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2005 H2030 annual average growth rate Figure 1.3 Primary Energy Demand by Region in the Reference Scenario Figure 1.4 Regional Shares in Incremental Primary Energy Demand by Fuel in the Reference Scenario, 2005-2030 Coal Oil Gas Nuclear Renewables OECD Transition economies Developing countries Coal Oil Gas Nuclear Renewables OECD Transition economies Developing countries Global primary energy intensity, measured as total energy use per unit of gross domestic product, is projected to fall on...
Why Does the Government Need to Reform Gas Prices
Gas produced by India's public-sector companies is sold at controlled prices under the Administered Pricing Mechanism APM . Many of these prices are below open market prices. APM gas currently accounts for about 60 of the gas sold in India but its share is expected to decline. Gas that is not covered by APM includes imported LNG, gas produced from fields exploited by companies with production-sharing contracts and gas to be produced from finds made under the New Exploration Licensing Policy...
Chapter Overview of the Energy Sector
8.1 Key Energy Indicators for China 263 8.2 Selected Targets for Improvements in Energy Efficiency in the 11th Five-Year Plan for Energy 276 Chapter 9. Reference Scenario Demand Projections 9.1 Key Assumptions for China's Energy Projections in the Reference Scenario 285 9.2 Energy Intensity in Selected Power-Generation Technologies and End-Use Sectors in the Reference Scenario 286 9.3 China's Primary Energy Demand in the Reference Scenario 287 9.4 Industrial Energy Demand in the Reference...
Box Modelling Economic and Energy Interlinkages the WEMECO Model
The IEA World Energy Model WEM is a partial equilibrium model with a rich technology representation of all energy sectors. The bottom-up structure of the model makes use of the extensive IEA statistical databases. Regional GDP growth rates and international fuel prices are exogenous. For the purposes of the High Growth Scenario, we developed in collaboration with the Centre International de Recherche sur l'Environnement et le D veloppement CIRED a French research institute a hybrid model,...
Energy and Other Commodity Prices and Expenditures
Higher growth in China and India affects the economies of the rest of the world through its impact on international commodity prices and on overall trade in all types of goods and services. Energy is the most important commodity category, as it is an indispensable input to all productive activities. The higher GDP growth rates assumed in the High Growth Scenario result in faster growth of energy demand in both countries, as described in Chapter 2. Higher growth in energy demand, combined with...
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Residential consumption of natural gas is small in India and is limited to major cities. We project it to grow by an average 9.1 per year in 2005-2030 several cities, including New Delhi, are expanding distribution networks to supply apartment complexes , but it will still account for only 2 of total residential energy use in 2030 all of it in urban areas. The share of coal in total residential energy is projected to fall from 1.8 in 2005 to 0.9 in 2030, with demand falling slightly in absolute...
Chapter Energy Trends in China and India
2.1 Shares of China and India in the Increase in World Primary Energy Demand by Fuel in the Reference Scenario, 2005-2030 118 2.2 Primary Oil Demand in China and India by Sector 2.3 Fuel Mix in Power Generation in China and India 2.4 Road Transport Fuel Consumption in China and India 2.5 Net Oil Imports in China and India in the Reference Scenario 125 2.6 Coal Balance in China and India in the Reference Scenario 127 2.7 Cumulative Investment in Energy Supply in China and India by Fuel in the...
Chinas Energy Sector
In less than a generation, China has moved from being a minor and largely self-sufficient energy consumer to become the world's fastest-growing energy consumer and a major player on the global energy market. Soaring energy use is both a driver and a consequence of the remarkable growth in the country's economy especially in heavy industry. For many years, China was able to meet its rapidly growing energy needs entirely from domestic resources, so its impact on global markets was minimal. That...
Residential Sector
Energy consumption in the residential sector grew on average by 1.6 per year in 1990-2005 and is projected to maintain this growth rate from 2005 to 2030.12 Its share of total final consumption will decrease from 44 in 2005 to 29 in 2030. Higher incomes and urbanisation progressively reduce reliance on traditional biomass, including fuel wood, dung and agricultural waste. These resources dominate residential energy consumption today, accounting for 79 of residential energy demand. That share...
Share of Natural Gas in Total Primary Energy Demand in China and India
2005 2030 2030 2030 Reference Alternative High 2005 2030 2030 2030 Reference Alternative High 2005 2030 2030 2030 Reference Alternative High 2005 2030 2030 2030 Reference Alternative High Although their current import needs are small in volume terms, the importance of China and India in global gas trade will increase particularly towards the end of the Outlook period. In the High Growth Scenario, their combined share of world inter-regional trade reaches 29 in 2030 11 percentage points more...
Power Generation Economics
The costs of alternative generation options have been assessed, on the basis of key parameters related to fuel prices, capital costs, capacity factors and discount rates. The analysis reveals that, in the current Chinese context and without a price on CO2 emissions, coal is likely to be the most competitive electricity supply source, followed by nuclear and advanced coal. Gas turns out to be the most expensive option, with costs ranging from 4.7 to 7.7 US cents per kWh Figure 10.17 . Coal can...
Urbanisation
China has undergone rapid urbanisation in recent decades. Cities have, on average, doubled in size over the past 20 years. China has more than 660 cities11 UNFPA, 2007 , 120 of which together contribute 75 of the country's GDP World Bank, 2007b . Along with Shanghai and Beijing, whose populations are over 10 million, China contains eight cities with more than five million people and 88 cities with 1 to 5 million Table 7.2 . Four Chinese cities rank among the 30 most populous in the world today....
Box Regional Air Quality
Rising energy consumption and the continuing heavy reliance on coal is contributing not just to higher CO2 emissions but also to worsening air pollution in China and India. Fossil-energy use gives rise to various toxic and noxious emissions, notably SOx, NOx, carbon monoxide and particulate matter soot . These emissions contribute directly to health problems, ground-level and atmospheric ozone and acid rain. Many of these problems are of a local nature. Despite some improvements in recent...
The Stabilisation Case
There is growing support worldwide for early action to tackle climate change in order to stabilise the concentration of greenhouse gases at a level that would prevent dangerous interference with the climate system. At their summit in Heiligendamm in 2007, G8 leaders, meeting with the leaders of several major developing countries and heads of international organisations, including the IEA, committed to taking strong and early action to tackle climate change in order to stabilise greenhouse-gas...
Can China and India Ever Mirror Western Lifestyles
In principle, the continued economic and social development of China and India need not be incompatible with protecting the local or global environment. But major shifts in resource use, policies and technologies as well as public attitudes and expectations will be needed worldwide. Quite simply, the resource-intensive economic model currently being pursued throughout the world cannot be sustained indefinitely. A level of per-capita income in China and India comparable with that of the...
Oil Trade
China imported 3.7 mb d of oil in 2006, equal to about 50 of its total oil consumption. Of these imports, 2.9 mb d, or 80 , were in the form of crude oil. The Middle East and Africa supplied almost 80 of China's crude oil imports. The biggest suppliers are Saudi Arabia and Angola, with about a 16 market share each of the import market Figure 10.5 . Russia currently supplies 11 of China's imports, entirely by rail. Preliminary data for 2007 show crude oil imports accelerating to reach more than...
Box Kerosene Use in Rural Areas of India
Most rural households in India depend on kerosene lamps for lighting. Kerosene prices are controlled by the government and are heavily subsidised. About 90 of rural kerosene is distributed through a public distribution system PDS , comprising state and district level officials, wholesalers and retailers fair-price shops . The Ministry of Petroleum and Natural Gas fixes a quota for each state, according to historical patterns of supply rather than actual demand or relative poverty levels . A...
Figure Chinas Refining Distillation Capacity in the Reference Scenario
Existing capacities Sanctioned or likely projects Projected additions The large expansion of refining capacities which we project in China in the Reference Scenario could be underpinned by the convergence of interests with major oil-producing countries that are concerned about the prospects for oil-product demand. Early in 2007, the Chinese government approved, for the first time, foreign investment in domestic refineries, with ExxonMobil and Saudi Aramco taking combined stakes in two...
Energy Demand in Slums
Slum areas in India's major cities are growing. Despite this, there is no specific federal programme in place for extending energy access to the urban poor. The first-ever census of slums in India was undertaken in 2001. Slum data were reported by 26 of the 35 states and UTs. Some 43 million people lived in slums in 2001, about equivalent to the entire population of Spain. Those in slums constituted 15 of the total urban population and 22.6 of the urban population of the reporting states and...
Info Obi
Note The multi-coloured line shows efficiencies for state-of-art plants on a net electrical output, lower heating value basis. pressure is typically 245 bar and temperature in excess of 550 C, i.e. above the critical point at which water turns to steam without boiling. In ultra-supercritical designs, even higher temperatures are used, sometimes exceeding 600 C. More expensive materials are required, but the impact of this higher capital cost on the overall economics of the plant is, to some...
Implications for Investment 1
To meet projected energy demand growth of 4.2 per year in 2006-2030, a cumulative total of 1.7 trillion in year-2006 dollars , or some 66 billion a year, needs to be invested in India's energy-supply infrastructure in the High Growth Scenario. This is more than 400 billion, or 33 more than in the Reference Scenario. More than 70 of the increase is in power generation. For the energy sector as a whole, over three-quarters of investment will be needed for the power sector, where cumulative...
Coal Resources and Reserves
China's remaining coal resources are second only to Russia's, totalling 1 003 billion tonnes General Geological Bureau, 1999 . These resources have been defined by exploration and mapping, but only 115 billion tonnes can be regarded as proven reserves, yielding a reserve-to-production ratio of around 50 years at current production levels. More recent assessments conclude that proven reserves could be as high as 192 billion tonnes Barlow Jonker, 2007 . A prospecting programme is currently under...
Coal Transport
Our Reference Scenario projections imply a continuing need to expand China's inland coal transport infrastructure. Shipments from inland to coastal provinces will need to increase from 507 Mtce in 2005 to 1 060 Mtce in 2030 for steam coal and from 117 to 182 Mtce for coking coal. At present, coal is transported to consumers in China by rail, road, inland waterways and coastal vessels. Shanxi is a key coal supplier to other provinces, exporting around 300 million tonnes, mainly by rail, with the...
Final Energy Demand
Total final energy demand grew by 2.3 per year in 1990-2005, reaching 356 Mtoe. Demand is projected to accelerate to 3.3 per year over the Outlook period and will be 804 Mtoe in 2030. The share of transport in final energy demand in 2005-2030 grows from just some 10 today to 20 Figure 16.2 . The transport sector dominates the growth in demand for oil. Energy demand in the residential sector grows at a steady 1.6 per year, while industrial energy demand growth accelerates from 2.4 in 1990-2005...
gun Fuel Shares in Household Energy Consumption for Cooking in India by Area in
2000 2005 2015 2030 2000 2005 2015 2030 Fuelwood BCoke and coal BDung I Kerosene BLPG I Electricity 2000 2005 2015 2030 2000 2005 2015 2030 Fuelwood BCoke and coal BDung I Kerosene BLPG I Electricity Sources NSSO 2007 and IEA analysis. Electricity use by Indian households is growing rapidly, even in rural areas, though most of the increase in demand in absolute terms is in towns and cities. Lighting accounts for about 70 of electricity use in the residential sector. Refrigeration and air...
Many of the policies available to alleviate energy insecurity can also help to
Alternative Policy Scenario demonstrates, in many cases, those policies bring economic benefits too, by lowering energy costs a triple-win outcome. An integrated approach to policy formulation is, therefore, essential. The right mix of policies to address both energy-security and climate concerns depends on the balance of costs and benefits, which vary among countries. We do not have the luxury of ruling out any of the options for moving the global energy system onto a more sustainable path....
Coal Trade
China exported 71 Mt of coal in 2005, one-quarter below 2003 when exports peaked at 94 Mt. Imports totalled 25 Mt, mainly to meet demand in southern coastal provinces remote from the major coal-producing regions. In the first half of 2007, China's net coal imports stood at 4 Mt McCloskey, 2007 , a sharp reversal from the 25 Mt net exports of 2006. As recently as 2003, net exports were 83 Mt. This sudden swing to become a net coal importer has had a large impact on international coal trade. The...
Which Countries Gain Most from Economic Growth in China and India
SPOTLIGHT continud In general, exporters of natural resources and other primary commodities, that have other export industries that do not compete head-on with Chinese and Indian goods and services, could expect to benefit most from China's and India's economic expansion Goldstein etal., 2006 Stevens and Kennan, 2006 and Winters and Yusuf, 2007 . On the other hand, countries that export largely goods and services that match those of China and India are likely to suffer economic losses, at...
Primary Energy Demand 1
Primary energy demand in India is projected to increase from 537 Mtoe in 2005 to 770 Mtoe in 2015 and to 1 299 Mtoe in 2030 Table 16.2 . Demand grew by 3.5 per year in 1990-2005. Energy demand growth is somewhat faster in 2005-2015 at 3.7 per annum, slowing again to 3.5 in 2015-2030. As GDP growth is faster over the Outlook period, intensity improves more quickly than in the past. In 2025, India's energy demand passes that of the entire OECD Pacific region it equals 60 today. By 2030, India is...
Methodology and Assumptions
As in previous Outlooks, a scenario approach has been adopted to examine future energy developments. The projection period runs to 2030. The core projections are derived from a Reference Scenario, which assumes that there are no new energy-policy interventions by governments. This scenario is intended to provide a baseline vision of how global energy markets are likely to evolve if governments do nothing more to affect underlying trends in energy demand and supply, thereby allowing us to test...
Figure Indias Fossil Fuel Production and Imports
I Production Imports import dependence Imports of LNG, which started in 2004 from Qatar, are set to grow strongly in the coming years as new terminals are built. India's proven reserves of natural gas amounted to 1 100 bcm at the end of 2006 Cedigaz, 2007 . Prospects for expanding domestic production are good after a recent major discovery in the Krishna-Godavari basin and recent announcements regarding gas pricing see Spotlight below . India's energy sector is dominated by state-owned...
Electricity Pricing
Historically, until at least 2002, coal was sold to generators at prices below market values. Prices were determined annually at an Annual Coal Procurement Conference run by central government authorities. In 2004, the NDRC adopted a new scheme linking coal prices for electricity generation to on-grid wholesale power prices. The scheme allows generators to pass through to consumers approximately 70 of any increase in coal prices. An increase of 5 or more triggers an automatic adjustment to...
REFERENCE SCENARIO DEMAND PROJECTIONS Hae
Primary energy demand in India more than doubles by 2030 in the Reference Scenario, driven largely by GDP which is assumed to expand at an average annual rate of 6.3 . Coal remains the most important fuel, but oil demand also grows fast, increasing two-and-a-half times by 2030. Energy intensity declines progressively thanks to efficiency improvements and a continuation of the shift to services and less energy-intensive industry. A reduction in the share of fuelwood and dung in residential...
Box IEA Emergency Response Mechanisms
The IEA's emergency response mechanisms were set up under the 1974 Agreement on an International Energy Program IEP . The Agreement requires IEA countries to hold oil stocks now standing at the equivalent of at least 90 days of net oil imports and, in the event of a major oil supply disruption, to release stocks, restrain demand, switch to other fuels or increase domestic production in a co-ordinated manner. Implementation of IEP measures was initially designed for oil supply disruptions...
Box Restructuring of Chinas Oil Sector
The oil sector in China is dominated by three majority state-owned companies China National Petroleum Corporation CNPC , China Petroleum and Chemical Corporation Sinopec and China National Offshore Oil Corporation CNOOC . These companies are subject to policy set by the National Development and Reform Commission NDRC . All three companies were established in the 1980s. They were given specific sector-based responsibilities. CNPC was put in charge of oil and gas exploration and production...
Environment
India faces serious energy-related environmental damage. Congestion and pollution from motor vehicles is an increasing threat to health in all Indian cities. Over half of Indian cities have levels of particulate matter PM10 which are more 14. See OECD 2007 for guidelines for public-private partnerships. than one-and-a-half times the Indian standard of 0.1 to 0.5 microgrammes per cubic metre. Land degradation, resulting from opencast coal mining and over-extraction of water for mining purposes,...
On Energy Poverty
Part A Global Energy Prospects Impact of Developments in India Energy Trends in China and India 117 Alternative Policy Scenario 130 International Trade and the World Economy 135 China and India in the Global Economy 136 Explaining China's and India's Economic Growth 136 International Trade and Financial Flows 140 Global Economic and Energy Market Linkages 145 Simulating the Impact of Faster Growth in China and India 149 Energy and Other Commodity Prices and Expenditures 151 Economic Growth and...
Iron and Steel
The iron and steel sector is the largest industrial consumer of energy in China, accounting for 28 of total industrial energy use in 2005. It grew by 14.5 per year between 2000 and 2005, while steel production grew by more than 20 per year in the period. China is currently the world's largest producer of steel, accounting for 34 of world steel production in 2006 World Coal Institute, 2007 . The average efficiency of medium and large plants in China is lower than that of plants in other...
Simulating the Impact of Faster Growth in China and India
To determine how the economy in each region may be affected by the rise of China and India in the future, we made use of a general equilibrium model of the world economy to simulate the effect of faster growth in those two countries on the rest of the world. That model was integrated into the IEA World Energy Model WEM the primary tool for generating global energy projections in all the scenarios in the Outlook to capture energy-market effects and interactions Box 3.2 The integrated model,...
Acknowledgements
This study was prepared by the Economic Analysis Division of the International Energy Agency in co-operation with other divisions of the IEA. The Director of the Long-Term Office, No van Hulst, provided guidance and encouragement during the project. The study was designed and managed by Fatih Birol, Head of the Economic Analysis Division EAD . Other members of EAD who were responsible for bringing the study to completion include Maria Argiri, Raffaella Centurelli, Michael-Xiaobao Chen, Laura...
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Economic developments in China and India will increasingly affect the rest of the world, by dint of their sheer size and their growing weight in international trade and cross-border financial flows. The effects are both positive and negative economic expansion in China and India generates opportunities for other countries to export to them, while also increasing the other countries' access to a wider range of cheaper imported products. Both factors can boost productivity growth and raise...