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Energy Policy Scenarios to 2050

3.5. Key Indicators

To assess how proactive policies can meet the challenges of the physical, social, and economic world while achieving outcomes closer to the 3 A's, this Report applies the following key indicators to the four policy scenarios:

• Growth in gross domestic product
• Demographic growth
• Energy intensity
• Primary energy mix
• Total primary energy required (TPER)
• Greenhouse gas emissions
• Supply-demand tensions (the balance between the two)
• Oil
• Gas
• Coal
• Nuclear power
• Renewable energy
• Non-commercial or traditional energy
  

GDP growth (or economic growth) examines how regional and global economic development changes. Together with population growth, economic growth represents a clear energy-demand driver. Over the long-term, global economic growth has historically followed a consistent upward trajectory (ignoring short- and medium-term periods of stagnation or deflation in some countries), but the rate of increase in that growth in real purchasing power parity terms has declined. Maintaining positive rates of economic growth in all regions of the world is therefore an essential scenario backdrop.

Demographic growth examines how regional and global demography change over the period to 2050. Historic trends and existing forecasts suggest that population continues to grow and peaks at some point prior to 2050. The migration of people to large cities is a second element that needs to be addressed. Both are key drivers of growth and the demand for energy services and they will vary according to each scenario.

Energy intensity is measured as the energy required to produce a unit of economic activity (e.g., GDP on a PPP basis), allowing for the explicit consideration of technological development. While reductions in energy intensity are a sign that energy conversion, distribution, and end-use technologies have become more efficient, these gains may also lead to increased energy demand.

Energy mix captures the balance of primary energy sources in a country's portfolio, hence measuring diversity and possible security of the supply. This is done using concentration indices that, for an improvement, should show a growing range of energy sources, either in terms of the number of energy carriers or the sources of supply within and outside the country (e.g., securing gas from several countries rather than from one). A decline shows a narrowing of the supply base. This is an important indicator in assessing availability and in parallel with supply and demand tensions clearly describes market conditions.

Total primary energy required (TPER) describes the total energy supplies, usually in tonnes of oil equivalent, for the satisfaction of energy demand in an economy or the world as a whole. Driven by socio-economic factors (and technological change), this is a key "top-line" indicator of an economy's energy scene. We should not underestimate the importance of technological change which can affect energy demand directly but also indirectly in terms of an economy's energy intensity.

Greenhouse gas emissions need to be measured over time within a country, a region or globally. These are clearly linked to TPER and energy mix, but we also need to recognise the role of technologies, particularly those that successfully reduce the link between emissions and energy demand growth, e.g., fossil fuel use with carbon capture and storage, nuclear power, renewables including biofuels.

Supply-demand tension measures the relative balance between the demand for an energy carrier (solid, liquid, gas, or electricity) with its source. Tensions capture the state of the market for each commodity and indicate likely or possible energy price changes in each region or market. These have a pivotal role in determining market development and mapping futures. High tension signals imbalance while low tension suggests good balance.