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RENEWABLE ELECTRICITY IN THE APEC REGION (Phase II). Narumon INTHARAK and Jupri Haji JULAY Asia Pacific Energy Research Centre. 25 TH Meeting of the APEC EGNRET Tien Lai Spring Resort, Taipei, Taiwan, R.O.C. 31 October – 2 November 2005. OUTLINE. CURRENT APEC SITUATION
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RENEWABLE ELECTRICITY IN THE APEC REGION (Phase II) Narumon INTHARAK and Jupri Haji JULAY Asia Pacific Energy Research Centre 25TH Meeting of the APEC EGNRET Tien Lai Spring Resort, Taipei, Taiwan, R.O.C. 31 October – 2 November 2005
OUTLINE • CURRENT APEC SITUATION • QUESTIONS TO ADDRESS • METHODOLOGY • FINDINGS/CONCLUSIONS
CURRENT APEC SITUATION NRE is still a minor contributor in electricity generation for the APEC Region Biomass 50% Geothermal 24% Wind 6% Other 20% (PV, Hydro, Tide, etc.) NRE Nuclear 2% 15% Coal Hydro 44% 14% Natural gas Oil based 20% 5%
Electrification level (%) in selected APEC economies (2001) • 1600 million people have no access to electricity in the world • 200 million people in APEC region Russia Russia China China Viet Nam Viet Nam Thailand Thailand Philippines Philippines Peru Peru Papua New Guinea New Guinea Indonesia Indonesia Korea Korea Mexico Mexico Malaysia Malaysia Chile Chile 0 0 25 25 50 50 75 75 100 100 Percentage Percentage
QUESTIONS TO ADDRESS What is the real cost of supplying electricity from fossil fuels? How to eliminate or reduce the relatively high cost of renewable electricity technologies?
METHODOLOGY • analyze electricity costs by internalizing • externalities • assess the share of NRE technologies • based on fair competition among other • fossil fuel technologies to meet demand
DEFINING EXTERNALITY “Fuel cycle externalities are the costs imposed on society and the environment that are not accounted for by the producers and consumers of energy, i.e. that are not included in the market price. They include damage to the natural and built environment, such as effects of air pollution on health, buildings, crops, forests and global warming; occupational disease and accidents; and reduced amenity from visual intrusion of plant or emissions of noise. Traditional economic assessment of fuel cycles has tended to ignore these effects.” European Commission
BASIC ASSUMPTIONS AND SCOPE • Two different estimations - with and without externality accounting (Externality case and • BAU case)- are compared • Two time periods: 2005 to 2010 and • 2011 to 2020 • Capacity projections based on: • official national data of fossil fuels (and nuclear) • technical potential for NRE (allowing room for improvements)
BASIC ASSUMPTIONS AND SCOPE Leveraged cost of electricity production is the sum of two to four components : investment cost, operation and management cost (O&M), fuel cost and externalities. LeveragedCost (lCost) = Investment Cost + O&M Cost + Fuel Cost + Externality Cost Externality cost = is based on EU 2003 estimation
LEVERAGED COSTS FOR TECHNOLOGIES (Chinese Taipei) • without externalities, coal is the cheapest option and NRE (except • solar) are competitive to natural gas.
RESULTS AND FINDINGS (APEC Region) Individual sensitivities of APEC member economies to the application of externality • with the application of externality to • the cost of generation, more than half • or 9 of the APEC member economies • have significant changes in generation • structure, of more than 5% • this estimation discounts the effects of • transmission line construction and • dispatching.
RESULTS AND FINDINGS (APEC Region) • the real cost of generation would be twice as much as that without • externalities, US$ 1,137 Billion • economies could actually save up to 5% of real cost with the application • of externality 2005 2020 Unit Externality case BAU Difference - Electricity generation TWh 10,173 15,659 15,659 Leveraged generation cost Bln USD 305 482 448 32 Cost of Externality Bln USD 454 600 689 - 89 Leveraged generation cost ¢ per kWh 3.0 3.1 2.9 0.2 Cost of externality ¢ per kWh 4.5 3.8 4.6 - 0.8 ¢ per kWh 7.5 6.9 7.3 - 0.4 Total generation cost
Generation cost Externality cost Economy bln $ c/kWh bln $ c/kWh Australia 0.84 0.3 -2.80 -0.9 Brunei Darussalam negl. negl. negl. negl. Canada 1.97 0.3 -6.79 -0.9 Chile 1.19 0.9 -2.06 -1.6 China 11.96 0.3 -39.67 0.0 Chinese Taipei 0.35 0.1 -0.38 -0.1 Hong Kong, China 0.02 0.0 -0.03 -0.04 Indonesia 2.68 0.8 -5.87 -1.8 Japan negl. negl. negl. negl. Korea 3.16 0.6 -3.63 -0.7 Malaysia 2.59 1.2 -5.07 -2.3 Mexico 2.74 0.4 -5.07 -0.8 New Zealand 0.03 0.1 -0.06 -0.1 Papua New Guinea negl. negl. negl. negl. Peru 0.05 0.1 -0.05 -0.1 Philippines 0.48 0.4 -1.78 -1.3 Russia 3.47 0.2 -10.49 -0.7 Singapore negl. negl. negl. negl. Thailand 0.74 0.3 -3.43 -1.3 USA 1.95 0.0 -2.29 -0.1 Viet Nam 0.66 0.5 -3.60 -2.9 CURRENT NRE PROJECT : Results • Southeast Asia economies are the most to gain in the internalization of externality APEC average Brunei Darussalam Viet Nam Thailand Philippines Canada Australia China Russia Indonesia Papua New Guinea Malaysia New Zealand Mexico Hong Kong, China Chile USA Korea Chinese Taipei Externality yield over generation cost, Peru $ per $ Japan Singapore 0 2 4 6 8 10 12 14
CONCLUSION • NRE is still a minor contributor in electricity generation for the APEC Region • Southeast Asia economies show the least level of electrification and • the highest potential for NRE expansion through internalization of externality • the real cost of generation is twice as much as that without externalities • in general APEC economies could gain much from the internalization • of externality • with the application of externality to the cost of generation, more than half • of the APEC member economies have been found to exhibit significant • changes in generation structure, favoring NRE
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