The Major oil-consuming nations must either opt for “a bold change of policy direction” or end up in an “insecure, inefficient and high-carbon energy system,” the International Energy Agency (EIA) warned yesterday in its publication the World Energy Outlook 2011.
“Growth, prosperity and rising population will inevitably push up energy needs over the coming decades. But we cannot continue to rely on insecure and environmentally unsustainable uses of energy,” IEA Executive Director Maria van der Hoeven told a press conference in London, launching the publication.
The Fukushima nuclear accident, turmoil in parts of the Middle East and North Africa and a sharp rebound in energy demand in 2010 have pushed CO2 emissions to a record high, she said, stressing the “urgency and the scale of the challenge.”
Unless large-scale clean energy technologies are in place by 2017, the globally agreed goal of limiting temperature rise to 2°C is not possible, the report said.
As each year passes without clear signals to drive investment in clean energy, the “lock-in” of high-carbon infrastructure is making it harder and more expensive to meet our energy security and climate goals, it continued.
The report called delaying action on clean energy “is a false economy.”
“For every $1 of investment in cleaner technology that is avoided in the power sector before 2020, an additional $4.30 would need to be spent after 2020 to compensate for the increased emissions,” it said.
The publication has come up with different scenarios to arrive at key findings related to the energy sector as below:
- Under New Policies Scenario, assuming that recent government commitments are implemented in cautious manner, primary energy demand increases by one-third between 2010 and 2035, with 90% of the growth in non-OECD economies. ( Organisation for Economic Cooperation and Development)
- China consolidates its position as the world’s largest energy consumer: it consumes nearly 70% more energy than the United States by 2035, even though, by then, per capita demand in China is still less than half the level in the United States.”
- The share of fossil fuels in global primary energy consumption falls from around 81% today to 75% in 2035.
- Renewables increase from 13% of the mix today to 18% in 2035 and the growth in renewables is underpinned by subsidies that rise from $64 billion in 2010 to $250 billion in 2035.
- Cumulative CO2 emissions over the next 25 years amount to three-quarters of the total from the past 110 years, leading to a long-term average temperature rise of 3.5°C.
- China's per-capita emissions match the OECD average in 2035. Were the new policies not implemented, we are on an even more dangerous track, to an increase of 6°C.
- The 450 Scenario traces an energy path consistent with meeting the globally agreed goal of limiting the temperature rise to 2°C.
- Four-fifths of the total energy-related CO2 emissions permitted to 2035 in the 450 Scenario are already locked-in by existing capital stock, including power stations, buildings and factories.
- Without further action by 2017, the energy-related infrastructure then in place would generate all the CO2 emissions allowed in the 450 Scenario up to 2035.
- Short-term pressures on oil markets are easing with the economic slowdown and the expected return of Libyan supply. But the average oil price remains high, approaching $120/barrel (in year-2010 dollars) in 2035.
- Reliance grows on a small number of producers: the increase in output from Middle East and North Africa (MENA) is over 90% of the required growth in world oil output to 2035.
- If, between 2011 and 2015, investment in the MENA region runs one-third lower than the $100 billion per year required, consumers could face a near-term rise in the oil price to $150/barrel.
- Oil demand rises from 87 million barrels per day (mb/d) in 2010 to 99 mb/d in 2035, with all the net growth coming from the transport sector in emerging economies.
- The passenger vehicle fleet doubles to almost 1.7 billion in 2035. Alternative technologies, such as hybrid and electric vehicles that use oil more efficiently or not at all, continue to advance but they take time to penetrate markets.
- The use of coal – which met almost half of the increase in global energy demand over the last decade – rises 65% by 2035.
- Prospects for coal are especially sensitive to energy policies – notably in China, which today accounts for almost half of global demand.
- Alternative technologies, such as hybrid and electric vehicles that use oil more efficiently or not at all, continue to advance but they take time to penetrate market