Coal Demand Projection in ASEAN and East Asia and Issues and Challenges of Coal

Transcription

1 International Meeting on Cleaner Use of Coal Clean Coal Day September 214, Tokyo, Japan Coal Demand Projection in ASEAN and East Asia and Issues and Challenges of Coal Shigeru Kimura Special Adviser to Executive Director on Energy Affairs

2 Contents Energy Outlook Framework Major Model Assumptions Macro Assumptions Power Development Plan Energy Outlook Results (BAU) Final Energy Consumption Power Generation Primary Energy Supply Energy Intensity and Elasticity Energy Saving Potential Final Energy Consumption Power Generation and Primary Energy Supply Power Generation Mix (APS) Issues and Challenges of Coal Coal Production Potential in ASEAN and East Asia Comparison of Fossil Fuel Prices Economic Impact Shale Gas Impact Construction Costs Conclusion 2

3 Energy Outlook Framework ERIA Working Group for Analysis of Energy Saving Potential in East Asia 1 ASEAN Members Australia China, India, Japan, Korea, New Zealand MODEL ASSUMPTIONS (1 st meeting in July-August 212) Socio-economic & Energy saving target LEAP & MICROFIT E4CAST (Hybrid type) IEEJ MODEL (econometrics) Energy outlook results, BAU and APS (including the EE target) Energy saving potential = BAU APS in terms of TPEC and TFEC 3

4 Macro Assumptions Economic Growth 4.2 % P.A. from 211 to 235 (4.1% P.A. in 213) Population Growth.6 % P.A. from 211 to billion persons in 21 to increase to 3.94 billion in 235 Crude Oil Price (nominal price) Increase to about 2 US$/bbl in 235 due to tight balance between demand and supply GDP per capita 3,9 US$/person (constant 25 price and US$) in 211 increases to 9, US$/person in 235 Car Ownership.7 vehicles/person in 211, increases to.15 vehicles/person using vehicle data of 11 countries Source: ERIA ESP WG Report 213 4

5 Power Development Plan Hydro Nuclear TWh 25 TWh BAU APS 15 1 BAU APS Geothermal Solar/Wind/Biomass TWh TWh BAU APS 15 1 BAU APS Source: ERIA ESP WG Report 213 5

6 Energy Outlook Result (BAU) Final Energy Consumption (MTOE) 6 1% 9% 8% 7% 6% 5% times (2.4% P.A.) 4% 3% 2% 1% % times (3.5% P.A.) 1% 9% 8% 7% Coal Oil Natura Gas Electricity Heat Others 6% 1 5% 4% 3% Coal Oil Natura Gas Electricity Heat Others 2% 1% % Industry Transport Others N-Energy From 211 to 235, gas will mark the highest growth at 4.7% p.a., followed by electricity (3.6%) and oil (2.6%). Consequently gas share will increase from 7% in 211 to 12% in 235 and electricity share will also increase from 19% to 25%. Electricity demand will increase significantly and will be a second dominant fuel in 235. Electricity will be a key energy at energy demand side continuously in this region. The share of transport will increase 17% in 21 to 21% in 235, but share of industry sector will still be dominant in 235 and its share will remain above 38%. Source: ERIA ESP WG Report 213 6

7 Energy Outlook Result (BAU) 2 18 Power Generation 1% 9% 8% 7% 6% 5% times (3.5% P.A.) 4% 3% 2% 1% % times (6.5% P.A.) 5 (%) 45 4 Coal Oil Natural Gas Nuclear Hydor Geothemal Others Coal Oil Natural Gas Nuclear Hydor Geothemal Others Coal Oil Gas From 211 to 235, power generation by NRE will mark the highest growth at 6.9% p.a., followed by nuclear (6.%), geothermal (5.2%) and gas (4.2%). But power generation by oil will decrease. Consequently NRE share will increase from 3.% in 211 to 6.4% in 235, followed by nuclear (4.5% to 7.9%), gas (13% to 15.4%) and geothermal (.3% to.5%). But coal-fired generation will still be dominant and its share will be more than 6% in 235. This region will continue to depend on power generation system to use coal in future. On the other hand, thermal efficiency of coalfired power generation will be surely improved from 34.7% in 211 to 37.3% in 235 applying efficient technology. Source: ERIA ESP WG Report 213 7

8 Energy Outlook Result (BAU) Power Generation (2) % Share of Coal-Fired Power Generation (BAU) No coal-fired power plant (CPP) generation in Brunei and Singapore Cambodia, Laos, Philippines and Vietnam will increase CPP generation significantly Australia and Malaysia will decline CPP generation largely Other EAS countries will not change CPP generation share significantly In this regard, CPP will remain dominantly in future Source: ERIA ESP WG Report 213 8

9 Energy Outlook Result (BAU) Primary Energy Supply times (2.5% P.A) 1% 9% 8% 7% 6% times (4.2% P.A.) 5% 4% 3% 2 2% 1 1% % Coal Oil Natural Gas Nuclear Hydro Geothermal Other Coal Oil Natural Gas Nuclear Hydro Geothermal Other From 211 to 235, nuclear will mark the highest growth at 6.% p.a., followed by gas, geothermal, oil and coal. Consequently nuclear share will increase from 2.% to 4.4% in and gas share will increase from 9% in 21 to 14% in 235. On the other hand, oil share will slightly decline from 23.9% in 21 to 23.2% in 235. In 235, coal will be still dominant fuel and its share will be 46.6%. Source: ERIA ESP WG Report 213 9

10 Energy Outlook Results (BAU) GDP Elasticity of TPES : :.6 4.2% P.A. 2.5% P.A % P.A. 1 5 Energy Intensity (TPES/GDP) 199:34, 211:368, 235:25 Reduction rate: 32% from GDP TPES TFEC Source: ERIA ESP WG Report 213 1

11 Energy Saving Potential Final Energy Consumption (633 Mtoe saved) Energy Saving Share by Energy in Total Final Energy Consumption (BAU-APS in 235) En ergy Saving Potential by Sector in Total Final Energy Consumption (BAU-APS in 235) % 3% 4% 19% 31% 46% 9% 38% 23% Coal Oil Natura Gas Electricity Other Industry Transport Others N-Energy In terms of energy saving potential in the final consumption sector in 235, oil will have the largest potential savings followed by electricity, coal and gas. The electricity savings will contribute to reduction of thermal power generation. By sector, industry will have the largest potential in 235 followed by other (residential & commercial) and transport. Source: ERIA ESP WG Report

12 Energy Saving Potential (TWh) Pwer Generation Saving Potential by Type (BAU-APS in 235) Coal Oil Natural Gas Nuclear Hydor Geothemal Others Total Due to electricity demand savings and increase of non fossil power generation, coal fired power generation will be reduced significantly. -2. The current energy saving goals will surely contribute in reducing fossil energy consumption significantly. Source: ERIA ESP WG Report 213 (MTOE) Energy Saving Potential by Energy in Total Primary Energy Supply (BAU-APS in 235) Coal Oil Natural Gas Nuclear Hydro Geothermal Other Total 12

13 Energy Saving Potential Power Generation Mix (APS) TWh % Even the APS case, coal-fired power generation will be dominant and its share will keep 46.%. Coalfired power generation will be indispensable in this region. Thermal efficiency of coal-fired power generation in APS will be higher than BAU (38.7%) applying more efficient technology. 1 5 BAU in 235 APS in 235 Coal Oil Gas Hydro Nuclear Geothermal Other 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % APS in 235 Coal Oil Gas Hydro Nuclear Geothermal Other Source: ERIA ESP WG Report

14 Coal Production Potential in ASEAN and East Asia About half of Asia s coal reserves consist of lignite and subbituminous coals. Source: ERIA Working Group for Strategic Usage of Coal,

15 Comparison of Fossil Fuel Prices Relative Prices Crude Oil Steam Coal LNG Data Source: Japan s Trade Statistics (Import CIF) Estimation by IEEJ (Yen/1kcal) 15

16 Economic Impacts by CCT Show the importance of strategic usage of coal in ASEAN and EAS countries Develop a technology potential map for Clean Coal Technologies CCT is an useful technology to be able to use low ranked coal, which has a plenty reserve in this region; CCT needs large investment including coal mining development (US$3, billion); CCT increases number of employees in coal mining sector (55, employees per annual); CCT achieves high thermal efficiency and reduces coal consumption significantly compared to the ordinary type of coal fired plants; CCT still brings high initial cost and lot of CO2 emission. In this regard, cutting of the initial cost and low emission technologies such as CCS will be indispensable, thus further technology development of them is expected. Half the regional coal resource is low rank and more affordable. Its usage has huge positive economic impacts Promote usage of Low ranked coal Large room for thermal efficiency improvement from 26 5 % through CCT Increase thermal efficiency Environmental standards should be harmonized aiming at more stringent targets Social & environmental benefits Source: ERIA Working Group for Strategic Usage of Coal,

17 Shale Gas Impact on Coal Market Shale Gas Production Expansion has Four Impacts on the Coal Market (1/2) The first influence path is: US coal enters the European coal market, potentially resulting in increased exports to Asia from Colombia and South Africa. The second influence path is: Direct influx of PRB and Illinois to Asia. Issues to be resolved are the construction of export infrastructure on the West coast, and the degree of high sulfur Illinois coal demand. Source) Analysis from various resources 17 Source: ERIA Working Group for Strategic Usage of Coal, 213

18 Construction Costs Construction costs of high efficient coal-fired power generation plans such as SC, USC and IGCC are very diverse due to different technology and manufacturing countries. But generally the costs are surely expensive compared to ordinary coal-power generation plants. Then, reducing the construction costs is crucial for increasing high efficient coal-fired power generation. Consequently appropriate financing mechanism is essential. They are; - Public soft loan, ex. Low interest loan - Offset credit mechanism such as Bilateral Offset Credit Mechanism Cost-benefit analysis is an appropriate tool to study this financing issues. (US$/kWe) SC USC IGCC Source: ERIA Working Group for Strategic Usage of Coal,

19 Conclusions Many EAS countries consider that coal fired power generation plants applying high efficient technology will be important in future. The reasons are; Coal is a domestic fuel in a country and a region but mainly low ranked coal. (security) Coal price is much lower than oil and gas. (economic) Mitigation of CO 2 emissions compared to ordinary coal fired power generation plants are expected. (environmental) An opportunity of business enlargement in coal mining sectors. (employment) Large investment to high efficient coal fired plants brings stable economic impact. (economic growth) Coal supply out of ASEAN and East Asia will be secured by shale gas revolution. (security and competitive price) But initial cost of high efficient type of coal fired power generation plant is very high, so that financial support should be provided such as; Soft loan (low interest rate) from public banks BOCM (Bilateral Offset Credit Mechanism) CCUS technology development is indispensable to contribute the climate change issues. Thank you for your attention 19