Updated DPRK Energy Balance Draft and Work to Be Done

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Updated DPRK Energy Balance (Draft) and Work to
Be Done

• Dr. David F. Von Hippel and
• Dr. Jungmin Kang
• Nautilus Institute Senior Associates
• Prepared for the DPRK Energy Expert Study Group
  Meeting, Stanford University, California
• June 26 - 27, 2006

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THE DPRK ENERGY SECTOR OUTLINE OF PRESENTATION

• Background to Nautilus DPRK Energy Analysis
• DPRK Energy Balance Update
• Overall Approach
• Recent Trends in DPRK Economy
• Database Updates
• Overview of Draft Results Energy Supply/Demand
• Next Steps in Update

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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
• 1997-02 DPRK Village Energy Project, Study
  Tours, and Proposal Collaboration
• 2002 Update to 2000 base year (with KEEI)
• 2006 Update to 2005 base year (with KEEI)

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NAUTILUS INSTITUTE DPRK ENERGY ANALYSIS

• OVERALL APPROACH
• Obtain as much information as possible about the
  DPRK economy, energy sector from media sources,
  literature sources, visitors to the DPRK, trade
  statistics, market observers, other sources
• Information used includes quantitative, anecdotal
• Use available information, comparative analysis,
  and judgment to assemble a coherent and
  consistent picture of the DPRK energy sector
• Use physical measures and intensities whenever
  possible

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NAUTILUS INSTITUTE DPRK ENERGY ANALYSIS

• OVERALL APPROACH
• 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
• Including consideration of role of DPRK in
  regional energy economy
• Role of ROK in future energy paths, including
  additional energy sector connections on the
  Korean peninsula
• Update periodically (including this year)

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DPRK ENERGY BALANCE UPDATE OVERALL APPROACH

• Start with demand/supply estimates prepared for
  1990, 1996, 2000
• Modification of 1990/96/2000 estimates of demand
  for fuels to reflect reports of recent changes in
  conditions in the DPRK
• Revision of 2000 electricity supply estimates to
  meet 2005 demand, reflect thermal/hydro
  capacity/availability changes
• Estimation of 2005 oil supply reflecting
  available information (including official and
  "unofficial" trades)

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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

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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 Study Group

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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

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DPRK ENERGY BALANCE UPDATE DRAFT ENERGY BALANCE
TABLE
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THE DPRK ENERGY SECTOR RECENT TRENDS (1990s)

• Decline in the supply of crude oil
• Continuing degradation of electricity generation,
  TD infrastructure
• Continuing degradation of industrial facilities
• International trade in magnesite
• Difficulties with transport of all goods,
  especially coal
• Difficulties in coal production related to lack
  of electricity, mine flooding

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THE DPRK ENERGY SECTOR RECENT TRENDS (2000-on)

• Some economic revival, but mostly associated with
  foreign aid and/or in areas of the economy that
  are not energy intensive (markets, restaurants,
  small agriculture)
• Cessation of KEDO Heavy Fuel Oil deliveries
• Supply of electricity to Kaesong from ROK
• Electricity imports from China (modest)
• Cross border trade in oil/oil products(?)
• Construction of small power plants (possibly not
  connected to main grid)

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THE DPRK ENERGY SECTOR DATABASE UPDATES FOR 2005

• Database update in early phase, but possible
  changes include
• Somewhat improved electricity generation and
  electricity availability in recent years
• Modest additions to industrial capacity in recent
  years (but likely not across the board)
• Impacts of recent ROK/PRC infrastructure
  investments
• Changes in official/unofficial fuels
  imports/exports
• Revisit assumptions regarding fuelwood/biomass
  and coal use in rural residential sector
• Modest changes in transport sector
• Adjustments to revise fuel use in military sector

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THE DPRK ENERGY SECTOR DATABASE UPDATES FOR 2005

• Key Questions for Experts Study Group Input
• DPRK Energy Supply
• Have there been recent significant changes in
  generating capacity, or change to TD?
• What is total capacity of reported new small
  power plants, and what is their average capacity
  factor?
• What have been the trends/amounts of fuels
  imports/exports to/from the PRC, RF?
• Have there been recent significant changes in the
  coal mining sector resulting in changes in coal
  availability?
• What is the status of fuelwood and biomass
  production?

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DPRK ENERGY SUPPLY IMAGES
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DPRK ENERGY SUPPLY IMAGES
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THE DPRK ENERGY SECTOR DATABASE UPDATES FOR 2005

• Key Questions for Experts Study Group Input
• DPRK Energy Demand
• What do recent economic changes (for example, in
  the commercial sector) mean for energy use?
• Recent trends in rural household and services
  energy use--fuelwood/biomass, coal, electricity?
• Has heavy industry in the DPRK changed
  significantly in recent years?
• What impacts have recent ROK/PRC industrial
  sector investments had on energy use?
• Recent trends in agricultural sector energy use?
• Modest changes in transport sector
• Have military exercise tempos changed recently?

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DPRK ENERGY DEMAND IMAGES
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DPRK ENERGY DEMAND IMAGES
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DPRK ENERGY DEMAND IMAGES
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DPRK ENERGY DEMAND IMAGES
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THE DPRK ENERGY SECTOR DRAFT RESULTS
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THE DPRK ENERGY SECTOR DRAFT RESULTS
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THE DPRK ENERGY SECTOR DRAFT RESULTS
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THE DPRK ENERGY SECTOR DRAFT RESULTS
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THE DPRK ENERGY SECTOR DRAFT RESULTS
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DPRK ENERGY DATABASE UPDATES NEXT STEPS

• Review papers/presentations prepared for this
  Meeting and other information gleaned from
  Participants
• Continue review of available DPRK literature
• Interview additional recent visitors to the DPRK
• Revise/rebalance analysis of 2005 Energy
  Supply/Demand
• Obtain reviews of draft database/Report, and
  revise as appropriate
• Prepare Final Report
• 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

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ROK DATA ON DPRK ENERGY AND COMBINED KOREAN MODEL

• Reviewing ROK literature on DPRK energy sector
  and economy
• Available data in Korean
• Trace down ultimate sources of figures in ROK
  literature to the extent possible
• Use DPRK database to develop model of future
  energy supply/demand in the DPRK (using the LEAP
  energy/ environment software tool)
• In a parallel effort, develop and update ROK
  database in LEAP
• Use DPRK, ROK LEAP datasets to develop
  coordinated energy paths for Korea as a whole
• Including paths in which energy resource links
  are made with other countries in Northeast Asia

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• THANK YOU!