Business Daily from THE HINDU group of publications
Thursday, Nov 09, 2006
Industry & Economy
Policy support for energy security must : IEA
Energy future can be substantially improved if governments around the world implement policies & measures they are currently considering.
Global energy demand will be reduced by 10 per cent in 2030 - equivalent to China's entire energy consumption today.
Mumbai Nov. 8
Consider the following scenario that may develop over the next 25 years: Global primary energy demand increases by 53 per cent between now and 2030; over 70 per cent of this increase comes from developing countries led by China and India; imports of oil and gas in the Organisation for Economic Cooperation and Development (OECD) and developing Asia grow even faster than demand; world oil demand reaches 116 million barrels a day (mb/d) in 2030, up from 84 mb/d in 2005.
Rise in supply
In addition, most of the increase in oil supply is met by a small number of major OPEC producers, while non-OPEC conventional crude oil peaks by the middle of next decade; global carbon-dioxide (CO2) emissions reach 40 Gt in 2030, a 55 per cent increase over today's level; and China overtakes the US as the world's biggest emitter of CO2 before 2010.
This is the reference scenario, which provides for a baseline vision of how energy markets are likely to evolve without new government measures to alter underlying energy trends, according to the World Energy Outlook 2006 published by International Energy Agency.
The report argues that these trends would accentuate consuming countries' vulnerability to a severe supply disruption and resulting price shock, as well as amplify the magnitude of global climate change.
Advocating strong policy action to move the world onto a more sustainable energy path, the report has unveiled an alternative policy scenario that demonstrates that the energy future can be substantially improved if governments around the world implement policies and measures they are currently considering.
In this scenario, global energy demand is reduced by 10 per cent in 2030 - equivalent to China's entire energy consumption today. Global CO2 emissions are reduced by 16 per cent - equivalent to current emissions in the US and Canada combined - in the same timeframe. In the OECD countries, oil imports and CO2 emissions peak by 2015 and then begin to fall.
Improved efficiency of energy use contributes most to the energy savings.
Increased use of nuclear power and renewables also help reduce fossil fuel demand and emissions. "Just a dozen specific policies in key countries account for 40 per cent of the reduction of global CO2 emissions," the report observed.
Shift in trends
The shifts in energy trends described in this scenario would serve all three of the principal goals of energy policy: greater security, more environmental protection and improved economic efficiency, according to IEA.
"These policies are very cost-effective. There are additional upfront costs involved, but they are quickly outweighed by savings in fuel expenditures; and the extra investment by consumers is less than the reduction in investment in energy-supply infrastructure," the IEA chief executive remarked.
Demand-side investments in more efficient electrical goods are particularly economic. On average, an additional $1 investment in more efficient electrical equipment and appliances avoids more than $2 in investment in power generation, transmission and distribution infrastructure.
Coal is now cheaper than natural gas for electricity generation, while nuclear power may, in some cases, be cheaper than both coal and gas - even where there is no penalty for emitting CO2, the report pointed out adding that biofuels can make a significant contribution to meeting future road-transport energy needs, helping promote energy diversity and reducing emissions.
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