Tne IIASA Energy Systems Program's View o f Latin America's Energy Future:
An Evaluation
J.C. di Primio
Prepared for Ke~aforschungszentrum Xarlsruhe
Status Report Draft SR-80-2
July 1980
International Institute for Applied Systems Analysis A-2361 Laxenburg, Austria Telephone: 02236/71521*0
THE IIASA ENERGY SYSTEMS PROGRAM'S VIEW OF LATIN AMERICA'S ENERGY FUTURE:
AN EVALUATION
J. C. di Primio prepared for
Kernforschungszentrum Karlsruhe
J u l y 1980
With an Annex by A.M. Khan and A. H6lzl
The views and conclusions expressed in this report are the author's alone and should not be ascribed to the
Kernforschungszentrum Karlsruhe, the National Member
Organizations of IIASA, its Council or other staff of the International Institute for Applied Systems Analysis.
PREFACE
This report has been prepared in accordance with an agreement between the Kernforschungszentrum Karlsruhe and
IIASA providing for the application of the IIASA energy models and data base to Latin America. Its objectives are an
evaluation of the IIASA models as appropriate tools for
studying the Latin American situation, an analysis of IIASA's Latin American results to date, and a discussion of those
improvements in both the models and the data base that would be necessary to make them more suitable for understanding the
particular nature of Latin American energy problems.
ACKNOWLEDGEMENT
This study was made p o s s i b l e by grants from t h e Kernforschungszentrum Karlsruhe t o t a l i n g DM 1 4 0 , 0 0 0 .
TABLE OF CONTENTS
1. INTRODUCTION
2. IIASA-ENP MODELING SET: I T S APPLICATION TO THE LATIN AMERICAN CASE
2.1 T h e E n e r g y Demand Model MEDEE-2 2.1.1 B r i e f D e s c r i p t i o n
2.1.2 Main Scenario A s s u m p t i o n s 2.1.3 R e s u l t s
2.2 T h e E n e r g y Supply Model MESSAGE 2.2.1 S u m m a r y D e s c r i p t i o n 2.2.2 Main A s s u m p t i o n s 2.2.3 R e s u l t s
2.3 T h e E n e r g y - E c o n o m y I n t e r a c t i o n Model IMPACT 2.3.1 B r i e f D e s c r i p t i o n
2.3.2 A s s u m p t i o n s 2.3.3 R e s u l t s
3 . THE IIASA-ENP ENERGY PICTURE OF LATIN AMERICA
3.1 T h e S i t u a t i o n i n 1975
3.2 E n e r g y R e s e r v e s and E s t i m a t e d R e s o u r c e s
3.3 P r o j e c t i o n s of F u t u r e E n e r g y Demand and S u p p l y 4. THE COMPONENTS OF THE ASSESSMENT PROCESS
5. THE DEVELOPMENT I S S U E 5.1 What i s D e v e l o p m e n t ? 5.2 I m p l i c a t i o n s
5.3 C o n s t r a i n t s
5.4 P a s t - P r e s e n t D e v e l o p m e n t P e r f o r m a n c e 5.4.1 W o r l d w i d e T r e n d s
5.4.2 T h e D e v e l o p m e n t P a t t e r n of L a t i n A m e r i c a
6 . THE APPLICABILITY OF THE MODELING SET FOR ENERGY PROJECTIONS OF LDCS
6 . 3 E n e r g y Demand: MEDEE-2 6 . 2 E n e r g y Supply: MESSAGE 6 . 3 T h e IMPACT Model
6 . 4 C o n c l u s i o n s 7 . TRE ASSESSMENT
7 . 1 T h e G r o w t h of R e g i o n a l P r o d u c t
7 . 2 S o c i e t y ' s C a p a b i l i t y of R e a l i z a t i o n 7 . 3 C o n c l u s i o n s
7 . 4 C o m p l e m e n t a r y Work
8. RECOMMENDATIONS
APPENDIX: A.M. khan and A. H B l z l , " E v o l u t i o n of F u t u r e E n e r g y D e m a n d T i l l 2030 i n D i f f e r e n t World R e g i o n s , A n A s s e s s m e n t Made f o r t h e Two I I A S A S c e n a r i o s "
L i s t o f T a b l e s Table 2.1
Table 2.2 Table 2.3 Table 2.4 Table 2.5 T a b l e 2.6 T a b l e 2.7 T a b l e 2.8 T a b l e 2.9 T a b l e 3.1 T a b l e 3.2 T a b l e 3.3 Table 3.4 Table 7.1
Summary o f E c o n o m i c . I n d i c a t o r s
Assumed P e n e t r a t i o n o f Renewable S o u r c e s o f Energy Commercial F i n a l Energy R e s u l t s
E s t i m a t e s o f U l t i m a t e l y Recoverable Resources by Cost Category f o r L a t i n America
E s t i m a t e d Resource A v a i l a b i l i t y o f Renewable Energy Sources
Cost Assumptions f o r Major Competing Energy Supply and Conversion Technologies
S t a r t - u p and Build-up C o n s t r a i n t Assumptions f o r New Energy Technologies
Primary Energy o r E q u i v a l e n t , Low S c e n a r i o Primary Energy o r E q u i v a l e n t , High S c e n a r i o Base Year Data
Primary Energy Consumption, L a t i n America
I n s t a l l e d C a p a c i t y and G e n e r a t i o n of E l e c t r i c i t y , 1975 Primary Energy p e r C a p i t a
Regional Comparison
1
.
INTRODUCTIONI n t h e Proposal of I I A S A ' s Energy Systems Program ( I I A S A - E N P ) t o t h e Kernforschungszentrum Karlsruhe (KFK) f o r a "Long- Term ~ n e r g ~ ' ~ t r a t e ~ ~ Study f o r L a t i n America", t h e o b j e c t i v e of t h e s t u d y was s t a t e d a s f o l l o w s : "IIASA has conducted a long-
term g l o b a l a n a l y s i s , w i t h i n which seven world r e g i o n s were a n a l y z e d i n a f i r s t o r d e r approximation. This means t h a t , though much d a t a was g a t h e r e d f o r any one of them, t h e focus of t h e i n v e s t i g a t i o n was t h e g l o b a l p e r s p e c t i v e , and no d e t a i l e d c o n s i d e r a t i o n was d o n e
f o r each p a r t i c u l a r r e g i o n " .
The l a t t e r i s more v a l i d f o r t h e c a s e of t h e r e g i o n s i n - v o l v i n g less developed c o u n t r i e s ( L D C s ) : f o r them, s t a t i s t i c a l d a t a is s c a r c e and/or i n c o n s i s t e n t , and must be complemented by e x p e r t knowledge and judgment. I I A S A - E N P ' s work i n d i c a t e d t h a t , under c e r t a i n assumptions r e l a t e d t o p o p u l a t i o n and economic growth, L a t i n America p r o j e c t e d i t s e l f i n t o t h e f u t u r e a s a r e g i o n
capable of a t t a i n i n g t h e p r e s e n t l i v i n g s t a n d a r d s of t h e i n d u s t r i a l i z e d c o u n t r i e s ( I C s ) w i t h i n t h e t i m e h o r i z o n of the s t u d y .
Under t h e s e c i r c u m s t a n c e s , t h e q u e s t i o n a r o s e : Are IIASA p r o j e c t i o n s compatible w i t h t h e p a s t - p r e s e n t development t r e n d s of t h e c o u n t r i e s of L a t i n America, t h e n a t u r a l r e s o u r c e s , i t s s c i e n t i f i c - t e c h n o l o g i c a l and i n s t i t u t i o n a l f e a t u r e s ? I n o t h e r words, t h e r e s u l t s of t h e IIASA-ENP s t u d y c a l l e d f o r an a s s e s s - ment, i n v o l v i n g t h e e v a l u a t i o n of assumptions and parameters i n c o r p o r a t e d i n the modeling s e t , t o prove i f t h e y matched w i t h p l a n s , hopes and a s p i r a t i o n s , and t o look i n more d e t a i l i n t o
t h e e n e r g y demand and energy s u p p l y p r o j e c t i o n s t o r t h e r e g i o n .
The scope of t h e work was o r i g i n a l l y f o r m u l a t e d i n t h e f o l l o w i n g terms :
" ( 1 ) The f i r s t s t e p would be a r e e v a l u a t i o n of t h e l i f e s t y l e s c e n a r i o s f o r o u r energy demand model MEDEE-2. To t h a t end t h e s t r u c t u r e s o f t h e L a t i n American economy s h o u l d be r e c o n s i d e r e d , developmental t r e n d s more c l e a r l y p e r c e i v e d and on t h a t b a s i s a s e t of g o a l s r e f o r m u l a t e d . I n t h a t way t h e d a t a b a s e f o r MEDEE-2 could be a d j u s t e d s o a s t o r e f l e c t more p r e c i s e l y t h e s p e c i f i c needs and premises f o r L a t i n America.
( 2 ) Second, on t h e supply s i d e some of t h e production p r o f i l e s of t h e energy supply model MESSAGE would be redesigned. The i n -
t e n t i o n would b e t o t a k e more i n t o account v a r i o u s supply o p p o r t u n i - t i e s c h a r a c t e r i s t i c f o r t h e r e g i o n o r p a r t o f t h e region. T y p i c a l examples would b e h e r e t h e p o t e n t i a l f o r h y d r o e l e c t r i c i t y and b i o m a s s p r o d u c t i o n i n B r a z i l o r t h e heavy c r u d e s i n Venezuela.
( 3 ) I n a t h i r d s t e p , t h e n , t h e model r u n s f o r L a t i n A m e r i c a
would be r e p e a t e d and a somewhat more d e t a i l e d r e g i o n a l s t r a t e g y d e f i n e d .
( 4 ) F i n a l l y , we i n t e n d t o t e s t t h e r o b u s t n e s s of t h a t s t r a t e g y i n two ways. F i r s t , w e s h a l l d i s a g g r e g a t e t h e r e g i o n i n t o two, perhaps t h r e e b l o c k s , and run t h e s e t of models f o r
each b l o c k , a g g r e g a t e t h e r e s u l t s and compare them t o t h e p r e v i o u s l y computed s t r a t e g y . Second, a s e n s i t i v i t y a n a l y s i s w i t h r e s p e c t t o o u r growth assumptions w i l l be performed, t h u s h e l p i n g us t o under- s t a n d t h e i n t e r r e l a t i o n s h i p s between economic growth, l i f e s t y l e s and energy use i n L a t i n America."
These a c t i v i t i e s have been undertaken b u t n o t completed d u r i n g t h e a l l o c a t e d time. The r e a s o n s a r e manifold: t h e need t o understand model c o n s t r u c t i o n and t h e i r s p e c i f i c f u n c t i o n s a s w e l l a s i n t e r p l a y ; t h e n e c e s s i t y t o c o n c e p t u a l i z e o u r view of t h e p r e s e n t s t a t e of development of L a t i n America and judge upon i t s p o s s i b l e f u t u r e e'volution; t h e r e a l i z a t i o n t h a t t h e r e g i o n ' s
o u t l o o k c o n c e a l s t h e s i t u a t i o n of i n d i v i d u a l c o u n t r i e s , which have t o be known b e f o r e a t t e m p t i n g new r e g i o n a l r u n s .
Up t o t h e p o i n t of p r o g r e s s r e p o r t e d h e r e i n , we have r e s p e c t e d the scope of t h e work, sometimes w i t h a d i f f e r e n t emphasis due t o o u r view of t h e i r r e l a t i v e importance a t a given t i m e . Some d e l a y r e s u l t e d from o u r way t o d e a l w i t h n a t i o n a l c a s e s : w e d e c i d e d t h a t t h e y should be done i n c o l l a b o r a t i o n w i t h L a t i n American i n s t i t u - t i o n s , which c o u l d p r o v i d e d a t a and the p a r t i c u l a r u n d e r s t a n d i n g of t h e i r own c a s e . The r e q u i r e d agreements took t i m e , b u t t h e e x p e r i e n c e was rewarding and demonstrated t h a t c o o p e r a t i o n was t h e b e s t method t o perform s e r i o u s l y o u r t a s k .
A d d i t i o n a l e f f o r t w i l l be n e c e s s a r y
t o
accomplish t h e o b j e c t i v e s . S i n c e t h e o r i g i n a l agreement between IIASA-ENP and XFX has beenextended, i t i s hoped t o conclude o u r work i n c l u d i n g t h e a d d i t i o n s r e q u i r e d by such an e x t e n s i o n , i n p a r t i c u l a r t h e p o s s i b l e r o l e of renewable energy s o u r c e s .
2 . IIASA-ENP MODELING SET: I T S APPLICATION TO LATIN AMERICA E a r l y i n 1976, t h e IIASA-ENP s t a r t e d a thorough modeling e f f o r t i n o r d e r t o q u a n t i f y i t s p r e v i o u s c o n c e p t u a l i z a t i o n of t h e f u t u r e energy problem. A set of mathematical models was b u i l t t o d e a l with m a t t e r s of t h e f u t u r e i n r e l a t i o n t o t h e economy, energy demand, energy s u p p l y and t h e economic conse- quences of implementing a given s u p p l y system. Though each of t h e s e t a s k s was a s s i g n e d t o an i n d i v i d u a l model, t h e y were conceived t o o p e r a t e i n harmony w i t h i n f o r m a t i o n flowing from one t o t h e o t h e r f i n a l l y c l o s i n g t h e loop. I n t h i s way,
s u c c e s s i v e i t e r a t i o n s p e r m i t t e d checking and a d j u s t i n g t h e a s s u m p t i o n s i n c o r p o r a t e d i n each s t e p of t h e a n a l y s i s by l o o k i n g a t t h e i r
b e h a v i o r and e f f e c t on o v e r a l l r e s u l t s . Thus, i n t e r n a l c o n s i s t e n c y of t h e modeling set was a s s u r e d .
The mod.eling set was a p p l i e d t o t h e s t u d y of t h e long-range, dynamic t r a n s i t i o n of t h e g l o b a l energy system, by compounding t h e r e s u l t s of seven r e g i o n s i n which the world was d i v i d e d . One of t h e s e r e g i o n s i s L a t i n America.
The scope and r e s u l t s of this comprehensive e x e r c i s e a r e e x t e n s i v e l y documented i n t h e f i n a l r e p o r t o f t h e ENP, "Energy i n a F i n i t e World", forthcoming i n book format i n 1981 [ I ] . Its c o n t e n t i s complemented by a number of p u b l i c a t i o n s a u t h o r e d by t h e members o f t h e ENP, which document t h e e v o l u t i o n of i d e a s d u r i n g t h e l a s t seven y e a r s .
I t i s n o t o u r purpose t o p r e s e n t h e r e i n a d e t a i l e d d e s c r i p t i o n of t h e models composing t h e s e t . This h a s been most a p p r o p r i a t e l y done by t h e m o d e l l e r s themselves. O u r main concern i s t h e e v a l u a t i o n of t h e r e s u l t s o b t a i n e d by t h e i r a p p l i c a t i o n t o L a t i n America,
t h a t i s , i f t h o s e r e s u l t s imply a r e a s o n a b l e f u t u r e t h a t c o u l d be achieved d u r i n g t h e t i m e h o r i z o n of t h e s t u d y and what k i n d of assumptions t h e y c a r r y on t h e economic, s o c i a l , t e c h n o l o g i c a l and even p o l i t i c a l domains.
I n such a c o n t e x t , o n l y a b r i e f d e s c r i p t i o n of t h e models used f o r t h e r e g i o n a l s t u d y under c o n s i d e r a t i o n becomes n e c e s s a r y , i n o r d e r t o h i g h l i g h t t h e i r c o n c e p t u a l framework and t h e assumptions
i n c o r p o r a t e d t o p r o j e c t t h e f u t u r e e v o l u t i o n of L a t i n America.
For t h i s r e a s o n , r e f e r e n c e w i l l o n l y be made t o t h e t h r e e models t h a t were c o n s i s t e n t l y used f o r t h e q u a n t i t a t i v e a n a l y s i s of t h e f u t u r e energy s i t u a t i o n of t h e r e g i o n . They a r e : t h e energy demand model MEDEE-2; t h e energy supply model MESSAGE; and t h e IMPACT model designed t o e v a l u a t e t h e economic consequences of t h e g r a d u a l implementation of t h e energy supply system. S i n c e a macroeconomic model f o r developing c o u n t r i e s was n o t a v a i l a b l e ,
t h e macroeconomic module of MEDEE-2 was t h e l i m i t e d t o o l used t o d e s c r i b e economic behavior.
2 . 1 The Energy Demand Model MEDEE-2 2.1.1 B r i e f D e s c r i p t i o n
The energy demand model used a t IIASA i s a s i m p l i f i c a t i o n
of a more d i s a g g r e g a t e d b u t c o n c e p t u a l l y i d e n t i c a l model o r i g i n a l l y b u i l t a t I E J E , U n i v e r s i t y of Grenoble, France, t o p r o j e c t f u t u r e energy consumption p a t t e r n s of an i n d u s t r i a l i z e d c o u n t r y . The p r i n c i p a l c h a r a c t e r i s t i c of MEDEE-2 i s t h a t t h e c a l c u l a t i o n of f u t u r e energy requirements a r e b a s i c a l l y d r i v e n by p r o j e c t i o n s of p o p u l a t i o n , economic growth and v a r i o u s parameters r e f l e c t i n g b e h a v i o r a l p a t t e r n s of s o c i e t y ( l i f e s t y l e s ) . The e f f e c t of
p a r t i c u l a r p o l i c i e s a f f e c t i n g t h e energy s e c t o r , e i t h e r n a t i o n a l o r t h e r e s u l t of i n t e r n a t i o n a l i n t e r r e l a t i o n s h i p s , could be i n p r i n c i p l e i n c o r p o r a t e d through t h e assumed i n f l u e n c e on l i f e - s t y l e i n d i c a t o r s , which a l s o can show t h e expected e f f e c t of v a r i a t i o n s i n t h e energy prices'. The t e c h n i q u e used i s t h u s one of s c e n a r i o s , which must c o n s i s t e n t l y r e p r e s e n t a f u t u r e develop- ment p a t t e r n .
Three main energy consuming s e c t o r s a r e i d e n t i f i e d i n t h e model: t r a n s p o r t a t i o n , i n d u s t r y and h o u s e h o l d / s e ~ i c e . I n a d d i t i o n , t h e macroeconomic module of MEDEE-2 d e s c r i b e s , i n an
a g g r e g a t e way, t h e p r o d u c t i o n and e x p e n d i t u r e of t h e g r o s s domestic product (GDP). T h i s d e s c r i p t i o n , f o r t h e s t a r t i n g y e a r and t h e p r o j e c t i o n s a s w e l l , must be provided exogenously: i t c o n s t i t u t e s ,
t o g e t h e r w i t h t h e p r o j e c t i o n s of p o p u l a t i o n growth and t h o s e
corresponding t o t h e l i f e s t y l e i n d i c a t o r s , t h e s c e n a r i o parameters t h a t d r i v e energy demand. L e t us c o n s i d e r t h e way i n which t h e c a l c u l a t i o n of energy demand i s performed f o r each s e c t o r .
T r a n s p o r t a t i o n Module
Two main t y p e s of t r a n s p o r t a t i o n a r e d e a l t w i t h : f r e i g h t and ?assenger t r a n s p o r t a t i o n . The main d r i v i n g f o r c e s f o r t h e d e t e r m i n a t i o n of p h y s i c a l a c t i v i t y l e v e l s a r e , r e s p e c t i v e l y ,
t h e growth and s t r u c t u r e of t h e economy and t h e p o p u l a t i o n growth;
b o t h d e t e r m i n a n t s a r e q u a l i f i e d by l i f e s t y l e i n d i c a t o r s . S t a r t i n g w i t h p h y s i c a l a c t i v i t y l e v e l s , t h e c a l c u l a t i o n of energy demand r e q u i r e s t h e knowledge of t h e ' m o d a l s p l i t of each t r a n s p o r t a t i o n system, i . e . , t h e r e l a t i v e c o n t r i b u t i o n of v a r i o u s k i n d s of v e h i c l e s t o s a t i s f y t h e needs. For passenger t r a n s p o r t a t i o n , t h e corresponding l o a d f a c t d r s must be s p e c i f i e d . P r o j e c t i o n s of t h e s e parameters (modal s p l i t , l o a d f a c t o r s )
have t o d e s c r i b e a f u t u r e t r e n d c o n s i s t e n t w i t h a s e l e c t e d p a t h of development.
Once t h e a c t i v i t y l e v e l s a r e o b t a i n e d , t h e c a l c u l a t i o n of energy demand i s s t r a i g h t f o r w a r d when the s p e c i f i c f u e l consump- t i o n of each mode of t r a n s p o r t a t i o n involved ( v e h i c l e s , p i p e l i n e s ) i s known. P r o j e c t i o n s of t h e l a t t e r must a l s o be made due
considerations b e i n g g i v e n t o t h e l o n g l e a d times a s s o c i a t e d t o t e c h n i c a l e f f i c i e n c y improvements.
The MEDEE-2 t r a n s p o r t a t i o n module c a l c u l a t e s energy demand i n terms of f i n a l e n e r g y , s i n c e o n l y s p e c i f i c energy c a r r i e r s a r e u t i l i z e d , namely, e i t h e r motor f u e l o r e l e c t r i c i t y .
I n d u s t r y Module
The i n d u s t r y i s d i v i d e d i n s e c t o r s t o perform t h e c a l c u l a t i o n of energy demand, n a l y : a g r i c u l t u r e , c o n s t r u c t i o n , mining and t h r e e manufacturing s u b s e c t o r s , e a c h of which i n v o l v e s i n d u s t r i e s w i t h s i m i l a r energy use p a t t e r n s .
I n a l l c a s e s , though, f u t u r e energy demand i s c a l c u l a t e d upon t h e knowledge of t h e p r e s e n t ( b a s e y e a r ) consumption
f e a t u r e s e x p r e s s e d by means of an energy i n t e n s i v e n e s s parameter f o r t h r e e t y p e s of energy c a r r i e r s : motor f u e l , e l e c t r i c i t y ,
o t h e r used f o r h e a t p r o d u c t i o n ( u s e f u l energy i n t h e manufacturing i n d u s t r i e s ) . F u t u r e energy demand i s c a l c u l a t e d f o r each
i n d u s t r i a l s e c t o r by i n t r o d u c i n g a c o e f f i c i e n t of expected changes i n consumption p a t t e r n , and t h e t o t a l monetary a c t i v i t y of t h e s e c t o r ( s i n c e energy i n t e n s i v e n e s s is given i n terms o f energy per u n i t value-added)
.
The p e n e t r a t i o n of a l t e r n a t i v e energy s o u r c e s l i k e s o l a r c o l l e c t o r s o r c o g e n e r a t i o n t o r e p l a c e f o s s i l f u e l s i n t h e manu- f a c t u r i n g i n d u s t r y is e s t a b l i s h e d by c o e f f i c i e n t s which a f f e c t t h e t o t a l u s e f u l energy demand. Conversion of u s e f u l i n t o f i n a l energy t a k e s i n t o account r e l a t i v e f u e l e f f i c i e n c i e s (with
r e s p e c t t o e l e c t r i c i t y )
.
Household/Service Module
The a c t i v i t y l e v e l s a r e i n t h i s c a s e t h e h o u s i n g s t o c k and t h e t o t a l £1- a r e a i n t h e s e r v i c e s e c t o r . They a r e r e s p e c t i v e l y r e l a t e d t o p o p u l a t i o n growth and needs, and t o t h e s e r v i c e s e c t o r c o n t r i b u t i o n t o economic p r o d u c t , whose p r o j e c t i o n s consequently d e f i n e t h e i r a b s o l u t e f u t u r e v a l u e s .
This module i s concerned w i t h t h e c a l c u l a t i o n of energy demand f o r s p a c e h e a t i n g , h o t w a t e r , cooking and s p e c i f i c uses of e l e c t r i c i t y ( l i g h t i n g , a p p l i a n c e s , a i r c o n d i t i o n i n g ) . S i n c e t h e energy s e r v i c e s t y p i c a l of this s e c t o r can b e mostly m e t by d i f f e r e n t f u e l s which can s u b s t i t u t e one a n o t h e r ,
t h e f i r s t s t e p i s t o c a l c u l a t e u s e f u l energy demand. Once t h e b a s i c q u a n t i t i e s (number of d w e l l i n g s , service f l o o r a r e a ) a r e known, the s p e c i f i c energy consumption ( u s e f u l e n e r g y ) f o r each energy s e r v i c e i s used t o determine u s e f u l energy demand. Before c o n v e r t i n g u s e f u l energy i n t o f i n a l energy ( t h r o u g h a p p l i c a t i o n of t h e c o r r e s p o n d i n g f u e l e f f i c i e n c i e s ) , t h e p e n e t r a t i o n of a l t e r n a t i v e energy s o u r c e s o r t h e e f f e c t of energy c o n s e r v a t i o n measures is e s t a b l i s h e d by means of i n d i c a t o r s which d e f i n e
p o s s i b l e c o n t r i b u t i o n s of s o l a r power, d i s t r i c t h e a t , e l e c t r i c i t y , and h e a t pumps t o s u b s t i t u t e f o r f o s s i l f u e l s , and
energy s a v i n g s due t o b e t t e r i n s u l a t i o n .
The MEDEE-2 model h a s been e x t e n s i v e l y d e s c r i b e d by
B . L a p i l l o n n e [ 2 1 , and i t s a p p l i c a t i o n t o I I A S A ' s seven world regions by A.M. ~ h a n and A. ~ 6 1 ~ 1 [ 3 1 . W e w i l l proceed now with
t h e d e s c r i p t i o n of the main s c e n a r i o assumptions used d u r i n g the a p p l i c a t i o n of MEDEE-2 t o p r o j e c t t h e energy demand of L a t i n America u n t i l t h e y e a r 2030.
2 . 1 . 2 Main S c e n a r i o Assumptions
Two s c e n a r i o s w e r e c o n s i d e r e d i n the IIASA-ENP g l o b a l energy s t u d y , l a b e l l e d Low and High, mainly due t o the s e l e c t e d l e v e l s of f u t u r e economic growth and t h e s e c t o r a l d i s t r i b u t i o n of GDP;
f o r t h e a p p l i c a t i o n t o L a t i n America t h e y a l s o d i f f e r because of assumptions p e r t a i n i n g t o t h e t r a n s p o r t a t i o n and household/
s e r v i c e s e c t o r s , which imply a g e n e r a l t r e n d t o i n c r e a s e
a c t i v i t y l e v e l s of passenger t r a n s p o r t a t i o n and t o consume more energy ( p r e f e r a b l y e l e c t r i c i t y ) i n d w e l l i n g s i n t h e High s c e n a r i o .
From t h e p o i n t of view of t h e f u t u r e development p a t t e r n t h e two s c e n a r i o s do n o t d i f f e r i n terms of t e c h n o l o g i c a l
c a p a b i l i t y (energy i n t e n s i v e n e s s parameters i n t h e i n d u s t r y and i n t h e t r a n s p o r t a t i o n s e c t o r s ) .
I n what f o l l o w s , we w i l l p r e s e n t a d e s c r i p t i o n df the main assumptions i n c o r p o r a t e d i n t o t h e s c e n a r i o s .
Demography
A. Only one p r o j e c t i o n f o r p o p u l a t i o n growth h a s been used. I t f o l l o w s t h e p o p u l a t i o n growth t r e n d s made by K e y f i t z
[ & I .
1975
- -
2 0 0 0-
2030P o p u l a t i o n ( 1 0 6 p e o p l e ) 319 575 797
Average growth r a t e ( % / y r ) 2.4 1.1
B. The c o n c e n t r a t i o n of people i n c i t i e s f o l l o w s t h e p a s t t r e n d of r a p i d u r b a n i z a t i o n , UN p r o j e c t i o n s u n t i l the y e a r 2000 and t h e i r f u r t h e r e x t r a p o l a t i o n :
1975
- -
2000 2030Urban p o p u l a t i o n f r a c t i o n 0 . 6 0 0.75 0.85 F r a c t i o n of p o p u l a t i o n l i v i n g 0.37 0.53 0.69 i n c i t i e s 2105 i n h a b i t a n t s
C. The average f a m i l y s i z e d e c r e a s e s from 5.1 p e r s o n s p e r house- h o l d i n 1975 t o 4.8 i n 2000 and 4.15 i n 2030, i n l i n e w i t h the r e d u c t i o n i n p o p u l a t i o n growth and i n c r e a s i n g a f f l u e n c e . D. The economically a c t i v e p o p u l a t i o n f r a c t i o n i n c r e a s e s from
0.32 i n 1975 t o 0.41 i n 2030, i n l i n e w i t h t h e p o p u l a t i o n and l a b o r f o r c e p r o j e c t i o n s o f the UN u n t i l t h e y e a r 2000 and t h e i r e x t r a p o l a t i o n t h e r e a f t e r .
Economy
A. GDP i n c r e a s e s between 1975 and 2030 by a f a c t o r of 6.5 f o r t h e Low s c e n a r i o (LS) and by 10.5 f o r t h e High s c e n a r i o (HS).
GDP p r o j e c t i o n s a r e i n e q u i l i b r i u m w i t h t h o s e c o r r e s p o n d i n g t o o t h e r market economies.
Average Annual Growth Rates ( % )
Low S c e n a r i o High S c e n a r i o
GDP GDP/cap GDP G D p / c a ~
1975-1985 4.7 1.80 6.2 3.21
1 9 85- 2000 3.6 1.52 4.9 2.80
2000-201 5 3.0 1.72 3.7 2.42
201 5- 2030 3 .O 2.05 3.3 2.34
1975-2030 3.48 1.77 4.37 2.64
B. GDP s h a r e s o f a g r i c u l t u r e , i n d u s t r y and s e r v i c e s change g r a d u a l l y i n l i n e w i t h p a s t t r e n d s , towards t h e p a t t e r n o f t h e West E u r o p e a n . d i s t r i b u t i o n . I n p a r t i c u l a r , t h e s h a r e of t h e manufacturing i n d u s t r i e s i n c r e a s e s whereas t h o s e o f a g r i - c u l t u r e and s e r v i c e s decreases--more i n the HS t h a n i n t h e LS, s e e T a b l e 2.1
.
C . I n the m a n u f a c t u r i n g s e c t o r a r e l a t i v e l y f a s t e r development i s p r o j e c t e d f o r t h e ' b a s i c m a t e r i a l s i n d u s t r i e s (BM) ( m e t a l - l u r g i c a l , chemical, e t c . ) and t h e machinery and equipment (ME) i n d u s t r i e s t h a n f o r t h e nondurable goods ( N D ) ( f o o d , c l o t h i n g , e t c . ) i n d u s t r i e s , see Table 2.1.
D . F e e d s t o c k s f o r the chemical i n d u s t r y and s t e e l p r o d u c t i o n a r e p r o j e c t e d t o i n c r e a s e f o l l o w i n g t h e t r e n d o f t h e b a s i c m a t e r i a l s i n d u s t r i e s .
E . The GDP e x p e n d i t u r e s t r u c t u r e i s assumed t o change g r a d u a l l y , i n l i n e w i t h p a s t b e h a v i o r , w i t h t h e p r i v a t e f i n a l consumption d e c r e a s i n g from 70% i n 1975 t o 63% a n d 61% i n 2030 f o r t h e LS and HS, r e s p e c t i v e l y , w h i l e t h e i n v e s t m e n t is p r o j e c t e d t o remain c o n s t a n t a t i t s 1975 l e v e l o f 23% t h r o u g h o u t ( s e e T a b l e 2.1 )
.
F. The p r i v a t e f i n a l consumption s t r u c t u r e i s assumed t o . c h a n g e g r a d u a l l y i n t o t h e p a t t e r n o f i n d u s t r i a l i z e d c o u n t r i e s :
P r i v a t e F i n a l Consumption F r a c t i o n
i. D u r a b l e goods 0 . 1 0 0 . 1 1 0.12 0 . 1 2 0 . 1 4
ii. Nondurable goods 0 . 6 0 0.57 0.55 0.54 0 . 5 1
iii. S e r v i c e s 0 . 3 0 0.32 0 . 3 3 0.34 0 . 3 5
L i f e s t y l e s T r a n s p o r t a s i o n
A. The c a r o w n e r s h i p r a t i o ( p o p u l a t i o n $ number o f cars) v a r i e s i n v e r s e l y w i t h GDP/cap and u r b a n i z a t i o n . I t e v o l v e s a s f 0 l l o w s :
B. The a v e r a g e i n t e r c i t y d i s t a n c e t r a v e l l e d p e r p e r s o n i n one y e a r i n c r e a s e s l i n e a r l y w i t h t h e p r i v a t e f i n a l consumption p e r c a p i t a , as shown below (km) :
C . The p a t t e r n o f i n t e r c i t y t r a v e l changes i n s u c h a way t h a t t h e s h a r e s o f t r a v e l by car and a e r o p l a n e i n c r e a s e whereas t h o s e t r a v e l l e d by bus a n d t r a i n d e c r e a s e g r a d u a l l y . I t i s a l s o assumed t h a t by 2030 e l e c t r i f i c a t i o n o f t r a i n s w i l l i n c r e a s e up t o 2 0 % from t h e i r 1975 s h a r e o f 1 % i n t h e t o t a l r a i l r o a d i n t e r c i t y t r a f f i c .
D. Load f a c t o r s of buses and t r a i n s f o r g e n e r a l t r a v e l ( i n t e r c i t y a s w e l l a s urban) a r e c o n s i d e r a b l y h i g h e r t h a n t h o s e i n Western Europe and remain s o i n t h e p r o j e c t i o n s , with some improvement w i t h t i m e .
E . Use of p r i v a t e c a r s f o r urban t r a v e l i s assumed t o i n c r e a s e slowly u n t i l t h e y e a r 2000, and remain c o n s t a n t t h e r e a f t e r due t o c o n g e s t i o n i n c i t i e s . F r a c t i o n a l urban c a r t r a n s p o r t a t i o n grows from 0.30 i n 1975 t o 0.35 by 2000 and 2030.
F. T o t a l f r e i g h t t r a n s p o r t a t i o n i n c r e a s e s i n p r o p o r t i o n t o t h e assumed m o d i f i c a t i o n s of t h e v a l u e added of a g r i c u l t u r e , mining and manufacturing i n d u s t r i e s . The s h a r e t a k e n up by t r a i n s i s p r o j e c t e d t o i n c r e a s e from a b o u t 18% i n 1975 t o 28% i n 2030, w i t h corresponding r e d u c t i o n i n t h e s h a r e s of b u s e s and b a r g e s .
A . The u s e of e l e c t r i c i t y p e r household ( i n kWh/yr) f o r e l e c t r i c a l a p p l i a n c e s i s assumed t o be p r o p o r t i o n a l t o t h e u r b a n i z a t i o n p a t t e r n a s w e l l a s t o t h e p r i v a t e consumptian s p e n t on s e r v i c e s .
8. The u s e f u l energy requirement p a r person f o r h o t w a t e r i n c r e a s e s by 2030 between 1 . 6 and 2.5 t i m e s t h e 1975 v a l u e f o r t h e LS and H S , r e s p e c t i v e l y . This f o l l o w s from two assumptions: l a r g e r f r a c t i o n o f d w e l l i n g s w i t h h o t w a t e r f a c i l i t i e s and t h e a v e r a g e f a m i l y sFze d e c r e a s e s .
C . Unlike s p a c e h e a t i n g , t h a t i s r e q u i r e d i n modest amounts, a i r - c o n d i t i o n i n g i s d e s i r a b l e due t o c l i m a t i c c h a r a c t e r i s t i c s . I t i s assumed t h a t i t w i l l r a p i d l y i n c r e a s e w i t h more a f f l u e n c e :
1975 2000
2030
-
F r a c t i o n o f d w e l l i n g s a i r - c o n d i t i o n e d
LS
--
0 0.04 0.12HS
-
0 0.05 0 . 2 0F r a c t i o n o f s e r v i c e s e c t o r area a i r - c o n d i t i o n e d
LS 0 . 0 5 0.12 0.35
HS 0.05 0 . 1 5 0 . 4 0
Noncommercial e n e r g y i s e s t i m a t e d t o meet a b o u t h a l f o f t h e u s e f u l energy r e q u i r e m e n t s f o r c o o k i n g , s p a c e and water h e a t i n g i n 3975. I t i s assumed t h a t t h e q u a n t i t y o f s t r i c t l y non-
commercial e n e r g y w i l l remain a t t h e 1975 l e v e l a l l a l o n g .
Energy I n t e n s i v e n e s s , ~ f f i c i e n c i e s . P e n e t r a t i o n of E l e c t r i c i t y , S o l a r and O t h e r S o u r c e s (common t o b o t h s c e n a r i o s )
A. The e n e r g y i n t e n s i v e n e s s o f the m i n i n g , c o n s t r u c t i o n and manu- f a c t u r i n g i n d u s t r i e s w i t h r e s p e c t t o the u s e of f o s s i l f u e l s a r e . assumed t o d e c r e a s e from t h e c u r r e n t l e v e l , c l o s e t o t h a t o f t h e
U . S . , t o 85% o f i t by 2000 a n d 75% by 2030, s o a s t o become c l o s e r t o W e s t European d a t a .
B. The e n e r g y i n t e n s i v e n e s s w i t h r e s p e c t t o t h e u s e o f e l e c t r i c i t y i n t h e above i n d u s t r i a l a c t i v i t i e s are assumed t o remain a t t h e i r c u r r e n t l e v e l t h r o u g h o u t .
C . The e n e r g y i n t e n s i v e n e s s o f a g r i c u l t u r e w i t h r e s p e c t t o t h e u s e o f f o s s i l f u e l s is assumed t o i n c r e a s e by a f a c t o r o f 5.5 by t h e y e a r 2000 and t o i n c r e a s e t e n t i m e s t h e p r e s e n t v a l u e by 2030. T h i s w i l l l e a d t o t h e c u r r e n t West European l e v e l o f m e c h a n i z a t i o n i n a g r i c u l t u r e by 2030. S i m i l a r i n o r e a s e s a r e a l s o p r o j e c t e d i n t h i s s e c t o r f o r e l e c t r i c i t y u t i l i z a t i o n t o a c c o u n t f o r i r r i g a t i o n r e q u i r e m e n t s .
D. 15-208 improvements i n t h e a v e r a g e e f f i c i e n c y o f f o s s i l f u e l s i n m e e t i n g t h e h e a t demand o f h o u s e h o l d / s e r v i c e and i n d u s t r i e s a r e p r o j e c t e d as f e a s i b l e by 2030. The u t i l i z a t i o n e f f i c i e n c y
of noncommercial f u e l s i s a l s o assumed t o improve with t i m e , becoming by 2030 twice a s high a s i n 1975.
E . The c a r e f f i c i e n c y i s assumed t o improve from t h e c u r r e n t l e v e l s t o an average of 10.5 and 8 1/100 km f o r urban A d i n t e r c i t y t r a v e l , r e s p e c t i v e l y , by 2000 and remain c o n s t a n t t h e r e a f t e r .
F. 30% of new s i n g l e family houses a r e assumed t o g e t equipped with s o l a r h e a t i n g f a c i l i t i e s by 2000, t h i s f r a c t i o n i n c r e a s i n g t o 50% i n 2030. The same p r o j e c t i o n s hold f o r low-rise s e r v i c e s e c t o r b u i l d i n g s .
G. Hot water requirements a r e assumed t o be met with s o l a r energy i n t h e household s e c t o r t o t h e e x t e n t of 20% by 2000 and 30%
i n 2030.
H. D i s t r i c t h e a t i s assumed t o meet 3% i n 2000 and 2 0 % by 2030 of the t o t a l household/service s e c t o r ' s space and water h e a t i n g i n c i t i e s 1100,000 i n h a b i t a n t s .
I . P e n e t r a t i o n of e l e c t r i c i t y , d i s t r i c t h e a t , " s o f t ' s o l a r , co- g e n e r a t i o n (steam and e l e c t r i c i t y ) and h e a t pumps i n t h e
i n d u s t r i a l h e a t market a r e p r o j e c t e d t o such an e x t e n t t h a t f o s s i l f u e l s would have t o meet o n l y 78% of t h e u s e f u l energy r e q u i r e - ments f o r thermal uses i n i n d u s t r y by 2030.
J. Renewable sources of energy a r e assumed t o p e n e t r a t e i n t h e household/service s e c t o r mainly t o r e p l a c e f o s s i l f u e l s according t o t h e assumptions p r e s e n t e d i n Table 2 . 2 .
2.1.3 R e s u l t s
The c a l c u l a t i o n of f u t u r e energy consumption based on a s e t of assumptions whose main components were given i n t h e
p r e v i o u s paragraph i s f i r s t done i n t e r m s of u s e f u l energy, i . e . t h e energy needed t o p r o v i d e a s e r v i c e t o t h e consumer ( h e a t r e q u i r e d t o cook a meal, mechanical power t o t u r n a l a t h e ) . The c a l c u l a t i o n goes f u r t h e r t o e x p r e s s r e s u l t s i n terms of f i n a l energy, i . e . , t h e energy d e l i v e r e d t o t h e u s e r (motor g a s o l i n e , e l e c t r i c i t y ) , t a k i n g i n t o account t h e e f f i c i e n c y of end-use d e v i c e s t h a t s a t i s f y t h e demand f o r u s e f u l energy.
Table 2.3 summarizes MEDEE-2 energy demand p r o j e c t i o n s f o r L a t i n America u n t i l 2030.
2 . 2 The Energy Supply Model MESSAGE 2.2.1 B r i e f d e s c r i p t i o n
The o b j e c t i v e of MESSAGE i s t o determine a secondary energy supply s t r a t e g y t o s a t i s f y t h e f u t u r e energy demand p i c t u r e
q u a n t i f i e d by MEDEE-2. To perform t h i s t a s k , a dynamic optimi- z a t i o n l i n e a r program was b u i l t which t a k e s i n t o account t h e a v a i l a b i l i t y of primary energy s o u r c e s , t h e i r e s t i m a t e d maximum e x t r a c t i o n r a t e s and t h e t r a n s f o r m a t i o n i n t o secondary energy c a r r i e r s i n conversion s t a t i o n s . Each primary energy s o u r c e , e x c e p t s o l a r , i s s u b d i v i d e d i n t o a number of c a t e g o r i e s on t h e
b a s i s o f the p r i c e of e x t r a c t i o n , q u a l i t y of r e s o u r c e s and l o c a t i o n of d e p o s i t . These primary s o u r c e s a r e t h e n converted i n t o secondary energy i n c o n v e r s i o n s t a t i o n s u s i n g v a r i o u s t e c h n o l o g i e s , under
c o n s i d e r a t i o n of i n s t a l l a t i o n , o p e r a t i o n and maintenance and f u e l c o s t s ( e x c l u d i n g t h e c o s t of f u e l e x t r a c t i o n and t r a n s p o r t a t i o n ) .
The o b j e c t i v e f u n c t i o n i s t h e minimization of t h e c o s t of energy s o u r c e s , i n s t a l l a t i o n of c o n v e r s i o n f a c i l i t i e s and t h e i r o p e r a t i o n and maintenance, t o p r o v i d e t h e energy demand, each element d i s c o u n t e d o v e r t i m e , s u b j e c t e d t o c o n s t r a i n t s due t o r e s o u r c e a v a i l a b i l i t y a t s p e c i f i c p r i c e s and f a c i l i t y build-up r a t e s . Other c o n s t r a i n t s , such a s t h e need t o minimize p o l l u t i o n , c o u l d be i n c o r p o r a t e d a s r e q u i r e d : t h e s e c o n s t r a i n t s , although a v a i l a b l e , were n o t used i n t h e MESSAGE r u n s r e p o r t e d h e r e i n .
On t h e b a s i s o f t h e s e c o n d a r y e n e r g y a l l o c a t i o n d i s t r i b u t i o n , MESSAGE c a l c u l a t e s t h e t o t a l p r i m a r y e n e r g y r e q u i r e m e n t s f o r t h e p a r t i c u l a r y e a r s u n d e r c o n s i d e r a t i o n .
I n t h e e q u a t i o n s o f t h e model, which a r e r o u g h l y g i v e n
below, i n d i c e s a r e sometimes o m i t t e d t o f a c i l i t a t e u n d e r s t a n d i n g .
A t h o r o u g h d e s c r i p t i o n of t h e MESSAGE model i s g i v e n by M . Angew e t a l . [ 5 1 .
The O b j e c t i v e F u n c t i o n
The o b j e c t i v e f u n c t i o n o f t h e MESSAGE model is t h e sum o f d i s c o u n t e d c o s t s o f c a p i t a l , o p e r a t i n g - m a i n t e n a n c e , and f u e l s
( p r i m a r y e n e r g y ) :
where
t i s c u r r e n t i n d e x o f t i m e p e r i o d n i s number o f t i m e p e r i o d s
0 (t) i s d i s c o u n t f a c t o r
5 i s number o f y e a r s p e r p e r i o d
b i s v e c t o r o f e n e r g y r e s o u r c e s c o s t s
r i s v e c t o r o f resource a c t i v i t i e s (LP v a r i a b l e s ) c is v e c t o r o f o p e r a t i n g / m a i n t e n a n c e c o s t s
x i s v e c t o r o f e n e r g y c o n v e r s i o n a c t i v i t i e s (LP v a r i a b l e s ) d i s v e c t o r o f c a p i t a l ( i n v e s t m e n t ) c o s t s
y i s v e c t o r o f c a p a c i t y i n c r e m e n t s (LP v a r i a b l e s )
The d i s c o u n t f a c t o r i s c a l c u l a t e d from a n a n n u a l d i s c o u n t r a t e of 6 1 , a p p l i e d t o a c o n s t a n t d o l l a r i n v e s t m e n t s t r e a m . A s MESSAGE i s i n t e n d e d t o minimize s o c i e t a l c o s t s t h i s d i s c o u n t r a t e i s t o b e u n d e r s t o o d a s a p r e - t a x o n e .
The c o s t o f i n c r e m e n t s t o c a p a c i t y s t i l l o p e r a t i n g a t t h e end of the p l a n n i n g h o r i z o n is c o r r e c t e d by a " t e r m i n a l v a l u a t i o n
f a c t o r " , t v :
f o r example, t h e t e r m i n a l v a l u a t i o n f a c t o r f o r t h e l a s t t i m e p e r i o d i s
Resource C o n s t r a i n t s
The f o l l o w i n g r e s o u r c e c o n s t r a i n t i s d e f i n e d f o r e a c h r e s o u r c e and f o r e a c h c a t e g o r y :
where
r ( t ) i s a n n u a l e x t r a c t i o n i n p e r i o d t A v i s a v a i l a b i l i t y o f r e s o u r c e
Resource Requirements
The f o l l o w i n g e q u a t i o n i s s p e c i f i e d f o r e a c h t i m e p e r i o d and f o r e a c h r e s o u r c e :
where
j i s i n d e x o f r e s o u r c e c a t e g o r y J i s number of r e s o u r c e c a t e g o r i e s
V, i s s p e c i f i c consumption by p r o d u c t i o n a c t i v i t y x l w1 i s i n v e n t o r y r e q u i r e m e n t f o r c a p a c i t y i n c r e m e n t y, C a p a c i t y E q u a t i o n s
The f o l l o w i n g e q u a t i o n i s s p e c i f i e d f o r e a c h t e c h n o l o g y and f o r e a c h l o a d r e g i o n s u p p l i e d by t h i s t e c h n o l o g y :
where
j i s i n d e x of l o a d r e g i o n Cap i s c a p a c i t y
h j i s l o a d d u r a t i o n of l o a d r e g i o n j pf i s p l a n t f a c t o r
Demand C o n s t r a i n t
The f o l l o w i n g e q u a t i o n i s s p e c i f i e d f o r each time p e r i o d , f o r each demand s e c t o r , and f o r each l o a d r e g i o n :
where
j i s i n d e x of demand s e c t o r
n . .
i s conversion e f f i c i e n c y ( o r e q u a l t o 0 i f xi does n o t 1 3supply demand s x t o r j )
DM. i s annul secondary energy demand 3
Build-up C o n s t r a i n t s
The f o l l o w i n g e q u a t i o n i s s p e c i f i e d f o r some ( p r i m a r i l y new) t e c h n o l o g i e s and f o r each t i m e p e r i o d :
where
y i s growth parameter
g is c o n s t a n t , allowing f o r s t a r t up
2 . 2 . 2 Main Assumptions
The a s s u m p t i o n s i n c o r p o r a t e d i n t h e model f o r r u n n i n g t h e L a t i n American case are p r e s e n t e d t h r o u g h t h e s e l f - e x p l a n a t o r y T a b l e s 2 . 1 - 2 . 7 .
2 . 2 . 3 R e s u l t s
T a b l e s 2 . 8 and 2 . 9 summarize t h e most i m p o r t a n t r e s u l t s p r o v i d e d by t h e model.
2 . 3 The Energy-Economy I n t e r a c t i o n Model IMPACT
2 . 3 . 1 B r i e f D e s c r i p t i o n
Once an o p t i m a l e n e r g y s t r a t e g y i s i d e n t i f i e d , i t i s n e c e s s a r y t o u n d e r s t a n d t h e r e q u i r e m e n t s f o r c o r r e s p o n d i n g d i r e c t and
i n d i r e c t e n e r g y i n v e s t m e n t s .
IMPACT b e l o n g s t o t h e s e t o f e n e r g y - o r i e n t e d dynamic i n p u t / o u t p u t models, e x p l i c i t k y a c c o u n t i n g f o r l a g s between t h e s t a r t o f i n v e s t m e n t and t h e p u t t i n g i n t o o p e r a t i o n o f p r o d u c t i o n c a p a c - i t i e s . I t c o n s i s t s o f l i n e a r and n o n l i n e a r e q u a t i o n s t h a t d e s c r i b e t h e f o l l o w i n g f o r e a c h y e a r o f t h e p e r i o d c o n c e r n e d : b a l a n c e o f p r o d u c t i o n o f i n d i v i d u a l p r o d u c t s and s e r v i c e s and t h e i r consump- t i o n i n o p e r a t i n g and b u i l d i n g t h e e n e r g y s y s t e m s and r e l a t e d b r a n c h e s ; t h e c o n d i t i o n s f o r i n t r o d u c i n g e x t r a c a p a c i t i e s i n
e n e r g y - r e l a t e d b r a n c h e s ; i n v e s t m e n t and WELMN (Water,
- -
Energy, L a n d , M a t e r i a l s and Manpower) r e q u i r e m e n t s .- -
F o r e a c h g i v e n s t r a t e g y , t h e model d e t e r m i n e s : I n v e s t m e n t i n e n e r g y s y s t e m development;
The r e q u i r e d p u t t i n g i n t o o p e r a t i o n o f c a p a c i t i e s i n e n e r g y - r e l a t e d b r a n c h e s o f i n d u s t r y and c o r r e s p o n d i n g
( i n d i r e c t ) c a p i t a l i n v e s t m e n t ;
The r e q u i r e d o u t p u t of d i f f e r e n t t y p e s o f m a t e r i a l s , e q u i p m e n t , and s e r v i c e s t o p r o v i d e o p e r a t i o n a l and con- s t r u c t i o n r e q u i r e m e n t s o f t h e e n e r g y s y s t e m and r e l a t e d b r a n c h e s ;
D i r e c t and i n d i r e c t WELMM r e q u i r e m e n t s .
A l l t h e s e i n d i c a t o r s a r e e v a l u a t e d f o r e a c h y e a r o f t h e p e r i o d c o n s i d e r e d .
The model describes the building up of production capacities as a direct part of the energy supply system (ESS) and its related branches. In this way lead times of construction and related con- sumption of equipment and material are taken into account. This is done by identifying input/output relations between the following sectors of the economy important for the energy supply systems:
iron ore mining
primary iron and steel manufacturing fabricated metal products
nonferrous metal or mining
nonferrous metals manufacturing chemical products
plastic and synthetic materials petroleum products
stone, clay, and glass products lumber and wood products
miscellaneous materials engines and turbines electrical equipment mining equipment oil field equipment
construction equipment and machineries material handling equipment
metalworking equipment
instrument and control equipment transportation equipment
special industry equipment general industry equipment fabricated plate products miscellaneous equipment export goods I
export goods I1
construction in energy sectors construction (nonenergy)
transport (nonenergy)
maintenance and repair construction
The E q u a t i o n System o f IMPACT*
The d i r e c t r e q u i r e m e n t s o f t h e ESS f o r p r o d u c t s o f e n e r q y - r e l a t e d s e c t o r s a r e e x p r e s s e d a s
where
Y e ( t ) i s t h e v e c t o r o f d i r e c t i n v e s t m e n t a n d o p e r a t i o n a l r e q u i r e m e n t s o f t h e ESS f o r p r o d u c t s o f e n e r g y - r e l a t e d s e c t o r s i n t h e y e a r y
-
X e ( t ) i s t h e v e c t o r o f a n n u a l e n e r g y p r o d u c t i o n i n t h e y e a r tZ ( t ) i s t h e v e c t o r o f r e q u i r e d a d d i t i o n a l c a p a c i t i e s o f e
t h e ESS i n the y e a r t
A, i s t h e m a t r i x o f c o n t r i b u t i o n c o e f f i c i e n t s o f e n e r g y - r e l a t e d s e c t o r s t o t h e c o n s t r u c t i o n and o p e r a t i o n o f e n e r g y p r o d u c t i o n p e r u n i t o f a c t i v i t y
F ~ ( ' - ~ ) i s t h e m a t r i x o f c o n t r i b u t i o n c o e f f i c i e n t s o f e n e r g y - r e l a t e d s e c t o r s i n t h e y e a r t t o p u t t i n g i n t o o p e r a t i o n t h e a d d i t i o n a l c a p a c i t i e s o f t h e ESS i n t h e y e a r t
( t Z T < t + T )
-
;
i s t h e v e c t o r o f t h e t i m e l a g i n t r o d u c e d by con- s t r u c t i o n t i m e sT o t a l ( d i r e c t a n d i n d i r e c t ) m a t e r i a l a n d equipment r e q u i r e - ments o f t h e ESS a r e e x p r e s s e d a s
where
A2 i s t h e m a t r i x o f i n p u t / o u t p u t c o e f f i c i e n t s
A i s t h e m a t r i x o f m a t e r i a l s and equipment r e q u i r e m e n t s 3
c o e f f i c i e n t s p e r u n i t of i n v e s t m e n t i n e n e r g y - r e l a t e d s e c t o r s
* M a t r i x n o t a t i o n is u s e d t h r o u g h o u t t h e s e c t i o n . The l e t t e r s t o r
T i n p a r e n t h e s i s d e n o t e v e c t o r - v a l u e d t i m e f u n c t i o n s . A b a r d e n o t e s a n e x o g e n o u s l y g i v e n i n p u t .
X l ( t ) i s t h e v e c t o r o f o u t p u t i n e n e r g y - r e l a t e d s e c t o r s
x i n ( t )
i s t h e v e c t o r o f i n d i r e c t c a p i t a l i n v e s t m e n t s i n e n e r g y - r e l a t e d s e c t o r sD i r e c t c a p i t a l i n v e s t m e n t i n t h e ESS is e x p r e s s e d a s
I n d i r e c . t c a p i t a l i n v e s t m e n t i n t h e ESS is e x p r e s s e d a s
T o t a l ( d i r e c t and i n d i r e c t ] c a p i t a l i n v e s t m e n t i n t h e ESS
i s e x p r e s s e d as
where
F ; ' - ~ ) , F : ~ - ~ ) a r e , r e s p e c t i v e l y , t h e m a t r i c e s of c a p i t a l i n v e s t m e n t c o e f f i c i e n t s i n t h e y e a r t t o p u t i n t o o p e r a t i o n t h e a d d i t i o n a l c a p a c i t i e s of t h e ESS and e n e r g y - r e l a t e d s e c t o r s i n t h e y e a r t
' Z l ( t ) i s t h e v e c t o r o f new a d d i t i o n a l c a p a c i t i e s i n t h e e n e r g y - r e l a t e d s e c t o r s i n t h e y e a r t
X 2 ( t ) d i s t h e v e c t o r o f d i r e c t c a p i t a l i n v e s t m e n t i n t h e ESS
( 1 )
V e c t o r . Z l ( t )
.
w i t h v e c t o r components Z ,, . . . ,
Zl(k),
must s a t i s f y t h e f o l l o w i n g c o n d i t i o n s : *min [ x j i ) ( t 1)
-
xli) ( T I ] i f t h i s v a l u e i s p o s i t i v e ; TStzji'
(t) =0 o t h e r w i s e
f o r e v e r y i i{1,2,.
. .
, k } .V e c t o r n o t a t i o n i s u s e d i n t h e model f o r s i m p l i c i t y r e a s o n s . T h i s e q u a t i o n i s t h e r e f o r e w r i t t e n a s
The model a l s o i n c l u d e s an e q u a t i o n f o r c a l c u l a t i n g t h e d i r e c t and t h e i n d i r e c t e x p e n s e s o f t h e WELMM r e s o u r c e s . T h i s e q u a t i o n i s w r i t t e n as
where
X3 ( t ) i s t h e WELMM e x p e n d i t u r e s i n t h e y e a r t
A4 i s t h e matrix o f d i r e c t o p e r a t i o n a l WELMM c o e f f i c i e n t s
* I n o r d e r t o t a k e i n t o a c c o u n t instaZZed c a p a c i t y r e q u i r e m e n t s , t h i s e x p r e s s i o n c a n b e r e p l a c e d by ,
xii)
(T)I
i f t h i s v a l u e (1-
p) t-T+l i s p o s i t i v e ;o t h e r w i s e
f o r e v e r y i ~ E 1 , 2 ,
...,
k} where p i s t h e r a t e o f r e p l a c e m e n t .A i s t h e m a t r i x of i n d i r e c t o p e r a t i o n a l WELMM c o e f f i - 5
c i e n t s of e n e r g y - r e l a t e d s e c t o r s
A i s t h e m a t r i x of i n d i r e c t c o n s t r u c t i o n a l WELMM coef- 6
f i c i e n t s of e n e r g y - r e l a t e d s e c t o r s
( T - t ) i s t h e m a t r i x of d i r e c t c o n s t r u c t i o n a l WELMM c o e f f i c i e n t s
F u
i n t h e y e a r t t o put i n t o o p e r a t i o n new energy c a p a c i t i e s i n t h e y e a r t
Equations f o r e v a l u a t i n g a i r and water p o l l u t a n t emissions of t h e ESS and t h e e n e r g y - r e l a t e d s e c t o r s can be w r i t t e n a n a l o g i c a l l y .
The d r i v e r s f o r IMPACT'S r e l a t i o n s a r e
ze(t)
andy e ( t ) ;
t h e s e exogenous v a r i a b l e s c a n b e o b t a i n e d from an energy supply model( e . g.
,
the I I A S A MESSAGE model).
An a l g o r i t h m h a s been developed f o r s o l v i n g e q u a t i o n s i t e r a - t i v e l y . This a l g o r i t h m , a s w e l l a s o t h e r d e t a i l s of IMPACT'S s t r u c t u r e , l o g i c , and scope a r e d e s c r i b e d i n 1 6 1 %
2.3.2 Main Assumptions
The knowledge of t h e economic b e h a v i o r i n LDCs i s n o t w e l l documented, and t h e a t t e m p t t o d e a l w i t h a d e t a i l e d a n a l y s i s of
a c o u n t r y ' s economy i s of very r e c e n t d a t a . A t t h e time t h e IMPACT model was a p p l i e d t o understand t h e d i r e c t and i n d i r e c t consequences of t h e energy s e c t o r on t h e economy a s a whole, o n l y some b a s i c i n p u t d a t a was a v a i l a b l e f o r I n d i a ( more r e c e n t l y
s i m i l a r i n f o r m a t i o n has been p u b l i s h e d i n the c a s e s o f Mexico and B r a z i l ) .
For t h i s r e a s o n , IMPACT r u n s had an a g g r e g a t e d and p r o v i s o r y c h a r a c t e r , s i n c e t h e y w e r e done u s i n g t h e I n p u t / O u t p u t t a b l e
of I n d i a and c a p i t a l / o u t p u t r a t i o s p e r t a i n i n g t o developed coun- t r i e s .
2 . 3 . 3 R e s u l t s
Under t h e above d e s c r i b e d c o n d i t i o n s , t h e r e s u l t s of IMPACT f o r LDCs were used o n l y a s i n d i c a t i o n of l i k e l y t r e n d s . I t has been shown t h a t t h e c a p i t a l r e q u i r e m e n t s o f developing c o u n t r i e s must d r a s t i c a l l y i n c r e a s e i n t h e f u t u r e from t o d a y ' s s t a n d a r d s
(approximately 2% of GDP .is allocated to the energy sector) towards expenditures between 6% and 7% by 2030. For Latin America, in
particular, the maximum share of total energy investment in GDP fluctuates between 6.5% and 8% in the scenarios.
In addition, IMPACT estimates WELMM requirements associated with the implementation of the energy sector. Besides the growing demand of capital for investments, preliminary WELMM results point to the hardships that skilled manpower requirements will pose in the future.
TABLE 2.1. Summary of Economic Indicators Low Scenario High Scenario 1975 2000 2030 2000 2030 A. GDP/cap ($ 1975) 1066 1597 2797 2212 4478 B. GDP Shares ($1 i. Agriculture ii. Mining, construction, and 11 11 14 energy iii. Manufacturing 25 28 2 9 iv. Services, 52 5 1 50 C. structure of Manufacturing Industries ($1 i. Basic materials 3 1 3 4 3 6 ii. Machinery and equipment 26 3 3 3 9 iii. Nondurable goods 4 3 3 3 2 5 E. GDP Expenditure (%) i. Private consumption 70 65 6 3 64 6 1 ii. Government expenditure 11 12 14 13 16 iii. Investment 2 3 23 2 3 2 3 2 3 iv. Exports
-
4 0 0 0 0TABLE 2.2. Assumed Penetration of Renewable Sources of Energy (fraction of useful heat demand) Demand Sector Nature of Demand 2000 2030 Households Cities Cooking, space and water heating 0.40 0.60 Towns ( >100,000 persons) Cooking, space and water heating 0.60 0.80 Villages (urban and rural) Cooking, space and water heating 0.75 0.90 Service Sector Cities Towns
Space and water heating Space and water heating Manufacturing Industries Low temp. steam/hot water 0.40 0.80 High temperature steam 0.30 0.60 - Furnaces 0.06 0.12
TABLE 2. 3. Commercial Final . Energy Results (GWyr) Base Year Low Scenario High Scenario 1975 1985 2000 2015 2030 1985 2000 2015 2030 By Sector Transportation 104.7 171.6 303.8 473.3 726.2 . 195.4 409.5 712.7 1153.7 Total commercial 254.4 424.8 732.7 1118.6 1655.6 486.4 1004.5 1699.5 2640.1 (incl. feedstocks) By Energy Form Fossil substitutable District heat Soft solar Electricity Motor fuel Coal (metallurgical) Feedstocks Total commercial (incl
.
feedstocks)TABLE 2 . 4 . E s t i m a t e s of Ultimately Recoverable Resources by Cost Category f o r L a t i n America
Resource
Cost Coal
-
O i 1 N a t u r a l Gas- -
Uraniumcategorya T o g t c e e y r 1 o 9 t o e m y r
i i j ' z i i q
m y r 1 0 ' t ~a ~ o s t c a t e g o r i e s r e p r e s e n t e s t i m a t e s of c o s t s e i t h e r a t o r below t h e s t a t e d q u a n t i t y o f r e c o v e r a b l e r e s o u r c e s ( i n c o n s t a n t U.S.
d o l l a r s of 1975)
.
O i l and n a t u r a l gas Coal
Uranium
Category
1 2 3
TAI3LE 2.5,.
sth hated
Resource A v a i l a b i l i t y of Renewable Energy Sources (commercial use o n l y )Maximum Capacity i n 2030
Production Low High
Capacity S c e n a r i o S c e n a r i o
(GWyr/yr) ( m y r / y r ) (GWyr/yr)
~ ~ d r o e l e c t r i c i t y a 583 355 355
Wood from f o r e s t s 2 0 9 0 458 704
a ~ h e f i g u r e s r e f e r t o primary energy e q u i v a l e n t a t an e f f i c i e n c y of about 37%.
