Transcript Energy cooperation with DPR Korea in the context of

Energy Crisis in DPR Korea and
Cooperation Issues
DPRK Energy Expert Study Group Meeting
Stanford University, Palo Alto, California, USA
June 26 – 27, 2006
Ji-Chul Ryu, Ph.D.
Korea Energy Economics Institute
1
Energy Crisis in DPR Korea
2
Energy Crisis in DPR Korea
Total Primary Energy Supply (unit: million TOE)
25
Others
20
Nuclear
15
Hydro
10
Oil
5
Coal
0
1980
1985
1990
1995
2000
2003
3
Energy Crisis in DPR Korea
• Total primary energy supply
–  3.5 % pa since 1990
– 16.1 million TOE (Ton of oil equivalent) in 2003 = 66 % of 1990
level (less than 1/13 of total energy supply in Korea)
• The downturn of the energy sector in the country is a
combined result of
– Significant cut of subsidized oil supply from the Former Soviet
Union and China since the late 1980's
– Failure to maintain and modernize energy infrastructure,
– Impacts of natural disasters, and
– Inefficient energy production
4
Energy Crisis in DPR Korea
 Closed economic system: Self-reliance policy (Juche ideology)
– Domestic energy sources: Anthracite coal, hydro
– Coal: 72%, Hydro: 16% , NRE: 5%, Oil: 7 %
• Linked energy issues with external politics
– Oil supply: Political friendship with China and FSU
– Electricity: KEDO 2 Light Water Reactor (LWR)
 Energy Poverty + Collapse of Industry
– Non-existence of commercial energy markets  financing problem
– Serious shortage of fuels for people and industry
– Deforestations  flooding
5
Fuel wood use in DPR Korea
땔감채취 주민(금강산 온정리)
Deforestation and Land Slide
Gaesung area
Transport Energy in Gaesung, DPR Korea
Energy Indicators in Two Koreas
1990
2003
Unit
DPRK
Korea
DPRK
Korea
MMTOE
24.0
93.2
16.1
215.1
TOE
1.2
2.2
0.7
4.5
Generation capacity
GW
7.14
21.02
7.77
56.05
Generation
TWh
27.7
107.7
19.6
347.3
천bbl/d
70
840
70
2,438
MMbbl
18.5
308.4
4.2
804.8
million ton
33.2
17.2
21.9
3.3
Total Energy
per capita
Refinery capacity
Oil imports
Coal production
Source: Korea Energy Economics Institute, 2004
National Statistics Administration, 2004, Republic of Korea
9
Energy Policy of DPR Korea
Policy ideology
Self-Reliance
Sector
Policy Measures
Production
Hydro development
Coal development
Oil investigation
Consumption
Maximum use of coal & hydro
Limited use of imported energy
Extended use of renewable energy
Energy conservation
Technology
Technology development for
domestic resources utilization
10
Recommendation for DPR Korea
1. Abandoning its long-pursued self-reliance economic policy
• opening the energy system to commercial energy supply from overseas
2. Establishing market mechanism for energy and creating energy
market
• introducing energy pricing and tax systems and reforming energy legal
structures
3. Promoting active regional/international cooperation
• rehabilitation of the existing energy facilities
• expansion of energy system + accommodating foreign investments.
4. Adopting cost-effective energy options in recovering energy system
• increasing role of petroleum in energy mix in parallel of pursuing new and
renewable energy in the short term
• natural gas with the medium-long term goals.
5. Strengthening energy policy making capability
• improving energy statistics and modeling infrastructure
• training energy experts and scientists.
11
Creation of Environment for Energy Cooperation
with DPR Korea
1. Accept demand from the international community for
security concerns transparently
• dismantling nuclear weapon programs
• de-coupling the energy issues from the politics
2. Access to the membership of the IFO
• International Monetary Fund (IMF), other international financing
organizations (WB, ADB), and multilateral energy cooperation
bodies
3. Closely consult with Korea and other developed countries
in reconstructing the energy system
• energy systems of both Koreas can be integrated into mutually
compatible single system in future.
12
Energy Cooperation Agenda with DPR Korea
1. Providing with training/education programs for energy planning/
implementation
2. Humanitarian aids for supply of energy products for civilian use
• anthracites coal, LPG, kerosene, diesel
• heavy fuel oil and coal for power generation
3. Power supply to a limited area (eg, Gaesung, Pyeongyang)
4. Renovation/re-construction of existing energy production facilities:
• coal mines, refineries, power plants, transmission/distribution systems
• technical, financial and experts assistances
5. Power interconnection with Korea and Russia Far East
6. Natural gas pipeline project: Sakhalin and Irkutsk projects
7. Resuming the construction of two LWRs of the KEDO ?
13
Energy Projects in Implementation with DPR Korea
• Power Supply to Gaesung from Korea
– 15,000 kW to South Korean factories from March 2005
• NGOs’ Briquette Aids to Civilians Kumgang Mt. area
– cooking and heating
• Training/education program
– UN DESA, EU programs
• Inter-governmental meeting for regional energy
cooperation in Northeast Asia
– UN/ESCAP, Korean government initiatives + SOC meetings
14
NGOs’ Briquette Aids to DPR Korea
Energy Projects in Discussion with DPR Korea
• Proposal of Power Supply of 2 GW by Korean government
– to replace the KEDO’s two LWRs
• Power Interconnection with Russia
– Russia’s supply of power to DPR Korea
– Size: 500 MW, Distance: 380 km, Capital: US$ 180 million
• Natural gas pipeline projects from Russia
– Multilateral cross-border projects with the long term goals
16
Russia-DPR Korea Power Interconnection
Bureya HPP
CHINA
Khabarovsk
500 kV Network
(Source: Kap-Goo Yoon, 2004)
Vladivostok
DPRK
17
동북아 천연가스 개발 협력
(Source: TNK-BP, 2005)
18
Thank you very much
Gamsa’hamnida
- End -
19