1 Overview of/Update Overview of/Update on the Energy on the Energy Sector and LEAP Sector and LEAP Modeling Effort in Modeling Effort in the Republic of the Republic of Korea Korea Dr. David F. Von Hippel Dr. David F. Von Hippel Nautilus Institute Senior Associate Nautilus Institute Senior Associate [Presented for the ROK Team, and based [Presented for the ROK Team, and based on AES2006 Presentations by Dr. Chung on AES2006 Presentations by Dr. Chung Woo-jin and Dr. Jungmin Kang] Woo-jin and Dr. Jungmin Kang] Asian Energy Security Project Meeting Asian Energy Security Project Meeting Tsinghua University, Beijing, PRC, November 1, Tsinghua University, Beijing, PRC, November 1, 2007 2007
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1 Overview of/Update on the Energy Sector and LEAP Modeling Effort in the Republic of Korea Dr. David F. Von Hippel Nautilus Institute Senior Associate.
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1
Overview of/Update on Overview of/Update on the Energy Sector and the Energy Sector and
LEAP Modeling Effort in LEAP Modeling Effort in the Republic of Koreathe Republic of Korea
Dr. David F. Von HippelDr. David F. Von HippelNautilus Institute Senior AssociateNautilus Institute Senior Associate
[Presented for the ROK Team, and based on [Presented for the ROK Team, and based on AES2006 Presentations by Dr. Chung Woo-jin AES2006 Presentations by Dr. Chung Woo-jin
and Dr. Jungmin Kang]and Dr. Jungmin Kang]Asian Energy Security Project MeetingAsian Energy Security Project Meeting
Tsinghua University, Beijing, PRC, November 1, 2007Tsinghua University, Beijing, PRC, November 1, 2007
AES 2007AES 2007 2Von Hippel/ROK Group 11/2007
OUTLINE OF PRESENTATION: The ROK Economy and Energy Sector—Brief
Update Overall Trends and KEEI Forecasts Structure of Energy Supply and Demand Key Policy Processes/Changes
The ROK LEAP Model—Current Status and Ongoing Work Model Structure Existing Paths Work ongoing and to be done Coordination/Integration with DPRK Model
AES 2007AES 2007 3Von Hippel/ROK Group 11/2007
ROK ECONOMY, ENERGY SECTOR
Rapid and Continuing Economic Growth Industry key sector, but Commercial,
Transport has been growing fast Population growth slowing
Structure of Energy Sector Vast majority of energy imported
Population (million) 38.7 42.9 45.1 47.8 48.3 1.2 0.74 0.35
AES 2007AES 2007 5Von Hippel/ROK Group 11/2007
ROK Economic Growth/Energy Consumption
For 1987 - 1997• AAGR of Energy Consumption & GDP : 10.3% & 7.7%, respectively• Energy Elasticity of Energy Consumption to GDP : 1.34
For 1998 – 2005• AAGR of Energy Consumption & GDP : 4.7% & 5.6%, respectively• Energy Elasticity of Energy Consumption to GDP : 0.84• In 2006, GDP grew 5.2%, but Energy Consumption only 2.1%
For 1987 - 1997• AAGR of Energy Consumption & GDP : 10.3% & 7.7%, respectively• Energy Elasticity of Energy Consumption to GDP : 1.34
For 1998 – 2005• AAGR of Energy Consumption & GDP : 4.7% & 5.6%, respectively• Energy Elasticity of Energy Consumption to GDP : 0.84• In 2006, GDP grew 5.2%, but Energy Consumption only 2.1%
and District Heating Several negative results • Energy-Intensive Economic Structure • Environmental Problem
ROK Energy Policy Directions
AES 2007AES 2007 18Von Hippel/ROK Group 11/2007
ROK Energy Policy Directions Market Development and Privatization
Break up of KEPCo into generation, transmission, distribution components
Development of Korea Power Exchange Break up of KEPCo generation into nuclear, non-nuclear
components, with sale and private operation of some (non-nuclear) assets
Partial sale to private sector of part of stock of Korean National Oil Company
Revise tax structures for some fuels (including biofuels) Energy Cooperation
Oil and gas resources development (foreign and domestic) Participating in NEA energy cooperation research
AES 2007AES 2007 19Von Hippel/ROK Group 11/2007
ROK Energy Policy Directions
Energy-EfficientSociety
High Oil Price
SustainableEnergy System
EnvironmentalRegulation
Oil MarketInstability
UNFCCC
Challenges Policy DirectionsChanging Conditions
Overseas EnergyDevelopment
Energy SecurityThreats
ResourceCompetition
Open PolicyFramework
Conflicts betweenStakeholders
Policy DecisionProcess
InternationalOil Market
EnvironmentalConcerns
Energy Supply
Security
Non-GovernmentalOrganizations
AES 2007AES 2007 20Von Hippel/ROK Group 11/2007
Overseas DevelopmentRenewables
Energy Intensity(%) Share(%) Rate(%)
Efficiency
0.32
0.25
0.20
0.30
0.40
2005 2011
2.3
5.0
0.0
2.0
4.0
6.0
2005 2011
Oil Gas
3.7
15.0
4.7
30.0
0.0
10.0
20.0
30.0
2005 2013 2005 2013
ROK Energy Policy Directions From 2nd Energy Plan—3rd Plan upcoming 2007
AES 2007AES 2007 21Von Hippel/ROK Group 11/2007
THE ROK LEAP MODELDEMAND STRUCTURE Residential—Driven by number of households
Cooking, Space Heating, Lighting, Appliances (electric)
Industrial—Driven by industrial GDP, share Mining, Agriculture/Fisheries, Manufacturing,
Construction (Manufacturing dominant) Commercial/public—Driven by building area Transport—Driven by number of vehicles
Private vehicles — 4 types Mass transit and freight vehicles — 8 types
AES 2007AES 2007 22Von Hippel/ROK Group 11/2007
THE ROK LEAP MODELTRANSFORMATION STRUCTURE Electricity T&D Electricity Generation — 11 Types of power plants Industrial Combined Heat and Power (CHP) District Heating Town Gas production LNG Gasification Oil Refining Pipeline Gas Imports from RFE (for Regional Path) LNG Imports from DPRK (for Regional Path) Electricity Imports from RFE (for Regional Path)
AES 2007AES 2007 23Von Hippel/ROK Group 11/2007
THE ROK LEAP MODELReference or BAU Path
Extrapolation of currently evolving economy/energy sector trends (Need to update to latest projections)
Item 2001 2010 2020 2030 Annual Increase (%)
’01-’10
’10-’20 ’20-’30
GDP (1995 T KRW) 493.4 768.4 1,165 1,629 5.0 4.3 3.4
Population(Million)
47.3 49.6 50.7 50.3 0.5 0.2 -0.1
Households(Million)
14.9 16.9 18.2 19.1 1.5 1.0 0.5
Person per Household
3.2 2.9 2.8 2.6 -1.0 -0.5 -0.5
AES 2007AES 2007 24Von Hippel/ROK Group 11/2007
THE ROK LEAP MODEL
National Alternative Path—Current Structure Assumptions currently similar to BAU Path,
except electricity generation projections. Emphasizing renewable energy: Share of electricity
generation by renewables 7.0% of total electricity generation in 2011, comparing with 2.6% in BAU
No new deployment of nuclear power plants after 2017
Demand side planned, but not yet developed
AES 2007AES 2007 25Von Hippel/ROK Group 11/2007
THE ROK LEAP MODELRegional Alternative Path ROK participates in many of the regional
infrastructure and other cooperative activities proposed for the Regional Alternative path
Natural gas pipeline: recipient of gas from pipeline bringing gas from North Sakhalin in the RFE to the ROK, with some gas used in the DPRK, and beginning operations in 2016
LNG Terminal: ROK/DPRK collaboration on a new LNG terminal, in the southern DPRK
Electricity Import: Transmission interconnection between RFE and ROK, passing through DPRK; 3 GWe in both directions
AES 2007AES 2007 26Von Hippel/ROK Group 11/2007
ROK LEAP MODEL: Initial ResultsResidentialIndustrialCommercial PublicTransportation
Demand Results: Energy demand final unitsScenario: BAU, Fuel: All Fuels
ROK LEAP MODEL: Initial ResultsAnt. CoalBit CoalOil SteamLNG SteamCombined CycleInternal CombustionNuclearHydroWind PowerSolar PVTidal Power
Transformation Results: CapacityScenario: BAU, Capacity: All Capacities
2001 2005 2009 2013 2017 2021 2025 2029
Thou
sand
Meg
awat
ts
110
100
90
80
70
60
50
40
30
20
10
0
AES 2007AES 2007 31Von Hippel/ROK Group 11/2007
THE ROK LEAP MODELNEXT KEY STEPS BY ROK TEAM Team leader, Prof. Shin Eui-soon of Yonsei Univ., Dr.
Chung Woo-jin of KEEI advising Update to 2006 Base Year, add latest projections Add detail as available/needed (Manufacturing
subsectors?), review assumptions Add/revise Demand-side measures for National
Alternative Plan; add demand-side costs Add supply-side costs for a number of modules Add resource costs Develop, evaluate Nuclear “Max” and “Min” Paths Link with updated DPRK paths (LNG, imports from