E-learning course for DS: Energy and sustainable development GLOBAL CHALLENGES 2 Giovanna Anselmi

E-learning course for DS:E-learning course for DS:Energy and sustainable developmentEnergy and sustainable development

GLOBAL CHALLENGES 2GLOBAL CHALLENGES 2

Giovanna AnselmiGiovanna AnselmiEnea - Ufficio di PresidenzaEnea - Ufficio di Presidenza

[email protected]@sede.enea.it

UNESCOUNESCORome, 2007 22Rome, 2007 22ndnd January January

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ENERGYMAIN GLOBAL CHALLENGES 2

STUDY CASES:BRAZIL

INDIA, CHINA

INVESTMENTS FOR ENERGY P&T

INFRASTRUCTURES

DEEPENING THE DIALOGUE

TO DAY LECTURE OUTLINETO DAY LECTURE OUTLINE

Objective Issue Possible responses Short-medium term Longer term

Reduction (as E.S.) of Oil Demand

Road transport Gas To Liquid and biofuels Hydrogen or electric propulsion

More efficient automobilies

Generation of Elect. & less Env. Impacts

Air Pollution

Green house gases Emis.

Energy efficiency New nuclear & Renewables

Cleaner Coal, Nuclear Fission

Renewables

Quality Power & Distributed E. Gen.

Redesign of local grids New supervision systems ------

& electricity storage

Reduce the

freight & urban transport imp.

Redesign inter-modal Transp. Syst.

Traffic control

Efficiency Improvement of New collective transport public transp. systems

Individual drivers info Systs

Greater efficiency in urban energy consumption

Reduce use of energy and greenhouse gas emissions

increased energy efficiency Nanotechnology in solar

in buildings generation on buildings

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ENERGY MAIN GLOBAL CHALLENGES

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POPULATION

Source: WEO 2006

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MACROECONOMIC FACTORS

Source: WEO 2006

COUNTRY ENERGY SHEET: BRAZIL

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Brazil is the world’s second-largest producer and largest exporter of

ethanol.

Brazil is Latin America’s largest energy consumer accounting for over 40% of the region’s consumption

Its energy mix is dominated by renewable energy sources (27%)

& oil which accounts for 42% of total demand

Hydropower (14%) is expected to meet most of its power-generation needs, if build about 66 GW of new capacity in 2004-2030 as in the R. S.

It is also expanding its production and use of biodiesel

Public incentives and privat Invetments are required for the projected growth in energy supply


7Source: WEO 2006


8Source: WEO 2006


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- mobilising investment in oil, gas and electricity infrastructure

- resolving environmental issues over the construction of large dams,

pipelines and transmission lines

THE MAJOR CHALLENGES1

A priority for the government :

to strengthen its policy & regulatory framework to secure the necessary investments


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THE MAJOR CHALLENGES2

- Uncertain gas supply related to gas import from Bolivia, at the present

the 43% of total consumption

- Environmental concerns related to CO2 emission

- Building of new large hydropower plants

- Promoting use of bagasse and non-hydro renewables for cogeneration

of heat and power

COUNTRY ENERGY SHEET: BRAZILTHE POLICY1

11Source: WEO 2006

COUNTRY ENERGY SHEET: BRAZILTHE POLICY2

12Source: WEO 2006

COUNTRY SHEET: BRAZIL

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INVESTMENTS FOR ENERGY P&T INFRASTRUCTURES in 2005-2030

The investment needed to meet the projected growth in energy supply is

considerable, some $470 billion (in year-2005 dollars) of wich:

power generation $252 billion : - ½ for generation - ½ for transmission & distribution Infrastructures

cumulative oil : $ 138 billion

§ gas: $ 48 bn

biofuels $ 31bn

COUNTRY SHEET: BRAZIL

14Source: WEO 2006


COUNTRY ENERGY SHEET: CHINA 2005-2006

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- China’s real gross domestic product (GDP) is estimated to have grown at 9.9 percent in 2005

- FDI into China totaled $86.1 billion

- China is the second largest energy consumer behind the United States

- China is the world’s third-largest net importer of oil behind the US & Japan

- The Government provides refiners with subsidies to ease the gulf between low domestic rates and high international oil prices- In 2004 China generated 2,080 & consumed 1,927 Bkwh of electricity Since 2000, both el. generation and consumption have increased by 60%

- China is the largest producer and consumer of coal in the world: coal makes up 69 percent of China's total primary energy consumption

COUNTRY ENERGY SHEET: CHINA

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THE MAJOR CHALLENGESCOUNTRY ENERGY SHEET: CHINA

- Secure energy supply will meet energy needs of future development

- Decrease air and soil pollution

- Open the country to FDI and become attractive

- Decrease oil and coal share in energy mix

- Develop new renewables and nuclear plants


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THE POLICY11998: the Chinese government reorganized most state owned oil and gas assets into vertically integrated firms: - the China National Petroleum Corporation (CNPC) - the China Petroleum and Chemical Corporation (SINOPEC)- the China National Offshore Oil Corporation, (CNOOC) the other major state sector firm (offshore exploration and production, roughly 15% of China's domestic crude oil production)- many foreign companies have been contracted to undertake oil exploration & production activities: the China’s oil companies by law have the majority (51%)- the Chinese government mandates a royalty fee of 12.5 % for oil sector foreign companies- discounts have been offered for development and exploration in more remote onshore areas, such as the western provinces of Qinghai and Xinjiang.


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THE POLICY2- The country has been acquiring interests in oil exploration and production abroad: in 21 countries spanning four continents- The Chinese government is in the process of drafting a new legal

framework for the natural gas sector, to attract investors

- NDRC’s directives are aiming to reforme coal sector to raise total coal output, attract greater investment and new coal technologies, to improve the safety and environmental record of coal mines, closing small local inefficient mines

- Chinese government has made the expansion of natural gas-fired

power plants a priority, reformed the sector dismantling the monopoly- January 1, 2006: The new Law on Renewable energy: a priority to a cleaner environment

COUNTRY SHEET: CHINA

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INVESTMENTS FOR ENERGY P&T INFRASTRUCTURES in 2005-2030 1

- CNPC announced its intentions to invest $18 bn in foreign oil & gas assets in 2005 - 2020

- In Sudan, CNPC has invested more than $8 billion in the country’s oil sector, including investments in a 900-mile pipeline to the Red Sea- CNPC finalized the purchase of PetroKazakhstan, it was complemented by the completion of the 600-mile Sino-Kazakh oil pipeline - CNPC other overseas investments: purchasing Encana’s oil and gas assets in Ecuador and PetroCanada’s oil and gas assets in Syria.- Sinopec has also looked overseas for oil exploration and production opportunities- In 2004 Sinopec signed a Memorandum of Understanding (MOU) with the Iranian government to acquire 51% stake in the large Yadavaran oil field

COUNTRY SHEET: CHINA

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INVESTMENTS FOR ENERGY P&T INFRASTRUCTURES in 2005-2030 2

- China is firmly committed to improving its domestic & transnational oil and gas transport infrastructures- China’s national oil companies are currently planning or building several new refineries and upgrading existing plants refinery capacity- CNOOC built China’s first LNG import terminal in Guangdong & LNG import terminal in Fujian province, receiving LNG respectively from Australia’s Northwest Shelf & from BP’s Tangguh consortia in Indonesia for about 6.3 Mmt/y LNG supply- China is currently building the Three Gorges Dam hydroelectric facility, the largest hydroelectric project in the world.- China is also actively promoting nuclear power as a clean and efficient source of electricity generation $50 b

COUNTRY ENERGY SHEET:INDIA

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- India’s economy continues to grow at a rate of nearly 7%(GDP)y

- Annual foreign direct investment (FDI) in India has hovered in the range of $5-$6 billion over the last several years,

- Oil consumption in India is projected to grow to 3.1 million bbl/d by2010, from 2.5 million bbl/d in 2005

- Indian consumption of natural gas has risen faster than any other fuel from 0.63 Tcf/y in 1995, to 0.96 Tcf in 2003 and is projected to reach 1.8 Tcf in 2015

- India is the world’s third largest coal producer

- power generation capacity is seriously below peak demand at the present


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THE MAJOR CHALLENGESCOUNTRY ENERGY SHEET: INDIA

- Economic Reforms related to energy sectors

- Limit its dependence on oil imports as energy source

- Expand low drilling recovery rates in the oil supply

- Expand refinery capacity

- Reforms in natural gas pricing mechanism and sector

- Decrease the high level of transmission, distribution losses & widespread power theft, improve the efficiency


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THE POLICY

- policy changes to encourage foreign investment (lowering tarifs on imported goods, eliminating them for equipment of large scale power generation projects…)

- reduction of political tensions with Pakistan very important for energy sector development

- the abandonment of full privatization of the state-owned petroleum sector - reforms in the electric utilities sector (Electricity Act of 2003)

COUNTRY SHEET:INDIA

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- India has implemented a series of policy changes since the mid-1990s to encourage foreign investment: Annual FDI $5-$6 bilion

- Nuclear hotline and gas & oil pipelines between India and Pakistan are planned

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DEEPENING THE DIALOGUE

- Not only good external relations, but also to build up profitables agreements for both exporting and importing countries

And follow good praxis as:- Build up (as Brazil do) infrastructures for Transnational pipelines like :

GASBOL (Bolivia-Brazil gas pipeline. 1999) TGM (Argentina to Brazil: Transportadora de Gas del Mercosur. 2000)

It means:

- Diversifying the exporting countries mix (Brazil is doing agreements to import gas from Venezuela too)

- Involving international oil companies for exploration and development (as China do)

- Promoting FDI in nuclear plants, as China do, involving nippon - american Westinghouse, french and russian multinational companies in its program to build up new 30 atomic reactors between 2004-2020

- A reduction of political tensions (as India has done restoring relations with Pakistan & resuming high-level contacts)

THANK YOU FOR YOUR ATTENTIONTHANK YOU FOR YOUR ATTENTION

PLEASE DO YOUR QUESTIONS NOWPLEASE DO YOUR QUESTIONS NOW

Energy and sustainable development:Energy and sustainable development:Global challenges for a sustainable FutureGlobal challenges for a sustainable Future

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E-learning course for DS: Energy and sustainable development GLOBAL CHALLENGES 2 Giovanna Anselmi

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