43 / 386
BUSINESS OVERVIEW
06
6.1 Markets for nuclear power and renewable energies
6.1.
MARKETS FOR NUCLEAR POWER
AND RENEWABLE ENERGIES
6.1.1.
NUCLEAR POWER AND RENEWABLE ENERGIES IN THE GLOBAL ENERGY
LANDSCAPE
6.1.1.1.
THE CHALLENGES OF THE ENERGY SECTOR
Strong growth in demand for electricity
Global economic growth is relatively stable; it has risen slightly since 2012 (about
2.4% per year, according to the World Bank), but growth is unevenly distributed
regionally. However, world demand for energy has continued to grow, including in
industrialized countries. Several macro-economic indicators suggest that economic
growth in industrial countries will remain weak in the medium term. Emerging
markets, on the other hand, will continue to expand and offer the most promising
growth opportunities for the energy sector.
On the whole, global demand for energy is set to increase, led by world population
growth, more widespread access to energy, and long-term economic growth.
According to the New Policies Scenario
(1)
of the
World Energy Outlook
(WEO)
published by the International Energy Agency (IEA) in November 2016, world
primary energy consumption is expected to grow from 13.684 gigatons of oil
equivalent (Gtoe) in 2013 to 17.9 Gtoe in 2040, translating into average annual
growth of 1%. According to the report, it is China and India along with emerging
countries and developing countries that are expected to account for the majority
of the added demand.
World electricity consumption, which averaged 3.2% from2000 to 2014, has grown
a bit more than world primary energy consumption. According to the IEA’s New
Policies Scenario, world power generation in 2040 is estimated at 34,250 TWh,
compared with 20,557 TWh in 2014, giving average annual growth of 2%. Almost all
of this growth originates in non-member countries of the Organization for Economic
Cooperation and Development (OECD). In China, however, electricity consumption
jumped from 2000 to 2014, with an average annual growth rate of almost 11%;
this growth is expected to decelerate sharply in the coming years, with an average
annual growth rate of 2.4% from 2014 to 2040.
On the supply side, oil, gas and coal continue to be the preferred energy sources.
In 2014, oil constituted 31.3% of global primary energy, while coal represented
28.6%and natural gas 21.2%. In the United States, technologies deployed on a large
scale by the oil and gas industry are facilitating the development of oil and shale gas
production. However, the hydraulic fracturing technique used in non-conventional
gas production is a cause for environmental concern. The energy policies being
implemented by several countries are looking to reverse this trend. The fight against
greenhouse gas emissions (GHG) and the security of fossil fuel supply issue have
become major concerns for the public, businesses and governments alike. The
latter are devisingmeasures to conserve energy and policies to promote renewable
energies and diversify their portfolios of energy technologies. A number of countries
are currently considering the possibility of using nuclear power and renewable
energies and/or increasing their contributions to bolster their security of energy
supply, enhance competitiveness and cost predictability, and reduce CO
2
emissions
in order to ensure sustainable economic growth.
Energy and global warming
United Nations Framework Agreements
Since the United Nations Framework Convention on Climate Change was created
in Rio in 1990, the world’s governments have become involved in the subject of
global warming. The objective is to limit the average temperature increase on Earth
to 2°C in relation to the pre-industrial era. The Conference of the Parties (COP), a
meeting of all governments, is held at the end of each year in a different country. A
first major agreement for a reduction of greenhouse gas emissions over the 2008-
2012 period was reached in 1997 when historically industrialized countries signed
the Kyoto Protocol in Japan.
The second agreement, known as the Paris Agreement, was signed during the 2015
United Nations Climate Change Conference (COP 21) held in Paris in December.
It entered into force on November 4, 2016, having been ratified by more than
100 countries totaling close to 75% of the world’s greenhouse gas emissions. The
new agreement concerns both developed and developing countries. It calls for
attempts to limit the average temperature increase to 1.5°C to significantly reduce
its risks and impacts. At the Convention’s request, the Intergovernmental Panel on
Climate Change (IPCC) will publish a report in 2018 specifying the emissions level
to reach this ultimate goal.
Achieving the objective of the Paris Agreement will occur principally through the
mechanism of the Nationally Determined Contributions (NDC) communicated by
each party specifying their emissions reduction intentions in the energy sector.
To date, 189 countries covering 98.8% of global greenhouse gas emissions have
submitted their contributions. The Paris Agreement calls for an update of the NDCs
every five years and an increased ability to adapt to climate change. It also calls
for the availability of a Green Climate Fund, which was set up in 2009 during the
Copenhagen Conference and provisioned at the level of 7.4 billion euros in 2014
through contributions from the United States, Japan, the United Kingdom, Germany
and France. A floor of 100 billion dollars per year by 2020 has been set to help
the most vulnerable countries adapt to climate change and support low-carbon
investment projects. The Agreement also encourages bilateral and multilateral
sources of public and private funding, which have already been created in the
formof, for example, the Green Climate Fund and the Global Environmental Facility.
(1) In addition to national policies and measures decided in mid-2015, the IEA’s New Policies Scenario includes greenhouse gas reduction statements communicated at the Framework
Convention on Climate Change. Other reductions are expected to be necessary in order to limit the impact of climate change to a temperature increase of 2°C. The 450 Scenario
in the report confirms that new nuclear and renewable energy facilities would be required to meet this goal.
2016 AREVA
REFERENCE DOCUMENT
43