Long Run Energy Demand in in Iran: Efficiency and Renewable Energy Scenarios

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1 Long Run Energy Demand in in Iran: Efficiency and Renewable Energy Scenarios Saeed Moshiri STM College, University of Saskatchewan, Canada Farideh Atabi Department of Environment, Science and Research Branch, Azad University, Iran Mohammad Hassan Panjehshahi Department of Chemical Engineering, University of Tehran, Iran Stefan Lechtenböehmer Wuppertal Institute for Climate, Environment, and Energy, Germany 29 th USAEE/IAEE N.A. Conference Calgary, Canada October 21

2 Introduction Objectives Modeling energy demand in different sectors Identifying potentials for energy efficiency and renewables Projecting demand scenarios Methodology End use approach Historical trends Past and current policies Period of Study Scenarios Business As Usual (BAU) High Efficiency High Renewables Combined & Constrained 2

3 Economy Amount GDP (PPP) $599.2 b. World rank: 22 GDP per capita $87 World rank: 98 GDP growth 5.5 % Population 7 m. 68% urban, 6% under 3 Population growth 1.3% 2% in the 198s Unemployment rate 12% Inflation rate 15% Current account balance $12b. Note 3

4 Energy production and use in Iran Amount Primary Energy Production MBOE Primary Energy Exports MBOE Primary Energy Imports MBOE Primary Energy Use* MBOE Oil Proven Reserve bbl (11%) World rank: 3 Oil Production mbl/day World rank: 4 OPEC rank: 2, R/Q = 91 Oil use 1.51 mbl/day Oil Exports 2.5 mbl/day World rank: 4,OPEC rank:2 Natural Gas Reserves tcm (15.3%) World rank: 2 Natural Gas Production 83.9 bcm/year World rank: 7, R/Q = 317 Natural Gas Use Natural Gas Exports Natural Gas Imports Electricity Nominal Capacity Electricity Production bcm/year 3.56 bcm/year 5.2 bcm/year 37.3 GW 155 bkwh/year Energy Use per capita (energy use/population) 11.5 BOE/cap 5% average growth rate Energy Intensity (boe/million rials) % average growth rate Energy Factor (Final use growth/gdp growth) 1.52 MBOE: million barrel oil equivalent, bbl: billion barrel, tcm: trillion cubic meter, bcm: billion cubic meter, bkwh: billion kilo watt hour, GW: Giga Watt Note 4

5 Energy Supply and Use 2 16 MBO E Mboe Final Consumption Primary Energy Supply Per capita energy use has outpaced the world energy use since

6 Energy Intensity Energy Intensity (tboe/$1, PPP) Energy Intensity (tboe / US $ 1, PPP) OECD US Asia Africa Middle East Iran World 6 Barrels Per Million Rials

7 Energy Policies Subsidies Electrification Natural Gas Development Price reform 7

8 Energy Demand Scenarios Demand for energy type j in sector h with M capitals (K) at time t h= 1,, H, j=1, 2,,J e: energy coefficient φ: utilization rate of capital H = 5 (household, industry, transport, others, power plants) J = 6 (fuel oil, gas oil, kerosene, gasoline, natural gas, and electricity) Data sources: household budget survey, manufacturing survey, transport survey, technical studies, energy audits reports, expert surveys, historical data 8

9 Business As Usual (BAU) BAU: Demand for energy if no far reaching changes in consumption patterns are made. Assumptions: The economy and the energy sector follow the historical trends Five year development plan will be implemented The economy will move in the 2 year Vision s direction GDP and population growth: GDP Growth (%) Population Growth (%)

10 BAU: Residential Fuel Regression results Natural gasification policy (rising share to 95%) Solar energy share will grow to 5% by 23 Share (%) 25 mboe 23 mboe Growth (%/year) Kerosene Space heating Cooking Water heating Gasoil Space heating Cooking Water heating LPG Space heating Cooking Water heating Natural Gas Space heating Cooking Water heating Total (Oil & Natural Gas) Solar * Heating Cooking Warm water * The solar share will increase from 1 percent in 21 to 5 percent in 25. MBOE Gasoil LPG Natural Gas Solar Kerosene 1

11 BAU: Residential Electricity Demand for Electricity: E t = M j = 1 ( φ jt e jt ) For a household with M appliances φ penetration rate, e electricity use by each appliance t TE t = ( Nbase (1 + r) )/ n) ( C / H) ( Et ) All households N population in the initial year r population growth rate n size of household C number of customers H number of households 11

12 BAU: Residential Electricity Appliance Average electricity consumption by appliances Average electricity Average electricity consumption of households consumption of households (kw/year), 25 (kw/year), 23 Lamp<1 W Lamp 1 W Fluorescent Lamp Low consumption Lamp 1 53 Refrigerator Freezer Mixer 9 7 Soft cooker Microwave Tea-coffee Maker 1 25 Vacuum Cleaner 6 8 Washing Machine Iron Cooler (water) Cooler (gas) TV Computer Total 2,837 3,424 Source: A study of household s electricity consumption pattern and their satisfaction in Tehran, various years, TAVANIR. 12

13 BAU: Residential Electricity Residential Demand for Electricity, BAU Scenario (25 23) Growth (%) Urban Number of Customers (million) Consumption per household per year (MkWh) 3,319 3, Total Consumption (MkWh) 39,79 65, Rural Number of Customers (million) Consumption per household per year (MkWh) 1,538 2, Total Consumption (MkWh) 6,836 12, Total Number of Customers (million) Total Consumption (MkWh) 46,626 78,

14 BAU: Residential Electricity 8, 7, 6, 5, 4, 3, Urban Rural Total 2, 1,

15 BAU: Manufacturing Industries Energy demand e: energy intensity, VA: value added Manufacturing Industries Value Added and Energy Use (25) Manufacturing Industries Value Added Constant 1997 b. Rials Share % Energy Use MBOE Share % Food 7, Textile 4, Wood Paper 1, Chemical 1, Refinery 7, Non metal mining 6, Basic metals 1, Machinery and Equipment 28, Other industrial 3, Total 79, Source: The Large Manufacturing Industries Survey, Statistical Center of Iran, and authors calculations. 15

16 BAU: Manufacturing Industries Decreasing energy intensity (7% annually for the past 15 years) Slower decrease in recent years Trend will continue but at a slower rate Energy Intensity in Manufacturing Industries BOE/b. Rails (constant 1997) Food Textile Wood Paper Chemical Refinery Non-metal mining Basic metals Machinery and Equip Other industrial Total

17 BAU: Manufacturing Industries Manufacturing Industries Demand for Energy (21-23), MBOE Growth (%) Food Textile Wood Paper Chemical Refinery Non-metal mining Basic metals Machinery and Equip Other industrial Total

18 BAU: Manufacturing Industries Food Textile Wood Paper Chemical Refinery Non-metal mining Basic metals Machinery and Equip. Other industrial Total Energy Demand in Manufacturing Sector 18

19 BAU: Transportation Demand for energy C total number of vehicles T: Travel distance per vehicle per year E: specific energy consumption Private Public Number of cars (million) Average total travel distance by a passenger car per year (km/year) 24, 22, Total travel distance by passenger cars per year (million km/year) 144, 41,632 Average load per car (person) Total travel distance by passengers (million person km/year) 244,8 62,449 Average gasoline consumption per car (liter/1 km) Total gasoline consumption by passenger cars (m. liter) 2,16 3,122 Number of buses 233, 358, Average travel distance by bus per year (km/year) 45, 41,25 Total travel distance by bus (mkm/year) 1,496 17,219 Total travel distance by passengers bus (million person km/year) 182, ,497 Average gas oil consumption by bus (liter/1 km) Total gas oil consumption by bus (million liter) 5,353 4,35 Total travel distance by train (million person km) 11,149 29,78 Total gasoil consumption by train (million liter) Total travel distance by air (million person km) 1,985 29,284 Total fuel consumption by airplane (million liter) 1,63 3,166 19

20 BAU: Transportation Mobility in Iran in Mio. Pkm 5, 45, 4, 35, 3, Mio. Pkm 25, 2, 15, 1, 5, cars train bus aviation 2

21 BAU: Transportation Demand for energy MBOE Gasoine Gas Oil Kerosine CNG 21

22 BAU: Power Generating Plants Total energy demand TGC: total generation capacity s: share of each power plant type E: specific energy consumption l: load factor Telec: total electricity demand TDL: transmission and distribution loss OU: own demand 22

23 BAU: Power Generating Plants Electricity Generation by Renewable and Non Renewable Sources- BAU (25-23)` Electricity generation (GWh) Existing thermal power system 4,615 6,394 nuclear power 6 Renewable Sources: Hydropower 4,5 6,75 Wind power 22 2,75 Photovoltaic 7 Geothermal 33 Solar thermal power 1.6 Small hydropower 28 Biomass 18 other Source: Tavanir and authors estimation 23

24 BAU: Power Generating Plants Energy demand by power generating plants Growth (%) Total Fuel 458,5 717, Gas Oil 47,312 44, Natural Gas (existing plants) 326, , Natural Gas (new plants) 282,72 9 Solar Heat Power Plants Heavy Fuel 84,753 8,32.22 Average Efficiency Factor (%)

25 BAU: Others (Agriculture) Change in Energy Change in Energy Energy Carrier Energy Intensity (24) (BOE/Const m.rials) Intensity (%) Energy Intensity Intensity (23) (%) Gas oil Kerosene Gasoline Fuel Oil Electricity Total

26 BAU: Others (Agriculture) Agriculture Demand for Energy (25 23) MBOE Energy Carrier Growth (%) Gas Oil Kerosene Gasoline Fuel Oil Electricity Total

27 BAU: Others (Agriculture) Gas Oil Kerosene Gasoline Fuel Oil Electricity 27

28 BAU: Others (Commercial) Energy use and energy intensity in the commercial sector 24 Energy Use (BOE) Energy Intensity (BOE/constant 1997 million Rials) Electricity a Gasoline Kerosene 438, Gas Oil 4,185, Fuel Oil 9,718, Natural Gas 1,12, Electricity and natural gas intensities are calculated for

29 BAU: Others (Commercial) MBOE Gasoline Kerosene Gas Oil Feul Oil Electricity Natural Gas 29

30 BAU: Others (Public) Energy Demand in Public Sector (24) Energy Consumption (BOE) Energy Intensity (BOE/Constant 1997 million Rials) Gasoline 626, Kerosene 944,19.29 Gas Oil 6,368, Fuel Oil 73, Electricity 1,336, Natural Gas 16,.3 3

31 BAU: Others (Public) MBOE Gasoline Kerosene Gas Oil Fuel Oil Electricity Natural Gas 31

32 B AU: Total Demand Total Primary Energy Demand in Iran by Sectors (25 23), MBOE 25 Share (%) 23 Share (%) Growth (%) Household Manufacturing Industries Commercial Public Agriculture Transport Total ,

33 BAU: Total Demand 1,6 1,4 1,2 1, MBOE Household_Oil & Gas Manufacturing Industries Commercial Public Agriculture Transport 33

34 BAU: Total Demand Total Energy Demand in Iran by Type of Energy Carriers (25 23), MBOE 25 Share (%) 23 Share (%) Growth (%) Kerosene Gas oil LPG Fuel Oil Natural Gas Gasoline CNG Total Energy Demand

35 BAU: Total Demand 2, 1,8 1,6 1,4 MBOE 1,2 1, Kerosene Gas oil LPG Fuel Oil Natural Gas Gasoline 35

36 High Efficiency Scenario Assumptions Household: building efficiency measures (renovations, replacement, more efficient appliances relative to European standards Industry: The auditing recommendations will be applied: Use of efficient motor system, improved monitoring and process control, process optimization and integration (pinch analysis), and recycling New plants will be more efficient Transport: More efficient vehicles and public transportation will be used 36

37 High Efficiency Scenario 2, 1,8 1,6 1,4 1,2 mboe 1, BAU EFF 37

38 High Renewables Scenario Assumptions Electricity production by 23: Wind power : 22 TWh/a Geothermal: 45 Twh/a Biomass:.18 Twh/a Solar: 94 TWh/a CSP:.7 TWh/a Hydropower: 17.3 TWh/a 38

39 High Renewables Scenario 2, 1,8 1,6 1,4 1,2 mboe 1, BAU Renewalbe 39

40 Combined Scenario 2, 1,8 1,6 1,4 1,2 mboe 1, BAU Combined 4

41 All Scenarios Scenario Total Demand (MBOE) Savings in 23 (% of BAU) Growth (%) BAU 97 1, High Efficiency 97 1, High Renewables 97 1, Combined 97 1, Constrained 97 1,

42 All Scenarios Household: Heat Household: Electricity MBOE KWH/HH/YEAR BAU EFF COMB CONS RENEW Manufacturing Transport BAU EFF COM CONS RENEW MBOE BAU EFF COMB CONS RENEW BOE BAU EFF COM CONS RENEW 42

43 All Scenarios MBOE M B O E Agriculture Public BAU EFF COM CONS RENEW BAU EFF COM CONS RENEW MBOE Commercial 2, 1,8 1,6 1,4 1,2 1, Total BAU EFF COM CONS RENEW BAU EFF Renewable Combined Constrained 43

44 World Germany BAU Renew. Efficiency Combined BAU Target 23 Scenarios f or Iran Comp. Iran Germany Energy Intensity MJ/$ ppp

45 All Scenarios: Savings US$ billion Efficiency Renewables Combined Constrained Additional Revenue Due to Energy Savings 45

46 All Scenarios: Emissions m. tonnes BAU Efficiency Renewable Combined Emissions in Different Scenarios 46