11th Russian Petroleum & Gas Congress / RPGC 2013

Moscow, Russia
27 June 2013

APEC Energy Demand and Supply Outlook 2013 by

APERC: The Role of Natural Gas in Energy
Balance of APEC Economies for the period till 2035

Dmitry Sokolov
Asia Pacific Energy Research Centre (APERC)
 Contents

Introduction to APERC
Introduction to the Outlook 5th Edition
Overview of the Outlook 5th Edition
Business-as-usual Models
Outlook 5th Edition Key Findings
Regional Perspective

2
Introduction to APERC

3
APEC Member Economies

4
From APEC website, http://hrd.apec.org/index.php/Image:APEC-map.gif
 Background on APERC
Asia Pacific Energy Research Centre supports the energy
activities of APEC with
Research especially analysis of energy supply, demand,
and greenhouse gas emissions
Cooperative programs to promote energy efficiency and
low-carbon energy
Funded by the Japanese government and based in Tokyo

Legally a subsidiary of IEEJ, but APERC research is

directed by the APEC Energy Working Group (EWG) and
the APEC Expert Group on Data and Analysis (EGEDA)

5
APERC Ongoing Research Efforts
APEC Energy Statistics (Annual)
APEC Energy Overview (Annual)
APEC Energy Demand and Supply Outlook (every 3-
4 years)
Compendium of Energy Efficiency Policies (Annual)
Research support for Cooperative efforts
Analysis of monitoring of APECs energy intensity
improvement target

6
 APERC Cooperative Efforts
Peer Review of Energy Efficiency (PREE)
Tenth PREE held in Brunei Darussalam in June 2013
Cooperative Energy Efficiency Design for Sustainability
(CEEDS)
Fourth CEEDS held last year on ESCOs
Peer Review of Low-Carbon Energy (PRLCE)
PRLCE Phase 2 held in Jakarta in May 2013
Follow-up PREE/CEEDS Capacity-Building
Second Follow-Up PREE to be held in Thailand
Oil and Gas Security Exercise (OGSE)
OGSE to be held in 2013, 1st Forum held in April 2013
LNG Producer-Consumer Conference
The Second Conference to be held on Sept. 10, 2013
7
 Introduction to
the Outlook 5th Edition

8
APEC Energy Outlook

APERC has historically

produced an APEC
Energy Demand and
Supply Outlook every 3
or 4 years
The 5th Edition was
published in February
2013
A 25 year look-ahead
(2010-2035) assuming
business-as-usual and
several alternative cases
9
 Goals of the Outlook Project
Help facilitate APEC cooperation by providing policymakers
with
A useful reference work on energy in the APEC region
A statistically-supported review of the challenges and opportunities
facing the APEC economies individually and as a region
Provide useful suggestions and inspiration to policymakers in APEC
economies who wish to pursue more sustainable energy policies
Demonstrate the benefits that alternative policies might have on energy
security, environmental protection, energy costs, etc
Draws on expertise of APERC researchers, supplemented by
advice and feedback from APEC government experts

10
 Contents of the Outlook Report
Volume 2:
Volume 1:
Discussion of specific APEC
Overall APEC Demand and Supply
economies
Summary of Key Trends Introduction to the economys
Overview of APERCs model Energy demand
Overall APEC Final Energy Demand Energy resources
by Sector Energy policies
Overall APEC Primary Energy Business-as-Usual Scenario
Supply by Fuel Type Alternative Scenarios
APEC Energy Investment Overview High Gas Scenario
APEC Carbon Emissions Improved Urban Planning
Virtual Clean Car Race

11
 Cases Examined
Business As Usual (BAU) Assumes existing
policy continues, including policies in process of
implementation (legislation already approved)
Three Alternative Cases:
High Gas Scenario
Alternative Urban Development Scenario
Virtual Clean Car Race

12
 Overview of the
Outlook 5th Edition
Business-as-usual Models

Source: APERC Analysis (2012) 13

 Outlook 5th Edition Models
Models are totally new and developed by APERC
Designed to support additional detail in results
Designed to model alternative policies and
technologies
Designed for re-use in future editions of the Outlook

14
 Business-as-usual (BAU)
Key Assumptions
APEC Energy Demand Drivers:
1. Volatility in the Oil Market
2. Climate Change
3. Rapid Growth of Developing Economies
4. The Continuing Economic Crisis
5. The Fukushima Nuclear Accident
6. Advances in Technology

What is considered BAU?

Energy Policies: Only existing policies are considered.

GDP and Population: Continued economic and population growth assumed
for the long term. For developing economies, there will be increasing use of
commercial fuels and motorized vehicles and better access to electricity.
Oil Prices: IEAs oil projections are adopted for this Outlook.
15
 Overall Model Structure

KEY
ASSUMPTIONS Industrial and RESULTS
Macroeconomic Non-Energy Demand TABLES
Data Model Macroeconomic
Oil Prices
Data
Domestic Fossil Fuel
Transport Demand Energy Production
Production
Model and Imports
Biofuel Content of
Own Use and
Liquid Fuels
Other Sector Transformation
Own-Use Rates
(Residential/Commercial Losses
Heat Production
Final Energy
Market Shares and /Agricultural) Demand
Demand
Efficiencies by Fuel Model Energy Intensities
CO2 Emission
CO2 Emissions
Factors
Electricity Supply Model

16
 Transport Sector Model Other Sector Model
Road Top Population GDP Etc
Customer Re-fuelling
Vehicles Down
Purchasing Power Infrastructure
Total Demand
Upfront Fuel Cost Bottom Up
Capital Road Vehicle
Expenditure Fleet Demand Total Demand
Etc
Air- Water
Other Aviation, Shipping, Rail Conditioning Heating Cooking Etc
Vehicles
Sub-sector Demand
GDP or Electricity Model
GDP per
capita Oil Price Expected Infrastructure
Investment Historical Data Estimated Government
and System Electricity Electricity
Characteristics Demand Policies
Industrial Sector Model
LEAP Software
Industry Gross Industry Energy Price
Sector Output (USD) Index Power plant Fuel
Energy capacity Consumption
Etc
Intensity
Total Industrial Sector Electricity Electricity
Generation Imports/Exports
Energy Demand Etc
17
Outlook 5th Edition Key Findings

18
Key Finding #1: APECs energy intensity goals
will probably be met under business-as-usual

350
300 Total Primary
250 Energy Supply
Index (2005 = 100)

200 Index
GDP Index
150
100
50 Primary Energy
Intensity Index
0
1990
1995
2000

2010
2015
2020
2025
2030
2035
2005

19
Key Finding #2: Nuclear development slows
down, but not by much

APEC nuclear electricity production

300
250
200
MTOE

150
100
50
0
2005

2010

2015

2020

2025

2030

2035
5th Edition 4th Edition 20
Key Finding #3: Gas generation growth speeds
up, coal share declines

APEC electricity output for coal and gas

Coal Gas

29% 28% 27% 27% 29% 31% 32% 34% 36% 39%

71% 72% 73% 73% 71% 69% 68% 66% 64% 61%

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
21
Key Finding #4: New Renewable Energy (NRE)
goes mainstream

APEC electricity generation from NRE

2500

2000

1500
TWh

1000

500

0
2005

2010

2020

2025

2030

2035
2015

5th Edition 4th Edition

22
 Projected New Renewable Energy (NRE) Shares in Power Generation

NRE Share in Power Generation 2010 NRE Share in Power Generation 2035

Hydro
Hydro Wind 13%
Gas 13% Nuclear 1.3% Nuclear Wind
20% Gas 15% 6%
12%
24%
Oil Solar, 0.1% Renewables
Renewables
2% 10%
4%
Biomass and Oil Solar, 1%
others 0.40%
Coal 1.4% Coal Biomass and
49% 38% others, 2%
Geothermal Geothermal,
0.4% 0.7%

23
Key Finding #5: Big opportunities to improve
efficiency, especially in transportation through
better urban planning

BAU High Sprawl Constant Density Fixed Urban Land

3500
3000
Million Tonnes CO2

2500
2000
1500
1000
500
0
2010 2020 2035

24
...and improving the efficiency of the vehicle fleet

BAU Hyper Car Transition

Electric Vehicle Transition Hydrogen Vehicle Transition
Natural Gas Vehicle Transition
3000
Million Tonnes CO2

2000

1000

0
2010 2020 2035

25
Key Finding #6: Oil security remains a major
threat to the economies of the APEC region

3500
Oil Production and
Imports (MTOE)

3000
2500
2000 Oil Imports
1500 Oil Production
1000
500
0
2010 2015 2020 2025 2030 2035

26
 Key Finding #7: Business-as-usual is
environmentally unsustainable

APEC CO2 emissions from fuel combustion

30000 International
Million Tonnes CO2

Transport
25000
Domestic Transport
20000
Other
15000
Industry
10000
Other
5000 Transformation
Electricity
0 Generation
2010 2015 2020 2025 2030 2035
27
 Regional Perspective
Many of the most important things that are happening in energy
are happening in specific economies or specific regions
This overview of the Outlook 5th Edition business-as-usual
(BAU) scenario therefore takes a regional approach
Six APEC regions will be examined here:
Latin America
North America
South-East Asia
North-East Asia
South Pacific
Russia

28
 Latin America
Business-as-Usual, including:
Chile
Mexico
Peru

29
Latin America Oil and Gas Production
Grows
Coal Oil Gas Coal Imports Oil Imports Gas Imports
250
Production and Import (MTOE)

200

150

100

50

-50

-100
2015
1990

1995

2000

2005

2010

2020

2025

2030

2035
30
Gas Share of Electricity Generation in
Latin America Grows
Coal Oil Gas Hydro NRE Nuclear Import

5% 6% 7% 7% 8% 9%

25% 22% 20% 17% 18% 19%

29% 19% 19%
30%

10%
20%
13% 35%
41%
49%
52% 51% 50% 49%

45%
37% 37%
22%
16%
10% 6%

15% 16% 17%

11% 11% 13% 14% 13% 13%
10%

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
31
 Latin America Final Demand Grows
Rapidly in All Sectors
Industry Other Non-Energy Domestic Transport International Transport
300

250

200
MTOE

150

100

50

0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
32
 North America
Business-as-Usual, including:
Canada
United States

33
 Oil and Gas Production in North
America Will Grow
Coal Oil Gas Coal Imports Oil Imports Gas Imports
1200
Production and Import (MTOE)

1000

800

600

400

200

-200

2030
1990

1995

2000

2005

2010

2015

2020

2025

2035
34
 N.A. Gas and Renewables Will Have
Increased Roles in Electricity Generation
Coal Oil Gas Hydro NRE Nuclear Import

19% 20% 19% 18% 19% 18% 18% 18% 18% 17%

7% 8% 10% 11% 13%

13% 13%
15% 16% 13%
13%
14% 13% 13% 13%
11% 14% 17%
13%
22%
25%
26% 28% 29% 30%

48% 47% 49% 46%

41%
36% 32% 30% 28% 26%

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
35
 And N.A. Growth in Primary Energy
Demand Is in Low-Emission Fuels
Coal Oil Gas Hydro NRE Nuclear Electricity-Net Import
3000

2500

2000
MTOE

1500

1000

500

0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
36
 Consequently, North American CO2
Emissions Level-Off
Electricity Generation Other Transformation Industry
Other Domestic Transport International Transport
7000

6000
Million Tonnes CO2

5000

4000

3000

2000

1000

0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
37
 South-East Asia
Business-as-Usual, including:
Brunei Darussalam
Indonesia
Malaysia
Philippines
Singapore
Thailand
Viet Nam

38
South-East Asias Demand for Fossil
Fuels Will Grow Rapidly
Coal Oil Gas Hydro NRE Nuclear Electricity-Net Import
1200

1000

800
MTOE

600

400

200

0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
39
Thus, SE Asia Will Become a Net Gas
Importer and Growing Oil Importer
Coal Oil Gas Coal Imports Oil Imports Gas Imports
600
Production and Import (MTOE)

500
400
300
200
100
0
-100
-200
-300
2015
1990

1995

2000

2005

2010

2020

2025

2030

2035
40
South-East Asia Share of Coal-Fired
Electricity Generation Grows
Coal Oil Gas Hydro NRE Nuclear Import

5% 5%
7% 6%
14% 10% 6% 6%
17% 12% 10% 10%
11% 11% 9%
10%

16%
36% 32%
42% 48% 42% 38% 35% 33%
49%

44%

31% 19% 14% 9%

43% 46%
39% 41%
36%
23% 25%
18% 21%
14%

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
41
So South-East Asias CO2 Emissions
Grow Rapidly
Coal Oil Gas
3000

2500
Million Tonnes CO2

2000

1500

1000

500

0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
42
 North-East Asia
Business as Usual, including:
China
Chinese Taipei
Hong Kong, China
Japan
Korea

43
 The Incredible Chinese Growth Story
Continues
50000 US$32,000/person 1600
Real GDP (2005 Billion USD PPP)

45000 Population 1400

40000

Population (Million)
1200
35000
30000 1000

25000 800
20000 GDP
600
15000
400
10000
Assumed
200 China
5000
GDP Growth Rates:
0 02010-2020: 7.9%
2010

2035
1990

1995

2000

2005

2015

2020

2025

2030
2020-2030: 5.8%
2030-2035: 5.5%
44
 North-East Asia Primary Energy
Demand Grows
Coal Oil Gas Hydro NRE Nuclear Electricity-Net Import
6000

5000

4000
MTOE

3000

2000

1000

0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
45
Although Chinas Energy Production Grows,
NE Asia Oil Imports Grow Rapidly
Coal Oil Gas Coal Imports Oil Imports Gas Imports
2000
Production and Import (MTOE)

1800
1600
1400
1200
1000
800
600
400
200
0
1990

2010

2030
1995

2000

2005

2015

2020

2025

2035
46
NE Asia Nuclear, NRE, Hydro and Gas
Generation Grow, But Coal is Still King
Coal Oil Gas Hydro NRE Nuclear Import

9% 10% 11% 12% 12% 12%

13%
17% 18% 17%
7% 8% 9% 9%
11% 14%
11% 15%
14% 12%
16% 16% 14% 12%
9% 9%
10% 11% 10%
11% 6%
10%
12% 14% 18%
9%
15%
20%

64%
61% 60%
52% 55% 53% 51% 49%
45%
38%

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 47
 North-East Asias CO2 Emissions
Grow
Electricity Generation Other Transformation Industry
Other Domestic Transport International Transport
14000

12000
Million Tonnes CO2

10000

8000

6000

4000

2000

0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
48
But Per Person CO2 Still Remains
About Average for APEC
18
16
Tonnes CO2/Person

14
12
10
8
6 2010
4 2035
2
0

49
 South Pacific
Business-as-Usual, including:
Australia
New Zealand
Papua New Guinea

50
The South Pacific Will Be a Rapidly
Growing Gas Producer and Exporter
Coal Oil Gas Coal Imports Oil Imports Gas Imports
600
Production and Import (MTOE)

400

200

-200

-400

-600
2015
1990

1995

2000

2005

2010

2020

2025

2030

2035
51
Gas and NRE Have Growing Roles in
South Pacific Electricity Generation
Coal Oil Gas Hydro NRE Nuclear Import

10%
16% 13% 12% 19% 22%
20% 21% 23% 23%
11%

10% 14% 16% 10%

11% 9% 10% 10% 10%
18%

20%
24%
29%
34%

71% 69%
65% 67% 66%
59%
50%
43%
37%
32%

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 52
 And Growth in South Pacific Primary
Energy Demand Is in Lower Emission Fuels
Coal Oil Gas Hydro NRE Nuclear Electricity-Net Import
200
180
160
140
120
MTOE

100
80
60
40
20
0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
53
 Consequently, South Pacific CO2
Emissions Almost Level-Off
Electricity Generation Other Transformation Industry
Other Domestic Transport International Transport
500
450
400
Million Tonnes CO2

350
300
250
200
150
100
50
0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
54
 Recommendations
1. Educate Policymakers cannot take action without the support of their
stakeholders and constituents.
2. Promote Energy Efficiency (EE) Provide information and set standards for
buildings, appliances, and vehicles; eliminate wasteful fossil fuel subsidies;
provide financing for cost-justified EE investments; promote Energy Service
Companies.
3. Promote Energy Research Low carbon energy supplies, including
renewables, nuclear, and carbon capture and storage; advanced vehicles;
smart grids; building materials and designs; better communication as an
alternative to transportation.
4. Put a Price on Emissions A major market failure is due to the fact that
those who emit greenhouse gas do not have to pay for the damage they are
causing.
5. Cooperate No one economy can do it alone. APEC has a big role here.
55
Available for Downloading at
http://aperc.ieej.or.jp/

56
Thank you very much for your kind
attention!

http://aperc.ieej.or.jp/

57