Climate change and the shifting energy mix

Transcription

1 Climate change and the shifting energy mix Constanza Jacazio Senior Gas Analyst International Energy Agency

2 Natural gas in a sustainable energy system Costanza Jacazio, Senior Gas analyst, IEA November 2015

3 The usual gas industry view is: Coal to gas switch in power generation is a large and cost efficient climate policy option Consequently we should raise the CO2 price to make gas competitive Renewable targets/subsidies distort markets In any case, gas is the ideal back up for renewables so it is needed anyway

4 Meanwhile views from the green community Gas is a fossil fuel which will have to be phased out Cheap gas risks locking out renewables Earthquakes, methane leakage, water contamination - fracking is bad the utility death spiral with solar and batteries we will not need large energy companies anyway

5 EU and USA: the biggest gas consuming sector is not electricity

6 Industrial gas demand: a modern society without plastics and fertiliser?

7 Electricity in Asia: the taste of things to come Growth of power generation Asia ex China and Japan from 1990 USA from USA 1950: 2200 kwh/capita Developing Asia 2013: 1400 kwh/capita Years

8 Coal mainly compete with long distance gas imports and will not disappear quickly TWh Global coal-fired generation Other US China countries with domestic gas countries with imported gas

9 Is LNG still competitive with wind and solar? Recent long-term remuneration contract prices (e.g. auctions or FITs) Ireland 69 $/MWh Germany $/MWh Onshore wind Utility PV US 48 $/MWh Chile 89 $/MWh 85 $/MWh US ~75 $/MWh Brazil 81 $/MWh UK 120 $/MWh Brazil 54 $/MWh UK 120 $/MWh Egypt Dubai 41 $/MWh 60 $/MWh <60 $/MWh SA 52 $/MWh Turkey 73 $/MWh SA 65 $/MWh China $/MWh India 88 $/MWh Australia 65 $/MWh Combination of technology cost reduction, better resources, appropriate regulatory framework attracting financing Long-term PPAs and price competition effective drivers

10 Electrification in Asia without coal? 5 Per capita electricity supply, Mwh/year times EU wind and solar or 6 times EU gas imports from Russia 1 0 India, Indonesia, Vietnam Malaysia

11 Integration of renewables: innovation in the software of clean energy Better forecasting algorithms Close to real time operation Improved grid monitoring and TSO collaboration System friendly renewables

12 Very large capacity with very low load factors capacity, GW generation, Twh

13 Does cheap gas kill renewable investment?

14 Who is cleaning the air in China? Expansion of energy sources with low particulate and SO2 emissions

15 Power generation: On a 450ppm path, gas becomes a HIGH carbon fuel within a decade t/mwh

16 Supply security concerns Gas production or infrastructure affected by conflict or terrorism Conflict with potential gas supply security implications

17 Bcm Global production growth shifts towards OECD countries Incremental gas supply by region, Major downward revisions 2015 v OECD Americas OECD Asia Oceania Middle East FSU/non-OECD Europe China Africa Non-OECD Asia Latin America OECD Europe

18 Resilient production turns North America into a major exporter Marcellus Cost deflation Technological progress Access to capital

19 Bcm The next wave of additional LNG supply is coming soon Additional LNG export capacity by year, United States 60 Russia Southeast Asia Qatar Other Middle East Latin America Norway Africa Australia

20 Methane leakage can move gas from solution to part of the problem 1400 kg/mwh 1200 Greenhouse gas emissions from power generation worst case leakage best case leakage combustion coal gas

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