In the Name of God Significance of Diversification of Energy Resources Reza Amrollahi.

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Transcript In the Name of God Significance of Diversification of Energy Resources Reza Amrollahi.

Slide 1

In the Name of God

Significance of Diversification
of Energy Resources
Reza Amrollahi


Slide 2

Outline






Energy Production and Its Perspectives
Definition of Security and Its Categories
Security & Disruption in Energy Supply
Types of Energy Production Risks
Diversification & Security in Energy
Supply
• Energy Production Factors
– Energy Diversification Factor
– Energy Supply Risk Factor

• Solutions
• Summing Up


Slide 3

Energy & Its Perspectives
• World population would reach 8.2 billion in
2030, from 6 billion in 2000.
• One third of the world population have no
access to electricity and another one third
have only limited access.
• If the per capita energy usages in the
developing and developed states are to be the
same then the energy demand would increase
8 fold till 2050.
• In 2030 70% of total energy demand would
form in developing countries.
• Therefore, the energy exchange trade
(production, demand, supply, transport) would
significantly grow.


Slide 4

Energy & Its Perspectives
In 2030:
• Still more than 1.4 billion people have no
electricity.
• Natural gas would rapidly replace other
energy resources.
• Growth in natural gas usage would be limited
by advances in other energy technologies.
• Flower-house emissions would increase
steeply.
Conclusion:
Stability of states in near future depends
primarily on their capability to produce clean
and enough secure energy.


Slide 5

Definition of Security
• Security can be relatively defined as:
Getting Free of Risks, Survival,
and Preservation of Basic Values
• Security is the fundamental concern for all
states from military and non-military aspects.
• Non-military aspects can be divided into
different categories, including Energy
Production, Economic, and Environmental
issues.


Slide 6

Security and Disruption
• Energy Supply and Risking Factors
Technological Limitations

Geographic Limitations

Major Dependence on
One or Few Technologies
for Energy Production

Major Dependence on
One or Few Countries
for Energy Imports

Energy
Supply
Risk


Slide 7

Security and Disruption
• Energy production security similar to security
itself, covers a vast and diverse concept.
• Countries with major reliance on limited
energy supplies and import them would be
more vulnerable to risks.
• Instabilities in energy supply and demand,
technological, or geographical limitations can
lead to disruptions in energy market.
• Energy importing countries usually do not face
political chaos, but they are threatened by
market disruptions (e.g. developed states).


Slide 8

Security and Disruption
On the other hand, developing countries
usually experience all three types of
disruptions:
1. Disruptions Because of Political Issues: Due
to Inability of Exporting Country, Internal
Political Problems (Internal Chaos, Post-war
Issues, etc.), External Problems, and Group
Decisions of Unions,
2. Disruptions in Markets: Due to, for instance,
Embargos,
3. Disruptions Due to Accidents: Natural
Disasters, with no humans playing role.


Slide 9

Types of Energy Supply Risks
Effective Risks in
Energy Supply

Diversifiable
Risks

Non-diversifiable
Risks

Problems in Access
to Technologies

Problems in the
Global Market

Problems in the
Local Markets


Slide 10

Types of Energy Supply Risks
Non-diversifiable Risks:
• Correspond to oscillations in the global
market and affect a large number of
producers and consumers in countries.
Diversifiable Risks:
• Correspond to those risks, against which
a country can increase the security
factor by taking proper policies and
programs.


Slide 11

Diversification & Security
• According to IEA, in 2030 fossil fuels would
produce about 89% of world’s energy with the
current rate.
• This will be 2% above the corresponding
figure at the beginning of the current century.

• At present, major available energy resources
are:






Oil
Coal
Natural Gas
Nuclear Energy
Hydro-power


Slide 12

Diversification & Security
• Share of various energy resources in the world

(Source: IEA)


Slide 13

Energy Production Factors
• For a quantitative rather than a
qualitative measurements we define two
energy production factors.
Usage of
Various
Technologies
& Resources

Stability &
Reliability
in Energy
Production

Qualitative Evaluation

Quantitative Evaluation

Energy
Diversification
Factor

Energy
Security
Factor

1. Comparison to Other States

2. Position of Technology


Slide 14

Energy Diversification Factor
Primary Energy Supply in Various Countries
(Million Ton Crude Oil)
Country
US
Japan
France
Canada
South Korea
India
Iran
Indonesia
Saudi Arabia
Turkey
Total World

1999
2242.3
516.4
255.1
244.4
178.5
502.1
121.7
140.6
90.1
71.0
9711.6

2000
2302.6
521.6
257.6
350.9
190.9
523.6
125.00
146.1
105.3
77.5
9963.5

2001
2253.9
517
266.4
248.2
193.9
524.2
134.5
149.6
119.7
71.6
10150.1

2002
2290.4
516.9
265.9
350.0
203.5
538.3
143
156.1
126.4
75.4
10376.4


Slide 15

Energy Diversification Factor
Percentage of Primary Commercial Energy
Supply (Based on 2003 Statistics)
Country

Hydropower

Nuclear
Energy

Coal

Natural
Gas

Oil

US
Japan
France
Canada
South Korea
India
Iran
Indonesia
Saudi Arabia
Turkey

2.6
4.5
6.5
23.5
0.7
4.5
1.5
2.1
__
1.7

7.9
10.3
38.3
5.7
13.8
1.1
__
__
__
__

24.9
22.2
4.7
10.6
24.1
53.6
0.5
17.6
__
20.8

26.6
13.6
15.1
27.0
11.4
7.8
56.0
29.9
45.1
25.4

39.7
49.2
36.1
33.0
49.8
32.8
41.8
50.3
54.9
42.9


Slide 16

Energy Diversification Factor
• To measure the diversification of various
energy resources we define the energy
diversification factor d as:
N

d  N

i 1

xi
100



1
N

Here:
• N is the number of energy resources,
• xi is the percentage of the ith energy in
the country’s supply.


Slide 17

Energy Diversification Factor
Calculated Diversification Factors for Countries
Country

US
Japan
France
Canada
South Korea
India
Iran
Indonesia
Saudi Arabia
Turkey

Energy Diversification Factor

3.0
3.1
3.4
2.3
3.4
4.6
5.7
4.0
6.0
2.9


Slide 18

Energy Diversification Factor
• Canada with the smallest and Saudi Arabia
with the largest diversification factors have
respectively the most even and most uneven
usage of energy resources.
• Iran has a close d-factor to that of Saudi
Arabia, showing its unreasonable situation.
• Some states essentially have no capacity to
produce some forms of energy, e.g. hydropower in Saudi Arabia.
• Hence, diversification in energy production
schemes should be of the primary concern for
Iran.


Slide 19

Energy Supply Risk Factor
• From the energy supply security side,
we can take quantitative measures too.
• Energy supply risk factors are given
relative to crude oil for Japan as
– Liquid Natural Gas:
– Crude Oil:
– Coal:
– Nuclear Power:

1.94
1.00
0.317
0.026

• Unexpectedly, the risk factor for nuclear
energy (in Japan) is much lower than
other forms, being 75 times less than
LNG.
Jap. J. Political Sci. 5, 1 (2004)


Slide 20

Energy Supply Risk Factor
• This remarkable difference can be due
to Japan’s access to nuclear fuel cycle.
• Therefore inability to access the
peaceful nuclear fuel cycle will be a
direct cause for increasing nuclear
energy’s risk factor.
• Of course, there are numerous political,
regional, and global issues affecting this
situation.
• In fact a precise evaluation of risk
factors for every country requires a
separate and detailed research.


Slide 21

Energy Supply Risk Factor
• If we take zero risk factor for Hydropower and equal factors for LNG and
natural gas, then we can define the total
energy supply risk factor e as
e

1
100

N

rx
i

i

i 1

where ri is the risk factor of ith energy.


Slide 22

Energy Supply Risk Factor
Calculated Energy Supply Risk Factors
Country

US
Japan
France
Canada
South Korea
India
Iran
Indonesia
Saudi Arabia
Turkey

Energy Supply Risk Factor

0.99
0.83
0.67
0.89
0.80
0.64
1.51
1.14
1.43
0.99


Slide 23

Energy Supply Risk Factor
• India and France have the smallest energy supply risk
factors:
Cause:
– Major reliance respectively on nuclear and coal energies (low
risk resources).

• Iran and Saudi Arabia have the largest energy supply
risk factors.
Cause:
– Heavy reliance on high risk energy resources (fossil fuels).

Although the geographical and local benefits of these
two countries are not included in this estimation,
however, several compensating issues should be
considered in the long term as follows in the next
pages.


Slide 24

Energy Supply Risk Factor
• Iran has huge natural gas reservoirs, but this would
not help to attain a more reasonable energy supply
risk factor:
Pressure drop in
many oil fields and
the necessacity of
gas reinjection

Very low internal
prices, encouraging
unreasonable
consumption

Limitations in Long-term
Usage of Natural Gas

Global limitations in
usage of fossil fuels
due to flower-house
emissions

Heavy subsidies
paid, encouraging
Illegal trade


Slide 25

Solutions




In general, countries having large energy
diversification factors (i.e., uneven usage of
resources), have large energy supply risk
factors too. In both cases Iran has almost the
worst situation.
There are three inter-related solutions for
Iran:

1. Diversification of Energy Resources
2. Development of Low Risk Technologies
(Coal, Hydro-power, and Nuclear Power)
3. Maximum Utilization of Renewable Energies


Slide 26

Solutions
Hydro-power:
• Iran has not yet fully developed its hydropower capacities. Through the completion of
existing projects, the share of this clean
energy form would increase.
• Within 9 months the total installed capacity of
hydro-power plants would exceed 6007MW,
which constitutes 18% of total country’s
electricity.
• After completion of current projects during the
next twenty years, the total capacity of hydropower plants in Iran would reach 11,584.4MW.


Slide 27

Solutions
•Karon-3 Dam


Slide 28

Solutions
• Jiroft Dam (Illustration of Spillway)


Slide 29

Solutions
Natural Gas:
• Currently, European Union is considering Iran
as the best alternative for Russia to import
natural gas.
• From another point of view, exports of national
reservoirs such as natural gas and oil, in their
crude form, results in destruction of many
economic potentials as well as very low
surplus benefits.
• Perhaps the best way to deal with this, is to
keep the exports and therefore exchange with
money to minimum, and replace it with the
imports of science and technology, in the
infra-structures of energy production with high
efficiency, nuclear energy, renewables, and
collaboration in the nuclear fusion research.


Slide 30

Solutions


Slide 31

Solutions
Coal:
• Current estimations show that only 50% of the
country’s coal can be used for total required
electricity over the next 30 years.
• Iran’s Electricity Development Organization
has the first coal plant with the Clean Coal
Technology in Tabas, close to the Mazino coal
mines.
• If the share of coal from the total energy
supply is one-third of the current total value,
then internal coal mines would last for about a
century.


Slide 32

Solutions
Nuclear Power:
• Atomic Energy Organization of Iran initially
planned in 1977 for a minimum of 9000MW
and maximum 19800MW nuclear power
according to country needs and consultation
with Stanford Research Institute.
• 2x1200MW reactors in Bushehr and
1800MW plants in Ahwaz were planned.
• After the revolution, contracts were
unfortunately stopped. However Bushehr
plants would be ready for operation at
reduced capacity in 2 years.


Slide 33

Solutions
Bushehr reactors under construction


Slide 34

Solutions
• With the completion of Iran’s hydro-power
projects within the current year, energy
diversification and supply risk factors would
improve to 4.3 and 1.29, respectively, which
show a much more favorable situation.
• Completion of Bushehr nuclear plants, Tabas
coal plants, and all remaining hydro-power
projects should be done in about 15 years. In
this case, the energy diversification and
supply risk factors would reach 3.5 and 1.09,
respectively, which represent a situation quite
comparable to developed states.


Slide 35

Solutions
Current Status of Energy Factors and Their
Expected Values in Future
Factor

Current
Value
Diversification 5.7
d-Factor
1.51
Supply eFactor

Mid-2006

2020

4.3

3.5

1.29

1.09

• For comparison, the Energy Diversification
and Supply factors respectively for France
and the United States are 3.4 and 0.99.


Slide 36

Solutions
• Renewable energies require heavy initial
investment and small energy production
capacitites, which limit their usefulness.
• Considering all political aspects and the
serious enviornmental issues involved with
nuclear fission, the best remaining choice for
energy production is the peaceful and clean
NUCLEAR FUSION technology.
Breaking heavy nuclei

Nuclear
Fission

Attaching light nuclei

Nuclear
Fusion

Nuclear
Power


Slide 37

Summing Up
• Not only diversification in energy resources of
developing countries has direct relationship to
their energy supply security, but also it is a
condition for sustained development as well.
• Developed countries with stable economies
enjoy favorable diversified energy production
among various resources and rely on low-risk
energies.
• Nuclear energy, contrary to the serious
political difficulties during the construction
have never been, at least up to now, affected
by external problems after operation.


Slide 38

Summing Up
• From both energy diversification and
supply security views, there is a one-toone correspondence. In general
countries with large d-factors (less
diversified) have large e-factors (less
reliable situation) too.
• In both cases Iran is the most critical
state.
• Through completion of hydro-power,
coal, and nuclear projects, Iran’s energy
factors would come close to the figures
for developed countries.


Slide 39

Thank You for Your Attention