Sorghum and Millets in Eastern and Southern Africa Facts, Trends and Outlook
Lights Out? The Outlook for Energy in Eastern Europe and Central Asia
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The World Bank Lights Out? The Outlook for Energy in Eastern Europe and Central Asia Sustainable Development Department Europe and Central Asia Region The World Bank
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Lights Out? The Outlook for Energy in Eastern Europe and Central Asia. Sustainable Development Department Europe and Central Asia Region The World Bank. MAJOR FINDINGS. The countries of Eastern Europe and Central Asia region could face an energy crunch within the next five to six years - PowerPoint PPT Presentation
Transcript of Lights Out? The Outlook for Energy in Eastern Europe and Central Asia
The World Bank
Lights Out?The Outlook for Energy in Eastern Europe and Central Asia
Sustainable Development DepartmentEurope and Central Asia RegionThe World Bank
The World Bank
MAJOR FINDINGS
The countries of Eastern Europe and Central Asia region could face an energy crunch within the next five to six years
The financial crisis has created some breathing room and a window of opportunity to mitigate the impact of the anticipated crisis
Mitigating actions are required both in the demand and supply side. Significant investments will be required (3% of cumulative GDP over 2010-2030) and the public sector alone won’t be able to provide this level of investments
Countries need to take actions now to create a climate that is attractive for investments in the sector
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The Region’s Transition and The Current Economic Crisis
1990
1991
199
2
199
3
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
e
2009
p
0
20
40
60
80
100
120
140
160
180
Changes in Real Output(Index: 1990 = 100)
CSE/CIS Region
CIS
Central and South-East Europe(CSE)
Annual average GDP Growth
(%)-5.5 +1.1 +6.0 -5.6
The World Bank
1990 2000 2008 (e) -
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Oil
Gas
Coal
HydroNuclear
Production reduced by 30% in 2000, but recovered by 2008
Consumption stood at 80% of 1990 levels
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Amply Endowed with Energy Resources and Oversized Infrastructure, the CIS/ CSE Region is a Key Primary Energy Exporter
Million Tons of Oil Equivalent (Mtoe)
The World Bank
Europe and Central Asia Region
EU-10 (Central Europe)
Southeastern Europe
CIS North
CIS South
0 10 20 30 40 50 60
47
41
48
58
51
17
11
26
9
21
BEEPS 2005 BEEPS 2008
Source: World Bank and 2005 and 2008
Increase: 2005-2008(%)
+30
+49
+22
+30
+30
By 2008 Energy Supply Became a Constraint to Growth
Percentage of Firms that Consider Electricity a Problem in Doing Business(%)
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The World Bank6
The Economic Crisis Eased Some of These Concerns, But Respite is Only Temporary
2001-05 2006-10 2011-15 2016-20 2021-300.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
GDP
Electricity Consumption
Primary Fuel Consumption
Average Annual GDP, Electricity Consumption, and Primary Fuel Consumption Growth Rate in the CIS/CSE Region, 2005–30 (%)
4.4 %
3.1 %
1.9 %
Source: World Bank staff calculations.
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Where will These Additional Supplies Come From?
The World Bank8
The Russian Federation Plays a Key Role Meeting Natural Gas Needs of the EU and Will Continue To Do So
Gas piped from Russia
0
50
100
150
200
250
300
350
127
93
50
45
Liquefied Natural Gas
Russia’s role in the EU gas sector: 40% of import requirements
25% of overall demand
Gas piped from Algeria & Libya
Gas piped from Norway
Gas Imports by the EU in 2008(billion cubic meters)
Gas piped from Russia
The World Bank9
Russia has Significant Potential to Increase its Production But Investments are Still Below the Required Levels
-
100
200
300
400
500
600
700
800
900
1,000 Optimistic
Baseline
Pessimistic
Actual and Projected Scenarios for Natural Gas Production(billion cubic meters)
0
5
10
15
20
15
20
4.5
8.6
Required Investments Vs. Historical Investments for Upstream Gas Exploration and Development
(billion USD a year)
Source: World Bank staff calculations. Source: World Bank staff calculations and Gazprom’s financial statements
Required Investments
Average Investments 2001-2008
Investments 2008
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Absent Significant Investments or Actions to Limit Demand Growth…
The region could become a net importer of oil and gas
Source: World Bank staff calculations.
2005 2010 2015 2020 2025 2030-100
0
100
200
300
400
500
Imports of OECD Europe (non-CIS/CSE) Net CIS/CSE exports, base caseNet CIS/CSE exports, optimistic case
Actual and Projected Gas Exports from CIS/CSE region 2005-2030(billion cubic meters)
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And the Outlook for Electricity Supply is of Even Greater Concern
2006-10 2011-15 2016-20 2021-25 2026-30-100
-50
0
50
100
150
200
250
300
Additions Rehabilitation Retirements
Projected Generating Capacity Additions, Rehabilitations and Retirementsin CIS/CSE region 2005-20 (GW)
Source: World Bank staff calculations
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The Region will Face Significant Investment Needs Over the Next Two Decades
Sector Amount Required
Electricity 1,500
Crude Oil 900
Heating 500
Gas 230
Coal 150
Refining 20
Total 3,300
Projected Energy Sector Investment Needed in the CIS/CSE region by 2030(USD billion)
3%Estimated investments in the Energy Sector amount of cumulative GDP
Although the public sector will need to finance a portion of these investments, it will not be able to do it alone, the financial depth and technical know-how of the private sector and energy companies will be required
Source: World Bank staff calculations.
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Countries Will Need to Create a Competitive Investment Climate by Adhering to 10 Key Principles
DO’s1. Do introduce an acceptable legal framework.
Electricity
2. Do provide supporting regulations administered by an independent and impartial regulator.
3. Do create an environment that facilitates assured nondiscriminatory access to markets.
4. Do honor internationally accepted standards.
5. Do abide by contractual undertakings and preclude the use of an administrative bureaucracy to constrain investor activities
6. Do prevent monopoly abuses.
7. Do ensure that the sector is kept free of corruption
Don’ts
1. Don’t impose a punitive or regressive tax regime.
2. Don’t interfere with the functioning of the market place.
3. Don’t discriminate among investors.
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One of the Most Critical Elements is Ensuring the Financial and Commercial Viability of the Sector
Kyr
gyz
Rep
ublic
Ukr
aine
Kaz
akhs
tan
Rus
sia
Aze
rbai
jan
FYR
Mac
edon
ia
Arm
enia
UN
MIK
Kos
ovo
Ser
bia
Geo
rgia
Est
onia
Bul
garia
Alb
ania
Lith
uani
a
Mol
dova
Mon
tene
gro
Cro
atia
Rom
ania
Latv
ia
Bos
nia
and
Her
ze...
Turk
ey
Pol
and
Slo
vaki
a
Hun
gary
0
5
10
15
20
25
Weighted average electricity tariffs for residential consumers in 2008US$ cents / KWh
Source: ERRA Tariff Database
The World Bank
…And Countries will Need to Ensure that They Will Act in an Environmentally Responsible Fashion
0 2 4 6 8 10 12 14 16 180
2
4
6
8
10
12
14
16
18
ArmeniaAzerbaijan
Bulgaria
Croatia
Czech Republic
Estonia
FYR Macedonia
Hungary
Russia
Kazakhstan
Kyrgyz Republic
LatviaLithuania
Moldova
Poland
Romania
Serbia and Montenegro
Slovak Republic
Slovenia
Tajikistan
Turkey
TurkmenistanUkraine
BelarusAlbania
Uzbekistan
CO2 per Capita in Tons
GDP
per
Cap
ita in
Tho
usan
ds U
S$
Carbon emissions in the CIS/CSE region in 2005
High carbon emissions reflect the region’s: Reliance on abundant
domestic coal
Low energy efficiency
Outdated infrastructure
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Source: World Bank World Development Indicators
The World Bank
1990 2005 2010 2015 2020 2025 20300
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
CO2 Emis-sion in 1990
Target = 80% of 1990
Other
Residential
Transport
CO2 emissions in 1990
EU Target : 80% of 1990 levels by 2020
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Focused Efforts are Required if the Region is to Meet its Emissions Targets
Actual and projected CO2 emission in CIS/CSE region(million tons of CO2)
Source: World Bank staff calculations.
The World Bank
Energy – Next Steps for Poland•Primary Energy Supply Concerns
•Energy Efficiency•Diversify Supply Options•Improve Prospects for Trade
•Investment Needs•New Investments, Retire or Rehab Existing Assets
•Environmental Impact•High Efficiency Plant, Low Carbon Fuels•Cost Impacts
The World Bank
Poland’s Energy Strategy
• Implement the Energy Strategy to 2030• Simplify Legislation Consistent with Strategy• Improve Trade Capacity to:
– Enable Low Cost Imports– Facilitate Profitable Exports
• Develop New Technologies (e.g.,Smart Grids)• Accelerate Use of Cogeneration
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Climate Change Issues
• Carbon Reduction Primarily from:– Energy Efficiency– Nuclear Power– Renewable Energy– Carbon Capture and Storage
• Impacts of Options on Growth, Jobs, Trade• Government Role in R&D and Standards
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Energy Efficiency – Supply Side
• Promote the Use of New Technologies
• Rehabilitate and Retire Older Plants
• Incentivize Cogeneration and Renewables
• Network Loss Reduction Using Smart Grids
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Energy Efficiency – Demand Side
• Improve incentives to shift peak demand• Commit public sector to exemplary role• Create a comprehensive approach to EE
investment support• Designate a Lead Energy Efficiency Agency• Make energy performance certificates mandatory
when selling/renting buildings and apartments• Support R & D for new solutions and technologies
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The World Bank
The Way Forward
• Implement/Develop New Technologies– IGCC with CCS– Coal bed methane capture and use– Electric Vehicles– Underground coal gasification
• Make Energy Markets Work– Finish/Update the Reforms Program– Integrate Supply and Demand
• Implement Renewable Energy Options• Urbanization – Good Urban Planning
The World Bank
Possible Questions to be Addressed
1. How Do You Delink Carbon and Growth?2. The Future for Coal if CCS Doesn’t Work?3. Will Nuclear Power be Accepted?4. The Long-Term Costs of Nuclear Power?5. If EE is so Cheap, why doesn’t it Happen?
