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World Energy Outlook 2012 Calls for Increased Subsidies to Halve Energy Demand Through Efficiency

IEA12 November 2012: The International Energy Agency (IEA) has released the 2012 edition of the World Energy Outlook (WEO). The report calls for continued subsidies to support the increased deployment of renewable energy sources. It also urges coordinated policy efforts in support of energy efficiency measures, to reduce global energy demand and limit global temperature increases to two degrees Celsius.

The report notes that while fossil fuels remain dominant in the energy mix, renewable energy sources will become the second-largest source of power generation by 2015 globally. In 2035, the report says, renewables will compete with coal as the primary power source and account for almost one-third of total electricity output. This rise in renewable energy can be attributed mainly to continued subsidies that amounted to US$88 billion in 2011, and which will need to increase to US$4.8 trillion in the period up to 2035 in order to continue increases in deployment. The report also calculates that the energy sector accounts for 15% of global water use, and that increased power generation and biofuels production will result in an increase of 85% of water consumption by 2035.

The report further states that global energy demand will increase by more than one-third over the period to 2035, and that current energy efficiency efforts are insufficient. It claims that without more coordinated policies, two-thirds of the economically viable potential to improve energy efficiency will remain unrealized. The WEO's Efficient World Scenario shows that greater efforts to reduce barriers to implementing energy efficient measures could cut the growth in global energy demand by half. “Energy efficiency is just as important as unconstrained energy supply, and increased action on efficiency can serve as a unifying energy policy that brings multiple benefits,” said IEA Executive Director Maria van der Hoeven at the WEO launch, held on 12 November 2012, in London, UK.

The report also finds that in a scenario in which global temperature rise remains limited to two degrees Celsius, 80% of carbon dioxide (CO2) emissions allowable by 2035 are already locked in by existing energy infrastructure. The report argues that rapid deployment of energy-efficient technologies can postpone a complete lock-in from 2017 to 2022, providing some more time for the negotiation of a global greenhouse gas (GHG) emissions reductions agreement. The report also notes that achieving the two degrees goal entails that a maximum of only one-third of currently proven proven fossil fuel reserves can be consumed by 2050. [IEA Press Release] [Publication: World Energy Outlook Executive Summary]