Key results of the south africa energy [r]evolution scenario
6.1 energy demand by sector
One important underlying factor in energy scenario building is future population development. Population growth affects the size and composition of energy demand, directly and through its impact on economic growth and development. World Energy Outlook 2009 uses the United Nations Development Programme (UNDP) projections for population development. For this study the most recent population projections from UNDP up to 2050 are applied.
Table 6.1 shows that, based on UNDP’s 2009 assessment, the world’s population is expected to grow by 0.86% on average over the period 2007 to 2050, from 6.7 billion people in 2007 to more than 9.1 billion by 2050. Population growth will slow over the projection period, from 1.2% per year during 2007-2010 to 0.4% per year during 2040-2050. The updated projections show a small decrease in population by 2050 of around 40,000 compared to the previous edition. This will scarcely reduce the demand for energy. The population of the developing regions will continue to grow most rapidly. The Transition Economies will face a continuous decline, followed after a short while by the OECD Pacific countries. OECD Europe and OECD North America are expected to maintain their population, with a peak in around 2020/2030 and a slight decline afterwards. The share of the population living in today’s non-OECD countries will increase from the current 82% to 85% in 2050. China’s contribution to world population will drop from 20% today to 16% in 2050. Africa will remain the region with the highest growth rate, leading to a share of 22% of the world’s population in 2050. Satisfying the energy needs of a growing population in the developing regions of the world in an environmentally friendly manner is a key challenge for achieving a global sustainable energy supply. The South African population is projected to grow from 49 million people in 2007 to 57 million in 2050.
6.2 economic growth
Economic growth is a key driver for energy demand. Since 1971, each 1% increase in global Gross Domestic Product (GDP) has been accompanied by a 0.6% increase in primary energy consumption. The decoupling of energy demand and GDP growth is therefore a prerequisite for reducing demand in the future. Most global energy/economic/ environmental models constructed in the past have relied on market exchange rates to place countries in a common currency for estimation and calibration. This approach has been the subject of considerable discussion in recent years, and the alternative of purchasing power parity (PPP) exchange rates has been proposed. Purchasing power parities compare the costs in different currencies of a fixed basket of traded and non-traded goods and services and yield a widely-based measure of the standard of living. This is important in analysing the main drivers of energy demand or for comparing energy intensities among countries.
Although PPP assessments are still relatively imprecise compared to statistics based on national income and product trade and national price indexes, they are considered to provide a better basis for global scenario development40. Thus all data on economic development in WEO 2009 refers to purchasing power adjusted GDP. However, as WEO 2009 only covers the time period up to 2030, the projections for 2030-2050 are based on our own estimates. Prospects for GDP growth have decreased considerably since the previous study, due to the financial crisis at the beginning of 2009, although underlying growth trends continue much the same. GDP growth in all regions is expected to slow gradually over the coming decades. For South Africa this study assumes a 4%/year GDP increase after 2010 and 3.5%/year after 2040.
6.3 development of energy demand to 2050
Future development pathways for South Africa ́s energy demand are shown in Figure 6.1 for the Reference and both Energy [R]evolution scenarios. Under the Reference scenario, total primary energy demand in South Africa increases by more than 50% from the current 5,500 PJ/a to 8,246 PJ/a in 2050. In both Energy [R]evolution scenarios a decrease from the current consumption level is expected by 2050, reaching 5,020 PJ/a and 4,095 PJ/a in the advanced scenario. Under the Advanced Energy [R]evolution scenario, electricity demand in South Africa is expected to increase disproportionately, with households and services the main source of growing consumption (see Figure 6.2). With the exploitation of efficiency measures, however an even higher increase can be avoided, leading in the Basic Energy [R]evolution scenario to final electricity demand of 400 TWh/a in the year 2050. Compared to the Reference scenario, efficiency measures avoid the generation of about 135 TWh/a in the advanced scenario. The Advanced Energy [R]evolution scenario introduces electric vehicles earlier and more transport - both from freight and passengers - is shifted to electric trains and public transport. Fossil fuels for industrial process heat generation are also phased out more quickly and replaced by electric geothermal heat pumps and hydrogen. This means that electricity demand in the advanced version is higher and reaches 431 TWh/a in 2050, still 10% below the Reference case.
Efficiency gains in the heat supply sector are also significant. Under the Energy [R]evolution scenarios, final demand for heat supply can even be reduced (see Figure 6.3). Compared to the Reference scenario, consumption equivalent to 272 PJ/a are avoided through efficiency gains by 2050.
In the transport sector, it is assumed under the Basic Energy [R]evolution scenario that energy demand will reach 732 PJ/a by 2050, saving 40% compared to the Reference scenario. This reduction can be achieved by the introduction of highly efficient vehicles, by shifting the transport of goods from road to rail and by changes in mobility-related behaviour patterns. Because South Africa, as a developing country, has a relatively low starting point for transport demand, the outcome (in terms of kilometres travelled per person and freight volumes) has not been reduced in the Advanced Energy [R]evolution scenario any further than in the basic version. Due to a wider use of more efficient electric drives, however, the overall final energy demand in transport can be even reduced to 642 PJ/a, 48% lower than in the Reference case and also lower than current consumption.