Tapping technology’s potential
to secure a clean energy future
IEA Caspian Energy Policy Dialogue and Training
3-5 July 2012, Astana, Kazakhstan
Ambassador Richard H. Jones
Deputy Executive Director
International Energy Agency
© OECD/IEA 2012
ETP 2012 – Choice of 3 Futures
2DS
a vision of a sustainable
energy system of reduced
Greenhouse Gas (GHG)
and CO2 emissions
The 2°C Scenario
4DS
reflecting pledges by
countries to cut
emissions and boost
energy efficiency
The 4°C Scenario
6DS
where the world is now
heading with potentially
devastating results
The 6°C Scenario
© OECD/IEA 2012
Sustainable future still in reach
Is a clean energy
transition urgent?
Are we on track to
reach a clean
energy future?
Can we get on
track?
YES ✓
NO ✗
YES ✓
© OECD/IEA 2012
Recommendations to Governments
1. Create an investment climate of confidence
in clean energy
2. Unlock the incredible potential of energy
efficiency – “the hidden” fuel of the future
3. Accelerate innovation and public research,
development and demonstration (RD&D)
© OECD/IEA 2012
A smart, sustainable energy system
Co-generation
Renewable energy resources
Centralised fuel production,
power and storage
Distributed
energy resources
Smart energy
system control
H2 vehicle
Surplus heat
EV
A sustainable energy system is a smarter,
more unified and integrated energy system
© OECD/IEA 2012
Clean energy: slow lane to fast track
Cleaner coal power
Nuclear power
Renewable power
CCS in power
CCS in industry
Industry
Buildings
Progress is too slow in
almost all technology areas
Significant action is required
to get back on track
Fuel economy
Electric vehicles
Biofuels for transport
© OECD/IEA 2012
Low-carbon electricity: a clean core
45 000
Other
Wind
Solar
Hydro
Nuclear
Biomass and waste
Oil
Gas with CCS
Gas
Coal with CCS
Coal
40 000
35 000
TWh
30 000
25 000
20 000
15 000
10 000
5 000
0
2009
2020
2030
2040
2050
Renewables will generate more than
half the world’s electricity in the 2DS
© OECD/IEA 2012
Nuclear and Renewables need to dominate
OECD Asia Oceania electricity
100%
2 500
2%
0.5%
6%
Other renewables
90%
6%
8%
6%
5%
6%
80%
Wind
2 000
24%
11%
8%
Generation share
70%
TWh
1 500
1 000
Wind
11%
Solar
Solar
60%
35%
Hydro
50%
Hydro
40%
Nuclear
30%
47%
67%
Fossil w CCS
20%
500
Other renewables
Nuclear
3%
Fossil w CCS
34%
6%
10%
Fossil w/o CCS
11%
Fossil w/o CCS
0%
0
4DS
2009
4DS
2DS
2050
2009
2DS
2050
Whereas today around two thirds of electricity are based on fossil fuels, nuclear and
renewables play an important role to decarbonise electricity supply under the 2DS.
© OECD/IEA 2012
Acceleration of nuclear, wind and PV needed
Hydro
Nuclear
CSP
2021-50
PV
Wind,
offshore
2011-20
Wind,
onshore
2001-2010
Biomass
Gas with CCS
Coal with CCS
0
1
2
3
GW per year
4
5
Massive deployment of low-carbon technologies needed,
especially of nuclear and renewable technologies.
6
© OECD/IEA 2012
All flexibility sources will be needed
Dispatchable
power plants
Demand side
Response
(via smart grid)
Energy storage
facilities
Interconnection
with adjacent
markets
Industrial
Biomass-fired
power plant
residential
Pumped hydro
facility
Scandinavian
interconnections
© OECD/IEA 2012
Smart grids offer net benefits
Total benefits of smart-grid investments outweigh costs – but
direct benefits of investment may be found in other sectors.
© OECD/IEA 2012
Power Generation from Natural Gas
TWh
Natural Gas: a transitional fuel
7 500
5 000
2 500
0
2009
2020
OECD
2030
China
India
2040
2050
Other non-OECD
Around 2030, natural gas becomes ‘high carbon’
© OECD/IEA 2012
The CCS infant must grow quickly
Mt CO2
Mt CO2
Mt CO2
Mt CO2
Mt CO2
Mt CO2
Note: Capture rates in MtCO2 /year
© OECD/IEA 2012
GtCO2
Industry must become more efficient
12
6DS
10
Other industries
8
6
Chemicals and
petrochemicals
Aluminium
4
Pulp and paper
2
Iron and steel
0
2010
Cement
2020
2030
2040
2050
Significant potential for enhanced energy efficiency
can be achieved through best available technologies.
© OECD/IEA 2012
Electric vehicles need to come of age
Passenger LDV sales (million)
200
FCEV
Fuel Cell Electric Vehicles
Electricity
150
Plug-in hybrid diesel
Plug-in hybrid gasoline
Diesel hybrid
100
Gasoline hybrid
CNG/LPG
50
Diesel
0
2000
Gasoline
2010
2020
2030
2040
2050
More than 90% of light duty vehicles need to be
propelled by an electric motor in 2050
© OECD/IEA 2012
Translating targets into action
8
million sales/year
7
Manufacturers
production/sales
6
5
Projection
(Estimated from
each country's
target)
Projection
(Estimated from
each country's
target)
4
3
2
1
0
2010
2012
2014
2016
2018
2018
2020
2020
Government targets need to be backed by policy action
© OECD/IEA 2012
Building Blocks of a Cleaner Future
Total energy savings
33 EJ Space heating
22%
Other
15%
Water heating
12%
Services
Lighting, 3%
Residential
Cooling and ventilation, 3%
Water heating, 2%
Cooking
15%
Space heating, 7%
Appliances
10%
Lighting
6%
Cooling and ventilation
5%
About 70% of buildings’ potential energy savings between
the 4DS and 2DS are in the residential sector
© OECD/IEA 2012
Building sector challenges differ
Billion households
2.5
2.0
1.5
1.0
0.5
0.0
2010
OECD
2020
2030
2040
2050
Non OECD
75% of current buildings in OECD will still be standing in 2050
Heating & Cooling: huge potential
Renewable heat
Integration with electricity
District heating and
cooling network
Co-generation
Surplus heat
Heating and cooling account for 46% of global energy use.
Their huge potential for cutting CO2 emissions is often neglected.
© OECD/IEA 2012
Emissions must be eliminated by 2075
A zero-carbon future looks possible but will be very
challenging, even if 2050 targets are met in the 2DS.
© OECD/IEA 2012
Increase public spending on RD&D
12%
25
6%
10
4%
5
4
3
2
2%
1
1990
1994
1998
2002
2006
2010
Energy efficiency
Fossil fuels
Renewable energy
Nuclear
Hydrogen and fuel cells
Other power and storage technologies
Other cross cutting technologies/research
Share of energy RD&D in total R&D
South Africa
1986
Russia
1982
Mexico
1978
India
1974
China
0
0%
0
Brazil
USD billion
15
2008 non-IEA country
spending
USD billion
8%
Share of energy RD&D in total R&D
10%
20
© OECD/IEA 2012
Clean energy investment pays off
Total savings
Fuel savings
Additional
investment
Additional investment
Power
Power
Industry
With
price effect
Transport
Industry
Without
price effect
Residential
Transport
Commercial
Undiscounted
Fuel savings
Residential
3%
Biomass
Coal
Commercial
10%
Oil
- 160
- 120
- 80
- 40
0
40
Gas
USD trillion
Every additional dollar invested in clean energy
can generate 3 dollars in return.
© OECD/IEA 2012
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Marginal change in primary energy mix
Mtoe
Primary energy demand in the Caspian by fuel based on the WEO 2010
New Policies Scenario
250
200
150
Other renewables
Hydro
Nuclear
Gas
Oil
100
Coal
50
0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Robust economic growth, spurred in large part by rising hydrocarbons
production, pushes up energy use with only a marginal change in the
primary energy mix
© OECD/IEA 2012
Caspian energy intensity of GDP
is set to decline
toe per thousand dollars of GDP
($2009, MER)
Primary energy intensity in the Caspian in the WEO 2010 New Policies
Scenario
3.5
Uzbekistan
3.0
Turkmenistan
2.5
Kazakhstan
Russia
2.0
Other Caspian
1.5
Azerbaijan
1.0
0.5
0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Structural economic factors and some efficiency gains drive further
declines in Caspian energy intensity, approaching but not reaching the
current average level for the whole world
© OECD/IEA 2012
Potential for reducing energy-related
CO2 emissions
Mt
Energy-related CO2 emissions abatement in the Caspian region, by scenario
650
600
Current Policies
New
Scenario Policies
Scenario
Abatement
2020 2030 2035
Efficiency
74%
74%
74%
41%
51%
56%
– End-use (indirect) 15%
18%
17%
17%
4%
1%
26%
23%
23%
0%
3%
4%
57
110
138
550
– End-use (direct)
500
– Power plants
Renewables
450
400
2008
450 Scenario
CCS
Total (Mt CO )
2
2015 2020 2025 2030 2035
Policies currently envisaged for implementation do not capture the
potential emissions reductions. Improved efficiency accounts for ¾ of
emissions savings in the 450 Scenario.
© OECD/IEA 2012
Implications for Caspian region
 Caspian countries have significant potential in areas of clean
energy technology development and deployment
 Even though the region’s share of global emissions is relatively small, it is
critical that all countries do more
 The region has much to gain from moving to a more sustainable
development model, not least in order to tackle local environmental issues
 The greatest potential in the short-medium term is in improved energy
efficiency; requires implementing best-practice technologies in all sectors
 Governments have responsibility to set goals and over-arching
policy-framework
 But the challenge is large, so industry and the finance community have a
role in implementation and operation
 IEA and its technology networks are working internationally on
R&D, roadmaps and best-policy practices, presenting
opportunities for mutually beneficial cooperation
© OECD/IEA 2012
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