Transcript The 6th APEC EMM

APEC Energy Outlook
and Security Issues
The 6th APEC Energy Ministers’ Meeting
Manila, the Philippines
10 June 2004
Masaharu Fujitomi
President
Asia Pacific Energy Research Centre
About APERC
• Background
– Established in in July 1996 in Tokyo pursuant to the Action Agenda
adopted by APEC Economic Leaders at the Osaka Summit in
November 1995
• Purpose
– To foster member economies' understanding of (1) long-term energy
demand and supply trends and associated energy policy issues
including (2) energy security, (3) energy infrastructure development,
(4) energy sector regulatory reform, and (5) environment.
• Operation
– Managed under the auspices of APEC EWG through EGEDA
– Fully financed by the government of Japan (METI).
• Staffing
– Based on one researcher from one economy principle, currently 15
APEC economies are well represented.
Outline of APERC’s Presentation
• APEC Energy Demand and Supply Outlook up to 2020
• Primary Energy Demand
• Oil Import Dependency
• Electricity Demand of Selected Economies
• Rising Energy Prices and Options for Enhancing Security
• Recent Oil, Gas and Coal Price Trends
• Enhancement of Technological Innovation
• Improvement of Allocation Efficiency
• Energy Investment Outlook for the APEC Region
• Energy Investment Requirements by Infrastructure Type
• Share of Energy Investments Relative to the Size of Economy
• Hurdles for Financing Energy Infrastructure
• Key Challenges for Energy Security in APEC
Total Primary Energy Demand in APEC
10000
Coal
Oil
Gas
Hydro
Nuclear
NRE
9000
NRE 1.1 % p.a.
Mtoe
8000
Nuclear 1.7 % p.a.
Hydro 2.7 % p.a.
7000
Natural Gas
6000
2.6 % p.a.
5000
4000
Oil 2.1% p.a.
3000
Coal 2.1% p.a.
2000
1000
0
1980
1990
1999
(Source) APERC (2002), “APEC Energy Demand and Supply Outlook”
2010
2020
Oil Import Dependency is Rising.
90%
80%
70%
Asia
60%
50%
45%
40%
30%
55%
APEC
35%
36%
North America
20%
10%
Latin America
0%
-10%
1990
1999
-20%
(Source) APERC (2002), “APEC Energy Demand and Supply Outlook”
2010
2020
Russia
Electricity Demand is Growing Fastest in
Southeast Asia, Latin America and China.
7,000
Northeast Asia + China + Russia
(4.0 % p.a.)
Electricity Demand (Tera Watthours)
6,000
5,000
North America (1.9% p.a.)
4,000
3,000
China (5.6% p.a.)
Northeast Asia ( 2.6% p.a.)
2,000
Russia (3.8% p.a.)
1,000
Latin America (5.7% p.a.)
Southeast Asia (6.1% p.a.)
Oceania (2.2% p.a.)
0
2000
2005
North America
Northeast Asia
Oceania
Russia
(Source) APERC (2002), “APEC Energy Demand and Supply Outlook”
2010
2015
Latin America
Southeast Asia
China
Northeast Asia + China + Russia
2020
Oil, Gas and Coal Prices are Rising.
0.035
Cold Weather and
Infrastructure
constraint
Cold Weather and
Infrastructure
constraint
0.030
Oil Demand Surge
in Asia and USA
0.025
$/1000 kcal
September 11th
Terrorist Attack
Commencement
of Iraq War
0.020
0.015
Electricity Shortages
in China
0.010
0.005
0.000
Jan 2000.
Jan 2001.
Jan 2002.
Jan 2003.
Jan 2004.
DUBAI in Tokyo market
WTI (Market of NY)
Henry Hub, La.
LNG Import Price to Japan
LNG Import Price to Korea
LNG Import Price to US
Coal Import Price to Japan
Source: APERC Analysis (2004)
Note: Original data is from EDMC (2004) on oil, Platts (2004) on coal, Energy Intelligence Group (2004) on Henry Hub Price and IEA
(2004) on LNG import price.
More Flexibility in Supply
Infrastructure is Required.
• Enhance Technological Innovation
– Development of Efficient Technologies
• CCGT, Mini-hydro, Advanced Nuclear, Clean Coal Technology
– Development of Alternative Energy Sources
• New and Renewable Sources, Non-conventional Oil, LNG
• Improve Allocation Efficiency
– Cross border cooperation will expand choice of energy and
reduce capacity requirements due to seasonal differences.
•
•
•
•
Power Interconnection
Oil Pipeline
Natural Gas Pipeline
Joint Stockpiling: Oil and Natural Gas
Energy Investment Needs in APEC will Total
US$3.4 Trillion to $4.4 Trillion (2000-2020)
Coal and delivery
costs
3%
Oil and gas
international trade
9%
Electricity
generation and
transmission
49%
(Source) APERC (2003), “Energy Investment Outlook for the APEC Region”
Oil and gas
pipelines
16%
Oil and gas
production,
processing,
petrochemical
23%
Energy Investment Needs as a Share of GDP
will be Greatest for Developing Economies.
9%
Energy Investment Needs as Share of
Gross Domestic Product, 1999-2020
Papua New Guinea
8%
Group C
7%
6%
5%
Viet Nam
Russia
Group A
Group B
4%
3%
2%
1%
China
Brunei Darussalam
Malaysia
Chile
Thailand
Indonesia
Mexico
Peru
Philippines
Korea
Chinese Taipei
NZ
0%
$0
$5,000
Canada
Singapore
$10,000
Hong Kong, China
$15,000
Australia
$20,000
GDP Per Capita in 1999, 1999 US Dollars
(Source) APERC (2003), “Energy Investment Outlook for the APEC Region”
Japan
$25,000
USA
$30,000
Hurdles for Financing Energy Projects
• Declining financial resources flow to developing
economies after the recent Asian financial crisis
• Large-scale projects become difficult to carry out.
• Underdeveloped financial markets in most developing
APEC economies.
• Creation of efficient financial market would help mobilise
available capital to the needed area.
• Regulatory uncertainty may make it harder to attract
energy investment in developed APEC economies.
• Energy efficiency and renewable energy projects are still
hard to finance commercially.
Increasing Financing Costs
in Developed Economies
Maintaining sound balance sheet is important to attract equity investors.
2001 May
2002 September
Rating
Outlook
Rating
Outlook
AES Corp.
BB
Positive
BB-
Negative
Allegheny Energy Inc.
A
Negative
BBB
Negative
Aquila Inc.
BBB
Stable
BBB-
Negative
Calpine Corp.
BB+
Stable
BB
Stable
Dynergy Inc.
BBB+
Watch Negative
B+
Watch Negative
Enron Corp.
BBB+
Stable
D
NRG Energy
BBB+
Stable
CCC
Watch Negative
Ecel Energy Inc.
A-
Stable
BBB
Watch Developing
Reliant Resources Inc.
BBB+
Stable
BBB-
Watch Negative
The Williams Companies Inc.
BBB+
Stable
B+
Negative
(Source) Standard & Poor’s (2002), “Project & Infrastructure Finance”
Challenges for Enhancing
Energy Security in APEC
• Robust Energy Demand Growth
• Energy demand will grow faster in APEC than the rest of the
world.
• Rising Energy Prices
• Strong demand is exerting long-term pressure on energy
prices.
• Greater Oil Import Dependency
• APEC oil import dependency will reach 55% in 2020 from
36% today.
• Large-scale Investment Requirements
• US$3.4 trillion to $4.4 trillion needed in the next two
decades.
APERC Activities to Address Energy Security
• Dissemination of Energy Data
• APEC Energy Database – Data on APEC Energy and Economy
• Joint Oil Data Initiative – Monthly Oil Data and Analysis
• Dissemination of Information and Analysis
•
•
•
•
APEC Energy Demand and Supply Outlook – Biannual Publication
Oil Supply Security – Oil Stockpile and Emergency Preparedness
Energy Market Reform – Electricity Market Reform and Gas Market Reform
Energy Infrastructure – Natural Gas Pipeline, Power Interconnection and
Energy Investment Outlook
• Energy Efficiency – Industry, Residential, Commercial and Transportation
Sectors
• Environment – New and Renewable Sources, Climate Change
• APEC Energy Overview – Annual publication on updates of notable
development in the energy sector of APEC