oa Impacts of PV Adoption in Qatar on Natural Gas Exports and Carbon Dioxide Emission Reduction

Qatar seeks to generate 2% of its electricity from solar power by 2020 (Bryden et al., 2013, REN 2015), and 20% by either 2024 (PV Insider, 2014) or 2030 (REN, 2015). Since electricity is produced almost entirely from natural gas in Qatar, these renewable energy targets introduce the prospect of natural gas savings that can be made use to increase trade and/or reduce carbon emissions. Electricity production in Qatar has been growing at a very fast pace since the mid-nineties. An estimated 7.3 millions of tons of oil equivalent (Mtoe) of natural gas were used in 2013 to produce 34.7 terawatt-hours (TWh), double the amount in 2007 and over five times as compared to 1997 (Table 1).

Table 1: Electricity production with associate natural gas (NG) use in Qatar 1971–2013. Source for electricity data: http://www.iea.org. Gas usage calculated as the estimated average efficiency for power plants using natural gas in the US for the period 2003–2013 (40.84%) estimated by the U.S. Energy Information Administration (http://www.eia.gov/electricity/annual/html/epa_08_01.html). Year – TWh produced in Qatar – NG used (Mtoe)1971 0.285 0.0601972 0.358 0.0751973 0.380 0.0801974 0.413 0.0871975 0.513 0.1081976 0.717 0.1511977 0.835 0.1761978 1.196 0.2521979 1.877 0.3951980 2.351 0.4951981 2.700 0.5691982 2.998 0.6311983 3.194 0.6731984 3.507 0.7381985 3.918 0.8251986 4.249 0.8951987 4.329 0.9121988 4.592 0.9671989 4.624 0.9741990 4.818 1.0141991 4.643 0.9781992 5.153 1.0851993 5.522 1.1631994 5.815 1.2241995 5.976 1.2581996 6.575 1.3841997 6.869 1.4461998 8.122 1.7101999 8.584 1.8072000 9.134 1.9232001 9.951 2.0952002 10.940 2.3042003 12.012 2.5292004 13.233 2.7862005 14.396 3.0312006 17.080 3.5962007 19.462 4.0982008 21.616 4.5512009 24.158 5.0872010 28.144 5.9262011 30.730 6.4702012 34.787 7.3252013 34.668 7.300

Ten-year forward projections, with cap limits of 200 Mtoe on yearly natural gas production, indicate that electricity production will peak at 48.4 TWh in 2021, with an associated natural gas use of 10.2 Mtoe (Table 2). Cap limits on natural gas production are necessary to prevent early depletion of natural gas reserves in Qatar, which have been estimated at 138 year at current output rates (QNB 2015).

Table 2: Ten-year projections (2014–2024) for electricity production and associated natural gas (NG) use in Qatar (Sanfilippo & Pedersen, in preparation). These projections assume that yearly NG production will not grow beyond 200 Mtoe. Year – Energy production (TWh) – NG needed for energy production (Mtoe) 2013 34.67 7.32014* 32.55 6.92015* 23.30 4.92016* 24.48 5.22017* 23.06 4.92018* 31.96 6.72019* 43.97 9.32020* 48.04 10.12021* 48.41 10.22022* 47.97 10.12023* 45.96 9.72024* 43.61 9.2.

The foreseen use of solar power to generate of electricity could yield a natural gas surplus of 0.2 Mtoe in 2020 and up to 1.8 Mtoe by 2024 or 2030, to reach 3.9 Mtoe thereafter, assuming a PV market peak of 43% in electricity generation – over 3.35% of Qatar total natural gas exports in 2013. This surplus could be repurposed for natural gas trade, and countries in the Far East stand as the most natural trading partners. Exports to Japan, Korea & China accounted for 41% of Qatar's NG world trade in 2013 (http://www.iea.org). Japan and Korea have historically been some of the greatest importers of natural gas from Qatar, and China is quickly emerging as a strong trading partner due to its growing need for energy. China's share in Total Primary Energy Supply (TPES) worldwide has grown from 7% in 1971 to 22% in 2013 (http://www.iea.org). China is now the world largest energy consumer with a 5% lead over the United States, the country that topped the list with 29% share of the world TPES in 1971. China's natural gas imports from Qatar rose from 0.5 to 8.8 Mtoe in only 5 years, from 2009 to 2013. Moreover, China is quickly becoming a major trading partner for Qatar. For the period 2009–2014, the trade between the two nations grew at a Compound Annual Growth Rate (CAGR) of 35.38%, as compared to 28.92% for the period 2003–2008 (http://data.imf.org). Across the same periods, Qatar's trade shows a sharp CAGR decline with both Japan (2009–2014 CAGR: 12.6 vs. 2003–2008 CAGR: 25.37%) and Korea (2009–2014 CAGR: 33.12 vs. 2003–2008 CAGR: 22.1%). Considering these market trends, China appears the most likely candidate partner for additional natural gas trade from Qatar. While the recent turbulence in Asian markets signals a slowdown in China's economy, it is unlikely that China's position as the world largest energy consumer will change in the years to come. Moreover, foreign natural gas is playing an increasingly important role in Chinese energy market (Higashi 2009). Despite plans by the Chinese government to expand domestic production, the internal Chinese natural gas market remains unbalanced (Li et al., 2014). The development and implementation of a new strategic roadmap are needed to manage the local production, marketing and transportation of gas efficiently. These changes may take decades to come to fruition, during which reliance on natural gas imports is bound to grow. In terms of carbon emissions, the amount of CO2 equivalent to the prospected 3.9 Mtoe of natural gas replaced by solar energy (see above) is 9,053,724 US tons, assuming the IEA estimate that each million British thermal units (MBtu) of energy generated by natural gas generate 117 pounds of CO2 emissions (http://www.eia.gov/tools/faqs/faq.cfm?id = 73&t = 11).

References

Bryden, J. Riahi, l., Zissler, R., (2013). MENA: Renewables Status Report. United Arab Emirates Ministry of Foreign Affairs, REN 21. International Renewable Energy Agency (IRENA).

Higashi, N. (2009). Natural gas in China. IEA Energy Markets and Security Working Papers.

Li, Z., Zhang, Q., Farfan Reyes, S., Wang, Z., (2014) Natural Gas Development strategy modeling in China. 4th International Association for Energy Economics Asian Conference, Beijing, China, September 19–21, 2014.

PV Insider, (2014). PV in MENA: Turning Policy into Projects. Retrieved on Nov 1, 2015 from http://www.pv-insider.com/menasol/pdf/policyintoplants.pdf. QNB, (2015).

QNB Economic Commentary, 21 June, 2015. REN21, (2015).

Renewables 2015 Global Status Report. http://www.ren21.net/status-of-renewables/global-status-report/. Sanfilippo, A. & Pederson, L., (in preparation).

Impacts of PV Adoption in Qatar on Natural Gas Exports to the Far East. In Lester, L. & Efird, B. (eds.) Energy Relations and Policy Making in Asia: The benefits of mutual interdependence, Palgrave Macmillan.