INTERNATIONAL ENERGY AGENCY World Energy Outlook Strategic Challenges

INTERNATIONAL ENERGY AGENCY World Energy Outlook Strategic Challenges Hideshi Emoto Senior Energy Analyst International Energy Agency

Energy Trends & Strategic Challenges Reference Scenario INTERNATIONAL ENERGY AGENCY

World Primary Energy Demand INTERNATIONAL ENERGY AGENCY Fossil fuels account for more than 80% of the growth in energy demand between now and 2030

World Nuclear Capacity Additions 250 200 150 GW Projected Historical 100 50 0 1950 - 1971 - 1981 - 1991 - 2001 - 2011 - 20211970 1980 1990 2000 2010 2020 2030 INTERNATIONAL ENERGY AGENCY Under current policies, projected capacity additions will be a third of the additions over the past thirty years

Challenge 1: Security of Supply INTERNATIONAL ENERGY AGENCY

World Oil Production Shifts Away from OECD INTERNATIONAL ENERGY AGENCY Global oil production climbs from 82 mb/d in 2004 to 115 mb/d in 2030; OECD share falls from 25% to 12%

MENA Crude Oil & NGL Production by Country INTERNATIONAL ENERGY AGENCY MENA’s share of world oil production rises from 35% in 2004 to 44% in 2030 in the RS, with Saudi production rising to over 18 mb/d

MENA Net Oil Exports INTERNATIONAL ENERGY AGENCY MENA plays an increasingly important role in international trade, its net exports surging from 22 mb/d in 2004 to 39 mb/d in 2030

Saudi Arabia’s Oil Production by Source in the Reference Scenario INTERNATIONAL ENERGY AGENCY Based on its reserves and global demand trends, Saudi oil production is projected to reach 18 mb/d in 2030

Iran’s Oil Balance in the Reference Scenario INTERNATIONAL ENERGY AGENCY Iran oil production reaches 6. 8 mb/d in 2030, but exports increase less rapidly due to strong growth in domestic demand

Oil Production Outlook in Iraq in the Reference Scenario INTERNATIONAL ENERGY AGENCY Oil production in Iraq is expected to reach around 3 mb/d in 2010 and 8 mb/d in 2030, provided that stability and security are restored

Net Oil Imports by OECD Regions 18 15 mb/d 12 9 6 3 0 2004 2030 2004 OECD North America OECD Europe MENA INTERNATIONAL ENERGY AGENCY 2030 2004 2030 OECD Pacific non MENA OECD Europe will rely more on MENA oil – imports from MENA reach 8. 5 mb/d, or nearly two-thirds of total imports in 2030

Proven Natural Gas Reserves INTERNATIONAL ENERGY AGENCY Gas reserves, concentrated in the Middle East & the transition economies, are equal to 66 years of current production

MENA Natural Gas Exports Billion cubic metres INTERNATIONAL ENERGY AGENCY MENA becomes the world’s leading gas exporter, with most of the increase in exports meeting surging European & US LNG demand

EU Gas Supply Balance 800 bcm 600 400 200 0 1980 1990 2004 Production INTERNATIONAL ENERGY AGENCY 2010 2020 2030 Net imports Rising demand – mainly for power generation – and declining output will cause net imports to surge

Challenge 2: Carbon Dioxide Emissions INTERNATIONAL ENERGY AGENCY

World Energy-Related CO 2 Emissions INTERNATIONAL ENERGY AGENCY Global emissions grow 50% between now and 2030, and developing countries’ emissions will overtake OECD’s in the 2020 s

CO 2 Increase, 2004 -2030 4 000 15 2030 million tonnes 2004 Pacific Europe 2 000 6 2030 North America 1 000 2004 0 3 0 China INTERNATIONAL ENERGY AGENCY 9 tonnes per capita 3 000 12 OECD CO 2 additions equal to only three quarters of Chinese CO 2 rise, but OECD emissions per capita still two times higher in 2030

World Alternative Policy Scenario INTERNATIONAL ENERGY AGENCY

Key Policies in Alternative Scenario for European Union Power generation l. Renewable energy directive l. Combined Heat and Power directive l. Extension of reactor useful lifetime l. Transport sector l. Prolongation and tightening of Voluntary Agreement with car manufacturers l. Biofuels target INTERNATIONAL ENERGY AGENCY Residential and commercial sectors l. Energy performance in buildings directive l. Energy labelling

Reduction in Oil Demand in the Alternative vs. Reference Scenario, 2030 Oil savings = 12. 1 mb/d INTERNATIONAL ENERGY AGENCY Oil savings in 2030 would be equivalent to the combined current production of Saudi Arabia and the UAE

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Global Energy-Related CO 2 Emissions in the Reference and Alternative Policy Scenarios 40 000 million tonnes of CO 2 35 000 30 000 25 000 20 000 1990 2000 Coal INTERNATIONAL ENERGY AGENCY Oil 2010 Gas 2020 Alternative Policy Scenario 2030 Reference Scenario In 2030, CO 2 emissions are 16% lower than in the Reference Scenario, but are still more than 50% higher than 1990

Share of Nuclear Power in World Electricity Generation 18% 16% 14% 12% 10% Reference Alternative 8% 6% 4% 2% 0% 1990 INTERNATIONAL ENERGY AGENCY 2003 2010 2020 2030 Policies going beyond the Alternative Scenario will be needed to maintain or increase the share of nuclear power

Summary & Conclusions l Projected market trends raise serious concerns Ø Increased risk for energy security Ø Rising environmental concerns l More vigorous policies would curb rate of increase in energy demand emission significantly l Nuclear power can largely contribute toward meeting these challenges INTERNATIONAL ENERGY AGENCY l Urgent and decisive government action needed

WEO 2006: Preliminary plan l World Alternative Policy Scenario Ø a “tool for change” Ø Deepening and broadening the analysis l Impact of high energy prices Ø Impact of high oil, gas and electricity prices on energy demand macro economy Ø Focus on developing Asia l Energy Investment Prospects Ø Requirements vs. projects and plans l Role for Nuclear Ø Availability of uranium and costs INTERNATIONAL ENERGY AGENCY Ø Nuclear investments in competitive markets