Transcript 0711 - GIE
NATURAL GAS
MARKEREVIEW
2008
Gas and the
Sustainability Drive:
what will it do the fuel mix?
Ian Cronshaw, Head of Energy Diversification
Division
International Energy Agency
GIE Annual Conference, Bucharest
23 October 2008
© OECD/IEA - 2008
OECD Europe--Gas Delivered
62,419
52,419
42,419
32,419
2002 - 2007 Range
2006
2007
2008
De
c
No
v
O
ct
Se
p
Au
g
Ju
l
Ju
n
ay
M
Ap
r
ar
M
Fe
b
22,419
Ja
n
Million Cubic Meters
72,419
Spain’s economy slows—
but not gas demand
4,184
3,184
2,684
2,184
1,684
2002 - 2007 Range
2006
2007
2008
De
c
No
v
O
ct
Se
p
Au
g
Ju
l
Ju
n
ay
M
Ap
r
ar
M
Fe
b
1,184
Ja
n
Million Cubic Meters
3,684
Japan—demand growth surprises
Japan Annual Totals
BCM
2002
78.71
2003
86.37
2004
83.26
2005
2006
2007
2008
8,799
7,799
6,799
5,799
2002 - 2007 Range
2006
2007
2008
De
c
No
v
O
ct
Se
p
Au
g
Ju
l
Ju
n
ay
M
Ap
r
ar
M
Fe
b
4,799
Ja
n
Million Cubic Meters
9,799
84.98
86.11
95.96
52.48
% Change
9.7%
-3.6%
2.1%
1.3%
11.4%
11.9%
Increase in Global Natural Gas
Demand, 2005-2030
400
20%
% Share of increase in world primary
natural gas demand, 2005-2030
billion cubic metres
350
300
250
200
150
100
13%
12%
11%
10%
10%
9%
7%
5%
4%
50
0
Middle Trans. OECD OECD China Latin Rest of Africa OECD India
America Asia
East economies N. Europe
Pacific
America
Natural gas demand grows by 2.1% per year through to 2030, from
2 854 bcm in 2005 to 4 779 bcm in 2030.
OECD Power generation growth
Incremental generation 2000-2007
TWh
1200
1108
1000
800
745
600
400
315
200
119
84
28
0
Gas
-200
Coal
Wind
Other
renewables
Nuclear
Hydro
Oil
-57
-126
Total
Changes in installed capacity in OECD
Changes in installed capacity in OECD
GW
250
200
150
100
50
0
1992-1996
1997-2001
2002-2006
-50
Sources: IEA data, Platts and GWEC
Coal
Oil
Gas
Nuclear
Hydro
Construction
2007-2012
Wind
Planned
2007-2017
Other Renewables
Policy uncertainty, especially with respect to climate change,
favours gas as the short term default option for new investment
Share of gas-fired power in electricity
output, and demand of gas for power
70%
2005
2006
2020
47
40
60%
31
50%
30
40%
16
30%
75
12
28
242
20%
52
188
15
13
22
10%
10
6
0%
US
UK
Spain*
Japan**
Canada
France
Italy
Germany
(Bcm at top of bars). Source: IEA data and forecasts from national government submissions
* Spain forecast for 2010. ** Japan forecast for 2030.
Gas-fired power in the US increased by 10% last year. All larger
OECD countries foresee further increases in gas demand for
power.
Monthly average prices of gas and power in
the UK, coal, and CO² in EU ETS
Investment:
EPC unit costs in LNG rise sharply
1600
8
1400
7
1200
6
1000
Unit cost (USD / million tonnes per year) - left
axis
Total capital requirement (USD billion) - right axis
5
800
4
600
3
400
2
200
1
1991-95
1996-2000
2001
2005
Investment: Pipeline projects in
Eurasia
Impact of financial crisis?
There is no major concern about gas
consumption growth except timely
construction of supply infrastructure
Financial crises may cause better
sentiment for tangible projects with
(fairly)stable return rate
Raw materials cost drop might be
beneficial, but regulatory framework and
formal difficulties associated with
infrastructure projects that were a
concern before the summer remain
Average Annual Power Generation Capacity
Additions in the “50% CO2 Reduction Scenario”
2010 – 2050
Coal-fired with
CCS
Gas-fired with
CCS
35 CCS coal-fired plants (500 MW)
Wind-onshore
Wind-offshore
Solar PV
Solar CSP
0
10
20
½ recent gas fired capacity increase in the US
Hydro
¼ current Chinese coal capacity increase
Global nuclear capacity growth in the 1980s
Nuclear
30
Current capacity additions
20 CCS gas-fired plant (500 MW)
32 Nuclear plants (1000 MW)
⅕ of Canada's hydropower
capacity
14 000 Wind turbines (4 MW)
3 750 Wind turbines (4 MW)
215 km2 solar panels
80 CSP Plants (250 MW)
40
BLUE Map
50
60
GW/year
70
Some summary observations
Demand growth still strong; both inside
IEA and non member countries
Gas consumption growth strong in 200708 despite slowing/zero growth
Electricity and gas markets now strongly
linked.
LNG grows fast, but demand grows
faster
Europe imports by pipeline and LNG
Global Gas Market Interactions Increase
Key message
In all scenarios, gas is a key source
of energy for the foreseeable future
Gas meets some interlinked
challenges:
security of supply, environment ,
affordability
Gas power generation seems to be
the default option providing needed
flexibility and back up to wind and
hydro power generation