-200 -161
2030
-300 -254
-307 2050
-400
-429
-500
Oceania Non- Africa North Latin Middle Other ASEAN OECD China India Japan/
OECD AmericaAmerica East Asia Europe Korea/
Europe/ Chinese
Central Taipei
Asia
61
Major steam coal trade flows (2016)
Unit: Mt
60
Russia
OECD
Non-OECD Europe 5 North America
/Central Asia 2 21
Europe 9 2
21 Mongolia
43 6
3
5 3 16
58 3
5
Middle China Japan/Korea/ 8 58
East 6 Chinese Taipei 5
India 3
3 22 103 Colombia
3
Africa 4 60 92
20 Indonesia
15
South-East Asia 44 154
9 62 Latin America
9 13 5
South Africa 6 Australia
7
4
62
Major steam coal trade flows (2030)

Reference Scenario
Unit: Mt
57
Russia
Non-OECD Europe 9 North America
OECD 19
/Central Asia 2 3
Europe
19 3 Mongolia 17
3 6
5 19 47
53 12 4
Middle
5
China
Japan/Korea/ 5 53
4 East 6Chinese Taipei
India 5 4
3 9 96 Colombia
4
Africa 93 90
57 15
5 Indonesia
7 80 Latin America
2
2 9 72 39
South Africa 5 Australia
9
4
63
Major coking coal trade flows (2016)
Unit: Mt
4 4
4
7 Russia
North America
OECD
5 13
Europe Non-OECD Europe
/Central Asia Mongolia
3 7
13 5 19
24
8
Middle China
Japan/Korea/
15 East
India
1Chinese Taipei
Colombia
Africa
2 40
Indonesia
South-East Asia 63
27 Latin America
Mozambique Australia
7
1
64
Major coking coal trade flows (2030)

Reference Scenario
Unit: Mt
2 4
2
Russia
3 North America
OECD 18
Europe
Non-OECD Europe 4
/Central Asia Mongolia
2 7
18 6 19
10
6
Middle 1 China Japan/Korea/
East 1 Chinese Taipei
1 India
16
Colombia
3 1
Africa
4
Indonesia
2 60
Latin America
3
Mozambique Australia
2 7
3
65
Fossil fuel supply/demand balances (Asia)

Reference Scenario
Oil Natural gas Coal
Mtoe Mtoe Mtoe

4,000 4,000 4,000
3,000 3,000 3,000

2,006
2,000 1,489 2,000 2,000
941 780
1,000 1,000 425 1,000 626
296 416
164
0 0 0
-1,000 -1,000 -1,000

Production
-2,000 -2,000 -2,000
Demand
-3,000 -3,000 -3,000
Net imports
-4,000 -4,000 -4,000
2015 2030 2050 2015 2030 2050 2015 2030 2050
66
Electricity final consumption

Reference Scenario
By region By sector
Mtoe Mtoe
3,500 Oceania 3,500 3,324
Buildings, etc.
Africa
Non-OECD Europe/Central Asia Transport 2,852
3,000 3,000
OECD Europe Industry
Middle East 2,373
2,500 2,500
Asia
Latin America
2,000 North America 2,000 1,737
1,500 1,500
1,092
1,000 1,000 835
586
500 500
0 0
1980 1990 2000 2015 2030 2040 2050 1980 1990 2000 2015 2030 2040 2050
67
Electricity final consumption (Asia)

Reference Scenario
By region By sector
Mtoe Mtoe
1,800 Others 1,800 Buildings, etc. 1,705
Korea Transport
1,600 1,600
Japan 1,441
Industry
1,400 ASEAN 1,400
1,200 India 1,152

1,200
China
1,000 1,000
800 800 740
600 600
400 400 280

158
200 200 88
0 0
1980 1990 2000 2015 2030 2040 2050 1980 1990 2000 2015 2030 2040 2050
68
Power generation mix

Reference Scenario
Electricity generated Share
TWh
50,000 Other renewables 100%
44,838
Hydro
39,101
40,000 Nuclear 80%
32,965
Natural gas
30,000 Oil 60%
24,255
Coal
20,000 40%
15,471
11,864
10,000 8,283 20%
0 0%
1980 1990 2000 2015 2030 2040 2050 1980 1990 2000 2015 2030 2040 2050
69
Power generation mix (Asia)

Reference Scenario
Electricity generated Share
TWh
Other renewables
25,000 100%
22,874
Hydro
19,641
20,000 Nuclear 80%
Natural gas 15,895

15,000 60%
Oil
Coal 10,204
10,000 40%
5,000 4,013 20%

2,252
1,196
0 0%
1980 1990 2000 2015 2030 2040 2050 1980 1990 2000 2015 2030 2040 2050
70
CO2 emissions
Reference Scenario
World 2015 Changes (2015-2050)

32.9 Gt

2050
25 GtCO2 CAGR
44.1 Gt GtCO2
North America (2015-2050)
(×1.3) Asia 8.6 1.3%
Latin America
20
Asia Africa 1.5 2.4%
Middle East 1.3%

Middle East 1.1
15 Non-OECD Europe
OECD Europe Latin America 0.9 1.2%
10 Africa Non-OECD
0.4 0.4%
Europe
Oceania
Oceania 0.0 -0.4%
5
OECD Europe -1.0 -0.9%
0 North America -1.1 -0.6%

1980 1990 2000 2015 2030 2040 2050
71
CO2 emissions (Asia)

Reference Scenario
Asia 2015 Changes (2015-2050)

15.1 Gt

2050
12 GtCO2 CAGR
23.7 Gt GtCO2
China (2015-2050)
(×1.6)
10 India 4.7 3.4%
India
ASEAN
8 ASEAN 2.3
Japan 3.0%
Korea
6 China 1.2 0.3%
Others
4 Others 0.6 2.0%
2 Korea 0.0 0.1%
0 Japan -0.3 -0.7%

1980 1990 2000 2015 2030 2040 2050
72
Advanced Technologies Scenario

Advanced Technologies Scenario assumptions

In this Scenario, each country further enhances policies on energy security and address
climate change. Technology developments and international technology transfers are
promoted to further expand the penetration of innovative technologies.
Introducing and enhancing environmental Promoting technology development and
regulations and national targets international technology cooperation
Environment tax, emissions trading, RPS, subsidy, FIT, efficiency R&D investment expansion, international cooperation on energy
standards, automobile fuel efficiency standard, low carbon fuel efficient technology (steelmaking, cement and other areas),
standard, energy efficiency labeling, national targets, etc. support for establishing energy efficiency standards, etc.
Demand side technologies Supply side technologies

■ Industry ■ Renewable energies
Under sectoral and other approaches, best available Wind power generation, photovoltaic power generation, CSP (concentrated solar
technologies on industrial processes (for power) generation, biomass-fired power generation and biofuel will penetrate further.
steelmaking, cement, paper-pulp and oil refining)
will be deployed globally ■ Nuclear
Nuclear power plant construction will be accelerated with capacity factor improved.
■ Transport
Clean energy vehicles (highly fuel efficient vehicles, ■ Highly efficient fossil fuel-fired power generation
hybrid vehicles, plug-in hybrid vehicles, electric technologies
vehicles, fuel cell vehicles) will diffuse further. Coal-fired power plants (SC,USC, A-USC, IGCC) and natural gas–fired more advanced
combined cycle (MACC) plants will penetrate further.
■ Buildings
Efficient electric appliances (refrigerators, TVs, etc.), ■ Technologies for next-generation transmission and
highly efficient water-heating systems (heat pumps, distribution networks
etc.), efficient air conditioning systems and efficient Lower loss type of transformation and voltage regulator will penerate further
lighting will diffuse further, with heat insulation
enhanced. ■ Carbon capture and storage
*SC: Super Critical, USC: Ultra Super Critical, A-USC: Advanced Ultra Super Critical
74
Major assumption: Energy and environmental
technologies Advanced Technologies Scenario
2015  2050 (Reference, 2050)

OECD Non-OECD
Thermal power plant Maintenance of financial scheme for initial investment.
Share of IGCC in install 0%  60% (20%)
Installing CCS after 2030 (Countries which have storage potential except for aquifer)
[Thermal efficiency (stock basis)] Natural gas: 48.5%  55.7% (56.9%) Natural gas: 36.7%  47.3% (44.9%)
Coal: 37.3%  44.4% (45.0%) Coal: 36.5%  40.2% (41.4%)
Nuclear Maintenance of appropriate price in Maintenance of framework for financing
wholesale electricity market initial investment
[Capacity] 2015: 309 GW  327 (241) 2015: 90 GW  629 (337)
Renewables System cost reduction System cost reduction
Cost reduction of power system Low cost investment
Efficient operation of power system Improvement of power system
[Capacity] Wind: 237 GW  1,091 (718) Wind: 178 GW  1,912 (1,152)
Solar: 165 GW  909 (573) Solar: 60 GW  1,588 (946)
Biofuels Development of next generation biofuel Cost reduction of biofuel
Higher diffusion of FFV Relating to agricultural policy
[Consumption] 50 Mtoe  107 (68) 26 Mtoe  94 (56)
Industry Best available technology diffuses 100% in 2050
Transportation Cost reduction of high fuel efficiency of vehicles. Twice of travel distance of ZEV
[Average fuel efficiency of new vehicle sales] 14.5 km/L  41.1 (27.8) 12.9 km/L  28.6 (20.2)
[Share in annual vehicle sales of ZEV] 0.8%  66% (35%) 0.5%  41% (17%)
Buildings The pace of improvement of efficiency of newly installed appliance, equipment
and insulation is twice. 20% improvement in 2050 in ratio of the Reference Scenario
Electrification and clean cooking in space heating, water heater and cooking
75
Nuclear power generation capacities

GW
1,200
1,000 956
784 Middle East/Africa

800
638 Latin America
577 FSU/Non-OECD Europe
600 492
385 399 OECD Europe
400 North America
Asia
200
0
2030 2050 2030 2040 2050
2005 2015 Reference Advanced Technologies

76
Renewables power generation capacities

Wind Solar PV
GW GW
3,500 3,500 Oceania
3,002
3,000 3,000 Asia
2,497
2,500 2,500 Middle East
2,000 1,865 2,000 Africa

1,519
1,500 1,370 1,500 FSU/Non-OECD
951 Europe
1,000 1,000 OECD Europe
415 500
500 224 Latin America
0 0 North America
2015 2050 2030 2050 2015 2050 2030 2050
Refer- Advanced Refer- Advanced

ence Technologies
ence Technologies
77
Biofuels consumption
Mtoe
300
265 Others
250
211 International
bunkers
200
China
144 146
150 ASEAN
108
100 76 Brazil
50 European Union
19
0 United States
2005 2015 2030 2050 2030 2040 2050
Reference Advanced Technologies
78
Vehicle stock and sales by type

Share of new passenger Share of passenger

light-duty vehicle sales light-duty vehicle stocks
2% 0% 1% 1% 0% 0%
100% 100% 2%
2% 12% 8%
28% 9% 21%
80% 11% 80%
25% 18%
60% 25% 21% 60% 1%
95% 1% 97%
40% 40% 37%
33%
50% 56%
20% 20% 1%
0%
17% 23%
0% 0%
Reference Advanced Reference Advanced
Technologies Technologies
2015 2050 2015 2050

ICE (gasoline, diesel) Plug-in hybrid vehicle
Compressed natural gas Electric vehicle
Hybrid vehicle Fuel cell vehicle
79
Fuel efficiency of passenger cars

Fuel efficiency Fuel efficiency

(New sales basis) (Stock basis)
km/L km/L
35 35
43% up 32.0
30 36% up
30 27.8
25 22.3 25
20.4
20 20
15 13.6 15 12.5
10 10
5 5
0 0
2015 2050 2015 2050
80
Energy consumption per unit of output in industry

2015=100 12% down 12% down 12% down 11% down 11% down
100
80.6 80.1
80 73.2 71.2 75.6 70.9
64.3 66.5 68.7
60.6
60
40
20
0
Technologies
Technologies
Technologies
Technologies
Technologies
Reference
Reference
Reference
Reference
Reference
Advanced
Advanced
Advanced
Advanced
Advanced
2015 2050 2050 2050 2050 2050
Iron and steel Non-metallic Chemical Paper and pulp Other industries
minerals
81
Total efficiency in buildings

2015=100
100 21% down
100
20% down
80 77.0
61.1
60
50.2
40.0
40
20
0
2015 2050, Household 2050, Commercial
82
Power generation mix

Electricity generated Capacity
50,000 TWh 44,838 14,000 GW 12,547 12,488

39,733 12,000
40,000
31,482 10,000 8,567
30,000 8,000
24,255
6,169
20,000 6,000
4,000
10,000
2,000
0 0
2015 2050 2030 2050 2015 2050 2030 2050

Coal Natural gas Oil Nuclear Hydro Other renewables
83
Power generation mix (Asia)

25,000 TWh 22,874 7,000 GW 6,421

6,178
20,032 6,000
20,000
5,000
15,136 4,094
15,000 4,000
10,204
3,000 2,530
10,000
2,000
5,000
1,000
0 0
2015 2050 2030 2050 2015 2050 2030 2050

84
Carbon intensity of electricity

Reference & Advanced Technologies Scenarios
World Asia
gCO2/kWh gCO2/kWh
700 700
641 638 646
613 622
Reference
600 566 600
555
541
507
Reference 487
500 500
445
464
389
400 400
Advanced
374 Technologies
Advanced
300 300 322
Technologies
251
200 200
1980 1990 2000 2010 2020 2030 2040 2050 1980 1990 2000 2010 2020 2030 2040 2050
*CO2 emissions per kWh at generation end

85
Energy savings by region and by sector

Final energy consumption Energy savings by region and by sector
Mtoe 13,675
16,000 Mtoe
Intl. bunkers
13,675
14,000
Non-energy Other
use Non-OECD
Other Asia
10,000 9,384 Buildings, India
etc.
China Transport
8,000
Other OECD
Japan 11,831
6,000 OECD Europe Mtoe
Transport
United States Industry
4,000
2,000 Industry
0
2015 2050 2050 2050 2050
Reference Advanced Reference Advanced Technologies
Technologies
86
Primary energy consumption reduction

Mtoe
19,789
20,000
18,374
18,000
16,562
17,219
16,000 16,693
15,717 International bunkers
13,647
14,000
12,873 Non-OECD
OECD
12,000
Reference
10,028 Advanced Technologies
10,000
8,774
8,000
1990 2000 2010 2015 2020 2030 2040 2050
87
Primary energy consumption reduction (Asia)

Mtoe
10,000 9,351
8,548
8,000 7,434
8,156
7,794
7,078 Other Asia
6,000 5,459 ASEAN
4,818 India
China
4,000
Reference
2,887
Advanced Technologies
2,108
2,000
1990 2000 2010 2015 2020 2030 2040 2050
88
Primary energy consumption by source

World Asia
Mtoe Mtoe
6,000 4,000
Fossil fuel share Fossil fuel share
81% (2015) 85% (2015)
3,500
5,000  79% (Reference) Oil  82% (Reference)
 68% (Advanced
Technologies) 3,000  71% (Advanced Coal
Technologies)
4,000
Coal 2,500
3,000 2,000
Natural gas
Other renewables 1,500 Oil
2,000
1,000 Other renewables

1,000 Nuclear
500 Natural gas
Hydro
0 Nuclear Hydro
0
1980 1990 2000 2010 2020 2030 2040 2050
1980 1990 2000 2010 2020 2030 2040 2050

Reference Scenario (solid)
Advanced Technologies Scenario (dotted)
89
Energy self-sufficiency ratio

Asia China India
100% 120% 100%

89% 87%
Coal
Coal 100% 94% Coal 81%
80% 83% 95% 80%
94% 70% 81%
80%
70% Natural gas Narural gas
60% 65% 60%
61%
52% 71%
60% Natural Gas
49% 60% 40%
40% 40%
29% 40% 39%
Oil 42% Oil

22%
20% 14% 20%
20% 20% Oil
22% 4%
13%
0% 0% 0% 4%
1990 2010 2030 2050 1990 2010 2030 2050 1990 2010 2030 2050
Reference Scenario (solid)

Advanced Technologies Scenario (dotted)
90
CO2 emission reduction by region

GtCO2
50 United States
Japan
44.1
41.6 Other OECD
40 38.1 China
India
32.9
31.3 Other Asia
33.4
30 32.1
Other non-OECD
29.7
International bunkers
23.4
21.2 Reference
20
1990 2000 2015 2030 2040 2050
91
CO2 emission reduction by region (Asia)

GtCO2
30
23.7
22.0
19.5 China
20
India
15.1 Other Asia
13.3 17.0 17.0
16.0 ASEAN
10 Reference
6.9 Advanced Technologies
4.9
0
1990 2000 2015 2030 2040 2050
92
CO2 emission reduction by technology

GtCO2
50
44.1
Efficiency
41.6
Biofuels
40 38.1
Wind, solar, etc.
Nuclear
32.9
31.3 Fuel switching
33.4 CCS
30 32.1
29.7 Reference
23.4 Advanced Technologies
21.2
20
1990 2000 2015 2030 2040 2050
93
CO2 emission reduction by technology (Asia)

GtCO2
30
23.7
22.0 Efficiency
19.5 Biofuels
20
Wind, solar, etc.
15.1 Nuclear
13.3 17.0 17.0
16.0 Fuel switching
10 CCS
6.9 Reference
4.9
0
1990 2000 2015 2030 2040 2050
94
Energy outlook in
China, India and ASEAN
Primary energy consumption in China

Mtoe
4,005 4,021
4,000 3,695
3,416
Other
2,973
3,000 renewables
Hydro
2,000
Nuclear
1,130
871
1,000
Natural gas
0 Oil
1990 2000 2015 2030 2040 2050 2050
Reference Advanced Coal

Technolo-
gies
96
Final energy consumption in China

Mtoe
3,000
2,532 2,555
2,500 2,346
2,215
1,906 Non-energy
2,000
use
1,000 781 Transport

654
500
Industry
0
1990 2000 2015 2030 2040 2050 2050
Reference Advanced
Technolo-
gies
97
Fossil fuel supply/demand balances in China

Reference Scenario
Mtoe Production Mtoe Production Mtoe Production

2,500 Demand 2,500 Demand 2,500 Demand
Net imports Net imports Net imports
2,000 2,000 2,000
1,500 1,500 1,500
1,000 1,000 1,000

576 614
500 319 500 500
119 210 114 125 110
46
0 0 0
-500 -500 -500
-1,000 -1,000 -1,000
-1,500 -1,500 -1,500
-2,000 -2,000 -2,000
-2,500 -2,500 -2,500

2015 2030 2050 2015 2030 2050 2015 2030 2050
98
Power generation mix in China

12,000TWh 10,763 4,000 GW

3,354 3,421
10,000 9,298
8,441 3,000
8,000 2,387
5,844
6,000 2,000
1,511
4,000
1,000
2,000
0 0
2015 2030 2050 2050 2015 2030 2050 2050

Technolo- Technolo-
gies gies
99
Primary energy consumption in India

Mtoe
3,000
2,545
2,500
2,061 2,158 Other
2,000 renewables
1,585 Hydro
1,500
Nuclear
1,000 851
Natural gas
441
500 306
Oil
0
1990 2000 2015 2030 2040 2050 2050 Coal
Reference Advanced
Technolo-
gies
100
Final energy consumption in India

Mtoe
2,000
1,729
1,494
1,500 1,383
1,056 Non-energy
use
1,000
Buildings, etc.
578
Transport
500 315
243
Industry
0
1990 2000 2015 2030 2040 2050 2050
Reference Advanced
Technolo-
gies
101
Fossil fuel supply/demand balances in India

Reference Scenario
Mtoe Mtoe Mtoe Production

1,500 Production 1,500 Production 1,500
Demand
Demand Demand Net imports
Net imports Net imports
1,000 1,000 1,000
656
500 348 500 500

222
164 169 115 159
17 75
0 0 0
-500 -500 -500
-1,000 -1,000 -1,000
-1,500 -1,500
-1,500
2015 2030 2050 2015 2030 2050 2015 2030 2050
102
Power generation mix in India

6,000TWh 5,663 1,600 GW 1,507

4,845 1,337
1,400
5,000
1,200
4,000
3,106 1,000
3,000 800 649
600
2,000 1,383
400 280
1,000
200
0 0
2015 2030 2050 2050 2015 2030 2050 2050

Technolo- Technolo-
gies gies
103
Primary energy consumption in ASEAN

Mtoe
1,800
1,544
1,600 1,472
Other
1,400 1,259 renewables
1,200 Hydro
982
1,000
Nuclear
800 621
600 Natural gas
379
400 233
200 Oil
0
Coal
1990 2000 2015 2030 2040 2050 2050
Reference Advanced
Technolo-
gies
104
Final energy consumption in ASEAN

Mtoe
1,200
1,006
1,000 873
817
800
645
Non-energy
600
436 use
Buildings,
400
270 etc.
173 Transport
200
0 Industry
1990 2000 2015 2030 2040 2050 2050
Reference Advanced
Technolo-
gies
105
Fossil fuel supply/demand balances in ASEAN

Reference Scenario
Mtoe Mtoe Mtoe

500 Production 500 Production 500 Production
Demand 395 Demand Demand
400 Net imports 400 Net imports 400 Net imports
300 300 300

201
200 200 200
91 72
100 100 100 50
10
0 0 -46 0
-128
-100 -100 -100 -163
-200 -200 -200
-300 -300 -300
-400 -400 -400
-500 -500 -500

2015 2030 2050 2015 2030 2050 2015 2030 2050
106
Power generation mix in ASEAN

3,500 TWh 3,220 800GW

689 667
2,882
3,000
2,500 600
2,000 1,670
400 355
1,500
868 217
1,000 200
500
0 0
2015 2030 2050 2050 2015 2030 2050 2050

Technolo- Technolo-
gies gies
107
Peak Oil Demand Case

New car sales and car ownership

❖ Assumption of new car sales ❖ Car ownership

100% 100%
80% 80%
60% 60%
Conven- ZEV Conven-
tional 100% tional
40% 40% ZEV
66% 74%
20% 20% 40%

30%
20% 15%
9% 14% 10% 14%
0% 0% 0% 0% 5%
2015 2030 2040 2050 2030 2040 2050 2015 2030 2040 2050 2030 2040 2050
Reference Peak Oil Demand Reference Peak Oil Demand
Note: ZEV consists of plug-in hybrid vehicles, electric vehicles and fuel cell vehicles
Expectation on penetration speed of ZEVs varies a lot. In the Peak Oil Demand Case, 30% and 100% of
global new car (passenger and freight) sales are assumed to be ZEVs in 2030 and in 2050, respectively.
Sensitivity analysis of energy supply and demand was conducted assuming that the electricity demand
increased by the ZEVs will be met by thermal power generation.
109
Oil prices
❖ Assumption of real crude oil prices

140
125
115
120
95
100
$2016/bbl
80 70
Reference
60 52
70 Peak Oil Demand
65
60
40 50
44
20
0
2010 2020 2030 2040 2050
Assuming that the supply and demand relaxation will result in a decline in international oil prices.
In the Peak Oil Demand Case, the prices begin to decline after the 2020s and fall to $50/bbl in 2050.
110
Utilisation of natural gas in Asia

Golden age of natural gas coming to Asia

Changes (2015-2050) Shares (2050)
Natural
90
Hydro gas, 16%
90 Others
807 17%
Nuclear
330 Hydro 10%
649
Others
444
Nuclear
644
Oil
993
-240 Coal
Coal
1,015
748
Natural gas Oil
1,020
-500 0 500 1,000 1,500

Inside: 2015
Mtoe
Middle: Reference, 2050
Advanced Technologies Reference Outside: Advanced Technologies, 2050
While natural gas demand grows at a slow pace currently, it grows at the fastest pace among primary
energy sources in long term.

In the Advanced Technologies Scenario, the increases are the largest among fossil fuels and the share
increases by 6%p from 2015.
112
To ensure golden age of natural gas coming to Asia
In order to ensure increase of natural gas usage, policy implementation by each government
and public entity in the following area are important.
 Improving flexibility in LNG market Supporting finance
Demand in new LNG importing countries in Asia has While natural gas supply requires large investments,
high uncertainty, thus more flexible supply system is private finance cannot afford the investment amount.
required. Public support is essential.
Survey on LNG Trades published by Japan Fair Trade Financial support from each government, the Export
Commission in June 2017 point out that providing Credit Agencies which have the companies in the
destination clauses under a fixed-term FOB contract country which are interested in infrastructure
is likely to be in violation of the Antimonopoly Act. building and multilateral development bank such as
Not only new contracts or timing of renewal the World Bank and the Asian Development Bank in
contracts but also existing contracts are required to financial arrangements are important.
be reviewed for destination restrictions. If Fair Trade
Commission in other Asian countries have the same Human capacity building
announcement, lifting destination restrictions
becomes standard in LNG market The shortfall in human resources for rapid
Developing and implementing natural development of natural gas and LNG demand in
gas usage policies (energy mix) both of the governments and industries is likely to
The advantage (clean, geographical dispersal, and hinder swift decision-making.
ease of usage) of natural gas has is scarcely reflected LNG requires more expertise for deal, security, and
to the price and political support is required. environment more than other energy. If the
To reduce uncertainties of new investment of countries which have been consuming LNG such as
infrastructure as much as possible, political Japan play an active role, it would help increases the
commitment by the government is required and LNG usage in Asia significantly.
implementing energy mix target is recommended.
113
Role of coal and its efficient use

Share of coal in power generation

China India ASEAN
TWh TWh TWh
12,000 6,000 3,500
5,000 3,000
10,000
Other
2,500 renewables
8,000 4,000 Hydro
2,000
Nuclear
6,000 3,000
1,500 Oil
4,000 2,000
1,000 Natural gas
2,000 1,000 Coal

500
0 0 0
2015 2030 2050 2050 2015 2030 2050 2050 2015 2030 2050 2050
Reference Advanced Reference Advanced Reference Advanced
Technolo- Technolo- Technolo-
gies gies gies
In the Reference Scenario, most of the increase of coal-fired power generation occurs in Asia, especially
in India and ASEAN.
In the Advanced Technologies Scenario, electricity generated from coal declines significantly even in
Asia, due to the lower electricity demand with the further progress of energy conservation, and the shift
from coal to other sources in power generation.

However, in India, Indonesia and other ASEAN countries with abundant coal resources, the construction
of coal-fired power plants continues from the viewpoint of energy security and economic efficiency.
115
High efficiency coal-fired power plant and CO2 emissions

Thermal efficiency and CO2 emissions per kWh CO2 emissions per kWh by plant
(kg-CO2)
1.0
sub-C 0.896
sub-C, 38%
0.9
SC 0.811
SC, 42%
USC, 44%
0.8
USC 0.774
A-USC, 48%
0.7 IGCC (1,700°C class), 52% IGCC

IGCC (1,500°C class), 48% 0.709
(1,500°C class)
IGFC, 57%
0.6 0.0 0.2 0.4 0.6 0.8 1.0
CO2 emssions per kWh (kg-CO2)
A-IGCC,A-IGFC, 60%
0.5 Cost of coal-fired power plant
36 38 40 42 44 46 48 50 52 54 56 58 60
sub-C SC USC IGCC
Gross thermal efficiency (%), LHV
Plant cost ($/kW) 1,422 1,689 1,867 2,144
Source: estimated from IEA, “World Energy Outlook 2016”
With the improvement of the thermal efficiency, CO2 emissions per kWh in SC, USC and IGCC are
respectively 90%, 86%, 79% of that in sub-c coal fired plants. On the other hand, their plant costs are
more expensive, about 1.2, 1.3, 1.5 times of that of sub-c plant.
Though high thermal efficiency do reduce fuel costs, financial support remains necessary for the
introduction of high-efficiency power plants. To ensure future commercialisation and wide utilisation of
IGCC, cost reductions are required.
Contact :report@tky.ieej.or.jp 116

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IEEJ：October 2017 © IEEJ2017

The 427th Forum on Research Work

IEEJ Outlook 2018

Tokyo, 12 October 2017

The Institute of Energy Economics, Japan

Overview of the current global energy market

development strategies” by 2020. This Outlook expands its estimation

Scenarios in this Outlook

#Oil Demand Peak Case Thermal power none Newly

<Climate Model Analysis>

#Reference: Emissions path with continuing past trends

Energy Outlook up to 2050

Energy market shifting to southern Asia

Despite large improvements in energy efficiency/intensity, global energy demand

Demand led by fuels for Generation & Transport

transportation. The economic development and improvements in living standards of the

High dependence on fossil fuels continues

Drawing another path – Advanced Technologies Scenario

With the maximum installation of low-carbon technologies, the Advanced Technologies

Zero-emission Generation occupies two thirds

Coal falls significantly and below renewables

CO2 emissions peak in the middle of 2020s

Ultra-long-term Climate Analysis

Rule for ultra long-term: Reduce the total cost

agricultural crop drought, disease pandemic, Cost

the climate change effects enough to stop

Minimizing Total Cost in IAM* *Integrated Assessment Model

❖ GHG Emissions ❖ GHG Concentrations ❖ Temperature Rise ❖ Total Cost

Reference Minimizing Cost Halving Emissions by 2050*

Still large uncertainties in the climate analysis

10 1.0 1.4 °C emphasis of adaptation and damage, and

1.9 and 4.5 degree. 10 1.0 difference

Another path to “2°C target”

Reference Minimizing Cost 2°C Minimizing Cost Halving Emissions by 2050*

Technology development for ultra long-term

Lower cost is key for innovative technologies

-200 IGCC (low)

Further CO2 reductions from ATS

Reference 1) CO2 Free Hydrogen (refer to previous Outlook)

Peak Oil “Demand” Case

Transport, especially cars, drives oil demand

The time for car electrification has come?

Deputy Minister mentioned that In 2030, two-thirds of automobile

petroleum product composition changes

Biomass 80% 27%

Natural gas Jet fuel

oil 34% 33% 34%

the Middle East

Changes in net oil export ratio to

Note: Europe excludes the former Soviet Union

Impact of less oil consumption diverges

How do we recognise the rapid de-oiling?

...and then  The rising dependence on the Middle East crude

switching from oil to other producing countries’ own efforts continue to be

• The world is geographically aggregated into 42 regions.

- South Africa (Rep. of)

meet the projected future damage caused by climate

Major assumption: Population

2015 1,371 1,311 608 629 1,185 7,336

1980 981 697 347 361 477 4,436

0 2,000 4,000 6,000 8,000 10,000

Japan Other Asia North America OECD Europe

Major assumption: Real GDP