World Energy Outlook 2002 Sees Abundant Energy until 2030, But Projects Challenges on Security, Investment, Environment and Poverty

(Osaka) — 21 September 2002

"The world has abundant energy resources for the coming thirty years," Robert Priddle, executive director of the Paris-based International Energy Agency said today. "Nonetheless, these resources have to be converted into accessible, reliable supplies, which demonstrates that the renewed concern for security of supply is well-founded." Mr. Priddle made his remarks at the International Energy Forum in Osaka, where he presented the 2002 edition of World Energy Outlook, the IEA's flagship publication.

"Despite our plentiful energy resources," Mr. Priddle continued, "there are formidable challenges. Consuming countries will increasingly depend, especially for oil, on a small number of producers, some of them located in unstable political areas. To get the energy out of the ground and to the market will require investments of trillions of dollars. Far too many people in the world lack access to modern energy and that energy poverty is not set to end. And, despite serious efforts by many nations, energy-related carbon dioxide emissions, which threaten to change the earth's climate decisively, continue to grow."

Robert Priddle said that the IEA had decided to launch this year's WEO at the Osaka meeting at the request of the Japanese government and in recognition of Japan's dedicated membership in the Agency. The decision also underlines the IEA's commitment to constructive dialogue between energy-producing countries and energy consumers that finds a unique expression in the Forum. "The messages in this book are of equal relevance to producers and consumers," Mr. Priddle remarked, "and the challenges it describes can be best met if we co-operate in tackling them."

The Outlook, which appears every two years, is the IEA's most ambitious and most widely read publication. It projects trends in energy supply and demand, prices, trade and carbon emissions from now until the year 2030. Its projections are recognised as authoritative throughout the energy world.

This year, WEO innovates in several ways:

  • It extends its projection horizon from 2020 to 2030.
  • In a separate chapter called "Energy and Poverty," it examines the plight of the world's energy poor. On the basis of entirely new research, it describes the past and the future of electrification in developing countries; it explores the use of traditional biomass and traces the course of very poor families, as they move from energy deprivation and into the modern energy world.
  • A special in-depth study of China, the new "energy giant," describes this enormous country's efforts to establish secure energy supplies and points to the implications for the energy security of all other consuming nations.
  • It presents an Alternative Policy Scenario, which - unlike the basic Reference Scenario - assumes that OECD countries adopt all those energy efficiency and climate-friendly policies and measures now under discussion.

The Reference Scenario projects continuing rapid growth in energy demand from now till 2030, at a rate of 1.7% annually. By 2030, the world will be consuming two-thirds more energy than today. And developing countries will replace the industrialised world as the largest group of energy consumers.

Fossil fuels will remain the dominant sources of energy, filling more than 90% of the coming increase in demand. Oil demand will increase even faster than in the past thirty years. Natural gas will be the fastest-growing fuel, doubling in volume in the 30-year projection period. Coal will grow more slowly, and its share in world energy supply will decline. Under present policies, nuclear power will decline as old plants are retired and few new ones are built. Renewable energy will increasingly contribute to power generation. Use of wind power and biomass will expand very quickly, but from an extremely small base. The two energy sectors that will grow most over the next thirty years are electricity and transport, especially in the developing world, where rising incomes will swell the demand for electricity services and mobility.

Energy trade is set to expand very rapidly, as the major oil and gas consuming nations increase their imports. Production of oil and gas will be increasingly concentrated in a few states - OPEC members, especially in the Middle East, and Russia.

Enormous investments will be required to increase production to meet rising world demand - and to move that production to market. Mobilising the necessary investment will depend on an investment climate which persuades potential investors that they can earn a fair return on their money. The WEO 2002 estimates that developing countries will need investment of $2.1 trillion to meet growing demand for electricity generation alone. This is more than double the investment in power generation in these countries over the past thirty years. Finding the funds will be a major challenge.

Steady growth in energy use will drive up climate-disrupting emissions of carbon dioxide. In the Reference Scenario - which projects the results expected to be achieved on the basis of these energy-efficiency or ecological policies and measures so far adopted - energy-related carbon emissions will grow by 16 billion tonnes, or 70% above today's level. The lion's share of new emissions will come from developing countries, with China alone adding 3.6 billion tonnes. Under the Reference Scenario, OECD countries with Kyoto commitments will need to rely heavily on the purchase of emissions credits in order to fulfil them.

In the Alternative Policy Scenario, OECD countries will achieve cuts in carbon emissions, particularly through the use of renewable energy sources in electricity generation. Meeting the Kyoto targets will still not be easy.

In the meantime, energy poverty will persist. Some 1.6 billion people now lack electricity. If no radical new measures are taken to change the situation, 1.4 billion will still have no access in thirty years time, because population growth will nearly keep pace with the growth in new electricity connections.

WEO 2002 includes detailed studies and statistics related to energy developments and projections in ten world regions. Mr. Priddle said "There is a rich banquet of information in this volume, whatever the reader's particular interest in energy may be."

Share

Latest articles