Transcript Russian Far East Team Contribution to AES Project

RUSSIAN FAR EAST TEAM
CONTRIBUTION TO AES
PROJECT
Asian Energy Security (AES) Project
Asian Energy Security Workshop
2006
6 to 7 November, 2006, Beijing, China
RFE Team Members:
Ruslan Gulidov, Victor Kalashnikov,
Alexander Ognev
[Presented for Team by David Von Hippel, Nautilus Institute]
1
RFE AES CONTRIBUTION: PROJECT
TEAM AND ROLES

Dr. Victor Kalashnikov: Overall supervisor of
Russian team





Develops the strategic framework of the LEAP modeling
activities and follow-up analysis of the results
Defines basic qualitative and quantitative assumptions of
the scenarios implemented
Resolves various theoretical problems
Dr. Alexander Ognev: Advisor for all general and
specific issues related to the RFE electric power
industry
Mr. Ruslan Gulidov: Modeler


Collects and processes data, inputs to LEAP model
Creates and examines LEAP scenarios for RFE energy
sector based on advice from other members
2
RFE AES CONTRIBUTION: RFE
ENERGY SECTOR OVERVIEW

RFE Energy Sector







Generating, transmission & distribution companies, marketing
and management bodies of the electric power industry
Coal-mining industry (in all territories of the RFE)
Oil and gas industries (Yakutia, Sakhalin, Kamchatka, Chukotka)
Refining industry (mostly in Khabarovskiy Krai, but also in
Sakhalin and Yakutia)
Characterized by huge distances, low level of development,
non-uniform and dispersed character of the development of
RFE's economy
20+ "energy districts" independent in power supply, energy
sectors based on local resources. With some imports from
elsewhere in RFE
Favorable conditions for concentration of energy production
and centralization of energy transportation and distribution

Power grid: Integrated Power System of the East (OES Vostoka).
3
RFE AES WORK:
RFE ENERGY SITUATION
Energy production in the Russian Far East in Recent Years
Index
Electricity production,
bill kWh
Crude oil extraction,
mill tons
Natural gas extraction,
BCM
Coal mining, mill tons
Oil Refining, mill tons
2000
2001
2002
2003
2004
38.8
39.0
38.6
38.9
40.1
3.8
4.2
3.6
3.6
4.0
3.5
3.5
3.5
3.6
3.6
28.3
6.3
28.2
6.7
30.1
7.4
30.7
9.1
31.8
8.8
4
RFE AES WORK:
RFE ENERGY SITUATION
Energy industry accounts for more than
10% of regional GDP, 28% of industrial
output, employs 4% of economically active
population
 Investments in modernization and
development of energy sector in 2003-2004 >
50% of total capital investments in region’s
economy

 Implementation
of large-scale, capital-intensive
projects -- “Sakhalin-1”, “Sakhalin-2”, Bureiskaya
hydropower power plant
5
Anadir'
Bilibino
Kolymskaya HPP
Arkagalinskaya
TPP
Magadan
Petropavlovskiy
"energy district"
Yakutsk
Viluyskiy "energy district"
Okha
Nikolaevsk-on-Amur
Nerungrinskaya TPP
Bratsk
Zeyskaya
HPP
Komsomolsky centre
Sakhalinskaya TPP
Bureyskaya
Mayskaya
HPP
(under construction) TPP
Chita
3
Primorskaya
TPP
1
Gusinoozerskaya
TPP
Yuzhno-Sakhalinsk
Khabarovsk
2
Kharanorskaya TPP
Ulan-Ude
ЯПОНИЯ
MONGOLIA
Yuzhno-Primorsky
centre
CHINA
LEGEND
MAJOR CENTRES OF POWER GENERATION
Fuel and energy types
Installed generating capacity, MW
50-100
500-1000
100-200
Coal
Nuclear
Fuel Oil
Geothermal
Natural gas
Hydro
ZONES AND REGIONS OF CENTRALIZED POWER SUPPLY
More than 1000
200-500
OES Sibiri
OES Vostoka
BACKBONE TRANSMISSION LINES
500 кV
Autonomous
energy regions
ELECTRICITY SUPPLIES OUTSIDE THE REGION
220 кV
Operating
6
Planned for construction
Numbered: 1 – Krasnokamensk CHP, 2 - Blagoveschenskaya CHP, 3 - Raychikhinskaya TPP
RFE AES WORK:
RFE ENERGY SITUATION
RFE'2002 Primary Energy Production
29.7 mln tce
Natural Gas
13.8%
Crude Oil
17.7%
Renewables
8.6%
Nuclear 0.2%
Coal 59.7%
7
RFE AES WORK:
RFE ENERGY SITUATION
RFE'2002 Primary Energy Consumption
37.6 mln tce
Natural Gas
10.9%
Coal
44.1%
Other
Renewables
3.6%
Nuclear
0.2%
8
Hydropower
3.2%
Oil&Oil
Products
38.0%
RFE ENERGY SITUATION,
RECENT TRENDS


Growing signs of stabilization in current energy supplies in
RFE since 2002, due to solution of financial problems
related to payments for energy products and services
2003-2004, ratio of RFE and Russian average tariffs
stabilized at 1.6 for electricity, 1.8 for heating




Regional energy companies operated at a profit in 2004
Cross-subsidies between consumer groups, inter-regional
subsidies in wholesale electricity sales still exist
Coal industry stabilizing gradually with closing of
unprofitable mines; share of coal in underground mines in
RFE in 2004 fell to 10% from 26.1 % in 1991
Increasing demand in energy industries for equipment
renovation of outdated and obsolete equipment
9
RFE ENERGY SITUATION,
RECENT TRENDS

Bureiskaya HPP (designed capacity of 2000 MW, average
generation 7.1 TWh/yr) unit additions to total of 1005 MW




To transfer power from Bureiskaya HPP, construction of high
voltage transmission lines continues
Increasing electric load on TPP in “OES Vostoka” grid,
increased Bureiskaya HPP output by 2007 will decrease
average electricity prices
Mergers, takeovers and processes of vertical integration
of assets, restructuring of RFE coal and power industries
2005-2007--Unified holding company created for RFE
electricity sector (existing and new) controlled (over 52%)
by Federal government
10
RFE ENERGY SITUATION,
RECENT TRENDS
Phase out of coal facilities in some territories of
RFE and Transbaikalia as Sakhalin gas comes to
market
 Northern/NE territories of RFE self-sufficient in
coal supply, import petroleum as refined products
from Khabarovsk area

11
RFE ENERGY SITUATION,
RECENT TRENDS
Highly likely that major projects in the energy
sector will shift the trade balance of primary
energy towards export supplies to international
and interregional markets of crude oil, LNG and
coking coal, and electricity to “isolated districts”
in Northeast China.
 Despite overall good prospects for supply in
RFE, there are continuing problems of “small”
communal utilities (electricity and heat supply)

 Neglect
and malfunctioning of production facilities
and engineering infrastructure, unresolved financial
problems
12
RFE ENERGY SITUATION,
RECENT TRENDS

Stationary “small” power industry varies both
technologically and in respect to its manageability. For
communal heat supply alone in the RFE there are more
than 5300 municipal heating plants, which generate
about 25 million gigacalories.


Positive examples of vertical integration of communal energy
utilities, form basis for structural reforms in communal services.
Strategic position of RFE in North-East Asia energy
sector is being restructured, strengthened

Construction/investment activities for implementing the
“Sakhalin-1” and “Sakhalin-2” projects mean doubling primary
energy production in RFE by 2008  net energy exporter,
supplying crude oil, LNG to energy markets of Northeast Asia
13
RFE ENERGY SITUATION,
RECENT TRENDS



End 2004 RF Government approved a framework project
for construction of Taishet – Scovorodino – Perevoznaya
Bay Oil Pipeline (the East Siberia – Pacific Ocean Project
– ESPO project) first section is to be completed by
second half of 2008, with throughput of 30 Mte crude oil
Oil terminal in Perevoznaya Bay is to be finished by
second half of 2008, with similar throughput
2005, RF Government of Russia Federation re-orienting
Kovyktinskoye gas project to meet domestic gas needs in
W. RF, thus excluding it from NEA market, probably
meaning a focus on the triangle "Sakhalin shelf –
Northeast China – the Korean Peninsula“ for exports
14
RFE ENERGY SITUATION,
RECENT TRENDS



2004 and 2005 Exxon Neftegas (operator of the Sakhalin1 project) in commercial negotiations on pipeline gas
supply to Northeast China via Khabarovsk Krai, 8-10
BCM/year
Gazprom negotiating with operator of the Sakhalin-1
project to obtain 25% share, which may speed
development of international connections
Completion of Bureiskaya HPP construction, power
availability in “OES Vostoka” created preconditions for
export-oriented power industry, but so far only strong
activities in near-border power trade (negotiations on 600
MW power lines from Blagoveschensk to Kheikhe)
15
POSSIBLE COOPERATIVE
INITIATIVES: RFE AND NEA

"Amur Arc" Project:
 Planned
specialized infrastructure for fuel and energy
resources transit, goods transit
 Oil and gas pipelines
 High-voltage power lines
 Trans-Siberian Railway
 Arc-like energy corridor on the route "Eastern Siberia –
Skovorodino – Blagoveshchensk – Khabarovsk and
Komsomolsk-on-Amur – south of Primorskiy Krai“
 Economic concept of industrial-service development of
energy corridor
16
POSSIBLE COOPERATIVE
INITIATIVES: RFE AND NEA

"Amur Arc" Project:
 Oil-and-gas projects of the Sakhalin shelf—Sakhalin 1
and 2, onshore and offshore, extraction/processing
 Oil pipeline “Eastern Siberia – Pacific Ocean” (ESPO)
 Integrated system of gas production and transportation
in Eastern Siberia and the Far East
 Prospects for electricity cooperation with China: the
“Small China” project--Export electricity into “loading
islands” – near-border areas/cities of NE China
 Prospects for electricity cooperation with China: the
“Big China” project—25-30 TWh/yr into integrated
energy systems of Northeastern and Eastern Chinese
provinces
17
POSSIBLE COOPERATIVE
INITIATIVES: RFE AND NEA

"Amur Arc" Project:
 Energy bridge "Far East – Korean Peninsula
 Project induces important external benefits:
 Improved investment climate in region
 New technological opportunities for development of
joint enterprises for hydrocarbons processing
 Energy-intensive enterprises based on new efficient
hydroelectric power plants, gas- and coal-fired
power plants
 In view of the large scales, investments required,
complex effects, planning, implementation, the
power supply and pipeline sections of Project
require support and coordination of Russian
Government
18
LEAP MODELING OF RFE
ENERGY SYSTEM

Information Sources: Current Accounts
 State
Statistics in Russian Far East for Petroleum,
electricity product supply and balances
 Customs data on imports and exports
 Statistics on social and economic indicators
 Russia’s regional fuel and energy complexes
 Provincial government data sources
 Data from private companies; such as "Unified Power
Grid of Russia“
 Information from experts in Energy Departments of
territorial administrations of subregions of RFE
 Estimates of research fellows of Institutes in region
19
LEAP MODELING OF RFE
ENERGY SYSTEM

Information Sources: Paths/Scenarios
 Official
materials from government authorities, private
companies
 Economic and social development projections
 Demographic forecasts
 Plans for energy and other infrastructure
 Reports and papers on futures of energy industries of
RFE (Russian and International publications)
 Coal, gas, petroleum extraction industries
 Hydroelectric development
 Other materials: RF-wide projections/futures
documents, regional experts, company publications
20
LEAP MODELING OF RFE
ENERGY SYSTEM
 Data
Gaps and Challenges
 Little
demand data except for electricity—no
energy balance since 1990, errors in data that
do exist
 Energy supply data good for most sources,
with the exception of heat production units
 International export and import data available,
but information on imports/export to/from other
parts of RF lacking
 Cost data generally had to be estimated
21
LEAP MODELING OF RFE
ENERGY SYSTEM

Structure of RFE LEAP dataset


General economic assumptions (exogenous parameters)
 GDP growth rates, industrial output growth rates
 population dynamics,
 Economic cooperation: RFE (and RF), other NEA countries
Driving factors of energy policy (key variables)
 Necessary and cost-effective energy supply/demand in RFE
 Regional energy cooperation
 Environmental standards and constraints,
 Investment limitations, availability of advanced energy
technologies
 Energy conservation/energy efficiency policy
 Role of renewable sources of energy
 Diversification of primary energy demand and supply in RFE
22
LEAP MODELING OF RFE
ENERGY SYSTEM

Structure of RFE LEAP dataset


Demand: no sectoral structure, just final demand by fuel, with fuel
demand by geographic area for natural gas, heat, electricity, crude
oil (sector division planned)
Transformation (multiple modules for geographic areas):
 Heat and Electricity T&D modules
 5 Export Transmission Line modules
 6 Electricity Generation modules, alternating with 6 Heat
Generation modules
 Pipeline Oil Export, 4 Oil Refining modules
 Coal Washing, Gas Processing, LNG Production Modules
 Natural Gas T&D, 2 Crude Oil Production modules
 Pipeline Gas Export, 4 Natural Gas Extraction Modules
 Modules for Bituminous and Lignite Coal Production
23
LEAP MODELING OF RFE
ENERGY SYSTEM

Structure of RFE LEAP
dataset: Paths
Cool attitude to
energy-efficient
technologies
Weak deployment
of renewables
Coal dominance
Not
available
Regional
Alternative
Reference
Scenario
National
Alternative
Moderate GDP growth,
No Real international cooperation
24
Intensive
introducing
energy-efficient
technologies
Wide use of
renewables
Switching to
natural gas
LEAP MODEL OF RFE ENERGY
SYSTEM: PATHS AND RESULTS

LEAP Paths (“Scenarios”)
 Reference
Case: extrapolation of currently evolving
economy/energy sector trends
 Moderate economic growth, slowing of population
decrease
 Energy supply priorities sufficient production of
energy and fuels at minimal costs  self-sufficient
energy balance
 Coal and petroleum products will remain balance
compensators
 Stagnation in the sphere of international economic
cooperation with NEA and Pacific Rim: only
Sakhalin-1 and Sakhalin-2 projects realized
25
LEAP MODEL OF RFE ENERGY
SYSTEM: PATHS AND RESULTS
70
Reference Primary Energy Demand
60
mln TCE
50
40
Others
Hydro
30
Natural Gas
20
Coal
Petroleum
10
0
2005
2010
2015
2020
26
2030
mln TCE
LEAP MODEL OF RFE ENERGY
SYSTEM: PATHS AND RESULTS
100
90
80
70
60
50
40
30
20
10
0
Reference Primary Energy Production
Others
Crude Oil
Hydropower
Natural Gas
Solid Fuels
2002
2005
2010
2015
27
2020
2030
LEAP MODELING OF RFE
ENERGY SYSTEM

LEAP Paths (“Scenarios”)
 National
Alternative Case: Similar to Reference
Case: extrapolation of currently evolving
economy/energy sector trends, but…
 More dynamic development of renewable energy
sources, more active energy efficiency policy,
switching from oil and coal to natural gas
 New energy priorities nominally supposed to be
supported with legislative acts, administrative
directives but regional and local business unable to
carry out in full
 Stagnation in the sphere of international economic
cooperation with NEA and Pacific Rim: only
Sakhalin-1 and Sakhalin-2 projects realized
28
LEAP MODEL OF RFE ENERGY
SYSTEM: PATHS AND RESULTS
NA Primary Energy Demand
60
mln TCE
50
Others
Hydro
Natural Gas
Coal
Petroleum
40
30
20
10
0
2005
2010
2015
2020
29
2030
LEAP MODELING OF RFE
ENERGY SYSTEM

LEAP Paths (“Scenarios”)

Regional Alternative Case: Fast integration/ transformation of
RFE into "the Russian center of fuel and energy production and
supplies within NEA“
 Implement energy integration of Russia into NEA
 Projects in the southern zone of RFE core source for
optimization of energy usage in the territory
 International cooperation, sound domestic policy yield rapid
economic growth, slowing of the rate of population decrease
increase from 2015 due to migration and international labor
 Priorities of energy policy: sufficient production of energy and
fuels at acceptable costs, large-scale energy export, active
diversification of energy consumption to hydro and other
renewables, intensive switching to natural gas; joint regional
programs on energy efficiency, environmental protection.
30
LEAP MODEL OF RFE ENERGY
SYSTEM: PATHS AND RESULTS
RA Primary Energy Demand
90
80
mln TCE
70
60
Others
50
Hydro
Natural Gas
40
30
Coal
Petroleum
20
10
0
2005
2010
2015
2020
31
2030
LEAP MODEL OF RFE ENERGY
SYSTEM: PATHS AND RESULTS
RA Primary Energy Production
250
mln TCE
200
Others
Crude Oil
Hydropower
150
100
Natural Gas
Solid Fuels
50
0
2005
2010
2020
2015
32
2030
LEAP MODEL OF RFE ENERGY
SYSTEM: PATHS AND RESULTS
Final Energy Demand by Scenarios
60
Reference Scenario
National Alternative
Regional Alternative
mln TCE
50
40
30
20
10
0
2005
2010
2015
33
2020
2030
LEAP MODEL OF RFE ENERGY
SYSTEM: PATHS AND RESULTS
Primary Energy Production by Scenarios
250
mln TCE
200
Reference Scenario
National Alternative
Regional Alternative
150
100
50
0
2005
2010
2015
34
2020
2030
LEAP MODEL OF RFE ENERGY
SYSTEM: PATHS AND RESULTS
Electricity Net Output by Scenarios
billion kWh
160
140
Reference Scenario
National Alternative
Regional Alternative
120
100
80
60
40
20
0
2005
2010
2015
35
2020
2030
LEAP MODEL OF RFE ENERGY
SYSTEM: PATHS AND RESULTS
mln tones CO2 Equivalent
Total Greenhouse Gas Emissions by
Scenarios
160
140
120
Reference Scenario
National Alternative
Regional Alternative
100
80
60
40
20
0
2005
2010
2015
36
2020
2030
LEAP MODEL OF RFE ENERGY
SYSTEM: PATHS AND RESULTS
billion USD 2002
Cumulative Discounted Costs by Scenarios
900
800
700
600
500
400
300
200
100
0
Reference Scenario
National Alternative
Regional Alternative
2005
2010
2015
37
2020
2030
LEAP MODEL OF RFE ENERGY
SYSTEM: PATHS AND RESULTS
Energy
Supply &
Demand
Economic
Technological
Environmental
Social and
Cultural
Military /
Security
Total Primary
Energy
Total
Energy
System
Internal
Costs
Diversification
Indices for key
industries by
technology
type
GHG
emissions
(tonnes CO2,
CH4
Exposure to
Risk of Social,
Cultural
Conflict over
energy
systems
Exposure to
Military /
Security
Risks
Lower in NA
Lower in
BAU
Higher in RA
Lower in NA
Likely lower
in BAU
Likely lower in
RA
Fraction of
Primary
Energy
as
Imports
Total Fuel
Costs
Diversity of
R&D
Spending
Acid gas
emissions
(tonnes
SOx,
NOx)
Relative
spending on
energyrelated
security
Lower in RA
Lower in RA
Likely higher in
RA
Lower in NA
scenario
Likely lower in
BAU, NA
38
LEAP MODEL OF RFE ENERGY
SYSTEM: PATHS AND RESULTS
Energy Supply
& Demand
Economic
Technological
Environmental
Diversity of
Import Fuel
supply by fuel Costs
and supplier
Reliance on
Proven
Technologies
Ecosystem
and Aesthetic
Impacts
Higher in NA
and RA
Lower in NA
Higher in BAU
Lower in BAU
Energy
Intensity
(TPES
/GDP)
Technological
Adaptability
Ecology
Intensity
(GHG/GDP)
Lower in NA
and RA
Higher in RA
Lower in RA
39
Social and
Cultural
Military /
Security
LEAP MODEL OF RFE ENERGY
SYSTEM: PATHS AND RESULTS
Energy Supply
& Demand
Economic
Technological
Environmental
Diversity of
Import Fuel
supply by fuel Costs
and supplier
Reliance on
Proven
Technologies
Ecosystem
and Aesthetic
Impacts
Higher in NA
and RA
Lower in NA
Higher in BAU
Lower in BAU
Energy
Intensity
(TPES
/GDP)
Technological
Adaptability
Ecology
Intensity
(GHG/GDP)
Lower in NA
and RA
Higher in RA
Lower in RA
40
Social and
Cultural
Military /
Security
THANK YOU!
41