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E-learning Course for DS: Energy and Sustainable Development Global Challenges

This course explores the global challenges of energy and sustainable development, focusing on Brazil and China. It covers the energy mix, policy initiatives, major challenges, and required investments for infrastructure development.

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E-learning Course for DS: Energy and Sustainable Development Global Challenges

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  1. E-learning course for DS: Energy and sustainable development GLOBAL CHALLENGES 2 Giovanna Anselmi Enea - Ufficio di Presidenza ganselmi@sede.enea.it UNESCO Rome, 2007 22nd January

  2. TO DAY LECTURE OUTLINE 2

  3. ENERGY MAIN GLOBAL CHALLENGES

  4. POPULATION 4 Source: WEO 2006

  5. MACROECONOMIC FACTORS 5 Source: WEO 2006

  6. 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%) & oilwhich accounts for 42% of total demand  Brazil is the world’s second-largest producer and largest exporter of ethanol. COUNTRY ENERGY SHEET: BRAZIL  It is also expanding its production and use of biodiesel • 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. • Public incentives and privat Invetments are required for the projected growth in energy supply 6

  7. COUNTRY ENERGY SHEET: BRAZIL Source: WEO 2006 7

  8. COUNTRY ENERGY SHEET: BRAZIL Source: WEO 2006 8

  9. THE MAJOR CHALLENGES1 A priority for the government : to strengthen its policy & regulatory framework to secure the necessary investments COUNTRY ENERGY SHEET: BRAZIL • - mobilising investment in oil, gas and electricity infrastructure • resolving environmental issues over the construction of large dams, • pipelines and transmission lines 9

  10. 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: BRAZIL 10

  11. COUNTRY ENERGY SHEET: BRAZIL THE POLICY1 Source: WEO 2006 11

  12. COUNTRY ENERGY SHEET: BRAZIL THE POLICY2 Source: WEO 2006 12

  13. 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 13

  14. INVESTMENTS FOR ENERGY P&T INFRASTRUCTURES in 2005-2030 COUNTRY SHEET: BRAZIL Source: WEO 2006 14

  15. 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 COUNTRY ENERGY SHEET: CHINA 2005-2006 - China is the world’s third-largest net importer of oil behind the US & Japan • China is the largest producer and consumer of coal in the world: coal • makes up 69 percent of China's total primary energy consumption • 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% 15

  16. COUNTRY ENERGY SHEET: CHINA 16

  17. COUNTRY ENERGY SHEET: CHINA 17

  18. COUNTRY ENERGY SHEET: CHINA 18

  19. COUNTRY ENERGY SHEET: CHINA 19

  20. COUNTRY ENERGY SHEET: CHINA THE MAJOR CHALLENGES • 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 20

  21. THE POLICY1 • 1998: 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) COUNTRY ENERGY SHEET: CHINA • 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. 21

  22. 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 COUNTRY ENERGY SHEET: CHINA • 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 priorityto a • cleaner environment 22

  23. INVESTMENTS FOR ENERGY P&T INFRASTRUCTURES in 2005-2030 1 • 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 • CNPC announced its intentions to invest $18 bn in foreign oil & gas • assets in 2005 - 2020 23

  24. 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 SHEET: CHINA 24

  25. - 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, COUNTRY ENERGY SHEET:INDIA • 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 25

  26. COUNTRY ENERGY SHEET:INDIA 26

  27. COUNTRY ENERGY SHEET:INDIA 27

  28. COUNTRY ENERGY SHEET:INDIA 28

  29. COUNTRY ENERGY SHEET:INDIA 29

  30. COUNTRY ENERGY SHEET: INDIA THE MAJOR CHALLENGES • 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 30

  31. 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 COUNTRY ENERGY SHEET:INDIA - the abandonment of full privatization of the state-owned petroleum sector - reforms in the electric utilities sector (Electricity Act of 2003) 31

  32. INVESTMENTS FOR ENERGY P&T INFRASTRUCTURES in 2005-2030 • India has implemented a series of policy changes since the mid-1990s • to encourage foreign investment: Annual FDI $5-$6 bilion COUNTRY SHEET:INDIA • Nuclear hotlineand gas & oil pipelines between India and Pakistan are • planned 32

  33. DEEPENING THE DIALOGUE It means: • 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) 33 • 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)

  34. Energy and sustainable development: Global challenges for a sustainable Future THANK YOU FOR YOUR ATTENTION PLEASE DO YOUR QUESTIONS NOW OR SEND THEM AFTERWORDS BY EMAIL TO:ganselmi@sede.enea.it 34

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