Gdmp model ray tomkins (formatted)
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Transcript of Gdmp model ray tomkins (formatted)
Presented by:
Ray Tomkins Economic Consulting Associates, UK
Shangri-La Hotel, Jakarta
21 June 2012
Gas Development Master Plan Outline of Indonesia GDMP Model Consensus Building Workshop
2
Overview
• Purpose of the Indonesia GDMP Model
• What will the model be used for?
• What should be the key outputs of the model?
• Structure of the Indonesia GDMP Model
• Detailed and comprehensive vs simple and user friendly
• Scope of the Indonesia GDMP Model
• What time horizon should be used in the model?
• What should be the inputs of the model?
• What policy assumptions should be considered?
• What scenarios should be included in the model?
• How are the scenarios assessed and analysed?
3
Purpose of the Model will determine key outputs
• What will the model be used for: • During the GDMP study
• After the GDMP study
• The model can be designed to assist policy makers in developing policies to achieve certain outcomes
• The purpose of the Indonesia GDMP Model (the ‘IGM’) will determine the scope of the model
4
What will the model do?
Integrate outputs from other parts of the study: • Supply
• Demand
• Projects and their assessments
INPUTS
INDONESIA GDMP MODEL
OUTPUTS
Analyze alternative scenarios:
• Assumptions on supply and demand
• Alternative investment projects
Provide a range of output indicators:
• Cost, financial impacts
• Other gas policy indicators, eg:
• Economic value of gas (value of gas consumed, Government revenues)
• Carbon dioxide (CO2) emissions reduction
5
Structure of the Model
Inputs Scenarios and projections Outputs
Demand scenarios • Electricity • Others
Price scenarios
Supply scenarios,
resources, fiscal terms
List of potential investments for given
scenarios
Total cost of projects for given scenarios
Financial and economic analysis of projects
Transportation
scenarios
• Scenario / programme development
• Supply demand balancing
• Project selection • Financial and
economic calculations
• Other indicators
Price impacts
Total gas cost, Government financial
returns
Other policy indicators
6
Price modeling issues
• Prices as input: – International price scenarios
– Domestic price scenarios
Demand scenarios – fixed per scenarios, use RUPTL
• Prices calculated in model: • International price scenarios
• Supply / fiscal terms – domestic gas price
Demand scenarios:
− Electricity price depends on electricity demand
− Simple electricity dispatch model
− Gas demand price elasticity
• Latter may be too complex unless timeframe and scope extended
DEMAND
SUPPLY
PRICE
7
Time horizon of the IGM
• The Gas Master Plan is developed for the time period of 2012 – 2025
• For the model to simulate realistic investments, longer time period should be used, e.g. up to 2050 or 2060
• Economic gas prices should ultimately reflect Long Run Marginal Cost (LRMC), which is affected by the backstop price when there is shortfall in gas supply
8
Options for modeling gas demand in electricity
• Taking into account changes to gas prices in calculating the electricity demand, and then re-calculate gas prices based on changes in demand (iterative calculation)
• Based on a simplified approach to electricity dispatch, eg dispatch curve
• Making gas prices exogenous to the model, i.e. price sensitivity will be modeled as different scenarios
• Or use the RUPTL for electricity sector demand
• A simple electricity model to be included in the IGM
• The electricity demand analysis could take into account price sensitivity of electricity demand by:
9
Model component – Demand
DG MIGAS regional gas demand
Demand calculations
Electricity demand
Demand scenarios
Industrial demand
Export demands
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
mmscfd
Other industries
Flat Glass
Ceramics
Metal
Pulp and paper
Petrochem - energy
Petrochem - feedstock
Fertiliser - feedstock
10
Model component – Demand scenarios
• Demand scenarios could include: • Different levels of electricity demand (base case, high and low)
• In-build demand elasticity (model will re-calculate demand based on price scenarios)
• Different levels of export demand, based on contracted amount, possible contract extensions, new contracts, etc
• Possible changes to domestic market obligations
• Separate demand scenarios for each regions as well as national demand
• Other policy issues
11
Model component – Prices
Price calculations and transportation
costs
Upstream and
export gas prices
Price scenarios
Domestic prices
6.95
10.05
10.13
14.35
18.11
18.29
24.28
29.07
30.76
31.01
33.00
0 5 10 15 20 25 30 35
PGN Average Sales Price
LPG 3kg Subsidised
PGN West Java Price (May 2012)
LPG 12kg Unsubsidised
LPG 50kg Unsubsidised
LPG Bulk
MFO
MDF/IDO (Diesel)
HSD
Kerosene
Premium
$/mmbtu
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Prices of
competitive fuels (coal, oil)
International
gas prices
Transport
project costs
Delivered gas prices
12
Model component – Price scenarios
• Price scenarios could include: • Different levels of international gas price forecasts (base case,
high and low)
• Domestic price calculation based on costs (upstream, LNG, transportation, distribution)
• Subsidized and unsubsidized domestic prices
• Changes in other competitive fuel prices (e.g. removal of coal and fuel oil subsidies)
• Long run convergence to economic prices
13
Model component – Supply
DG MIGAS regional existing gas supply
Supply scenarios
Imports (?)
Unconventional gas Resources
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• Supply projection • Balancing annual
supply and demand
• Allocation of production by resource
14
Model component – Supply, gas production
• Each group of fields modeled separately:
• Proven, in production
• Probable, possible, yet to find
• Model allocates production and start date for each new field
• Example of Parameters for each field
Fields (name)
Fully or partly contracted? (0-fully, 1-partly)
Initial reserve in 2011 (bcm)
Depletion policy (years)
Start of development (year)
CAPEX - exploration (US$ m)
CAPEX - development (US$ m)
OPEX - fixed (% of CAPEX)
OPEX - variable (US$/mmbtu)
Start production ( year)
Initial production volume (bcm)
Maximum production volume (bcm)
Time to reach max prod. vol (years)
Domestic sales via Ashdod (% of production)
Pipeline export via Northern terminal (% of production)
LNG export via Northern terminal (% of production)
LNG export via Ashdod (% of production)
LNG export via Cyprus (% of production)
15
Model component – Supply scenarios
• Supply scenarios could include: • Probability of new supply
• Ultimately recoverable resource
• Year when fields are being developed and when production starts
• Exploitation of unconventional gas
• Different depletion policies (DMO, export policies)
• Production rates of each filed (determined in the model)
16
Model component – Transportation and infrastructure
Transmission & Distribution Master
Plan
Transportation project selection
and costs calculations
Existing
transportation modes
Transportation scenarios
New projects
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Model component – Gas transportation options
• Gas can be transported between regions through: • Gas pipelines
• LNG
• Electricity
• Model could include different transport scenarios using the different options
• A generic interconnector between each region for existing capacity will be included, plus
• New interconnector for added capacity: • Combine projects’ capacities for each mode of transportation
between regions
• Financial appraisal based on expected utilisation
18
Model component – Infrastructure projects
• Project sheet (example): Capacity of pipe to shore bcm
Capacity of LNG terminal bcm
Capacity of transport to market bcm
Distance to terminal km
Distance to market km
Lifetime of assets years
Pipeline costs US$ m / km
LNG transport costs US$ m / km
CAPEX - pipe to shore US$ m
CAPEX - LNG terminal US$ m
CAPEX - transport to market US$ m
Annuatised CAPEX - pipe to shore US$ m / year
Annuatised CAPEX - LNG terminal US$ m / year
Annuatised CAPEX - transport to market US$ m / year
OPEX % of CAPEX
Pipe capacity utilisation %
LNG terminal capacity utilisation %
Transport to market capacity utilisation %
Netback costs US$ m/bcm
US$/mbtu
• Each project will have a sheet within the IGM with its parameters and evaluation
• Financial and economic evaluations:
• Netback costs
• NPV (at start date)
• Rate of return
19
Model component – Policy assumptions
• Domestic market obligation policy will continue
• Discount rate assumptions
• Exchange rate
• Transmission and distribution master plan
• PLN’s RUPTL as base case for electricity demand forecast
• Other policy issues?
20
How the Model works
Demand scenarios
Supply scenarios
Transportation scenarios
Price scenarios
+
+
+
Gas balance
Transportation projects
Total costs and other indicators
Supply projects
Key outputs
21
Model outputs, indicators
Key model outputs:
• Least cost set of investment projects
• Financial and economic values of projects
• List of investment projects to meet a set of indicators, including:
• Costs
• Percentage split between export and domestic consumption
• Remaining reserves at a certain year (eg 2030)
• Government revenues / economic value from gas
• Minimize costs, or
• Maximize value of gas
• Emissions • Change in CO2 emissions from power sector
22
Summary of key questions
• What is the main purpose of the model?
• What should be the time horizon for the model?
• What policy assumptions should be considered?
• What scenarios should be developed?
• What are the key outputs/indicators the model should produce? • Least cost investment projects?
• Set of investment projects to meet certain indicators?
• Maximize economic value of gas use?
23
Next steps and time frames
• Agree on scope of the model
• Gather key parameters for model inputs
• Develop model
• Modify and update model as project progress
Timeframe depends on scope of the model