updates on the rfe energy sector and the rfe leap model, and implications of a regional alternative...

Updates on the RFE Energy Sector and the RFE LEAP model, and Implications of a Regional

Alternative Path for the Russian Far East

Victor KalashnikovEconomic Research Institute FEB RAS

Alexander OgnevVostokenergo-RAO EES Rossii, Khabarovsk, Russia

Ruslan GulidovEconomic Research Institute FEB RAS

Asian Energy Security Workshop11-14 May, 2004, Beijing, China

Some Economic Indicators of the Russian Far East (as of 2003)

• GDP Growth – 11.1 %

• Industrial Product Growth – 4.7 %

• Investments Growth – 37.3 %

• Incomes Growth – 12 %

• Export Growth – 12.7 %

Investments into the RFE Energy Sector,

million USD

1999 2002 2003(estimated)

Electric Power 123 421 435

Oil & Gas 81 732 1940

TOTAL 214 1296 2445

Bureiskaya HPP & Related Network Project

• Construction of a hydropower plant of 2 GW with an output of 7.1 bln kWh per year

• First Unit of 185 MW commissioned in June 2003

• Second Unit of 185 MW commissioned in December 2003

Basic Characteristics of the RFE Energy Balance, 2002

• Primary Energy Production - 30 million tce

Coal 64%

Natural Gas 13.3%

Crude Oil 17%

Nuclear 0.24%

Renewables 5.4%


• Total Energy Consumption - 36.4 million tce

Coal 48%

Nuclear 0.19%

Renewables 5.5%

Natural Gas 11%

Oil & Oil Products

36%


• Total Energy Import - 22.8 million tce

(62.5 % of Total Energy Consumption )

• Net Energy Import – 6.3 million tce

(17.3 % of Total Energy Consumption )


• Final Energy Consumption - 20.8 million tce

Industry 28.9%

Agriculture 2.2%Residential 26%

Commercial 8.3%

Non-specified 5.2%

Construction 1%Transport 27.5%

Energy Security Attributes Applied for Modeling the RFE Energy Sector

• secure of energy supply for reasonable

prices

• rational use of energy resources

• ecologically sustainable energy production

and consumption

Methods to Model the Impact of Various Decisions on the RFE Energy Security

• Demand for primary energy

• Sufficient energy supply with minimal costs

• Reasonable energy self-sufficiency, or energy independence

• Diversification of energy resources

• Energy efficiency policy

• Development of renewable sources

• Minimization of environmental impact (by the structural and

technological factors)

• International cooperation with NEA countries

Southern Region

Sakhalin

CHINA

THE RUSSIAN FAR EAST

JAPAN

Key Assumptions for the Both Scenarios

• Growth of GDP in 2002-2010 – 5.5% annually, in 2011-2020 – 5% annually

• Growth of industrial product in 2002-2010 – 4% annually, in 2011-2020 – 3.5% annually

• Population growth in 2002-2010 – 0%, in 2011-2020 – 0.8% annually

Key Assumptions for the BAU Scenario • There is no development of international energy cooperation

• There is no intensification of the use of renewable energy resources (the federal law “On Renewable Energy Resources” has been frozen)

• Russia does not ratify the Kyoto Protocol and the Energy Charter Treaty.

• There is no enhancement of ecological standards in the transformation sector

• The energy saving policy is absent

• Municipal reform is frozen.

Basic Implications of the Assumptions Accepted in BAU Scenario (1)

• The final electricity demand will amount to: 2.5% (2002-

2010), in 2.8% (2011–2020) annually

• The final commercial heat demand 0.5% (2002-2010), 0.8%

(2011-2020) annually

• The increase in production of primary energy will be

associated to the projects of Sakhalin-1 (oil), Sakhalin-2 (oil,

LNG). The projects’ total output will be exported

• The domestic primary energy demand will be mainly covered

by a slight growth of coal production and expansion of coal

import from Siberia

Basic Implications of the Assumptions Accepted in BAU Scenario (2)

• The growth of electricity generation will be connected with the completion of Bureiskaya HPP and the construction of conventional coal units

• The lack of financial resources will restrict installation of small HPPs, wind power and other renewables power

• Weak growth of heat generation will be connected mainly with conventional coal boilers and coal CP Units in the cities

• Emissions of greenhouse gases and oxides will increase• The energy consumption diversification index will rise

(Herfindal index)• Energy dependence of region will grow• Demand for primary energy will grow

Key assumptions for the Regional Scenario

• There is an expansion of cooperation in the sphere of oil, gas, and electricity infrastructure

• There is an intensification of the use of renewable energy (the federal law “On Renewable Energy Resources” is adopted and activated)

• Russia ratifies the Kyoto Protocol and probably the Energy Charter Treaty

• There is an enhancement of ecological standards in the transformation sector

• The energy saving policy is activated• Municipal reform is promoted

Basic Implications of the Assumptions Accepted in Regional Scenario (1)

• The final electricity demand will amount to 2.5 % (2002-2010), 2.8 % (2011–2020) annually.

• The increase in production of primary energy resources will be associated with the projects of Sakhalin-1 (oil, gas), Sakhalin-2 (oil, LNG), Sakhalin-3 (gas), the Siberian Kovykta project (gas)

• The growth in electricity generation will be connected with the completion of Bureiskaya HPP, steam-and-gas units, new hydro-power plants (oriented towards NEA countries)

• The promotion of the energy saving policy and the municipal reform will optimize the final use of commercial heat. The final demand for commercial heat will decrease as compared to the BAU scenario and annual growth rate will amount to 0% (2002-2010), 0.5 % (2011- 2020) annually.

Basic Implications of the Assumptions Accepted in Regional Scenario (2)

• The demand for heat generation will be covered with gas and low-sulfur oil-fired boilers

• The efficiency of energy transformation and distribution will significantly grow

• The non-traditional renewable energy will be applied in isolated and remote districts

• No increase in coal production is expected. Import of coal from Siberia will decline.

• Emissions of greenhouse gases and oxides will comparatively decrease

• The energy consumption diversification index will decline (Herfindahl index)

• The share of renewable energy resources will grow• Energy dependence will decrease• Demand for primary energy will comparatively decline

Major Projects for International Cooperation for the Regional Scenario

• Oil Extraction from Sakhalin-1 and Sakhalin-2, million tones per year

Sakhalin-1 Sakhalin-2 Total

2002 0 1.9 1.9

2006 12.6 4.7 17.3

2010 12.8 6.6 19.4

2015 12.6 4.73 17.3

2020 11.2 3.5 14.7


• Oil Pipeline Angarsk – Nakhodka

Route Length, km

Capacity, mln t

annually

Costs, bln

USD

Date of Commission

Angarsk – Taishet – Kazachinskoe – Tynda – Skovorodino – Nakhodka (incl. section of Tynda – Datsin)

4370 80

(incl. 30

to Datsin)

8 2012


• NG Extraction from Sakhalin-1 and Sakhalin-2, BCM annually

Sakhalin-1 Sakhalin-2 Total

2002 0 0 0

2006 1.5 2.5 4.0

2010 1.5 15.4 16.9

2015 10.2 16.4 26.6

2020 10.2 16.4 26.6


• International Gas Infrastructure Projects

Project Capacity, BCM Costs, USD

billion Date of

Commission

North Sakhalin – Khabarovsk – Vladivostok – DPRK - ROK

20 4 2016

Irkutsk – Mongolia - Beijing

30 6 2013

North Sakhalin - Japan 8

1.2 (subsea section)

2015


• Possible New Power Plants in the RFE

Plant Capacity, MW Output, bln kWh Date of

Commission Nizhnyay Bureya HPP 321 1.6 2012

Cascade Zeya HPPs 349 2.1 2014

Urgal-1 HPP 600 1.8 2015

Dalnerechensk HPP 595 1.4 2015

Uchur HPP 3700 17.2 2017

Sakhalin TPP (gas) 4000 20.0 2012


• Electricity Infrastructure Projects

Project Capacity, GW Costs, USD

billion Date of

Commission RFE – DPRK - ROK

0.5 GW (AC) 2-3 GW (DC)

0.2 1.0

2009 2012

RFE (Uchur HPP) - Shenyang 3 GW (DC) 1.5 2017

RFE (Irkutsk) – Mongolia - Beijing

3 GW (DC) 1.5 2017

Sakhalin – Hokkaido - Honshu

4 GW (DC) 2 2012

RFE (Cascade Bureya HPPs) - Kharbin

1 GW (AC) 0.3 2014

Thank you for Attention !

updates on the rfe energy sector and the rfe leap model, and implications of a regional alternative...

Documents

rfe energy balance

rfe energy sector

final energy consumption

primary energy production

production of primary

total energy import

rfe energy security

energy charter treaty