Energy Scenarios of Mediterranean Sea

Towards an Euro-Mediterranean

Energy Community

M e d i t e r r a n e a n W e e k o f E c o n o m i c L e a d e r sM e d a G r e e n E c o n o m i c S u m m i t

M e d i t e r r a n e a n F o r u m f o r E c o n o m i c I n t e l l i g e n c e

B a r c e l o n a - 2 8 N o v e m b e r 2 0 1 4

1

Dr Mourad PREURE ( I F P E N S c h o o l )

International Petroleum Expert

President of EMERGY International Strategic Consulting

IPEMED Energy Advisor

2

Asymmetrical interdependence in terms of energy between the two shores of the Mediterranean ...

European Commission (2010), EU energy

trends to 2030 — Update 2009, p. 67

20% of gas and 15% of oil consumed in Europe come from North Africa

84% of gas exports and 60% of oil exports from North Africa go to Europe

54% of energy consumption in the EU is provided by suppliers outside the EU.

Energy dependence of the EU could reach 60% by 2020 and 80% in 2030.

The primary energy demand in the SEMC will triple by 2030. 10 million people still lack access to energy ..

Increasing asymmetry. No development dynamics converge

33

North Africa : the center of a powerful movement where economic entropy vectors are highly aggravating factors…

Weakness of the productive fabric and inability to generate sufficient jobs to meet population growth

Food dependency and Water Stress

Energy is a stressor for both countries possessing resources and countries dependent on imports for their supplies

Two elements dominate the geopolitics of the Mediterranean energy and asymmetry with Europe

Strong instabilities at work in the MediterraneanSource CNUCED

France 1026

Espagne 537

Italie 364

Portugal 114

Turquie 145

Israël 59

Grèce 52

Egypte 50

Croatie 44

Bulgarie 36

Maroc 32

Tunisie 26

Algérie 11

Foreign direct investment(G $)

Increased prosperity and offsets uneven development between the north and south

GDP is a ratio of 1 to 10 between the North and South

Unemployment rate in North 8-10%, South 20% Tensions today on migration flow Arc of instability in East Mediterranean The Mediterranean is the most active area of economic divide in the world

Economic asymmetries strong instability in the South vs Northern Development

Strong dependence of the South to the North Economic crisis in Europe hit Euro-

Mediterranean countries 51% decrease in FDI while all continents rose,

according to a report by the UNCTAD Potential for spread of the financial crisis

to countries south of the Mediterranean already weakened by political crises.

5

The prosperity gap between North and South of the Mediterranean tends to increase ...

GDP/habitant

euros2009

GDP/habitant

2030

Rate of

variation

2009-2030

North 20 000 euros 27 800 +39%

South-West 4 800 euros 8 500 euros +77%

GDP/habitant and rate of variation 2009-2030

Source : OME

Annual

growth

rate of

GDP

1990-2009

Annual

growth rate

of GDP

2009-2030

Annual

growth rate

of

population

2009-2030

NORTH 1,7% 1,9% 0,3%

South

West4% 4% 1,2%

Growth rate of GDP and the population of the countries of the Mediterranean region

(%)

The population in the North is currently 216 million, with a GDP per capita of around € 20,000.

North Africa (Algeria, Egypt, Libya, Morocco and Tunisia): 162 million people with a GDP per capita of about 4800 euros. Young population in the South: The average age is north of 41, he is 26 years in the South, one third of the population is under 15 years

6%

51%

19%

4%

18%

2%

Charbon

Produits pétroliers

Gaz

Biomasse

Electricité

Géothermie, solaire, éolien

Source: données OME, AIE

25%

26%

27%

6%5%11%

Source: données OME, AIE

Industrie

Transport

Residentiel

Tertiaire

Agriculture

Usage non énergétique

6

Dominance of oil in the energy balance of the South ...

Petroleum products are highly dominant (51%), followed by gas (19%) and electricity (18%), far ahead of coal (6%), biomass (4%) and renewables (2% ) (geothermal, solar and wind).

The South needs to build an additional 200 GW of generating capacity by 2030 to ensure its economic and social development.

capacité

Final Energy consomption by

sector in the SEMC (2008)

Final energy consomption by

product in the SEMC (2008)

Source OME

7

We must expect a boom in electricity consumption in the South by 2030...

Les combustibles fossiles représentent

89,5% de la production d’électricité des

PSEM. Les énergies renouvelables (hors

hydraulique) sont encore très marginales

avec 0,5% seulement de cette production.

19%

17%53,5%

10%

0,5%

Source; données OME, AIE

Charbon

Pétrole

Gaz

Hydrologie

Renouvelables

Population pressure and economic growth in the Mediterranean energy demand is

expected to increase by over 40% by 2030. Much of the increase in demand therefore be located in the SEMC.

Demand in the South grow 4-5 times faster than in the North in 2030 to represent nearly 43% of the energy demand of the Mediterranean, against 30% today, the North saw its share fall by 72 to 58%.

Electricity demand in MENA represent 47% in the same horizon against 28% currently.

Gas demand expected to increase significantly and exceed the demand for oil in the next 10 years. Share of gas consumption will reach 36% in 2030.

Increasing Energy Efficiency to curb rising demand

Source OME

Electricity production by product SEMC (2008)

The countries of the Southern Mediterranean have abundant deposits of energy resources mainly with solar energy and to a lesser extent wind energy.

The energy of radiation received per km2 is equivalent to 1.5 million barrels of oil or 300,000 tons of coal.

A southerner now consumes 2,030 kWh and its northern neighbor 6,036 kWh. However, in 2030 the southerner consume twice or 4300 kWh / year.

8

The potential of the South: a renewable primary energy in abundance ...

Average sunshine duration (hours /

year

Averageenergy

received(KWh/m2/y

ear)

coastal 2 650 1 700

highlands 3 000 1 800

Sahara(86% of Algeria)

3 500 2650

Algeria has abundant gas resources. This qualifies for leadership in solar hybrid power / gas where the cost per kWh is optimum today

Oil and gas reserves around the (in Gbls)

Mediterranean. 4.6% of world reserves

Oil % Oil Gas % Gas

Iran 138.4 11.2 27.8 15.7

Irak 115.0 9.3 3.17 1.8

Koweït 101.5 8.2 1.78 1.0

Saudi Arabia 264.2 21.3 7.17 4.0

EAU 97.8 7.9 6.09 3.4

Qatar 27.4 2.2 25.6 14.4

ALGERIA 12.3 1 4.52 2.5

Egypt 4.1 0.3 2.06 1.2

Libya 41.5 3.3 1.5 0.8

Tunisia 0.6

Middle East 755.3 61 73.21 41.3

Russia 79.4 6.4 44.65 25.2

Kazakhstan 39.8 3.2 1.9 1.1

Azerbaïdjan 7 0.6 1.28 0.7 9

Source BP St Review

Interest of major projects ENR export like DESERTEC ...

technology transfer,

local manufacture of adequate equipment

export electricity surplus to Europe

For the south coutries…:

Producing countries does not want to exchange their position as an exporter of

oil to the exporter of solar energy

Nuclear Gas Ccgt charbon Wind power

onshore

Solar (PV) Solar (CSP)

USD/kWh 0,098 0 ,092 0,089 0,06 – 0,14* 0,22 -0,27* 0, 17- 0,36*

Durée de vie en

année60 30 40 25 25 25

Standardised costs of kWh Source : OCDE (2008), *IRENA (2012)

Solar kWh is expensive but a sharp decline in its cost is expected in the coming decades, up to 40% lower estimated 2020

0

200

400

600

800

1000

1200

1400

1600

197

5

197

8

198

1

198

4

198

7

199

0

199

3

199

6

199

9

200

2

200

5

200

8

201

1

MarketedProduction

Consumption

GAZ (Bcm)

The United States: a new player in the European energy game?

U.S. future gas exporter?

USA exports 45 Bcm in 2025 and more than 100 Bcm in 2040

U.S. oil production exceeding Saudi Arabia in 2025? 12 million bpd until 2040 geopolitical impact

Most of this growth will come from non-conventional oil

Power generation with coal fell a quarter in the US while the gas increased by 63%

US coal headed to EuropeMany gas power plants close in Europe. 28 being closed plants in Germany.

11

0

5000

10000

15000

20000

25000

30000

35000

.19

65

.19

68

.19

71

.19

74

.19

77

.19

80

.19

83

.19

86

.19

89

.19

92

.19

95

.19

98

.20

01

.20

04

.20

07

.20

10

Consommation

Production

Oil( mbj)

12© Mourad PREURE 2008

Algerian Gas

Russian Gas

Middle East Gas

United States

Libyan Gas

Gazoduc Nabucco

The European gaslandscape

GNL

NigeriaMozambiqueTanzanie

8%10%

23%

19%

0.0

100.0

200.0

300.0

400.0

500.0

600.0

Marketed Production

Consumption

Gazoduc Southstream

Gas Dépendancy:55% in201272% in201585% in2030

Gazoduc Northstream

Norway

Continuation of current trends increases the divergence resulting in shifts prosperity, instability and stress migration pressures.

Is not observed neguentropic factors at work, but rather an increase and diffusion of disorder. Economic factors contribute strongly.

Economic power of emerging countries in 2030 equivalent to that of developed countries, Asia = new center of gravity of global growth loss of influence of the Euro-

Mediterranean area in international regulations.

The North African states must develop their domestic demand to increase their productions by developing solvent markets out of low-cost production logics.

Scientific and technological development, renew productive organization coveting the technology-intensive segments of global value chains, out of the mirage of the service sector.

13

The Mediterranean is threatened in the future by marginalization and divergence ...

14

Towards an Euro-Mediterranean EnergyCommunity…

The increasing energy dependence of Europe can find a structural solution in a Euro-Mediterranean framework.

One can pose the problem in terms of complementarity and interdependence

We must also anticipate strong growth in energy demand and the various strategic alternatives that will be facing the countries of the south shore.The natural gas can be the lever of a new energy partnership

We must design and implement a new partnership based on energy transition.◦ Guarantee the security of the North of supply and security of the South

opportunities.◦ North Africa can become the electric battery of Europe combined fossil

fuels and renewable

Energy can be the regional integration lever such as coal and steel were for European integration.◦ the emergence of industrial and technological champions Euro-

Mediterranean renewable.◦ Densify the industrial and technological cooperation◦ Universities and research in southern countries must be the hearth of

the dynamic

http://mouradpreure.unblog.fr

Prospective, Études Stratégiques et Énergétiques

Communication, Communication de crise, Evènementiel

Intelligence Économique, Knowledge Management

Montage d’Affaires, Formation, Coaching de Dirigeants

www.emergydz.commouradpreure@yahoo/fr

emergydz@ymail.com

Téléphone/Fax: +213.21.63.19.36

Mobile: 0552.59.33.08

15