WEO 2012: FactSheets How will global energy markets evolve to 2035?
Taking all new developments and policies into account, the world is still failing to put the global energy system onto a more sustainable path. The New Policies Scenario, our central scenario, shows that several fundamental trends persist: energy demand and CO2 emissions
rise ever higher; energy market dynamics are increasingly determined by emerging economies; fossil fuels remain the dominant energy sources; and providing universal energy access to the world’s poor continues to be an elusive goal.
ENERGY DEMAND AND CO2 emissions rise ever higher in the New Policies Scenario; Global energy demand increases by over one-third in the period to 2035. Energy related CO2 emissions rise from an estimated 31.2 Gt in 2011 to 37.0 Gt in 2035, pointing to a long-term average increase of 3.6°C. A lower rate of global economic growth in the short term would make only a marginal difference to longer term energy and climate trends.
Emerging Economies Drive Energy Markets The share of non-OECD energy demand rises
from 55% in 2010 to 65% in 2035. China accounts for the largest share of the growth in global energy use, with its demand rising 60% by 2035, followed by India (where demand more than doubles) and the Middle East. OECD energy demand in 2035 is just 3% higher than in 2010, but there are dramatic shifts in its energy mix as fuel substitution sees the collective share of oil and coal drop by fifteen percentage points to 42%.
Fossil fuels remain the principal sources of
energy worldwide, though renewables grow rapidly. Demand for oil, gas and coal grows in absolute terms through 2035, but their combined share of the global energy mix falls from 81% to 75% during that period. The unlocking of unconventional resources portends a very bright future for natural gas, which nearly overtakes coal in the primary energy supply mix by 2035. Nuclear power maintains a 12% share of electricity
generation, a downward revision from previous projections in light of additional policy changes in several countries prompted by the accident at Fukushima Daiichi. Renewables deployment is driven by incentives, falling costs, rising fossil fuel prices and, in some cases, carbon pricing: their share of electricity generation grows from 20% in 2010 to 31% by 2035.
Subsidies to fossil fuels continue to distort energy
markets and expanded considerably last year despite international efforts at reform. Global fossil fuel consumption subsidies totalled $523 billion in 2011, almost 30% higher than in 2010. The increase
82 December 2012
reflects higher international energy prices and rising consumption of subsidised fuels. The subsidy bill would have been even more expensive without reform efforts in several countries. Financial support to renewable energy, by comparison, amounted to $88 billion in 2011.
An energy renaissance in the United States is
redrawing the global energy map, with implications for energy markets and trade. The US, which currently imports around 20% of its total energy needs, becomes all but self-sufficient in net terms by 2035 thanks to rising production of oil, shale gas and bioenergy, and improved fuel efficiency in transport. Falling US oil imports mean that North America becomes a net oil exporter by around 2030. This accelerates the ongoing shift in the international oil trade towards Asian markets, putting greater focus on the security of strategic routes that link them to the Middle East.
Large-scale investment in energy supply
infrastructure is required to replace existing supply capacity and expand to meet growing energy needs. In the New Policies Scenario, cumulative investment of $37 trillion is needed in the world’s energy supply system over 2012-2035, equivalent to 1.5% of global GDP on average during that period. Of the total, non-OECD countries require 61%. Oil and gas supply account for $19 trillion of the total; $17 trillion goes to the power sector, including for generation, transmission and distribution.
What Future for Oil & Gas? Growth in oil consumption in emerging economies,
particularly for transport in China, India and the Middle East, more than outweighs reduced demand in the OECD, pushing global oil use steadily higher. Global oil demand in the New Policies Scenario,
our central scenario, increases slowly to 2035, reaching 99.7 mb/d – up from 87.4 mb/d in 2011. China alone accounts for 50% of the net increase worldwide. A steady decline in OECD regions is brought about by efficiency gains, inter-fuel substitution and saturation effects.
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