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““The DPRK Energy Sector: The DPRK Energy Sector: Demand and Supply Demand and Supply
Overview, and Key Areas Overview, and Key Areas for Assistance”for Assistance”
David F. von HippelDavid F. von HippelNautilus InstituteNautilus Institute
Prepared for the DPRK Energy and Minerals Experts Working Group Meeting
September 21, 2010Tsinghua University, Beijing, PRC
EEWG Meeting, BeijingEEWG Meeting, Beijing 2 D. von Hippel 9/2010
OUTLINE OF PRESENTATION: History of the DPRK Energy Sector Nautilus Approach to Estimating DPRK
Energy Balance Approach to Analysis Selected Results Next Steps
Impacts of Energy Problems in the DPRK Assistance Approaches to Address DPRK
Energy Problems Conclusions: Key Lessons for Providing
Energy Sector Assistance in the DPRK
EEWG Meeting, BeijingEEWG Meeting, Beijing 3 D. von Hippel 9/2010
History of the DPRK Energy Sector Decline in the supply of imported crude oil in early
1990s (~stable since 2000, imports from China) Basically no domestic crude oil production, though resources
have attracted some attention by foreign companies Two main refineries, one working at present
Continuing degradation of electricity generation, T&D infrastructure Some modest local rehabilitation of power plants and T&D
systems, and some additions of new hydro facilities Continuing degradation of industrial, district heating
facilities International trade in magnesite, expanding trade with
China in coal/ores, ROK investments (until recently)
EEWG Meeting, BeijingEEWG Meeting, Beijing 4 D. von Hippel 9/2010
History of the DPRK Energy Sector Difficulties with transport of all goods, especially coal Coal production problems related to lack of electricity,
flooding Some reports of recent improvements in coal production,
possibly through Chinese investment Sporadic, highly localized economic revival
Mostly in non-energy intensive sectors (markets, restaurants, small agriculture)
End of KEDO Heavy Fuel Oil (HFO) deliveries New HFO under 6 PT in more recent years
Construction of small power plants (often not connected to main grid)
Significant fuelwood/biomass use in rural (and some urban) areas (ongoing deforestation)
EEWG Meeting, BeijingEEWG Meeting, Beijing 5 D. von Hippel 9/2010
Introduction and Background: Nautilus Introduction and Background: Nautilus Institute DPRK Energy AnalysisInstitute DPRK Energy Analysis
OVERALL APPROACH Obtain as much information as possible about
the DPRK economy, energy sector from media sources, visitors to the DPRK, other sources
Use available information, comparative analysis, and judgment to assemble a coherent and consistent picture of the DPRK energy sector
Think about possible future paths for DPRK energy sector/economy, what changes (national, regional, global) might bring those paths about, implication of changes for end-use, infrastructure
EEWG Meeting, BeijingEEWG Meeting, Beijing 6 D. von Hippel 9/2010
DPRK ENERGY BALANCE UPDATE: OVERALL APPROACH
Start with demand/supply estimates prepared for 1990, 1996, 2000, 2005
Modification of 1990/96/2000/2005 estimates of demand for fuels to reflect reports of recent changes in conditions in the DPRK
Revision of 2005 electricity supply estimates to meet 2008/9 demand, reflect thermal/hydro capacity/availability changes
Estimation of 2008/9 oil supply reflecting available information (including “official” and "unofficial" trades)
EEWG Meeting, BeijingEEWG Meeting, Beijing 7 D. von Hippel 9/2010
DPRK ENERGY BALANCE UPDATE: OVERALL APPROACH
Revision of oil products demand to meet the overall supply for major oil products
Set level of coal and biomass supply to meet demand
Consistent with information about coal infrastructure, forest productivity
Re-adjust supply/demand of other fuels as necessary to produce rough balance
Overall, approach: Obtain all information germane to DPRK energy sector
Sift, fit with other data, prepare internally consistent energy balance
EEWG Meeting, BeijingEEWG Meeting, Beijing 8 D. von Hippel 9/2010
DPRK ENERGY BALANCE UPDATE: OVERALL APPROACH
Information collected from: Reports by others Media reports Official statistics of DPRK trading partners Information on the DPRK from ROK
government agencies Reports of visitors to and observers of the
DPRK DPRK Energy Experts Working Group Meetings
(June 2006, Stanford, CA, USA; March 2008, Beijing; September 2010, Beijing)
EEWG Meeting, BeijingEEWG Meeting, Beijing 9 D. von Hippel 9/2010
DPRK ENERGY BALANCE UPDATE: OVERALL APPROACH
Energy Balance Elements--Rows Domestic resources extraction, imports,
exports Energy “transformation processes”– refining,
electricity production, losses… Energy demand sectors – industrial,
residential, transport… Energy Balance Elements– Columns
Fuel/resource categories – in DPRK Energy Analysis work, general and by refined product
For each fuel/resource considered, demand and supply must balance
Iterative analysis to balance columns
EEWG Meeting, BeijingEEWG Meeting, Beijing 10 D. von Hippel 9/2010 10
Hayes/von Hippel 8/2010
DPRK Energy Balance Update: Selected Results
Notes: 1 PJ is 1015 joules, ~ to energy in 24752 tonnes HFO; a 642 PJ/y economy is ~ of 15.5 million tonnes of HFO/yr6-700000 tonnes HFO = ~ 4% DPRK annual energy use in 2005
~22 million North Koreans currently use about 3 * energy as ½ million Washington DC residents
UNITS: PETAJOULES (PJ)COAL &
COKECRUDE
OILREF. PROD
HYDRO/NUCL.
WOOD/ BIOMASS
CHAR-COAL ELEC. TOTAL
ENERGY SUPPLY 405 24 17 33 162 - (0) 642
Domestic Production 480 1 - 33 150 - - 665 Imports 5 22 17 - 12 - 0 57 Exports 80 - 0 - 0 - 0 80 Stock Changes - - - - - - - -
ENERGY TRANSF. (117) (24) 17 (33) (4) 1 37 (121)
Electricity Generation (88) - (5) (33) - - 60 (66) Petroleum Refining - (24) 24 - - - - (0) Coal Prod./Prep. (23) - - - - - (3) (26) Charcoal Production - - - - (4) 1 - (3) Own Use - - (1) - - - (4) (5) Losses (6) - - - - - (16) (21)
FUELS FOR FINAL CONS. 289 - 35 0 158 1 37 520
ENERGY DEMAND 289 - 35 - 158 1 37 520
INDUSTRIAL 150 - 8 - 0 - 14 172 TRANSPORT - - 9 - 1 - 4 14 RESIDENTIAL 94 - 3 - 118 1 4 220 AGRICULTURAL 8 - 1 - 25 - 1 35 FISHERIES 0 - 1 - - - 0 2 MILITARY 22 - 12 - 4 - 9 46 PUBLIC/COMML 14 - 0 - 4 - 5 23 NON-SPECIFIED - - NON-ENERGY 2 1 6 9
- Elect. Gen. (Gr. TWhe) 5.23 - 0.17 11.15 - - - 16.55 *Note: Gross terawatt-hours for coal-fired plants includes output for plants co-fired with coal and heavy fuel oil.
EEWG Meeting, BeijingEEWG Meeting, Beijing 11 D. von Hippel 9/2010
DPRK Energy Balance Update: Selected Results (2008 results here preliminary)
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200
400
600
800
1,000
1,200
1,400
1990 1996 2000 2005 2008
Pe
tajo
ule
s E
ne
rgy
Us
e
Industrial TransportResidential AgriculturalFisheries MilitaryPublic/Commercial Nonspecified/OtherNonenergy
EEWG Meeting, BeijingEEWG Meeting, Beijing 12 D. von Hippel 9/2010
DPRK Energy Balance Update: Selected Results (2008 results here preliminary)
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200
400
600
800
1,000
1,200
1,400
1990 1996 2000 2005 2008
Pe
tajo
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s E
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rgy
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e Coal and Coke Refined ProductsWood/Biomass CharcoalElectricity
EEWG Meeting, BeijingEEWG Meeting, Beijing 13 D. von Hippel 9/2010
THE DPRK ENERGY SECTOR: THE DPRK ENERGY SECTOR: Selected ResultsSelected Results
- 10,000 20,000 30,000 40,000 50,000 60,000
Energy Demand (TJ)
Iron and Steel
Cement
Fertilizers
Other Chemicals
Pulp and Paper
Other Metals
Other Minerals
Textiles
Building Materials
Non-specified Industry
DPRK Industrial Energy Demand by Subsector: 2005
Coal
Petr. Prod.
Wood
Electricity
EEWG Meeting, BeijingEEWG Meeting, Beijing 14 D. von Hippel 9/2010
THE DPRK ENERGY SECTOR: THE DPRK ENERGY SECTOR: Selected ResultsSelected Results
- 20,000 40,000 60,000 80,000 100,000 120,000
Terajoules (TJ)
Coal
Ref. Prod.
Wood
Charcoal
Electricity
DPRK Residential Energy Demand by Fuel and Subsector: 2005
Urban
Rural
EEWG Meeting, BeijingEEWG Meeting, Beijing 15 D. von Hippel 9/2010
THE DPRK ENERGY SECTOR: THE DPRK ENERGY SECTOR: Selected ResultsSelected Results
- 2,000 4,000 6,000 8,000 10,000
Terajoules (TJ)
Road
Rail
Water
Air
Non-Specified
DPRK Transport Energy Demand by Subsector: 2005
Petr. Prod.
Electricity
EEWG Meeting, BeijingEEWG Meeting, Beijing 16 D. von Hippel 9/2010
THE DPRK ENERGY SECTOR: THE DPRK ENERGY SECTOR: Selected ResultsSelected Results
- 5,000 10,000 15,000 20,000 25,000 30,000 35,000
Terajoules (TJ)
Trucks and other Transport
Armaments
Air Force
Naval Forces
Military Manufacturing
Buildings and Other
DPRK Military Energy Demand By Subsector: 2005
Coal
Petr. Prod.
Electricity
Wood
EEWG Meeting, BeijingEEWG Meeting, Beijing 17 D. von Hippel 9/2010
THE DPRK ENERGY SECTOR: THE DPRK ENERGY SECTOR: Selected ResultsSelected ResultsEstimated DPRK PETROLEUM
PROD. DEMAND BY SECTOR: 2005
INDUSTRIAL 22%
MILITARY 34%
TRANSPORT 27%
RESIDENTIAL 8%
NON-SPECIFIED
0%
NON-ENERGY
2%
FISHERIES 3%
PUBLIC/COM0%
AGRICULT.4%
EEWG Meeting, BeijingEEWG Meeting, Beijing 18 D. von Hippel 9/2010
THE DPRK ENERGY SECTOR: THE DPRK ENERGY SECTOR: Selected ResultsSelected Results
Estimated DPRK COAL DEMAND BY SECTOR: 2005
MILITARY 7%
NON-SPECIFIED
0%
INDUSTRIAL 52%
RESIDENTIAL 32%
NON-ENERGY1%
PUBLIC/COMML5%
TRANSPORT 0%
FISHERIES 0%
AGRICULTURAL3%
EEWG Meeting, BeijingEEWG Meeting, Beijing 19 D. von Hippel 9/2010
THE DPRK ENERGY SECTOR: THE DPRK ENERGY SECTOR: Selected ResultsSelected Results
Estimated DPRK ELECTRICITY DEMAND BY SECTOR: 2005
PUBLIC/COMML12%
MILITARY 24%
INDUSTRIAL 38%
TRANSPORT 10%
RESIDENTIAL 11%
FISHERIES 1%
AGRICULTURAL 5%
EEWG Meeting, BeijingEEWG Meeting, Beijing 20 D. von Hippel 9/2010
THE DPRK ENERGY SECTOR: THE DPRK ENERGY SECTOR: Selected ResultsSelected Results
- 100 200 300 400 500 600
Petajoules (PJ)
Coal
Crude Oil
Ref. Prod.
Hydro
Wood
DPRK ENERGY SUPPLY BY FUEL AND SOURCE: 2005
Domestic Production
Imports
Exports
EEWG Meeting, BeijingEEWG Meeting, Beijing 21 D. von Hippel 9/2010
THE DPRK ENERGY SECTOR: THE DPRK ENERGY SECTOR: Selected ResultsSelected Results
Gross Generation in the DPRK, 1990, 1996, 2000, and 2005
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20
30
40
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60
1990 1996 2000 2005
Te
raw
att
-ho
urs
COAL-FIRED
HFO-FIRED
HYDRO
EEWG Meeting, BeijingEEWG Meeting, Beijing 22 D. von Hippel 9/2010
THE DPRK ENERGY SECTOR: THE DPRK ENERGY SECTOR: RECENT TRENDS, FORESTRYRECENT TRENDS, FORESTRY
Landsat Images of an Area in the DPRK taken in 1981 (left) and 1993 (right)
EEWG Meeting, BeijingEEWG Meeting, Beijing 23 D. von Hippel 9/2010
THE DPRK ENERGY SECTOR: THE DPRK ENERGY SECTOR: RECENT TRENDS, FORESTRYRECENT TRENDS, FORESTRY
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Mill
ion
To
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es
Tre
e B
iom
as
s
Implied Annual Biomass Available fromDegraded Forest Areas (Mte)Implied Annual Biomass Available fromReduction in Forest Area (Mte)Implied Annual Growth in Growing Stocks(Mte)
EEWG Meeting, BeijingEEWG Meeting, Beijing 24 D. von Hippel 9/2010
DPRK ENERGY DATABASE DPRK ENERGY DATABASE UPDATES: NEXT STEPSUPDATES: NEXT STEPS
Continue review of available DPRK literature Evaluate information from 2010 Energy Experts
Working Group meeting and to collect additional input
Review what is known about DPRK resources, energy/industrial infrastructure, including talking with visitors
Revise/rebalance analysis to produce 2008/2009 Energy Supply/Demand tables and related results
Partially revise database/Report as appropriate Use Report results, other materials/ideas collected
to work with others to identify and elaborate possible sets of activities to assist DPRK energy sector redevelopment
EEWG Meeting, BeijingEEWG Meeting, Beijing 25 D. von Hippel 9/2010
Impacts of Energy Problems in the DPRK Lack of fuels in many sectors of the DPRK economy has caused
demand for energy services to go unmet When and if supply constraints are removed there is likely to be a
surge in energy (probably particularly electricity) use The magnitude of such a surge will depend on the DPRK developing
an economy that can pay for fuel supplies. The DPRK Electricity Sector
Status of electricity sector had/has/will have important political implications related to Simpo LWR project, regional electricity grid interconnection options
Thermal power generation system has been eroding significantly; only some boilers and turbines per plant operating, usually at low efficiency due to maintenance problems, sometimes lack of fuel
Hydroelectric plants important, but output limited by maintenance problems, seasonal nature of river flows in the DPRK
Construction of hydroelectric plants of various sizes (small/local, and a few larger plants) is a recent focus of DPRK energy policies
Total estimated electricity supply: 1990: 46 TWh1996: 23 TWh 2000: 13 TWh 2005: 16.6 TWh, probably similar in 2008/2009
EEWG Meeting, BeijingEEWG Meeting, Beijing 26 D. von Hippel 9/2010
DPRK Energy Sector ProblemsDPRK Energy Sector ProblemsContinuing degradation of electricity generation, T&D
infrastructure (Nautilus observations)Voltage and Frequency in Nampo Hotel
0
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100
150
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250
9/18/98 12:00AM
9/20/98 12:00AM
9/22/98 12:00AM
9/24/98 12:00AM
9/26/98 12:00AM
9/28/98 12:00AM
9/30/98 12:00AM
10/2/98 12:00AM
Date and time
volt
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and
fre
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Voltage (V)
Frequency (Hz)
Unhari Village Voltage and Frequency
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9/25/9812:00 AM
9/25/9812:00 PM
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9/26/9812:00 PM
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9/27/9812:00 PM
9/28/9812:00 AM
9/28/9812:00 PM
9/29/9812:00 AM
9/29/9812:00 PM
9/30/9812:00 AM
Date and time
volt
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qu
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Series1
Series2
Frequency 50 Hz +/- 4 Hz
Voltage 230 V +/- 35%
EEWG Meeting, BeijingEEWG Meeting, Beijing 27 D. von Hippel 9/2010
Impacts of Energy Problems in the DPRK Industry
Lack of consistent supplies of coal and electricity for industry have idled many, perhaps most of DPRK’s industrial capacity, leaving workers also idled (though they may still have jobs)
Interconnections between energy supplies, lack of markets, parts for Soviet-built factories/power plants key complicating factors, requiring an integrated energy/economy solution
Transport Lack of gasoline, diesel fuel for trucks, buses, and cars, and
electricity for trains and trams Energy-related problems with obtaining spare parts for
vehicles and transport systems Affects agriculture, electricity generation as well Lack of transportation fuels, especially in rural areas means
most North Koreans are obliged to walk, ride bicycles, or use animal carts, hitch rides on (mostly military) trucks
EEWG Meeting, BeijingEEWG Meeting, Beijing 28 D. von Hippel 9/2010
Scrapped DPRK Industrial Infrastructure (2000)Scrapped DPRK Industrial Infrastructure (2000)
EEWG Meeting, BeijingEEWG Meeting, Beijing 29 D. von Hippel 9/2010
DPRK Transport: Images (rural/Pyongyang)DPRK Transport: Images (rural/Pyongyang)
EEWG Meeting, BeijingEEWG Meeting, Beijing 30 D. von Hippel 9/2010
Impacts of Energy Problems in the DPRK Agriculture
Lack of commercial fuels (electricity, diesel fuel) increases need for human, animal labor
More use of urban workers to help in agricultural activities Lack of energy and equipment for proper and timely post-
harvest processing cause crop losses (~15%) Lack of energy in industrial sector has resulted in shortages
of fertilizer, which have further depressed crop yields, and shortages of spare parts for agricultural equipment
Problem of lack of availability of electricity for irrigation has been improved somewhat by new major irrigation canals (in some areas)
Erosion of agricultural soils caused by deforestation due to use of biomass/wood as a substitute residential fuel
EEWG Meeting, BeijingEEWG Meeting, Beijing 31 D. von Hippel 9/2010
Agricultural Energy Demand: Images Agricultural Energy Demand: Images
EEWG Meeting, BeijingEEWG Meeting, Beijing 32 D. von Hippel 9/2010
Impacts of Energy Problems in the DPRK Residential/Institutional/Office/Military Units
Lack of availability of commercial fuel, largely coal, for cooking/space heating results (vary by region) in increased wood/biomass fuels use deforestation, erosion, reduced soil fertility
In cities, lack of central heating plants/spare parts for plants means reduced/no heat to apartment blocks, offices, leaving buildings without heat and/or using small amounts of other fuels for heat (sometimes with indoor air pollution impacts)
In turn, lack of heat in the winter combined with other factors, increases illness, reduces productivity
Electricity outages reduce availability of light for study, other productive/social activities
Reduced availability of heat, electricity reduces services that can be offered in clinics, hospitals, schools, nurseries…
EEWG Meeting, BeijingEEWG Meeting, Beijing 33 D. von Hippel 9/2010
Impacts of Energy Problems in the DPRK Further Indirect “Political” Impacts
Lack of domestic oil and shortages of other fuels, coupled with limited opportunities to earn hard currencies to pay for imported fuel, are a factor in DPRK weapons sales/barter, weapons, other, sometimes allegedly illicit, activities, to earn hard currency
Lacking fuels to run a modern economy, the DPRK uses threat of military action to coerce
Lack of energy supplies affects DPRK’s military security through shortage of fuels for military sector—substitution of nuclear for conventional deterrence may be one result
Lack of fuel supply to DPRK military also implies dependence on strategies other than prolonged battle to prevail in any conflict, namely overwhelming first-strike capability in conventional or nuclear weapons, or use of “nuclear umbrella” to support deterrence of attack by adversaries
EEWG Meeting, BeijingEEWG Meeting, Beijing 34 D. von Hippel 9/2010
Assistance Approaches to Address DPRK Energy Problems
Assistance for internal policy and legal reforms to stimulate, sustain energy sector rebuilding, open opportunities for private companies Capacity-building for reform of energy pricing practices,
energy planning, training for energy sector actors, regulatory agencies, educational/research institutions, legal and financial sector
Rebuilding of electricity transmission and distribution (T&D) system Start by working collaboratively to define priorities, and with
pilot installations in limited areas (associated with economic investments)
Rehabilitation of power plants and other coal-using infrastructure Small and medium boilers, power plants, steam lines
EEWG Meeting, BeijingEEWG Meeting, Beijing 35 D. von Hippel 9/2010
Assistance Approaches to Address DPRK Energy Problems
Rehabilitation of coal supply and coal transport systems Required for short- and medium-term economic
improvement Development of alternative sources of small-scale
energy, energy-efficiency measure implementation Emphasis on fast, small and cheap, agricultural and
humanitarian applications, support for economic development in specific areas. Energy efficiency is key to expanding availability of energy services
Rehabilitation of rural infrastructure to improve agricultural production
Begin transition to gas use with Liquid Petroleum Gas (LPG) networks Clean burning, limited military diversion potential, modest
investment costs
EEWG Meeting, BeijingEEWG Meeting, Beijing 36 D. von Hippel 9/2010
Conclusions: Key Lessons for Providing Energy Sector Assistance in the DPRK
A complex combination of historical economic dependencies, resource endowment, policy choices by the North Korean regime, and international responses to those policy choices DPRK energy problems
Impacts of energy problems in the DPRK affect every sector, human welfare
Challenges for the international community in working with the DPRK to address its energy security problems are many, thus…
Carefully considered energy assistance to DPRK in a broad suite of areas is needed, coordinated both with steps in addressing DPRK’s nuclear weapons issue and with economic assistance of various types
EEWG Meeting, BeijingEEWG Meeting, Beijing 37 D. von Hippel 9/2010
Conclusions: Key Lessons for Providing Energy Sector Assistance in the DPRK
Energy aid options for DPRK require consideration from many perspectives, or risk unintended consequences Internally coordinate and phase aid projects to work well
together, make sure DPRK’s human, organizational capacity is developed to support sustainable, peaceful economy
Help DPRK re-engage in regional energy/economic fora, complementing grassroots-level projects Consider energy import/export needs, goals of regional players
integrate DPRK into regional energy economy Larger-scale options that contribute to regional (and
Korean) economic integration are longer-term candidates Set up by smaller, cheaper, quicker local projects, extensive
human capacity-building Addressing DPRK’s underlying needs for energy services
required to sustainably solve nuclear weapons issue
EEWG Meeting, BeijingEEWG Meeting, Beijing 38 D. von Hippel 9/2010
THANK YOU!THANK YOU!
EEWG Meeting, BeijingEEWG Meeting, Beijing 39 D. von Hippel 9/2010
Additional Slides for Additional Slides for Reference: Energy Reference: Energy
Efficiency Analysis and Efficiency Analysis and DPRK Energy Paths (~2007 DPRK Energy Paths (~2007 results--not yet updated to results--not yet updated to
2008/9 base year)2008/9 base year)
EEWG Meeting, BeijingEEWG Meeting, Beijing 40 D. von Hippel 9/2010
THE DPRK ENERGY SECTOR: THE DPRK ENERGY SECTOR: Energy Efficiency AnalysisEnergy Efficiency Analysis
MEASURES TO SAVE COAL:Estimated Energy Total Estimated
Energy Savings InvestmentMeasure Potential, TJ/yr Cost, $US 2005TOTALS 115,000 TJ/yr 529,300,000$ Avoided Losses of Coal During Transport: 1,200 TJ/yrTOTAL COAL SUPPLY SAVINGS 116,000 TJ/yrFraction of 2005 Total Coal Supply 28.7%Investment required, $ per GJ/yr of Coal Supply Savings 4.55$ Investment required, $ per tce/yr of Coal Supply Savings 133$
MEASURES TO SAVE/GENERATE ELECTRICITY:Estimated Energy Total Estimated
Energy Savings InvestmentMeasure Potential, TJ/yr Cost, $US 2005TOTALS 15,240 TJ/yr 844,000,000$ Additional Avoided T&D Losses (based on 2005 Rates) 1,490 TJ/yrTOTAL ELECTRICITY SUPPLY SAVINGS/GENERATION 16,720 TJ/yrFraction of 2005 Total Electricity Generation 28.1%Investment required, $ per GJ/yr of Electricity Supply Savings/Generation 50.47$ Investment required, $ per MWh/yr of Electricity Supply Savings/Generation 182$
EEWG Meeting, BeijingEEWG Meeting, Beijing 41 D. von Hippel 9/2010
PREPARATION AND ANALYSIS OF ENERGY PATHS FOR THE DPRK
Goals/Philosophy of Paths Analysis Assemble plausible, potentially achievable, internally-
consistent alternative energy paths for the DPRK, based on best information available—not judgments on what would or should happen
Explore, quantitatively/qualitatively, relative energy security implications of different paths, including the implications of energy sector cooperation between countries of Northeast Asia
Use energy paths as focus, starting point to talk about how to assist in sustainable re-development of DPRK energy sector
Hope to work with DPRK colleagues to improve analysis, make more applicable
EEWG Meeting, BeijingEEWG Meeting, Beijing 42 D. von Hippel 9/2010
PREPARATION AND ANALYSIS OF ENERGY PATHS FOR THE DPRK
Overall Approach in Paths Preparation/Evaluation Start with older DPRK LEAP dataset that includes
several paths evaluated briefly in previous work Update data set to reflect most recent Nautilus
estimates of 1996, 2000, 2005 DPRK energy use (overall analysis period for paths, 1990 to 2030)
Develop overall “themes” for paths to be evaluated Identify specific assumptions for use in implementing
the themes within LEAP Modify paths so that all paths have the same
2005/2007 energy picture
EEWG Meeting, BeijingEEWG Meeting, Beijing 43 D. von Hippel 9/2010
PREPARATION AND ANALYSIS OF ENERGY PATHS FOR THE DPRK
Overall Approach in Paths Preparation/Evaluation Prepare demand-side data entries (and document assumptions in
Excel workbook) Enter demand-side assumptions in LEAP De-bug demand-side datasets Prepare approximate supply-side data entries (and document in
Excel workbook) Enter supply-side assumptions in LEAP (including nuclear energy
path variants), calculate, and modify parameters so that supply and demand balance
Enter cost and environmental data for all paths Run all paths, check results, debug, re-run, and evaluate relative
demand, transformation, cost, environmental results of paths Do off-line calculations (including, for example, spent fuel
estimates) using LEAP results in Excel as needed
EEWG Meeting, BeijingEEWG Meeting, Beijing 44 D. von Hippel 9/2010
DPRK Energy Paths ConsideredDPRK Energy Paths ConsideredPOLITICAL STALEMATE IS….
NOT RESOLVED RESOLVED
“RECENT TRENDS” CASE: Economy opens a very little, aid flows modest, infrastructure erodes
“COLLAPSE” CASE: Economy and regime fails (not quantitatively modeled)
“REDEVELOPMENT” CASE: Revitalization, re-mechanization, infrastructure upgraded + Nuclear Variants
“SUSTAINABLE DEV.” CASE: Redevelopment plus emphasis on energy efficiency, renewables
“REGIONAL ALTERNATIVE” CASE: Redevelopment plus regional projects + Nuclear Variants
EEWG Meeting, BeijingEEWG Meeting, Beijing 45 D. von Hippel 9/2010
DPRK ENERGY PATHS CONSIDERED
“Redevelopment” Path Used as National Reference path for DPRK Current political stalemate solved within next few years,
DPRK receives international assistance/cooperation in redevelopment
Industrial sector is revitalized, but mostly not rebuilt as it was before More iron and steel from scrap, efficiency improvements in iron
and steel, cement Most industry 50% of 1990 output by 2015, growth at 1.5%/yr
thereafter; textiles, fertilizer higher Natural gas begins to be used in industry ~2015
EEWG Meeting, BeijingEEWG Meeting, Beijing 46 D. von Hippel 9/2010
DPRK ENERGY PATHS CONSIDERED
“Redevelopment” Path (continued) Considerable increase in new light-industrial production
(IT, auto parts, joint ventures…) Increase in diesel, electricity use for light industry
Agricultural sector re-mechanized Cropped area decreases, but electricity, oil use in agriculture
increases (coal/biomass use decreases) Increase in residential electricity consumption
Fraction of population in urban areas increase Consumption of electricity, LPG, kerosene increase, NG use
begins, coal use declines Commercial sector expands rapidly
EEWG Meeting, BeijingEEWG Meeting, Beijing 47 D. von Hippel 9/2010
DPRK ENERGY PATHS CONSIDERED
“Redevelopment” Path (continued) Transport use, particularly personal transport, expands
Civilian auto, plane, train, bus transport per person rise Efficiency improvements in road, rail transport modes
Investment in new electricity infrastructure New coal, gas CC, some rehabilitation, particularly hydro, new
small hydro, existing coal plants retired, Simpo reactors completed 2013 (export power) in one variant of path
Re-investment in East Coast refinery Back on line by 2012, expanded 2015 (including power plant)
Natural gas, first as LNG, begins to play a role in powering industry, electricity generation, urban residences starting in about 2012-2015 Smaller LNG terminal built (Nampo?), part of output exported
EEWG Meeting, BeijingEEWG Meeting, Beijing 48 D. von Hippel 9/2010
DPRK ENERGY PATHS CONSIDERED
“Recent Trends” Path Assumes that current political difficulties remain, or are
addressed only very slowly DPRK economy opens a very little, aid flows modest,
infrastructure erodes Very gradual increase in industrial output relative to 2000
(after 2005), intensities remain high Transport activity increases slowly Residential energy demand increases slowly
Continued emphasis on coal, electricity gradually more available Some modernization/re-mechanization of agriculture Commercial sector floorspace, electricity/coal use grow
somewhat
EEWG Meeting, BeijingEEWG Meeting, Beijing 49 D. von Hippel 9/2010
DPRK ENERGY PATHS CONSIDERED
“Recent Trends” Path (continued) Transmission and distribution losses remain high
through 2015, decrease slightly after 2015 10 MW of small hydro power plants are added
each year from 2005 on Total capacity at existing hydro and oil-fired power
plants does not change over time Simpo nuclear reactors not completed Oil products (except KEDO HFO) continue to be
imported at year 2000 levels West Coast refineries continue to operate
EEWG Meeting, BeijingEEWG Meeting, Beijing 50 D. von Hippel 9/2010
DPRK ENERGY PATHS DPRK ENERGY PATHS CONSIDEREDCONSIDERED
“Sustainable Development” Path Same energy services as “Redevelopment” Path
—with same demographic assumptions, economic output—but…
Applies energy efficiency, renewable energy, other measures, in an aggressive fashion Upgrading of industrial infrastructure goes above
average standards to high-efficiency international standards
Rapid phase-out of existing coal-fired power plants. Earlier addition of LNG (liquefied natural gas) terminal
and gas CC (combined cycle) generating plants
EEWG Meeting, BeijingEEWG Meeting, Beijing 51 D. von Hippel 9/2010
DPRK ENERGY PATHS DPRK ENERGY PATHS CONSIDEREDCONSIDERED
“Sustainable Development” Path (continued) Costs
Cost estimates included for all demand end-uses, transformation processes, and fuels whose use changes relative to the Redevelopment case
EEWG Meeting, BeijingEEWG Meeting, Beijing 52 D. von Hippel 9/2010
DPRK ENERGY PATHS DPRK ENERGY PATHS CONSIDEREDCONSIDERED
“Regional Alternative” Path Demand-sector Modifications
As a result of regional cooperation, efficiency improvement targets reached two years earlier at costs 10% less than in Sustainable Development path
Transformation-sector Modifications Gas pipeline from RFE begins operation in 2011; 3% of
gas used in DPRK initially, 10% by 2020, 15% by 2030 DPRK gets $10 million/yr “rent” for hosting the pipeline Larger LNG facility installed (also shared with ROK) Power line from the Russian Far East through the Participation in regional cooperative activities in energy
EEWG Meeting, BeijingEEWG Meeting, Beijing 53 D. von Hippel 9/2010
DPRK ENERGY PATHS DPRK ENERGY PATHS CONSIDEREDCONSIDERED
“Regional Alternative” Path (continued) Transformation-sector Modifications (continued)
Cooperation in renewable energy technologies yield earlier deployment,10% reduction in cost of wind, small hydro technologies
Last of existing coal-fired plants retired by 2020 Sustainable Development/Regional Alternative
Path Costs Cost estimates included for all demand end-uses,
transformation processes, and fuels whose use changes relative to the Redevelopment case
EEWG Meeting, BeijingEEWG Meeting, Beijing 54 D. von Hippel 9/2010
DPRK ENERGY PATHS: SELECTED DRAFT RESULTS
DPRK Total Final Electricity Use by Path
0
5
10
15
20
25
30
35
40
45
50
1990 1996 2000 2005 2010 2015 2020 2025 2030
TW
h
Sustainable Development
Regional Alternative Total
Redevelopment Case
Recent Trends Case
EEWG Meeting, BeijingEEWG Meeting, Beijing 55 D. von Hippel 9/2010
DPRK ENERGY PATHS: SELECTED DRAFT RESULTS
Final Energy Use by Fuel: Redevelopment Case
0
200
400
600
800
1000
1200
1400
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
Mill
ion
GJ
VEGETAL WASTES RESIDUALFUELOILOTHER PETRO PROD NATURAL GASLPGBOTTLED GAS KEROSENEJETFUELHYDROGEN HEAT DISTRICTGASOLINE FIREWOODELECTRICITY DIESELGAS OILCommercial Wood COKING COALCOKECOAL AVG DOMES. CHARCOALBIOGAS
EEWG Meeting, BeijingEEWG Meeting, Beijing 56 D. von Hippel 9/2010
DPRK ENERGY PATHS: SELECTED DRAFT RESULTS
DPRK Total Final Coal Use by Path
0
100
200
300
400
500
600
700
800
1990 1996 2000 2005 2010 2015 2020 2025 2030
Mill
ion
GJ
Sustainable Development
Regional Alternative Total
Redevelopment Case
Recent Trends Case
EEWG Meeting, BeijingEEWG Meeting, Beijing 57 D. von Hippel 9/2010
DPRK ENERGY PATHS: SELECTED DRAFT RESULTS
Final Energy Use by Sector: Regional Alternative Case
0
200
400
600
800
1000
1200
1400
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
Mill
ion
GJ
Industrial Transport
Residential AgriculturalFisheries Military
Public Commercial NonspecifiedNonEnergy
EEWG Meeting, BeijingEEWG Meeting, Beijing 58 D. von Hippel 9/2010
DPRK ENERGY PATHS: SELECTED DRAFT RESULTS
EEWG Meeting, BeijingEEWG Meeting, Beijing 59 D. von Hippel 9/2010
DPRK ENERGY PATHS: SELECTED DRAFT RESULTS
Reserve Margin by Path: DPRK Electricity Sector
0
50
100
150
200
250
300
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
Pe
rce
nt
Sustainable DevelopmentRegional Alternative TotalRedevelopment CaseRecent Trends Case
EEWG Meeting, BeijingEEWG Meeting, Beijing 60 D. von Hippel 9/2010
DPRK ENERGY PATHS: SELECTED DRAFT RESULTS
Generation Capacity Summary: Redevelopment Path
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
MW
Existing Coal Existing OilExpanded Oil Large HydroKEDO LWR New CoalSmall Hydro Oil CCGas CC Wind Power
EEWG Meeting, BeijingEEWG Meeting, Beijing 61 D. von Hippel 9/2010
DPRK ENERGY PATHS: SELECTED DRAFT RESULTS
Generation Capacity Summary: Regional Alternative Path
0
2,000
4,000
6,000
8,000
10,000
12,000
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
MW
Existing Coal Existing OilExpanded Oil Large HydroKEDO LWR New CoalSmall Hydro Oil CCGas CC Wind PowerIGCC RFE Imports
EEWG Meeting, BeijingEEWG Meeting, Beijing 62 D. von Hippel 9/2010
DPRK ENERGY PATHS: SELECTED DRAFT RESULTSGlobal Warming Potential by Case
0
20
40
60
80
100
120
140
160
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
Mill
ion
To
nn
es
CO
2 E
qu
iv. Sustainable Development
Regional Alternative Total
Redevelopment Case
Recent Trends Case
EEWG Meeting, BeijingEEWG Meeting, Beijing 63 D. von Hippel 9/2010
DPRK ENERGY PATHS: SELECTED DRAFT RESULTS
Relative Cost (NPV) Relative to Redevelopment Case
($2,000)
($1,500)
($1,000)
($500)
$0
$500
$1,000
$1,500
Demand Transformation Resources Total Net Costs
Mill
ion
US
D (
Ne
t P
res
en
t V
alu
e)
Sustainable Development Case
Regional Alternative Case
EEWG Meeting, BeijingEEWG Meeting, Beijing 64 D. von Hippel 9/2010
DPRK ENERGY PATHS: INITIAL CONCLUSIONS FROM RESULTS
Sustainable Development and Regional Alternative Cases indicate significant reductions in energy use, emissions, are possible relative to Redevelopment Case, and…
Net costs of those reductions may be relatively small or even negative May offer opportunity for application of Clean
Development Mechanisms to share costs, carbon credits
Net costs very dependent on resource prices
EEWG Meeting, BeijingEEWG Meeting, Beijing 65 D. von Hippel 9/2010
NEXT STEPS IN DPRK ENERGY PATHS ANALYSIS
Next Steps on DPRK Paths Analysis (AES2007/AES2008) Refine and improve reference cost and performance
assumptions, particularly on the demand side, but for transformation, resources as well (Regional Alternatives)
Add detail on nuclear energy, including for “maximum nuclear” path
Sensitivity analysis (key costs, prices) Consideration of non-quantitative impacts on energy
security (as part of Regional integration of RAP) Consideration of other path variants
Work with DPRK Colleagues to Improve Analysis, Fully Implement in DPRK