What is in store for other fuels in a Golden Age of Natural Gas?
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© OECD/IEA 2013 Modelling the potential for industrial energy efficiency in IEA’s WEO Dr Fabian Kesicki International Energy Agency International Energy Workshop, Paris, 20 June 2013
Transcript of What is in store for other fuels in a Golden Age of Natural Gas?
© OECD/IEA 2013
Modelling the potential for industrial energy efficiency in IEA’s WEO
Dr Fabian Kesicki
International Energy Agency
International Energy Workshop, Paris, 20 June 2013
© OECD/IEA 2012
Global industrial energy demand increases by almost 40% up to 2035
Emerging economies determine industrial energy growth
Share of global industrial energy demand
0%
20%
40%
60%
80%
100%
1975 2010 2035
Rest of non - OECD
ASEAN
India
China
OECD
1 770 Mtoe 3 220 Mtoe 4 440 Mtoe
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Energy intensive sectors represent around 60% of industrial energy demand
Today’s industrial energy demand
Energy flows in the industry sector, 2010
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Modelling industrial energy demand
Industry accounts for more than a third of final energy consumption, but modelling faces difficulties:
No dominating sub-sector, many different production processes
Energy savings can impact on product quality and thus limit deployment
Data problems as energy consumption can evolve quickly and autoproduction can distorts energy consumption
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Four energy-intensive sectors are explicitly modelled
WEM industry model structure
Sub-sectors in industry
Sub-sector Activity variables Iron and steel Crude Steel Chemical and petrochemical Ethylene Propylene Aromatics Methanol Ammonia Cement Cement Pulp and paper Paper Other industries Value-added in industry
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Description of industry model
Activity projection
Econometric projection based on value added, price and pop.
Energy intensity
Process changes (e.g. primary vs secondary steel-making)
Technical energy savings
Systems optimisation
Operational efficiency
Fuel shares
Multiple logit model, electricity and fuel treated separately
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Process steps by sub-sector in industry
Industry modelling in WEM accounts for process changes in the various sub-sectors
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How to model energy efficiency policies?
0 2 4 6 8
10 12 14 16 18 20 22 24
0 0.02 0.04 0.06 0.08 0.1
Payb
ack
peri
od [y
ears
]
Energy savings [toe/t of product]
Energy savings as a function of the payback period
Acceptable payback periods and technology penetration vary with the scenario and the corresponding policy assumptions
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Capacity growth in industry
While growth will significantly slow down for iron&steel and cement, other industry sectors see continued growth, particularly in non-OECD countries
0%
20%
40%
60%
80%
100% OECD
Non-OECD
Iron & steel Chemicals Pulp & paper Other industries
Cement
2011- 2020
2021- 2035
2011- 2020
2021- 2035
2011- 2020
2021- 2035
2011- 2020
2021- 2035
2011- 2020
2021- 2035
Cumulative new capacity as a share of currently installed capacity
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Energy demand development
-2%
-1%
0%
1%
2%
3%
4%
NPS EWS NPS EWS NPS EWS NPS EWS NPS EWS
Efficiency*
Activity
Energy demand
Iron and steel
Chemicals Cement Pulp and paper
Other industries
Average annual change in industrial activity, efficiency and energy demand, 2010-2035
Energy demand will increase in all sub-sectors as rapid growth in industrial production outpaces energy efficiency improvements
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Trends by subsector
0
100
200
300
400
500
600
1990 2000 2010 2020 2030
Mto
e
Iron and steel
Chemicals and petrochemicals Cement
Pulp and paper
New Policies Scenario Efficient World Scenario
Global final energy consumption by industrial subsector
Energy efficiency can cut industrial energy demand growth by around 30%
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Policies to overcome existing barriers
Numerous barriers impede the implementation of energy efficiency: short payback periods, lack of awareness, distraction from core business, production interruption
Efficiency policies
Funding of research
Requirements for energy audits and management systems
Training and capacity building
Performance requirements
Financing mechanisms
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Conclusions
Industry is a driving factor behind energy demand growth in the future
Energy efficiency can slow down this growth by around 30%
Recent data and solid characterisation of production process are crucial for industrial energy modelling
Future research needs to shed more light on the black box ‘non-energy-intensive’ industries
