Sustainable Energy Mix and Power Trade for the GCC countries

Transcription

1 Sustainable Energy Mix and Power Trade for the GCC countries GCCIA 2nd Regional Power Trade Forum Towards Regional Prosperity: Activating the GCC Power Market through the Interconnector Leila Benali, PhD., Director 29 May 2013, Dubai

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3 Key Messages Energy viewed as National Strategic Asset - How to demystify? Strong drivers toward increasing connectivity (balance supply and demand mismatches), however, self-sufficiency, political agendas and commercial drivers impediments. Adoption of interruptible supply arrangements may ameliorate S/D imbalances. Electricity trade more acceptable. Energy prices will reflect a mix of national priorities (industrial competitiveness, HC exports) and increasingly different (and growing) supply costs. Oil/gas-fueled power continue to be most competitive for baseload. Solar PV progressively competitive for peak with diesel and then gas, and later for baseload vs. marginal gas costing. CSP (and nuclear?) most expensive- Case for energy highways and bilateral agreements? 3

4 MENA Electricity Consumption in a Global Context Electricity Intensity of GDP Middle East World CIS Africa Latin America North Africa North America Europe China India Non-OECD OECD MWh/real million US$ Source: IHS CERA and IHS Global Insight. Real 2010 US dollars. IHS_TFG_MCS_MENA_0312 4

5 Demand per Capita (KWh/capita) Residential Electricity Demand and Pricing Kuwait 9000 Electricity Demand per Capita in Electricity Tariffs Heavy Subsidization Cross or some Subsidization Limited or no Subsidization 6000 Bahrain Qatar SA UAE Israel 2000 Oman Iran Egypt Libya Jordan Lebanon 1000 Syria Tunisia Morocco Iraq 0 Algeria Yemen Average Electricity Tariff (US$/KWh) Source: IHS CERA and Electric Utilities Annual Reports. 5

6 Strong Drivers towards Connectivity Gas Imbalances, Geography and Timing Gas imbalance (Bcm) (shortage/excess) Source: IHS CERA Thirst for Growth Study

7 Qatar Saudi Rest of GCC Yemen Israel/Palestine Syria Levant Iraq Iran Algeria Morocco/Tunisia Libya Egypt Potential for Connectivity (unconstrained) from/to Qatar Saudi Rest of GCC Yemen Israel/Palestine Syria Levant Iraq Iran Algeria Morocco/Tunisia Libya Egypt -Assumes Egypt interconnected with Saudi Arabia, Yemen interconnected with GCC, and Saudi Arabia does not export LNG. -Egypt (or Levant) and Saudi Arabia pivot countries -"Gas by waves" is a given from LNG exporters or potential LNG exporters. Gas by pipe (includ swaps) Gas by wire & pipe Source: IHS CERA. IHS_TFG_MCS_MENA_0312 7

8 Indicative Gas Valuation Hierarchy in MENA Dollars per MMBtu International LNG imports $12 $18 Coal/oil in power cost-equivalent $8 $16 Export netback costs $4 $10 Industrial competitive gas price $3.75 $6.60 Marginal production costs $1 $6+ Legacy production costs* $0.50 $1.50 Source: IHS CERA. *Excluding Fiscal terms. 8

9 Nuclear III+ CCGT Thermal Boiler HFO Thermal Boiler Crude Steam Coal OCGT Base OCGT Peak Onshore Wind Offshore Wind Solar CSP Solar PV Diesel engines CCGT Diesel Peak $ per MWh (real 2010) Levelized Costs of Electricity for Conventional and Renewable Technologies The Gulf Fuel Var O&M Fixed O&M Capital Source: IHS CERA. Note: CCGT Diesel Peak refers to a baseload CCGT running on gas during 80% of the time, and on diesel during 20% of the time. OCGT peak has a capacity factor of 11%. Gas price Crude Gasoil HFO Coal CIF ARA $1.50 per MMBtu $10 per barrel $958 per ton $58 per ton $117 per ton IHS_TFG_MCS_MENA_0312 9

10 Generation Cost ($/MWh real 2010) Can Gulf solar PV compete with fossil-fuel power? Solar 20% util rate-low capex Solar PV competitive with baseload CCGT only at marginal gas prices in Gulf and not until around CCGT at 30% LF; 8$/MMBtu CCGT marginal cost ($8.00/MMBtu) CCGT legacy cost ($1.50/MMBtu) Competitive with peaking gas capacity earlier Already competitive with diesel/lng peakers Source: IHS CERA. 10

11 Connectivity Potential Models Gas Islands Gas by Pipe Potential for another model: Shared plants- Energy highways? Gas by Wire Gas by Waves Source: IHS CERA. IHS_TFG_MCS_MENA_

12 For more information about this presentation or IHS in general, please contact IHS Customer Care (IHS CARE) +44 (0) Leila Benali, Director, Middle East Africa