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With extensive data, projections and analysis, Energy Technology Perspectives 2010 provides decision makers with the detailed information and insights needed to accelerate the switch to

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(61 2010 14 1 P1) 978-92-64-08597-8 €100

To meet the challenges of energy security and climate change as well as the

growing energy needs of the developing world, a global energy technology

revolution is essential This was the key message of the 2008 edition of Energy

Technology Perspectives (ETP) But is this fundamental transformation happening?

What are the key technologies that can play a role? What are the costs and

benefits? And what policies do we need?

The new ETP 2010 explores such questions and many others, drawing on the extensive

expertise of the International Energy Agency (IEA) and its energy technology network

ETP 2010 presents updated scenarios from the present to 2050 that show which

new technologies will be most important in key sectors and in different regions of

the world It highlights the importance of finance to achieve change, examines the

implications of the scenarios for energy security and looks at how to accelerate the

deployment of low-carbon technologies in major developing countries It presents

roadmaps and transition pathways for spurring deployment of the most important

clean technologies and for overcoming existing barriers

With extensive data, projections and analysis, Energy Technology Perspectives 2010

provides decision makers with the detailed information and insights needed to

accelerate the switch to a more secure, low-carbon energy future

TEchnology PErsPEcTivEs

Scenarios & Strategies to 2050

1 0

November 1974 Its mandate is two-fold: to promote energy security amongst its member

countries through collective response to physical disruptions in oil supply and to advise member

countries on sound energy policy

The IEA carries out a comprehensive programme of energy co-operation among 28 advanced

economies, each of which is obliged to hold oil stocks equivalent to 90 days of its net imports.

The Agency aims to:

n Secure member countries’ access to reliable and ample supplies of all forms of energy; in particular,

through maintaining effective emergency response capabilities in case of oil supply disruptions

n Promote sustainable energy policies that spur economic growth and environmental protection

in a global context – particularly in terms of reducing greenhouse-gas emissions that contribute

to climate change

n Improve transparency of international markets through collection and analysis of

energy data

n Support global collaboration on energy technology to secure future energy supplies

and mitigate their environmental impact, including through improved energy

effi ciency and development and deployment of low-carbon technologies.

n Find solutions to global energy challenges through engagement and dialogue with non-member countries, industry, international organisations and other stakeholders. IEA member countries:

Australia Austria Belgium CanadaCzech RepublicDenmark

FinlandFranceGermanyGreeceHungaryIreland ItalyJapanKorea (Republic of)LuxembourgNetherlandsNew Zealand NorwayPolandPortugalSlovak RepublicSpain

SwedenSwitzerlandTurkeyUnited KingdomUnited States

The European Commission also participates in the work of the IEA.

Please note that this publication

is subject to specifi c restrictions

that limit its use and distribution.

The terms and conditions are available

The previous edition of Energy Technology Perspectives (ETP), published in summer

2008, called for an energy technology revolution to tackle the undesirable consequences of our current patterns of energy supply and use It also highlighted that, if we did not alter course, concerns about energy security and the threat of dangerous climate change would only become much worse So what – if any – progress have we made over the last two years in meeting these challenges?

At first sight, it may seem as though not much has changed Countries are still discussing what a long-term climate change framework should look like, while greenhouse-gas emissions go on rising Concerns about energy security are still with us and oil prices remain high and prone to further volatility

However, I believe that in fact we may be witnessing the early signs of the historic transition that we so badly need: high oil prices and the global financial crisis may have changed the demand structure for energy We may indeed see an “oil-less recovery” in OECD countries, in which our economies return to positive growth without a notable pick-up in oil demand We are also seeing some promising signs

of accelerated deployment for a number of important low-carbon technologies, particularly in renewable energy, energy efficiency and advanced vehicle technologies Funding for clean energy research, development and demonstration

is increasing again after more than two decades of decline and stagnation, and many countries have committed to spend even more in the future

But we still have formidable challenges before us Tackling climate change and enhancing energy security require a massive decarbonisation of the energy system leading to a new age of electrification We need to break the historic link between

CO2 emissions and economic output; and do this not just for a few years, but from

now on ETP 2010 shows how this can be achieved It identifies the technologies

that we require and the policies that we will need to stimulate the necessary investment Importantly, it also clearly demonstrates the benefits in terms not only

of reduced CO2 emissions, but also of fossil fuel savings

We also need to think about what a low-carbon energy mix will mean for comprehensive energy security On the one hand, reduced dependence on imported fossil fuels and broader development of alternative energy sources can help alleviate some of the current concerns around security of supply for these fuels Yet as the demand for decarbonised electricity and also for biofuels increases, so new challenges will no doubt emerge requiring innovative policies to ensure that

we have the affordable and reliable energy supplies that we need

ETP 2010 also shows how efforts to tackle climate change will need to include all

major economies and so require truly global co-operation We at the IEA acutely recognise this challenge, with our member states now representing a decreasing share of the world’s energy demand, production and CO2 emissions In the face of this, the IEA and its members must create ever stronger ties with key non-member countries such as China, India, Russia and many other countries The newly proposed international low-carbon energy technology platform is one way in which

we are doing this The platform, which was endorsed by the IEA Ministerial meeting

in October 2009, will bring together policy makers, business representatives and technology experts to discuss how best to encourage the spread of clean energy technologies and, we hope, will usher in a new era of broader, heightened and proactive collaboration.

By working together we can and must meet the global energy challenges we now

face There simply is no alternative ETP 2010 shows us what we have to do Let us

make that revolutionary future a reality together

This publication has been produced under my authority as Executive Director of the IEA The views expressed do not necessarily reflect the views or policies of individual IEA member countries

Nobuo Tanaka Executive Director

This publication was prepared by the International Energy Agency’s Directorate of Sustainable Energy Policy and Technology, under the leadership of Bo Diczfalusy, and in co-operation with other divisions of the Agency Peter Taylor, Head of the Energy Technology Policy Division, was the project manager and had overall responsibility for the design and implementation of the study The other main authors were Pierpaolo Cazzola, François Cuenot, Joana Chiavari, David Elzinga, Lew Fulton, Ben Gibson, Tom Kerr, Steven Lee, Uwe Remme, Cecilia Tam, Michael Taylor, Paul Tepes and Nathalie Trudeau

Many other IEA colleagues have provided important contributions, in particular Brendan Beck, Barbara Buchner (now with the Climate Policy Initiative), Keith Burnard, Kat Cheung, Hugo Chandler, Zuzana Dobrotkova, Paolo Frankl, Dagmar Graczyk, Yuichi Ikeda, Andrea Nour, Sara Pasquier, Cédric Philibert, Carrie Pottinger, Jonathan Sinton and Jayen Veerapen Helpful advice and support were also received from Sun Joo Ahn, Richard Baron, Marco Baroni, Fatih Birol, Jean-Yves Garnier, Didier Houssin, Julie Jiang, Nigel Jollands, Samantha Ölz, Roberta Quadrelli and Sylvie Stephan Martin Taylor of the Organisation for Economic Development (OECD) Nuclear Energy Agency was a main author of the nuclear roadmap The cement roadmap was jointly authored with the World Business Council for Sustainable Development (WBCSD) Cement Sustainability Initiative

A number of external experts have contributed significantly to different parts of the publication Heather Haydock (AEA Technology) helped co-ordinate the study and contributed to the chapter on policies to accelerate a low-carbon technology transition Bloomberg New Energy Finance contributed to the finance chapter Karen Ehrhardt-Martinez (Human Dimensions Research Associates) helped write the chapter on technology choices and behaviour Modelling and other support for the United States and OECD Europe chapters was provided respectively by Tom Alfstad (US Department of Energy [US DOE] Brookhaven National Laboratory), and Markus Blesl and Tom Kober (University of Stuttgart) Contributors to the China chapter included Wenying Chen (Tsinghua University), Libo Wu (Fudan University) and Yufeng Yang (Energy Research Institute), and their colleagues

The IEA is grateful for the contribution of the India Energy Technology Perspectives Expert Group, chaired by S.M Dhiman, Member (Planning), Central Electricity Authority; I.C.P Keshari, Joint Secretary, Ministry of Power, chairman of the power sub-group; Dr Ajay Mathur, Director General, Bureau of Energy Efficiency, chairman of the buildings sub-group; V Raghuraman, Chief Adviser, Jaguar Overseas Ltd, chairman of the industry sub-group; Dilip Chenoy, Director General, SIAM, chairman of the transportation sub-group, as well as all participants at the Joint IEA-India Workshop on Regional Analysis of India who provided valuable comments and feedback on the India analysis

Gillian Balitrand, Annette Hardcastle, Catherine Smith and Colette Davidson helped to prepare the manuscript Rob Wright (Wrighthand Ltd) carried editorial responsibility

Production assistance was provided by the IEA Communication and Information Office: Jane Barbière, Madeleine Barry, Viviane Consoli, Muriel Custodio,Rebecca Gaghen, Delphine Grandrieux, Corinne Hayworth, Bertrand Sadinand Marilyn Smith helped to improve and clarify content and managed the layout and graphic design.

Special thanks go to Pieter Boot and Dolf Gielen, former IEA colleagues, for their input and support during the early stages of the project and later expert review The work was guided by the members of the IEA Committee on Energy Research and Technology (CERT) who helped to improve substantially the policy relevance

of this document The Standing-Group on Long-Term Co-operation, the Working Party on Energy End-Use Technologies, the Working Party on Renewable Energy Technologies and the Working Party on Fossil Fuels also provided helpful inputs and suggestions

IEA Implementing Agreements

The technology analysis in this book draws extensively upon the unique IEA international network for collaboration on energy technology Numerous experts from many of the 42 IEA Implementing Agreements have contributed with data, suggestions and expert review Some of these experts are listed below:

Advanced Transport Materials Stephen Hsu

Demand Side ManagementHans Nilsson

Seppo KärkkäinenDistrict Heating and CoolingRobin Wiltshire

Efficient Electrical EquipmentHans-Paul Siderius

Electricity Networks Analysis, Research and DevelopmentLars Audun Fodstad

Rainer BacherJohn BakerOtto BernsenMinnesh BipathMichele DeNigrisStig Goethe Eric LightnerIan WelchEnergy Conservation through Energy StorageAndreas Hauer

Astrid Wille

Heat Pumping TechnologiesMonica Axell

Jerry GroffRoger NordmanShogo TokuraHybrid and Electric Vehicle Technologies and ProgrammesUrs Muntwyler

Martijn Van WalwijkHigh-Temperature SuperconductivityGuy Deutscher

HydrogenMary-Rose de ValladaresIEA Clean Coal Centre Paul Baruya

Colin HendersonJohn KesselsJohn TopperIEA Greenhouse Gas RD ProgrammeJohn Davison

Renewable Energy Technology DeploymentRyan Katofsky

Kristian PetrickMatthew StanberrySolar Heating and CoolingEsther Rojas

Wind Energy SystemsHannele Holttinen

Belgium; Ron Benioff, National Renewable Energy Laboratory (NREL), United States; Kamel Bennaceur, Schlumberger, France; Alissa Boardley, Environment Canada, Canada; Inger Pihl Byriel, Energinet, Denmark; Terry Carrington, Department

of Energy and Climate Change (DECC), United Kingdom; Satish Chander, The Fertiliser Association of India, India; Ian Christmas, Worldsteel, Belgium; Robert Clover, HSBC, United Kingdom; Jonathan Coony, World Bank, United States; Karlynn Cory, NREL, United States; Sean Cuthbert, Lloyd’s Register Group Services Ltd., United Kingdom; Pradeep Kumar Dadhich, The Energy and Resources Institute (TERI), India; Francois Dassa, EDF, France; Pedros Dias, European Solar Thermal Industry Federation, Belgium; Carmen Difiglio, US DOE, United States; Rick Duke,

US DOE, United States; George Eads, Consultant, United States; Andrew Eil, International Finance Corporation (IFC), United States; Eric J ten Elshof, Ministry of Economic Affairs, the Netherlands; Craig Erdrich, US DOE, United States; Robert Falzon, Goldman Sachs, United Kingdom; Nicolas Fichaux, European Wind Energy Association, Belgium; Michel Folliet, IFC, United States; Timothy Foxon, University

of Leeds, United Kingdom; Jim Fritz, UTC, United States; Eamon Geraghty, International Building Materials Group (CRH), Ireland; Doug Grano, United States Environmental Protection Agency (US EPA), United States; Sallie Greenberg, Illinois State Geological Survey, United States; Jake Handelsman, American Forest and Paper Association (AF&PA), United States; Atsushi Hatano, Nissan, Japan; Ruth Herbert, DECC, United Kingdom; Andrew Higham, United Nations Framework Convention on Climate Change (UNFCCC) Secretariat, Germany; Neil Hirst, Imperial College, United Kingdom; Volker Hoenig, VDZ, Germany; Bazmi Husain, ABB, Switzerland; Tomoya Ichimura, New Energy and Industrial Technology Development Organization, Japan; Kejun Jiang, ERI, China; Nakhun Jung, Ministry of Knowledge Economy, Korea; Birte Holst Jorgensen, Technical University

of Denmark, Denmark; Mitsuru Kaihori, Japan Paper Association, Japan; Larry Kavanagh, American Iron and Steel Institute, United States; Ron Knapp, IAI, United Kingdom; Steve Kidd, World Nuclear Association, United Kingdom; Joris Knigge, Enexis, Netherlands; Bernhard Kohl, Eurofer, Belgium; Joachim Krüger, CEFIC, Belgium; Martyna Kurcz-Jenn, Alstom, Belgium; Skip Laitner, American Council for an Energy-Efficient Economy, United States; Paul Lansbergen, Forest Products Association of Canada, Canada; Erin Laws, Energy Efficiency and Conservation Authority (EECA), New Zealand; Jean Le Cocguic, OECD, France; Henry Lee, Harvard University, United States; Yongpil Lee, Ministry of Knowledge Economy, Korea; Xavier Leflaive, OECD, France; Alan Meier, Lawrence Berkeley Laboratory, United States; Maria Mendiluce, WBCSD, Switzerland; Gilles Mercier, NRCan, Canada; Andy Miller, US EPA; United States; Marco Mensink, Confederation of European Paper Industries, Belgium; Motomi Miyashita, Japan Gas Association, Japan; Fuad Mohamed Siala, Organization of Petroleum Exporting Countries, Austria; Danielle H Monosson, US State Department, United States; David Mora, University of Flensburg, Denmark; Ben Muirhead, International Fertilizer Industry Association (IFA), France; Denise Mulholland, US EPA, United States; S Nand, The Fertiliser Association of India, India; Nakano Naokazu, Japan Iron and Steel Federation, Japan; Thomas Nowak, European Heat Pump Association, Belgium; Nils-Olof Nylund, VTT, Finland; Stathis Peteves, European Commission Joint Research Centre, the Netherlands; Dirk Pilat, OECD, France; Sean Plasynski, US DOE National Energy Technology Laboratory, United States; Thomas Pregger, German Aerospace Center, Germany; Shuba V Raghavan, Center for Study of

Science, Technology and Policy (CSTEP), India; Wayne Richardson, independent consultant, Canada; Nick Robins, HSBC, United Kingdom; Hans-Holger Rogner, International Atomic Energy Agency (IAEA), Vienna; Sea Rotmann, EECA, New Zealand; Claes Rytoft, ABB, Switzerland; Steve Sawyer, Global Wind Energy Council, Belgium; Laurent Schmitt, Alstom, France; Elizabeth Shove, Lancaster University, United Kingdom; William Sissions, UTC, United States; Rebecca Smith-Kevern, US DOE, United States; Erik Kjær Soerensen, Vestas Wind Systems A/S, Denmark; Ravi Srivastava, EPA, United States; Garry Staunton, Carbon Trust, United Kingdom; Helga Stenseth, Ministry of Foreign Affairs, Norway; Paul Stern, National Academy

of Sciences, United States; Didier Stevens, Toyota, Europe; Gary Stiegel, US NETL, United States; Ulrik Stridbæk, Dong Energy, Denmark; Hiroyuki Takahashi, Tokyo Electric Power Company Inc (TEPCO), Japan; Wanna Tanunchaiwatana, UNFCCC Secretariat, Germany; Martin Taylor, OECD Nuclear Energy Agency, France; Shogo Tokura, Heat Pump and Thermal Storage Center for Japan, Japan; Ferenc L Toth, IAEA, Vienna; Franz Trieb, German Aerospace Center, Germany; Caroline Twigg, WBCSD Cement Sustainability Initiative, Switzerland; Alice Tyne, Bloomberg New Energy Finance, United Kingdom; Fridtjof Unander, Research Council of Norway, Norway; Diana Ürge-Vorsatz, Central European University, Hungary; Rob van der Meer, Heidelberg Cement, Netherlands; Charles Vlek, University of Groningen, Netherlands; Michael Wang, Argonne National Laboratory, United States; Shannon Wang, REN21 Secretariat, France; Yanjia Wang, Tsinghua University, China; Masaaki Watanabe, TEPCO, Japan; Wolfgang Weber, BASF, Germany; Anthony White, B W Energy, United Kingdom; Michael Whitfield, Department of Resources, Energy and Tourism, Australia; Mark Winskel, University of Edinburgh, United Kingdom; Bartosz Wojszczyk, General Electric, United States; Jacqueline Wong, US DOE, United States; Casey Zils, European Climate Exchange, United Kingdom

DOE-Workshops

A number of workshops and meetings were held in the framework of this study and the development of the technology roadmaps The workshop participants have contributed valuable new insights, data and feedback for this analysis:

Enhancing International Technology Collaboration, 12-13 November 2008,  

Issues, 23 February 2009, Paris;

Expert Review of Industry Scenarios, 9-10 February 2009, Paris;

 The Global R&D Portfolio – Strategies to Accelerate Technology Development,  

First IEA-Indian ETP Expert Group Workshop, 20 October 2009, Delhi;

 From Roadmaps to Implementation, 2-3 November 2009, Paris;

 Workshop on Regional Analysis for the Energy Technology Perspectives 2010, 

19 January 2010, Beijing;

Energy Technology Roadmap Workshop, 20 January 2010, Beijing;

 Joint IEA-India Workshop on Regional Analysis of India in the Energy Technology  

Perspective 2010, 29 January 2010, New Delhi;

Chief Technology Officer Roundtable, 2 February, 2010;

 Energy Efficient and Low-Carbon Buildings: Heating and Cooling Workshops were  

held on heat pumps (9 November, 2009); thermal energy storage (9 December, 2009); solar thermal (2 February, 2010); CHP (3 February, 2010) and policy and finance issues (6-7 May, 2010)

This study has been supported by voluntary contributions and in-kind support from many IEA governments, including Australia, Canada, Denmark, Germany, Japan, the Netherlands, Norway, Switzerland, the United Kingdom and the United States.The individuals and organisations that contributed to this study are not responsible for any opinions or judgements contained in this study Any errors and omissions are solely the responsibility of the IEA

Comments and questions are welcome and should be

addressed to:

Peter TaylorHead, Energy Technology Policy DivisionInternational Energy Agency

9, Rue de la Fédération

75739 Paris Cedex 15France

Email: peter.taylor@iea.org

PART 1

TECHNOLOGY AND THE GLOBAL ENERGY ECONOMY TO 2050

PART 2

THE TRANSITION FROM PRESENT TO 2050

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Accelerating the diffusion of low-carbon technologies in emerging economies

Technology choices and behaviour

Environmental co-impacts of emerging energy technologies

Annexes

1

2

Foreword 3

Acknowledgements 5

Table of contents 11

List of fi gures 25

List of tables 36

List of boxes 42

Executive summary 45

Chapter Introduction 61 The political context 62

The purpose and scope of this study 63

PART

Technology and the Global Energy Economy to 2050 Chapter Overview of scenarios 67 Scenario characteristics 68

Energy and CO 2 emission trends 72

Technologies for reducing CO 2 emissions 74

Energy effi ciency 77 Power sector 79 Fuel switching in end-use sectors 80 Carbon capture and storage 81 Investment costs and fuel savings 82

Regional and country-level trends 83

Sectoral trends 88

Energy trends 90

Coal 91

1

1

2

Electricity 96Biomass 96

Going beyond the BLUE scenarios 98

Introduction 102 Recent trends 103

Future scenarios 106

Fossil fuel power plants 113

Electricity demand 143

Electricity demand by region 143 Electricity demand by sector 144 Demand profi les 145 Electricity generation 147

Power system fl exibility 149

Electricity network losses 149

Vision for the grid of the future 150

Smart grid technology 151 Benefi ts of smart grids 152 Smart grid CO2 emissions reduction 153 Benefi ts for developing countries 154 Storage technology 154 Analysis of electricity storage needs 155 How much does the grid of the future cost? 156 Barriers to electricity grid investment 156

Priorities for next steps 157

Regional assessment of grid needs 157 Technology research, development and demonstration (RD&D) needs 158 Markets 158 Regulatory and policy needs 159 Public education and public engagement 159 Human resources 159 Chapter Industry 161 Introduction 162

Industrial energy use and CO 2 emissions 162

Energy and CO 2 scenarios 166

Recycling 174

5

Iron and steel 176

Pulp and paper 189

in industry 201

Pathway to the next Industrial Revolution 202

Overview of the residential and service sectors 206

6

Current building stock and energy consumption 207

Global trends in buildings sector energy consumption 211

Demand drivers in the scenario analysis 214 The Baseline scenario 215

The BLUE Map scenario 218

Technology options in the BLUE Map scenario 230

Aviation 290Shipping 293

7

Chapter OECD Europe 297

Regional description 298

Overall energy policy framework 302

Regional description 338

Overall energy policy framework 341

8

9

Energy and CO2 emission scenarios 345

Regional description 374

Overall energy policy framework 378

Chapter India 415

Regional description 416

Overall energy policy framework 421

Introduction 460 The need for energy technology policies 463

Enabling actions: addressing the business and human aspects

Energy technology research, development and demonstration 476

11

2

12

Private-sector RD&D spending 478Assessing the gap: global low-carbon energy technology

A portfolio of technologies is needed 489 The role of roadmaps 492

Roadmaps 493

Financing options for an energy technology revolution 544 Public fi nance mechanisms 550 Risk and returns 552

Policy needs 555

13

14

A long-term integrated policy framework is needed 555

Introduction 566 Background 568

Diffusion of low-carbon technologies in emerging economies 571 Low-carbon technology fl ows 573 Trade fl ows 576 International fi nancial fl ows of low-carbon energy technologies 577

Summary of international fi nancial fl ows for diffusion of low-carbontechnologies 583

Enhancing technology diffusion 584 Strengthening low-carbon technological capacity in emerging economies 588 The way forward 592

Introduction 596 The potential contribution of behaviour 596 Social and behavioural frameworks 597

15

16

Consumer adoption of energy-effi cient technologies

in households 601 Consumer adoption of low-carbon transportation 605

Reducing driving rebound effects 608 Modal shifts 610 Eco-driving via feedback and programmes 611 Policy implications 612

Wind 632

Transport co-impacts: passenger light-duty vehicles 636

Annex Framework assumptions 651

A B C D E

2

Figure 2.13 World total primary energy supply 90

3

4

Figure 4.3 Daily average residential electricity demand in a sample of homes in

Florida, United States with a high penetration of central air-conditioning

in the industry sector in the BLUE scenarios compared to Baseline

Figure 5.20 Direct emissions reduction by technology option for aluminium 196

6

Figure 6.22 CO2 abatement costs for CHP in the buildings sector by technology,

7

Figure 7.25 International shipping activity, energy intensity and energy use

8

Figure 8.22 Additional investment needs and fuel cost savings for OECD Europe 332

Figure 9.4 Total primary energy supply by fuel for the United States, Baseline

9

Figure 9.20 Additional investment needs and fuel cost savings for the United States 369

Figure 10.9 Development of transmission network, and transmission and

Figure 10.10 Regional electricity generation in the BLUE Map scenario for China 2050 390

Figure 10.15 Residential and service sectors’ energy consumption by fuel for China 397 Figure 10.16 Residential and service sectors’ energy consumption by end use

Figure 10.18 Contribution to reductions in energy use in the BLUE Map scenario

10

Figure 10.25 CO2 emissions reduction by technology area in the BLUE Map

Figure 11.22 Passenger LDV sales by technology in India in the Baseline and BLUE

12

13

14

Figure 14.5 Share of investments in low-carbon technologies by technology 532

in emerging economies

15

16

17

Figure 17.7 Historical and projected NOX emissions from passenger vehicles 641

Table 4.3 Functional smart grid technology areas 152

5

6

Chapter Transport