World Energy Outlook 2002 Sees Koreas Energy Demand Rising Strongly Until 2030 and its Role in Global Energy Trade Expanding Rapidly
(Seoul) — 24 September 2002
William Ramsay, deputy executive director of the Paris-based International Energy Agency, released the "Korea Energy Outlook", today in Seoul. The Outlook was first published as a chapter in the 2002 edition of the World Energy Outlook, the IEA's flagship publication. "Korea plays an important role on world energy markets", Mr. Ramsay said, "and this role will expand over the next three decades."
The complete World Energy Outlook 2002 was released on 21 September in Osaka, Japan at the International Energy Forum. 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, the WEO extends its projection horizon from 2020 to 2030. In a separate chapter called "Energy and Poverty," the book examines the plight of the world's energy poor. 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. The WEO 2002 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.
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 Korea Energy Outlook, published in co-operation with the Korean Ministry of Commerce, Industry and Energy, provides a detailed look at the world's fourth-largest oil importer and second-largest importer of coal and liquefied natural gas. Korea's energy demand is projected to grow at 2.3% per year through 2030. "This energy demand growth will be faster than in almost every other OECD country", remarked Mr. Ramsay, "and much faster than in the rest of the OECD Pacific region."
Oil will continue to dominate Korea's fuel mix, although demand for natural gas and nuclear energy will continue to expand. Natural gas, which was introduced into Korea only recently, will be the fastest growing fossil fuel. The share of gas-fired power will increase rapidly, but coal and nuclear energy will remain the dominant fuels for power generation, accounting for nearly 75% of electricity output in 2030. Generation from nuclear power will more than double by 2030. The country will then account for 9% of world nuclear supply. The Outlook projects that Korea will need to build around 100 GW of new generating capacity over the next thirty years, at a cost of $88 billion.
Mr. Ramsay commended the Korean government's efforts to reform energy-markets and to improve energy security. He noted, however, that "expected improvements in energy intensity will be particularly important, as Korea has virtually no indigenous fossil fuel resources." The Outlook expects the country's role in world energy trade to expand dramatically.