EVALUATION OF ENERGY PATHS FOR THE DPRK

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EVALUATION OF ENERGY PATHS FOR THE DPRK

• Asian Energy Security (AES)/East Asia Energy
  Futures (EAEF) Project
  
• Fifth Asian Energy Security Workshop
• 12 to 14 May, 2004, Beijing, China
• David Von Hippel, Senior Associate
• Nautilus Institute for Security and Sustainable
  Development

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OUTLINE OF PRESENTATION

• Background to DPRK Energy Analyses
• History and general analytical approach
• Preparation and Analysis of Energy Paths for the
  DPRKNational and Regional
  
• Goals and philosophy in preparing paths
• Overall Approach and Scope
• Descriptions of Paths Considered
• Recent Trends Path
• Redevelopment Path
• Sustainable Development Path
• Regional Alternative Path

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OUTLINE OF PRESENTATION

• Selected Details of Modeling Approach by Path
• Selected Draft Results of Analysis of Future
  Energy Paths for the DPRK
  
• Energy Demand
• Fuel Supply/Transformation
• Energy Imports and Exports
• Costs
• Environmental Emissions
• Initial Lessons Learned from Analysis
• Next Steps in Analysis of Energy Futures for the
  DPRK

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PREVIOUS AND ONGOING NAUTILUS INSTITUTE DPRK
ENERGY WORK

• 1986-94 Nuclear Weapons/Proliferation Issues
• 1992-97 UN Energy-Environment Missions
• 1995 DPRK Energy Supply/Demand and Energy
  Efficiency Study
  
• 1996 KEDO-HFO Supply and Demand Study
• 1997 Supply and Demand for Electricity in the
  DPRK--1990, 1996, and Future Paths
  
• 1997 Spent Fuel Scenarios for East Asia
• 1997-02 DPRK Village Energy Project, Study
  Tours, and Proposal Collaboration
  
• 2002 Update to 2000 base year

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PREVIOUS AND ONGOING NAUTILUS INSTITUTE DPRK
ENERGY WORK

• OVERALL APPROACH TO DPRK ENERGY SECTOR ANALYTICAL
  WORK
  
• Obtain as much information as possible about the
  DPRK economy and energy sector from media
  sources, visitors to the DPRK, and 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 and economy, what changes (national,
  regional, global) might bring those paths about,
  what changes might mean at end-use,
  infrastructure levels

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PREPARATION AND ANALYSIS OF ENERGY PATHS FOR THE
DPRK

• Goals of Paths Analysis
• Assemble plausible, internally-consistent
  alternative energy paths for the DPRK, based on
  the best information available
  
• Explore, in a quantitative manner whenever
  possible (but not exclusively) the relative
  energy security implications of the different
  paths, including the implications of energy
  sector cooperation between countries of Northeast
  Asia
• Use energy paths as focus, starting point for
  discussions of how regional/other actors might
  assist in sustainable re-development of DPRK
  energy sector

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PREPARATION AND ANALYSIS OF ENERGY PATHS FOR THE
DPRK

• Philosophy in Paths Preparation/Evaluation
• Design paths that are plausible, and, under the
  right conditions, potentially achievable
  
• At the same time, paths shown are not intended in
  any way to judge what should happen
  
• Paths are built upon best, most
  internally-consistent DPRK information we can
  find, but there are undoubtedly many inaccuracies
  in the analysis
• We look forward to working with DPRK colleagues
  to improve analysis, make more applicable
  
• Paths are therefore a starting point for further
  discussion and analysis

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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 and 2000 DPRK energy use
  (overall analysis period for paths, 1990 to
  2025)
• Develop overall themes for several (4) 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
  energy picture

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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, 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

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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

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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

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DPRK ENERGY PATHS CONSIDERED

• Redevelopment Path (continued)
• Transport sector, particularly personal
  transport, expands markedly
  
• Civilian auto, plane, train, bus transport per
  person rise
  
• Efficiency improvements in road, rail transport
  modes
  
• Military ground forces activity decreases
• Energy efficiency in military sector improves
• Investment in new electricity infrastructure
• New coal, gas combined-cycle, some rehabilitation
  of older plants, particularly hydro, new small
  hydro, existing coal plants retired over time,
  KEDO reactors completed 2013 (export power)

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DPRK ENERGY PATHS CONSIDERED

• Redevelopment Path (continued)
• Re-investment in East Coast refinery
• Back on line by 2012, expanded 2015, with power
  plant expanded as well
  
• Oil products imported as needed to meet demand
  above domestic refining output
  
• Natural gas, first as LNG, begins to play a role
  in powering industry, electricity generation,
  urban residences starting in about 2012
  
• Smaller LNG terminal built (Nampo?), part of
  output exported
  
• Coal/Coke Exports/Imports at 2000 levels

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DPRK ENERGY PATHS CONSIDERED

• Recent Trends Path
• Assumes that current political difficuties
  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)
  
• Industrial energy intensities remain high
• Other Minerals (magnesite) production increases
• Transport activity increases slowly
• Civilian auto transport grows most

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DPRK ENERGY PATHS CONSIDERED

• Recent Trends Path (continued)
• Residential energy demand increases slowly
• Continued emphasis on coal, but electricity
  gradually more available
  
• Some modernization/re-mechanization of the
  agricultural sector
  
• Fertilizer, oil, electricity use up slightly over
  time
  
• Cropped area doesnt change
• Fisheries effort increases slowly
• Military sector energy use, activity change
  little
  
• Commercial sector floorspace, electricity/coal
  use grow somewhat

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DPRK ENERGY PATHS CONSIDERED

• Recent Trends Path (continued)
• Transmission and distribution losses remain high
  through 2015, decrease slightly after 2015
  
• Fraction of fuel inputs to coal-fired power
  plants as HFO declines with end of KEDO oil
  deliveries
  
• 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
  
• Coal-fired capacity meets net electricity demand
  after hydro, oil-fired plant output are factored
  in.
  
• KEDO nuclear reactors not completed

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DPRK ENERGY PATHS CONSIDERED

• Recent Trends Path (continued)
• Imports of heavy fuel oil via KEDO cease in
  2003.
  
• Other oil products (and HFO from elsewhere)
  continue to be imported at year 2000 levels
  
• West Coast refineries continue to operate
• Output increases slightly over time to cover
  demand net of imports
  
• Coal and coke imports and exports remain the same
  as in 2000 throughout the period modeled.
  

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DPRK ENERGY PATHS CONSIDERED

• Sustainable Development Path (National
  Alternative Path)
  
• Provides the same energy services as
  Redevelopment Pathwith same demographic
  assumptions, economic outputbut
  
• 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

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DPRK ENERGY PATHS CONSIDERED

• Sustainable Development Path (continued)
• Industrial sector modifications
• Industrial boiler improvements (25 percent by
  2025)
  
• Improvements in motors and drives/motor systems
• Substitution of gas (15 by 2025) for coal to
  produce process heat in most industries
  
• Transport sector modifications
• Diesel/gasoline truck/bus efficiency, diesel
  train efficiency, improved 25 by 2025
  
• Improvements in electric rail efficiency (27 by
  2025)
  
• Introduction of gasoline, CNG, hydrogen hybrid
  vehicles (starting in 2010/2015/2020) in civilian
  autos

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DPRK ENERGY PATHS CONSIDERED

• Sustainable Development Path (continued)
• Residential sector modifications
• Domestic coal boiler/stove/heater improvements
• In urban subsector, more switching from coal to
  natural gas and district heat.
  
• Urban/Rural residential building shell
  improvements, resulting in savings of coal, coal
  and biomass fuels
  
• Electric lighting and appliance efficiency
  improvements
  
• Agricultural Sector modifications
• Improvements in efficiency of diesel fuel use per
  hectare of land cropped improvements in boilers
  used to produce heat for processing of farm
  products, electric pump/machinery improvements

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DPRK ENERGY PATHS CONSIDERED

• Sustainable Development Path (continued)
• Fisheries Sector Modifications
• Improvements in efficiency of diesel fuel use per
  unit of fisheries effort improvements in
  electric motor/drive systems used in fisheries
  products processing
• Military Sector Modifications
• Improvement in efficiency of land vehicles,
  diesel-fueled naval vessels
  
• Improvement in coal-fired boilers, electric
  motors and drives in Military Manufacturing
  subsector improvement in coal-fired boilers,
  building envelopes, electric motors and drives
  Buildings/Other subsectors

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DPRK ENERGY PATHS CONSIDERED

• Sustainable Development Path (continued)
• Public and Commercial Sectors Modifications
• Improvement in coal-fired boilers, building
  envelope improvements, and overall electricity
  use improvement
  
• Electricity Generation Modifications
• Accelerated phase-out of existing coal-fired
  generating capacity (all 2005 capacity retired by
  2025)
  
• The addition of an integrated-gasification
  combined-cycle (IGCC ) generating plant in 2020
  (300 MW)
  
• Aggressive wind power development, new small/
  medium hydro, focus on refurbishment of existing
  hydro
  
• Less new coal-fired and gas combined-cycle
  capacity is built, especially in the years 2015
  to 2025

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DPRK ENERGY PATHS CONSIDERED

• Sustainable Development Path (continued)
• Other Transformation Modifications
• Additional district heating capacity is built to
  provide for expanded residential sector use
  
• LNG capacity is built earlier (first phase
  started in 2010, and second and third phases
  brought on line one year earlier) than in the
  Redevelopment case, but the same final capacity
  is in place by 2025 as in the Redevelopment path
• Costs
• Cost estimates included for all demand end-uses,
  transformation processes, and fuels whose use
  changes relative to the Redevelopment case

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DPRK ENERGY PATHS CONSIDERED

• Regional Alternative Path
• Follows modifications identified for the DPRK in
  Regional Alternative paths document
  
• 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
• Costs of cooperation reflected as module cost
• 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

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DPRK ENERGY PATHS CONSIDERED

• Regional Alternative Path (continued)
• Transformation-sector Modifications (continued)
• LNG facility roughly 3 times larger than in
  Redevelopment case starts operation in 2012 most
  output exported to the ROK
  
• A power line from the Russian Far East through
  the DPRK to ROK is modeled as importing 100 MW of
  power to DPRK at discounted price of 0.02/ kWh
  
• Participation in regional cooperative activities
  related to nuclear research and to nuclear waste
  handling, with annual costs (most possibly
  in-kind) to the DPRK from 2006

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DPRK ENERGY PATHS CONSIDERED

• Regional Alternative Path (continued)
• Transformation-sector Modifications (continued)
• Cooperation in renewable energy technologies with
  annual costs to the DPRK from 2007 on, earlier
  deployment,10 reduction in cost of wind, small
  hydro technologies
• Some changes in the schedule of additions of new
  coal-fired plants and gas-fired plants occurs
  
• Last of the coal-fired plants existing as of 2005
  are retired in 2020

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DPRK ENERGY PATHS SELECTED DRAFT RESULTS
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DPRK ENERGY PATHS SELECTED DRAFT RESULTS
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DPRK ENERGY PATHS SELECTED DRAFT RESULTS
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DPRK ENERGY PATHS SELECTED DRAFT RESULTS
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DPRK ENERGY PATHS SELECTED DRAFT RESULTS
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DPRK ENERGY PATHS SELECTED DRAFT RESULTS
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DPRK ENERGY PATHS SELECTED DRAFT RESULTS
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DPRK ENERGY PATHS SELECTED DRAFT RESULTS
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DPRK ENERGY PATHS SELECTED DRAFT RESULTS
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DPRK ENERGY PATHS SELECTED DRAFT RESULTS
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DPRK ENERGY PATHS SELECTED DRAFT RESULTS
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DPRK ENERGY PATHS INITIAL CONCLUSIONS FROM
RESULTS

• Sustainable Development Case indicates
  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
  
• Regional Alternative Case offers similar
  benefits, but net costs very dependent on
  resource prices

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NEXT STEPS IN DPRK ENERGY PATHS ANALYSIS

• Next Steps on DPRK Paths Analysis
• Refine and improve reference cost and performance
  assumptions, particularly on the demand side, but
  for transformation, resources as well (Regional
  Alternatives)
• Additional debugging of dataset
• Sensitivity analysis (key costs, prices)
• Consideration of non-quantitative impacts on
  energy security
  
• Consideration of other path variants
• Work with DPRK Colleagues to Improve Analysis,
  Fully Implement in DPRK