Overview of Market Development in Asia · nBy 2035, primary energy demand of Asia achieves twice as...

Overview ofMarket Development in Asia

=Future Energy Demand in Asia=

May 12, 2010Nara Hotel, Nara, Japan

Shigeru KIMURAThe Institute of Energy Economics, Japan

IEA BIOENERGY ExCo65

IEA Bioenergy Workshop

1

2

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,00019

71

1980

1990

2000

2007

2010

2020

2030

2035

? ? ? ? ? ? ??

Primary Energy Demand by Region (World)

n By 2035, primary energy demand of Asia achieves twice as much as current level, reflecting high economic growth; 3.6 billion toe(2007) ? 7.1 billion toe(2035).n Non-OECD will represent 90% of incremental growth of global energy demand toward 2035.

World

Asia

200711.1 bil. toe

?

203516.9 bil. toe(1.5-fold increase)

20073.6 bil. toe

?2035


Asia

AAGR*

’80-’07 ’07-’35

World 2.0% 1.5%

Asia 4.6% 2.5%

N.America 1.0% 0.3%

3.6 bil.toe

7.1 bil. toe

*Average annual growth rate

Mtoe

N.America

OECD Europe

Non-OECD EuropeL. America

Middle EastAfricaOceania

Source: IEEJ Energy Outlook 2009

3

0

2000

4000

6000

8000

1971 1980 1990 2000 2007 2020 2030 2035

China IndiaJapan KoreaTaiwan IndonesiaMalaysia PhilippinesThailand VietnamSingapore Hong KongOther Asia

China

Japan

India

Mtoe

14%

7%

12%

50%

49%

17%

Primary Energy Demand (Asia)

n Based on booming economic growth, the share of China and India together in Asian primary energy demand significantly increases to 66% by 2035. n Japan’s energy share in Asia, with its slower-paced economic growth and depopulation, will decline from 14% in 2007 to 7% in 2035.

20071.8 bil. toe / 0.4 bil. toe

?2035

3.5 bil. toe / 1.2 bil. toe(1.9-fold inc. / 2.8-fold inc.)

20073.6 bil. toe

?2035


Asia

China / India

AAGR China India Japan Korea Taiwan Singapore

1980-2007 5.5% 6.0% 1.5% 6.4% 5.2% 6.3%2007-2035 2.4% 3.7% -0.1% 1.5% 1.2% 1.9%

Indonesia Malaysia Philippines Thailand Vietnam Other Asia

6.4% 7.3% 3.4% 7.8% 7.7% 4.1%3.7% 2.6% 4.5% 3.6% 5.9% 4.2%


4

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1971 1980 1990 2000 2007 2020 2030 2035

? ? ? ? ? ? ? ?

Primary Energy Demand by Fuel (Asia)

AAGR

’80-’07 ’07-’35

Total 4.6% 2.5%

Coal 5.2% 1.8%

Oil 3.1% 2.3%

Gas 7.7% 4.1%

Oil31%? 29%

Coal52%? 43%

Natural Gas11%? 16%

Nuclear3.9%? 6.3%

Other Renewables1.3%? 4.1%

Hydro2.0%? 1.9%

n Coal and Oil will continue to maintain its centrality over Asian energy demand until 2035. n The share of natural gas will grow substantially to 16% by 2035, driven mainly by power generation. Fossil fuel dominates 88% of total energy supply and plays a key role by 2035.

Fossil Fuel94%? 88%

Mtoe

Share: 2007? 2035


5

0

1000

2000

1971 1980 1990 2000 2007 2020 2030 2035

China IndiaJapan KoreaTaiwan IndonesiaMalaysia PhilippinesThailand VietnamSingapore Hong KongOther Asia

China

JapanIndia

Mtoe

21%

8%

13%

33%

45%

16%

Oil Demand by Region (Asia)

Though the continuous improvement of fuel efficiency of automobile and deployment of advanced vehicle is expected, oil demand in China will boost from 7.4 million B/D in 2007 to 19.0 million B/D in 2035, due mainly to its escalating vehicle possession. The share of China and India together in Asian oil demand will grow from 46% to 61%

AAGR China India Japan Korea Taiwan Singapore

1980-2007 5.3% 5.5% -0.1% 4.8% 3.1% 5.2%2007-2035 3.4% 3.1% -1.2% 0.5% 0.6% 0.8%

Indonesia Malaysia Philippines Thailand Vietnam Other Asia

4.0% 4.4% 0.8% 5.2% 7.6% 3.8%2.0% 1.8% 4.0% 2.6% 3.4% 4.3%

20071.1 billion ton

(23 mbd)?

20352.0 billion ton

(42 mbd)

1.9-fold increase

(20 mbd inc.)2007 2035

China7.4 mbd 19.0 mbd

India2.9 mbd 7.0 mbd

Japan4.8 mbd 3.4 mbd


6

0

200

400

600

800

1971 1980 1990 2007 2020 2030 2035

million vehicles

Other Asia

China

India

Japan

48%

25%

22%

30%

16%

12%

9%

39%

420mil.

200mil.

620mil.

Number of Vehicles (Asia)

Considerable growth of vehicles is expected in China and India. In Japan, it grows only slightly.

2007~ 2035? ? ? ? ?

79 95

254

-2

Japan China India OtherAsia

60% 19% 22%

200742 mil.

?2035

300 mil.

(7.0-fold inc.)

China

200718 mil.

?203597 mil.

(5.3-fold inc.)

India


Primary Energy Supply by Region (World)

010002000300040005000600070008000

1980 2000 2007 2015 2030

N. America OECD EuropeNon-OECD Europe AsiaMiddle East AfricaL. America Oceania

MTOE

Source: WEO2009 by IEA 7

Primary Oil Demand by Region (World)

Mb/d

Source: WEO2009 by IEA

0

20

40

60

80

100

120

1980 2000 2008 2015 2030

Biofuels

International Bunkers

Oceania

L. America

Africa

Middle East

Asia

Non-OECD Europe

OECD Europe

N. America

24% 32%

8

Policy Process on Energy Security

¡ At the 2nd EAS in 2007 in Cebu, Leaders resolved “Cebu Declaration on East Asian Energy Security”.

¡ To show ERIA’s value-added to Leaders through policy-oriented recommendations, ERIA will contribute to the implementation of the Declaration.

¡ At the 2nd EAS in 2007 in Cebu, Leaders resolved “Cebu Declaration on East Asian Energy Security”.

¡ To show ERIA’s value-added to Leaders through policy-oriented recommendations, ERIA will contribute to the implementation of the Declaration.

ü Set individual goals and formulate action plans voluntarily for improving energy efficiency,

ü Encourage collective efforts in intensifying the search for new and renewable energy resources and technologies, including research and development in biofuels

ü Encourage the use of biofuels and work towards a standard on biofuels used in engine and motor vehicles,…

Cebu Declaration on Cebu Declaration on East Asian Energy SecurityEast Asian Energy Security

Working Group for Analysis on Energy Saving Potential in East Asia Region

Working Group for Standardization of Biodiesel Fuel for Vehicles in East Asia

Working Group for Sustainable Biomass Utilisation Vision in East Asia

ERIAERIA’’s Contribution s Contribution through Energy Projectthrough Energy Project

9

For example,

•Trade/Investment Promotion

•Trade facilitation,

•FTA/EPA strategy,

•Intellectual Property,

•Standard Conformity,

For example,

•Infrastructure developments,

•Human Resources,

•Small and Medium Enterprise,

•Economic development in CLMV countries,

For example,

•Energy, Environment,

•Poverty reduction

•Information Security

Economic Integration in East AsiaEconomic Integration in East Asia

Trade/InvestmentTrade/InvestmentFacilitationFacilitation

Narrowing the Narrowing the Development GapDevelopment Gap

Sustainable Sustainable DevelopmentDevelopment

Basic Researches Basic Researches on current and prospective economic situations on current and prospective economic situations of the region as a whole and individual countriesof the region as a whole and individual countries

For the sustainable economic growth in East Asia, we have to address not only Trade/Investment liberalization through FTA/EPAs but also wide range of policy issues

ERIA(Economic Research Institute for ASEAN and East Asia)

10

Working Group for Analysis on Energy Saving Potential in East Asia Region

l Methodology for assessing the energy saving potential

Establishment of the working groupwith 16 members and IEEJ experts

Model AssumptionslPopulation and GDPlCar ownershiplPower generationlEnergy saving goals and action plansBAU

Macro data, others

APSBAU+Energy saving goals

IEEJ/National Energy Outlook Models

Energy saving potential = BAU - APS

(Econometrics Approach)(CGE)

11

Energy Projection of Primary Energy Supply in East Asia

12

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

1990 2005 BAU APS BAU APS

Others

Geothermal

Hydro

Nuclear

Gas

Oil

Coal

MTOE

2020 2030

-20%

Source: ERIA EEC WG Report 2010

Energy Projection of Final Energy Consumption in East Asia

13

0

1000

2000

3000

4000

5000

6000

1990 2005 BAU APS BAU APS

Industry Transport Others Non-Energy

MTOE

2020 2030

-17%

-18%

-23%

-15%


Improvement of Fuel Efficiencyl Fuel Consumption/Number of Vehicles

14

1990=100


Outlook Results

l Energy Intensity

0

50

100

150

200

250

300

350

2005 BAU in 2030 APS in 2030

TPES(Total Primary Energy Supply)/GDP

-3% from 2005

-22% from 2005


Outlook Results

l Overall Result

0100020003000400050006000700080009000

10000

TPES TFEC CO2

2005 BAU in 2030 APS in 2030

MTOE,Mt-C

-20% -17%-28%

•TPES: Total Primary Energy Supply•TFEC: Total Final Energy Consumption•CO2: Carbon Dioxide Emissions•BAU: Business As Usual case•APS: Energy Saving Promotion case

}

}}

16Source: ERIA EEC WG Report 2010

Oil

CNG&GTL

Biofules

Transport Oil Demand in 2030

17

2%8%

872 MTOE


Biofuels Ratio in 2030

18

0%10%20%30%40%50%60%70%80%90%

100%

Aust

ralia

Brun

eiCa

mbo

dia

Chin

aIn

dia

Indo

nesia

Japa

nKo

rea

Lao

Mal

aysia

Mya

nmar

NZL

Phili

ppin

esSi

ngap

ore

Thai

land

Viet

nam

Biofuels

CNG&GTL

Oil

Total67 MTOE(8%)


Conclusion (1)

l Energy demand in Asia will surely increase due to strongeconomic growth. The growth rate of energy demand will be much higher than the world average.

l Coal will remain as the dominant energy in future but oil will also be major energy due to progressive motorization in China, India and ASEAN region.

l Several world energy outlooks indicates same trend mentioned above such as IEEJ and IEA.

l Accepting the situation mentioned above, the EAS leaders requested ERIA to study EEC and Biofuels on the view of energy security issue.

19

Conclusion (2)

l Under ERIA, one group was established to conduct EEC study and two groups were established to study biomass including biodiesel standardization.

l The EEC group has conducted to estimate energy saving potential applying EEC policies (energy saving goals and action plans).

l According to the study results of the EEC group, the current EEC policies contribute to save energy consumption significantly but are not sufficient to address climate change issues.

l In transport sector, fuel efficiency surely improves due to the EEC policies but will still continue to consume oil and emit CO2.

20

Conclusion (3)

l In transport sector, the use of biofuels is one of the solutions to mitigate CO2 emissions.

l According to biofuels policy of EAS countries, 11 countries consider to use biofuels in future and 2 countries use biofuels aggressively. But its share of total EAS region will only be 8% in 2030.

l Consequently we may need more aggressive biofuel policy paying attention to following issues;l Standard specificationl 2nd and 3rd generation biofuelsl Establishment of trading networkl Technology development to decrease its production costl etc 21

Thank You

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