Projections of the electricity demand for Serbia and SEE countries based on economy and sectors activity analysis

Transcription

1 Projections of the electricity demand for Serbia and SEE countries based on economy and sectors activity analysis Prof. Milovan Studovic PhD Energy Financing Team Serbian Ministry of Mining and Energy Workshop Study on capacity building of Republic Serbia in domain of the Strategic planning in energy sector Belgrade, May, 2010.

2 Contents Definition of the South East European Countries Region, Key determinants of the 11 SEE Countries, Energy Policy/Energy Development Strategy, Model`s specific data basis and Economy-Energy Indicators, Main Economy-Energy Indicators within 11 SEEC in EU MS with specific non-uniformities, Specific electricity end-use, current Generating Capacities and electricity production with Balance in past five years, Scenario the future electricity demand on the basis of economic/industrial sector activity drivers, Relationship between economics drivers and electricity consumption in year, Projections of electricity demand in each SEEC and Region until year, Possible impacts of economic recession on new GC`s, by technology, and decommissioning of old TPP`s, Projection of the electricity production and electricity balance,

3 Definition of SEE Region Eight countries as member of EC of the SEE: - Albania (Al) - Macedonia (Mc) - Bosnia and Herzegovina (B&H) - Montenegro (Mn) - Bulgaria (Bu), - Romania (Ro) - Croatia (Co) - Serbia (Ser*) Ser*-Serbia, without territory of Province Kosovo and Metohia) and including separately territory of Kosovo and Metohia (K & M*) with 52.8 million people, with GDP of only 5450 /capita, and consume only 2500 kwh/capita Three transition countries: - Greece (Gr_towards to East Balkan) - Hungary (Hu_towards to Central Europe) - Slovenia (Sl_towrdas to West Europe) with 23.5 million people, with GDP of /capita, and consume more than 4500 kwh/capita.

4 Besides that, the Region of 11 SEEC`s (Al, B&H, Bu, Co, Gr, Hu, K&M*, Mc, Mn, Ro, Ser* and Sl), with 76.3 million people is characterized by high degree of nonuniformity according to: - The level of the socio-economic development and living standard, - Structure of national economy and the technological levels of industrial branches, including low GVA and VA of economic sectors/industrial branches, - Availability of natural resources and scarcity of high quality of fossil fuels (hard coal, oil and natural gas), including the lack of access to the oil and natural gas supply pipe lines.

5 Key determinant of the 11 SEEC`s Volumes and structure of Final Energy consumption in Industry, Residential, Services and Transport sector, especially low electricity and natural gas consumption in Residential and Services sectors, Availability of the efficient energy production/ transformation capacities based on fossil fuels, Transparency and effectiveness of the Legal, Institutional Instruments and applied business practice for profitable energy/electricity system operation, including its structural changes suitable for private/foreign investments through strategic partnerships and partially assets privatization,

6 Almost in all EC MS, transition process of the real economic is to lasting and delayed even before economic recession (beginning of year), with the consequences on investments in a new already contracted and planned generating capacities, respecting the current and future Climate policy and LCP Directive, Economic incapability for self investment in a new energy/electricity infrastructure, in line with low credit rating from IFI, as well as not yet fully developed internal electricity markets and uncertain CO2 cost after 2012 year, create better conditions for exploration of the remaining hydro potential in all EC MS.

7 Energy Policy/Energy Development Strategy Key elements of National Energy Policy/Energy Development Strategy are: Establishing Objectives, which are Vision of needed/desirable and achievable targets, Specifying Priority Programs and set-up Instruments for its realization, which are the results of quantification of different Scenarios of Energy demand (volumes and structures), the ways which could be provided, and cost for its production and attribute these costs to the endconsuming sectors, including forecasting of energy supply security and impacts on environments

8 Such documents have already been prepared for almost all SEEC, on the different levels of details, mainly due to the lack of completeness and reliability of data basis, especially for Industrial branches, regarding demography, macro-economic data and energy production/supply and consumption (in past ten years, base and current year), as well as key assumptions for its future expectations. For all EU MS these projections have been done (and up-dated) with POLES and PRIMES Models, including famous models as: MEEDE, MAED, MEDPRO, LEAP and others. Generally speaking for most of 11 SEEC, energy (electricity/gas) demand have been overestimated, according to expectations for success of transition processes and accession to MS of EU (although in the LDC, current electricity and gas demand are below energy standards for energy services in Residential and non-business Services sector).

9 Economic-Energy Indicators for company operation on the markets

10 Main energy Indicators within 11 SEEC related to EU EU-27 11_C`s Intensity of primary energy Electricity end-use intensity Industry`s electricity intensity Installed power capacity Power CO2 emission intensity Energy import depedence

11 Key economic-energy Indicators within 11 SEEC va_1>ind, (k /cap) pe_1, ( kg oe/cap) fe_1, ( kg oe/cap) fe_1>ind (kg oe/cap) HDC`s MDC`s LDC`s 11 C`S

12 06 05 Key economy-energy Indicators within EU MS va_1>ind, (k /cap) pe_1, ( kg oe/cap) fe_1, ( kg oe/cap) fe_1>ind (kg oe/cap) Big_HDC`s 11 Med_DC`s 10 Small_DC`s EU-27

13 Specific energy Indicators in 11 SEEC related to EU Primary energy/cap. Final energy/cap. Electricity enduse/cap. Natural use gas/cap. Electricity use in R/S /cap Electricity use in Ind/cap EU-27 11_C`s

14 MWh/cap Specific electricity end-use by sectors 006 Industry Residential & Services EU 11 C`s HDC`s MDC`s LDC`s

15 1000 t.oe Electricity consumption trend in Serbian industrial branches Iron and steel industry Non-ferrous industry Building materials Chemical industry Non-metal industry Textile industry Wood industry Food industry Metal engineering Paper industry Energy sector without Other industries Source: Foundations of Serbian Energy Policy, Funded by World Bank, 2003 year.

16 GW Structure of technology in electricity GC within SEEC Thermal Other RES Hydro Nuclear Al Bih Bu Co Gr Hu KiM* Mc Mn Ro Ser* Sl

17 TWh 300,0 Past trend of the electricity production by technology 250,0 200,0 150,0 100,0 50,0,0 _05 _06 _07 _08 _09 Thermal RES Nuclear Hydro

18 Past trend of electricity balance within 11 SEEC _05 _06 _07 _08 _ Al Bih Bu Co Gr Hu KiM* Mc Mn Ro Ser* Sl

19 kwh/ Electricity intensity in industrial branches of EU and MS Iron&Steel Non-ferrous Chemical Non-met. min`s Food,drink,.. Pulp, paper,.. Engineering Other ind`s EU Ge Hu Bu

20 kwh/ Natural gas intensity in industrial branches of EU and MS Iron&Steel Non-ferrous Chemical Non-met. min`s Food,drink,.. Pulp, paper,.. Engineering Other ind`s EU Ge Hu Bu

21 Electricity demand driven by economic activities Key assumptions: Economic activities expressed in Gross Domestic Product/Gross Value Added/Value Added of Industrial branches has much stronger impact on energy (electricity/gas) demand than fuel price (Coal, Oil and Natural gas) Electricity and gas consumption in Households and Services sector (especially in non-business sub-sector) is not sensitive on electricity/gas price, what normally fluctuates during economic crises There is disagreement between Industrial Value Added (around 20% of GVA) and its energy end-use (app. 30% of final energy) Basic metals, Chemicals and Non-metal minerals consume 50% of industrial final energy, the same share as for electricity and natural gas end-use in Industry, while the share of its Value Added is only 18% in Value Added of whole Industry (NACE C, D and E)

22 Intensity of the production activities in energy intensive industrial branches, expressed through reduction of the physical volumes of products, can be used for estimation of energy (especially electricity and gas) reduction related to previous year, since intensity of final energy (electricity/gas), as inherent characteristic of production technologies and final products, has almost constant value (which have been confirmed for all industrial branches within EU, CEE and SEE countries, from 1995 year) Within EU-27 Steel production during falls for 30% (60 million tons), while within 11 SEEC production falls for 20% (5,4 million tons) Valuable information were collected through personal communication, with the representatives of energy intensive industrial branches within 11 SEEC, as well as from West and Central European countries, especially Germany since main electricity market is located there Information about Industrial production Index, and Industrial new orders, have been used for short term prediction of electricity/gas consumption in Industry.

23 10 Evolution of the Industrial VA growth rate, by quarters VA_Ind_gr (Qj_09/Qj_08) _Q1 _Q2 _Q3 _Q4

24 Gross domestic product, Value added of Industry and electricity consumption changes: 2009/2008 Pl Sk Cz 11 C`s Sl Ser* Ro Mn Mc K&M* Hu Gr Co Bu B&H Al EC_gr (%) VA_Ind_gr (%) GDP_gr (%)

25 TWh Predictions of electricity demand under recovering of economies Mn K&M Al Mc B&H Sl Co 20 Bu Ser* 10 0 _05 _06 _07 _08 _0.9 _10 _11 _12 _13 _14 _15 Hu Ro Gr

26 Total electricity demand beyond year for 11 SEEC ygr=1.8 % ygr=1.9 % 285 ygr=1.43 % ED_Severe case ED_Moderate case _05 _06 _07 _08 _0.9 _10 _11 _12 _13 _14 _15

27 TWh Trend of electricity demand in SEEC until year _05 _06 _07 _08 _09 _10 _11 _12 _13 _14 _15

28 GW Impact of economic recession on new GC in 11 SEEC RES Nuclear Hydro Thermal _10. w/o. Recess. _15. w/o. Recess. _20. w/o. Recess. _10. w. Recess. _15 w. Recess. _20 w. Recess.

29 GW Impact of economic recession on decommissioning of old TPP`s New GC_by decommiss. New GC_by demand GC`s of existing TPP`s 10 0 _05 _10 _15 _20 _05 _10 _15 _20 > Without recession < > With recession <

30 TWh Dominant electricity production based on fossil fuels-coal Thermal PP RES Hydro Nuclear 50 0 _05 _10 _15

31 GW GW Impact of economic recession on investment in a new GC`s Trend of a real new GC without recession Trend of a real new GC with recession <_10. <_15. <_20. 0 <_10. <_15. <_20. RES Nuclear Hydro Thermal RES Nuclear Hydro Thermal

32 (%) / ( /cap) Relative VA and investment rate in Industry and Energy sectors VA_Ind/GVA VA_ES/ (VA_Ind) Inv_Ind/ (VA_Ind) Inv_ES/ (VA_ES) Inv1_ES ( /cap) (5*Sk)

33 Industry and Energy sectors capability for investment in Energy sector VA_Ind (10* /cap) (VA_ES) ( /cap) Inv1_ES ( /cap)

34 Instead of Conclusion In the last 15 years, during several economic cycles, a strong relationship between energy consumption (especially electricity and natural gas) and Industrial production Index have been confirmed For successful operation of each energy company (energy producers, investors, industrial consumers, traders) on internal/regional market, variation of energy demand imposed by economic/industrial activities, require permanent updating of demand The structure of electricity demand in SEEC will not be greatly impacted by the current economic conditions, due to the relatively low electricity consumption in industry and non-business Service sub-sector, even in Residential sector in low developed countries

35 According to some of the most optimistic scenarios of the impact of the current crisis, the electricity surplus in the Region could be at constant level, between 4 and 7 TWh until year, if capacity phases of construction contracting will be finished in regular time Any prolongation in investment in a new generating capacity and up-grading of existing thermal power plants (LCPD) will impose a short position of electricity balance and create the price volatility conditions on electricity markets in the SEEC and C/W Europe Concerning this, economic incapability for self investment in energy/electricity infrastructure, critical case is in low developed countries (Al, BiH, Mc, Mn and on the territory K&M), in absence of private/foreign investors and supports of EU and IFI.

36 Thank you for your attention! Questions? Prof. Milovan Studovic, PhD