ENERGY AND DEVELOPMENT: Geopolitics and Research

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1 ENERGY AND DEVELOPMENT: Geopolitics and Research Morgan D. Bazilian, Ph.D. IIEA, Dublin, Eire, May 17, 2016

2 Scope and Scale Investment Geopoli cs & Security Research

3 IIASA, Nakicenovic

4 No Longer a Triangle ( all of the above is difficult)

5 Energy is Eternal Delight William Blake, The Marriage of Heaven and Hell, 1793 Lighting Heating/cooling Refrigeration Pumping Transport Motors We mostly take these for granted or assume their availability in wealthy countries. It is a very different situation in poor countries.

6 Energy and development: The golden thread A basis for security: migration, urbanization, equality Impacts on environment: air pollution (indoor and outdoor), climate change A foundation for economic activity across the economy Essential for social development: public health, education, food security, water services +Imminently doable : the physics in New York and Paris, the same as in Dhaka and Addis.

7

8 UN Sustainable Energy for All initiative One Goal: Achieving Sustainable Energy for All by 2030 Three Targets:

9 Access deficit almost three times as large for non-solid fuels as for electricity 2.9 billion 1.1 billion Cooking access deficit Electricity access deficit Roughly 600m without access in SSA now: projected to be 700m in 2030 (IEA). Only region going up in absolute terms. Without South Africa, the total SSA capacity is a mere 34 GW, equivalent to the installed capacity of Argentina. Manufacturing enterprises experience power outages on an average of 56 days per year; costs 6-16% of GDP.

10 Energy moving to Developing Economies Total power system investment is estimated at USD 16.9 trillion. Non-OECD countries account for 60% of cumulative investment. IEA WEO 2014

11 Inequity

12 Non-linear growth needed (more than a light big markets)

13 Additional frameworks for access to energy for: Household cooking Productive engagements Community Infrastructure Multi-tier Framework

14 In Kinshasa DRC, conventional access is 90%, but adjusting for service deficiencies score drops to 30%

15 Precedent of household electrification USA Mexico Mauritius China Brazil Thailand India UK Egypt South Africa 100 Percentage population with electricity access Source: Pachauri et al., 2011: Energy Access for Development. In: The Global Energy Assessment: Toward a More Sustainable Future. IIASA, Laxenburg, Austria

16 Innovation, technology and planning Nigeria Ethiopia Source: IEA in collaboration with the KTH Royal Institute of Technology, division of Energy Systems Analysis. In Nigeria, higher population density favours on-grid supply Low population density in Ethiopia means show mini- and off-grid solutions

17 Environmental Trade-offs? International Energy Agency (IEA): Universal modern energy access does not have any significant impact on energy or climate security It depends cookstoves or modern ovens and dishwashers

18 Sustainable Energy for All initiative One Goal: Achieving Sustainable Energy for All by 2030 Three Targets:

19 Investment flows need to triple to achieve the necessary pace of progress

20 Our new estimates Our medium estimate is roughly equivalent to other literature, including the World Energy Outlook The large disparity between our high scenario and the available literature is mostly due to the significantly higher assumption on per capita electricity use. That high per capita electricity use assumption is still roughly half of the average of today s North African demand so still nearly an order of magnitude lower than an OECD average Cummulative cost [billion USD] Cooking 0 Own estimates (high) Own estimates (medium) Own estimates (low) Pachauri et al 2013 IEA 2012 Riahi et al 2012 IEA 2011 IEA et al AGECC 2010 Electricity

21 Current flows are not being utilised entirely

22 Readiness for Investment

23 The wrong image

24 Nearly 50% of sub-saharan African companies own or share a generator. Sri Lanka (2011) Botswana (2010) Albania (2013) Gabon (2009) Micronesia, Fed. Sts. (2009) Benin (2009) Guinea-Bissau (2006) Uzbekistan (2013) Uganda (2013) Zimbabwe (2011) Togo (2009) Ghana (2013) Nepal (2013) Cameroon (2009) Timor-Leste (2009) Kosovo (2013) Afghanistan (2014) Myanmar (2014) Dominican Republic (2010) Chad (2009) Congo, Rep. (2009) Central African Republic (2011) Pakistan (2007) Lebanon (2013) Bangladesh (2013) Number of unscheduled outages per month

25 Source: E&Y, 2014

26 Oil, Governance, Aid, and Access (an evolving story) Angola Cameroon Electrification LPG Chad Congo Côte d'ivoire Equatorial Guinea Gabon Mozambique Nigeria Sudan Billion dollars (2007) The $18 billion needed for access to electricity and to clean cooking stoves and cylinders, is a mere 0.4% of the government take from oil and gas export revenues in

27 Flaring and planning About 140 billion cubic meters annually Enough to produce 750 billion kwh power More than the entire power consumption on the African continent currently

28 Natural gas and Africa Optimal transmission pipeline network and gas cost at city gate for the baseline scenario. Based on the estimated gas demand for 2050 and a gas production cost of $3/MMBtu. It is assumed that 1300 Bcf/year is exported from Matola(Southern Mozambique) to South Africa. The required investment is estimated at $56.7 Billion. Estimated potential natural gas demand in sub-saharan Africa by 2050.

29 Security and Geopolitics as Impetus and Lens Providing energy services in the poorest countries can lower the risk of internal unrest and reduce the movement of people across borders.

30 Towards a research agenda 1. How do we link energy and development issues firmly wider governance and security issues? 2. How to improve power planning methodologies, especially in fragile and conflict states under deep uncertainty? 3. How to respond to the challenges related to linkages with other sectors such as water and food security? 4. How to best understand links to natural gas and energy access? 5. How are the worlds financial institutions investing in the energy sector in developing countries, under what rules, and what rule-making?

31 Thank you Morgan D. Bazilian, Ph.D

32 Related references Bazilian, M., Sagar, A., Detchon, R., Yumkella, K More Heat and Light, Energy Policy38 (2010) , Elsevier. Bazilian, M., Nussbaumer, P., Haites, H. Levi, M., Yumkella, K Understanding the Costs of Universal Energy Access. Geopolitics of Energy. Vol. 32 (10 and 11). CERI. Bazilian, M. Hobbs, B., Blyth, W., MacGill, I., and Howells, M Interactions between Energy Security and Climate Change: A focus on developing countries. Energy Policy.Vol. 39 (6). Howells, M., Rogner, H., Strachan, N., Heaps, C., Huntington, H., Kypreos, S., Hughes, A., Silveira, S., Decarolis, J., Bazillian, M. & Roehrl, A. OSeMOSYS: The Open Source Energy Modeling System: An introduction to its ethos, structure and development Energy Policy. Elsevier Nussbaumer, P. Bazilian, M., Modi, V., Yumkella, K Measuring Energy Poverty: Focusing on What Matters. Renewable and Sustainable Energy reviews. Elsevier. Bazilian, M. Nussbaumer, P., Gualberti, G., Haites, E., Levi, M., Siegel, J., Kammen, J., Fenhann, J Informing the Financing of Universal Energy Access: An Assessment of Current Financial Flows. The Electricity Journal. Elsevier. Bazilian, M. Nussbaumer, P., Rogner, H., Howells, M., Hermann, S., Arent, D., Gielen, D., Steduto, P., Mueller, A., Komor, P., Tol, R., Yumkella, K Considering the Energy, Water and Food Nexus: Towards an Integrated Modelling Framework. Energy Policy. Elsevier. Benjamin K. Sovacool, Christopher Cooper, Morgan Bazilian, Katie Johnson, David Zoppo, Shannon Clarke, Jay Eidsness, Meredith Crafton, Thiyagarajan Velumail, and HilalA. Raza What Moves and Works: Broadening the Consideration of Energy Poverty. Energy Policy. Elsevier. Bazilian, M. Nussbaumer, P., Rogner, Brew-Hammond, A., Foster, V., H., Williams, E., Howells, M.,Niyongabo, P., Musaba, L., Ó Gallachóir, B., Radka,M., Kammen, D Access Scenarios to 2030 for the Power Sector in Sub- Saharan Africa. Utilities Policy. Elsevier. Bazilian, M. Nussbaumer, P., Eibs-Singer, C., Brew-Hammond, A., Modi, V., Sovacool, B., Remana, V., Aqrawi, P Improving Access to Modern Energy Services: Insights from Case Studies. Electricity Journal. Elsevier. Yumkella, K., Nakicenovic, N., Bazilian, m., Jewell, J The UN Sustainable Energy for All Initiative and Climate Change Mitigation. WMO Bulletin. Vol 61 (1). Bazilian, M. Rice, A. Rotich, J. Howells, M., DeCarolis, J., MacMillan, S., Vrooks, C., Bauer, F., Liebreich, M Open source software and crowdsourcing for energy analysis. Energy Policy. Onyeji, I., Bazilian, M. Bronk, C Cyber security and critical energy infrastructure. Electricity Journal. Elsevier. Taliotis, C., Bazilian, M., Welsch, M., Gielen, D., Howells, M Grand Inga to power Africa: Hydropower development scenarios to Energy Strategy Reviews. Bazilian, M., Van de Graaf, T., Nakhooda, S Energy Governance and Poverty. Energy research and social science. Elsevier. Taliotis, C., Miketa, A., Howells, M., Hermann, S., Welsch, M., Bazilian, M., Gielen, D An indicative assessment of investment opportunities in the African electricity supply sector. Journal of Energy in South Africa. Pedersen, A., Bazilian, M Oil Politics in South Sudan. Extractive Industries and Society. Elsevier. M. Welsch, M. Howells, M. Bazilian, J. DeCarolis, S. Hermann, H.H. Rogner, Modelling elements of Smart Grids: Enhancing the OSeMOSYS(Open Source Energy Modelling System) code. Energy. Elsevier Oneyji, I. Bazilian, M., Nussbaumer, P Contextualizing Electricity Access in Sub-Saharan Africa. Energy for Sustainable Development. Elsevier. Bazilian, M., Welsch. M., Divan, D., Elzinga, D., Strbac, G., Howells, M., Jones, J., Keane, A., Gielen, D., Brewhammond, A., Yumkella, K Smart and Just Grids. Renewable and Sustainable Energy Reviews. Elsevier. Bazilian, M. Onyeji, I. Liebreich, M., Gielen, D., Arent, D., Landfear, D Reconsidering the economics of photovoltaic energy generation. Renewable Energy. Elsevier. Nussbaumer, P., Patt, A., Bazilian, M A statistical analysis of the link between energy and the Millennium Development Goals. Climate and Development. Earthscan. Alcorta, L. Bazilian, M. Pedersen. A, DeSimone, G Return on Investment from Industrial Energy Efficiency: Evidence from Developing Countries. Energy Efficiency. Springer Bazilian, M. Onyeji, I. Aqrawi, P., Sovacool, B., Ofori, E., Kammen, D. Van de Graaf, T Oil, Energy Poverty, and Resource Dependence in West Africa. International Journal of Sustainable Resource and Energy Law. Tawney, L., Miller, M., Bazilian, M Innovation for sustainable energy from a pro-poor perspective. Climate Policy. Gualberti, G., Singer, C., Bazilian, M The capacity to spend development funds in the energy sector. Utilities Policy. September, pp Howells.M., Welsch, M., Bazilian, M., Segerstrom, R., Alfstad, T., Gielen, D., Rogner, H., Fischer, G., Van Velthuizen, H., Wiberg, D., et al., Integrated analysis of climate change, land-use, energy and water strategies. Nature Climate Change.3, Bazilian, M., Pielke, R Raising aspirations for energy access. Issues in Science and Technology. Bazilian, M., Pedersen, A., Pless, J., Logan, J., Medlock, K., O Sullivan, F Considering Shale Gas in China. International Journal of shale gas and oil. Brussels. Thompson, G., Bazilian, M Democratization, Energy Poverty, and the Pursuit of Symmetry. Global Policy. Bazilian, M Power to the Poor. Foreign Affairs. Bazilian, M., Roques, F Analytical Methods for Energy Diversity and Security, Elsevier Science, Amsterdam.