Download Methodologies for Quantifying Energy Security in the Power Sector

Methodologies for Quantifying
Energy Security in the Power
Sector
William Blyth
24th April 2005
Why quantify energy security?

Interested in quantifying in interactions between
energy security and climate change policies

Many energy policy issues linked through the
technology / fuel mix. Develop tools for
integrated approach to energy policy making.

Can already quantify climate change impacts of
technology / fuel mix – needed a quantitative
measure for energy security
Energy policy linkages
• Hypothesis – use fuel / technology
mix as linking factor
Climate change
mitigation
Coal
Oil
Gas
Geopolitical
energy security
Nuclear
Renewables
Power system
flexibility and reliability
Difficulties associated with
quantifying energy security

Many different aspects to energy security

No generally accepted definition - depends on
local circumstances and political priorities

Absolute quantification probably impossible

Try to develop method which can track trends
over time, and shows response to policy actions
What approach did we take?

Avoid attempt to quantify externality in financial
terms

Instead focus on underlying causes of energy
security concerns

Focus on two aspects
 Geopolitical energy security in primary
(fossil) fuel markets
 Reliability of power supply
Geopolitical energy security

Underlying policy concern: concentration of primary
energy resources and resulting market power of supply
countries

Focus on risk of price distortion rather than physical
supply disruption

Take account of political stability of suppliers and
flexibility of buyers to switch to different suppliers

Domestic supply treated as part of the market – i.e. does
not assume that domestic supply insulates from world /
regional market price
Defining the market
Country X domestic supply
(zero geopolitical risk)
1
Country X
demand
Energy
Supply
Market
2
(oil/gas/coal
separate
markets)
3
IEA
(oil)
2001
2010
2020
2030
All Others
NORWAY
ANGOLA
KAZAKHSTAN
RUSSIA
OPEC
All Others
NORWAY
MEXICO
KAZAKHSTAN
RUSSIA
All Others
OPEC
KAZAKHSTAN
MEXICO
NORWAY
RUSSIA
OPEC
All Others
OMAN
MEXICO
NORWAY
RUSSIA
OPEC
Mtoe
Concentration of suppliers –
world oil market
3,000
2,500
2,000
1,500
1,000
500
0
-
2001
2010
2020
2030
All Others
COLOM BIA
INDO NESIA
SOUTHAFRICA
CHINA
Country 1
All Others
COLOMBIA
INDONESIA
SOUTHAFRICA
CHINA
Country 1
All Other s
COLOMBIA
INDONESIA
SOUTHAFRICA
CHINA
Country 1
All Others
Country 4
INDO NESIA
SOUTHAFRICA
CHINA
Country 1
Mt oe
Concentration of suppliers –
world coal market
180
160
140
120
100
80
60
40
20
-
2001
2010
2020
2030
All Others
NIGERIA
IRAN
NORWAY
S. ARABIA
RUSSIA
All Others
ALGERIA
IRAN
S. ARABIA
NORWAY
RUSSIA
All Others
INDONESIA
S. ARABIA
ALGERIA
NORWAY
RUSSIA
All Others
NETHLAND
INDONESIA
NORWAY
ALGERIA
RUSSIA
Mtoe
Concentration of suppliers –
S. European gas market
600
500
400
300
200
100
Market concentration measures
Trends in geopolitical energy
security measure
1.3
1.2
1.1
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
Oil
Coal average
Gas
2001
2010
2020
2030
Factors excluded from measure

Direct price effects – volatility, balance of supply
& demand etc

Terms of trade effects for net exporters

Dependency on infrastructure development – e.g.
LNG investments

Physical security (e.g. infrastructure
concentration)
Policy driver interactions
Climate change and
geopolitical energy security factor
0.60
1.4
1.3
0.50
0.40
1.1
1
0.30
0.9
0.20
0.8
0.7
Country 1
CO2 emissions trend
GES factor
1.2
0.10
Country 3
Country 2
Country 4
Country 1 - CO2
Country 3 - CO2
Country 2 - CO2
Country 4 - CO2
0.6
0.00
0.5
2001
2010
2020
2030
• Test policy synergies
• Analyse root causes of trends
Reliability of Energy Supply

Reliability of complex system depends on many factors

Broadly based around ancilliary services





Flexibility of generation (response rates)
Intermittency and capacity credit
Voltage stability services
Transmission security
Black-start services
Broad-brush assumptions…

Intermittency…
Capacity credit = how much of the average annual power
output can be relied on at times of peak load?
Wind
Solar
All others

50%
50%
100%
Flexibility…
Plant type
Hydro
Gas turbines
Coal
Nuclear
Ramp rate - % of rated output per minute
50-100%
10-20%
1-3%
N/A
Intermittency
Effect of increasing non-hydro renewables to 5%, 10% and 15%
in 2010, 2020 and 2030 respectively
Back-up Capacity
(% of total installed capacity)
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
2001
2010
Country 1
Country 3
2020
2030
Country 2
Country 4
Average ramp rate
(% of generation per minute)
Flexibility
30%
14%
25%
20%
12%
15%
10%
10%
8%
5%
0%
6%
2001
2010
Country 2 (1st axis)
Country 3 (2nd axis)
2020
2030
Country 4 (2nd axis)
Country 1 (2nd axis)
But… reliability is system
specific

Impact of adding any given technology depends
on what is already in the system

Reliability specifically managed by system
operators

Quantification (of costs) possible at a detailed
level, but headline indicators are of limited value
Conclusions and next steps

Quantified approach can help to structure thinking about
energy security
 Identify key drivers
 Trends
 Effects of policy action

Needs to be analysed at national level, taking account of
energy system, market structure and policy priorities

Case Studies being undertaken with IEA member countries
using the Geopolitical Energy Security measure to test its
usefulness as a policy analysis tool