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