Comp 4bis 20/11/03 16:58 Page 1 INTERNATIONAL ENERGY AGENCY Energy Policies of IEA Countries E n 2003 Review e r g Energy Policies y This volume contains an analysis of developments in energy policies P and markets in the Member countries of the International Energy Agency. o It includes: li of IEA Countries c ■ Summaries of the in-depth reviews of Austria, Hungary, Italy, Ireland, i e Japan and Switzerland conducted from October 2002 to June 2003. s The full reviews are published separately. o ■ Short reviews of policy developments in Australia, Belgium, f Czech Republic, New Zealand, Norway, Spain, and Turkey. IE ■ Energy balances and key statistical data for all Member countries. A ■ Key energy statistics since 1973. C o The overview section examines trends in energy markets, including an u analysis of recent trends in energy demand, supply and the fuel prices. n t It highlights key issues related to energy security, which remains r i a major government preoccupation. It examines Member countries’ e s progress in energy market reform, their actions to meet the Kyoto greenhouse gas emissions targets, their policies on energy efficiency and energy R&D. It contains a short study of developments in non-Member countries, including China, India, Southeast Asia, Latin America, Russia, Central and South-eastern Europe and Saudi Arabia. 2 0 0 3 R e v i e w 2003 Review (61 2003 13 1 P1) €120 ISBN 92-64-01480-2 -:HSTCQE=UVY]UU: 001-Intro 2/12/03 10:59 Page 1 INTERNATIONAL ENERGY AGENCY Energy Policies of IEA Countries 2003 Review 001-Intro 2/12/03 10:59 Page 2 INTERNATIONAL ENERGY AGENCY ORGANISATION FOR 9, rue de la Fédération, ECONOMIC CO-OPERATION 75739 Paris Cedex 15, France AND DEVELOPMENT The International Energy Agency (IEA) is an Pursuant to Article 1 of the Convention signed in Paris autonomous body which was established in November on 14th December 1960, and which came into force 1974 within the framework of the Organisation for on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) to Economic Co-operation and Development (OECD) shall implement an international energy programme. promote policies designed: It carries out a comprehensive programme of energy co- • to achieve the highest sustainable economic growth operation among twenty-six* of the OECD’s thirty and employment and a rising standard of living in member countries. The basic aims of the IEA are: member countries, while maintaining financial stability, and thus to contribute to the development • to maintain and improve systems for coping with oil of the world economy; supply disruptions; • to contribute to sound economic expansion in • to promote rational energy policies in a global member as well as non-member countries in the context through co-operative relations with non- process of economic development; and member countries, industry and international organisations; • to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance • to operate a permanent information system on the with international obligations. international oil market; The original member countries of the OECD are Austria, • to improve the world’s energy supply and demand Belgium, Canada, Denmark, France, Germany, Greece, structure by developing alternative energy sources Iceland, Ireland, Italy, Luxembourg, the Netherlands, and increasing the efficiency of energy use; Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following • to assist in the integration of environmental and countries became members subsequently through energy policies. accession at the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973), * IEA member countries: Australia, Austria, Belgium, Mexico (18th May 1994), the Czech Republic Canada, the Czech Republic, Denmark, Finland, France, (21st December 1995), Hungary (7th May 1996), Germany, Greece, Hungary, Ireland, Italy, Japan, the Republic Poland (22nd November 1996), the Republic of Korea of Korea, Luxembourg, the Netherlands, New Zealand, (12th December 1996) and Slovakia (28th September Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the 2000). The Commission of the European Communities United Kingdom, the United States. The European takes part in the work of the OECD (Article 13 of the OECD Commission also takes part in the work of the IEA. Convention). © OECD/IEA, 2003 Applications for permission to reproduce or translate all or part of this publication should be made to: Head of Publications Service, OECD 2, rue André-Pascal, 75775 Paris Cedex 16, France. 001-Intro 2/12/03 10:59 Page 3 FOREWORD Reviewing the energy policies of member countries is a central activity of the International Energy Agency. Regular reviews have contributed substantially over the years to policy-making at the national level. Each member country is reviewed in depth every four years. This book contains summaries of reviews of Austria, Hungary, Ireland, Italy, Japan and Switzerland conducted from October 2002 to June 2003. Shorter standard reviews are also included covering seven other member countries: Australia, Belgium, the Czech Republic, New Zealand, Norway, Spain and Turkey. An overview focuses on recent developments in the energy market and in energy policies. The subjects highlighted this year include energy security, the progress of member countries in regulatory reform, their actions to meet the Kyoto greenhouse gas emission targets, their policies on energy efficiency and energy R&D as well as developments in major non-member countries. Key statistical information is also included. Claude Mandil Executive Director 3 001-Intro 2/12/03 10:59 Page 4 001-Intro 2/12/03 10:59 Page 5 ACKNOWLEDGEMENTS Much of the information in this report is drawn from in-depth reviews conducted by representatives of IEA member countries and members of the IEA Secretariat. The information contained in this publication is the best available as of September 2003 and is subject to change. The desk officer listed in each team was responsible for managing the review and was principal author of the report, which has also been published in a separate volume and appears in summary form here. The desk officers also wrote the shorter standard reviews included here. Jun Arima supervised preparations for this book and wrote the chapters on market trends and energy security. Many members of the IEA staff contributed to this book. Major contributions came from Antoine Halff, Lawrence Eagles (oil market trend), Fatih Birol, Gordon Duffus (energy security) Doug Cooke, Peter Fraser (electricity), Sylvie Cornot-Gandolphe (gas), John Cameron (coal), Jonathan Pershing, Kristi Varangu, Nicolas Lefevre (environment), Mitsuhide Hoshino (R&D), Alan Meier (efficiency), Xavier Chen (China), Ladan Mahboobi (India), Brett Jacobs (South-East Asia), Sylvie D’Apote, Anouk Honore (Latin America), Emmanuel Bergasse (Central and South-eastern Europe), Isabelle Murray (Russia), Dunia Chalabi (Saudi Arabia). Karen Treanton, Toril Ekeland and Pierpaolo Cazzola (key statistics and indicators), Monica Petit (figures), Marilyn Ferris and Sandra Martin (editing). 2002–2003 IN-DEPTH REVIEWS Austria Although the in-depth review for Austria was conducted in the 2001-2002 review cycle, the timing of its publication meant that the summary of conclusions was unable to appear in Energy Policies of IEA Countries – 2002 Review. Team Leader: José Carvalho-Netto (Portugal). Team members: Louis Meuric (France), Kaj Stærkind (Denmark), Franz Söldner (EC), Jun Arima (IEA), Shigetaka Seki (IEA), Jonathan Coony (IEA). Finland At the time of publication this report is under preparation. The summary of conclusions and recommendations will be included in the 2004 edition. Hungary Team Leader: John Havard (United Kingdom). Team members: Helen Gratsia (Greece), Karina Veum (Norway), Timo Haapalehto (NEA), Olivier Appert (IEA), Alain Bilot (IEA), Pierre Audinet (IEA). 5 001-Intro 2/12/03 10:59 Page 6 ACKNOWLEDGEMENTS Energy Policies of IEA Countries Ireland Team Leader: Michael Lear (New Zealand). Team members: Stephanie Bauer (Germany), Pekka Tervo (Finland), Johannes Maters (EC), Jun Arima (IEA), Jonathan Coony (IEA). Italy Team Leader: Didier Houssin (France). Team members: Jeroen Brinkhoff (the Netherlands), Kjetil Wilhelmsen (Norway), Wolfgang Langen (Germany), Johannes Maters (EC), Jun Arima (IEA), Sylvie Cornot-Gandolphe (IEA), Pierre Audinet (IEA). Japan Team Leader: Hartmut Schneider (Germany). Team members: Samuel Baldwin (United States), Jordi Dolader i Clara (Spain), Alan Heyes (United Kingdom), Helen Ratcliffe (Australia), Peter Wilmer (NEA), Olivier Appert (IEA), Richard Baron (IEA), Lea Gynther (IEA). Switzerland Team Leader: Kazuyuki Katayama (Japan). Team members: Timo Ritonummi (Finland), Margrethe Slinde (Norway), Rober-Rush Price (NEA), Jonathan Pershing (IEA), Jun Arima (IEA), Lea Gynther (IEA). STANDARD REVIEWS Australia: Pierre Audinet; Belgium: Lea Gynther; Czech Republic: Emmanuel Bergasse; New Zealand:Jonathan Coony; Norway:Jonathan Coony; Spain:Lea Gynther; Turkey: Pierre Audinet. 6 001-Intro 2/12/03 10:59 Page 7 TABLE OF CONTENTS FOREWORD .......................................... 3 ACKNOWLEDGEMENTS ................................ 5 PART 1 OVERVIEW OF ENERGY POLICY AND MARKET DEVELOPMENTS ....................... 11 INTRODUCTION ................................... 13 MARKET TRENDS .................................. 17 Energy Demand: OECD ...................................... 17 Energy Consumption by Sector: OECD ........................ 23 World Energy Production .................................... 28 Energy Prices ............................................... 33 Energy Intensity and CO Emissions ........................... 47 2 ENERGY SECURITY ................................. 55 Near Term Risks ............................................. 55 New Dimension of Energy Security ............................ 57 Global Challenges for Energy Security ......................... 61 ENERGY MARKET REFORM ......................... 69 Electricity ................................................... 69 Gas ........................................................ 79 Coal ....................................................... 85 CLIMATE CHANGE AND SUSTAINABLE DEVELOPMENT .. 89 Climate Change ............................................. 89 Sustainable Development .................................... 98 ENERGY EFFICIENCY ............................... 105 General Trends in Efficiency Policies ........................... 105 Minimum Efficiency Regulations .............................. 106 Voluntary Efficiency Programmes .............................. 109 TECHNOLOGY AND RESEARCH AND DEVELOPMENT POLICY ....................... 111 Critical Role of Energy Technology ............................ 111 R&D Funding Challenge ..................................... 111 Promising Areas for Clean Technology Development ............ 112 7 001-Intro 2/12/03 10:59 Page 8 TABLE OF CONTENTS Energy Policies of IEA Countries The Role of the IEA to Promote Collaborative Efforts ............. 114 Recent Trends in Member Countries’ Energy R&D Policies ........ 117 ENERGY POLICIES IN NON-MEMBER COUNTRIES ..... 121 China ...................................................... 121 India ....................................................... 123 South-east Asia .............................................. 124 South America .............................................. 126 Russia ...................................................... 130 Central and South-eastern Europe ............................. 133 Middle East ................................................. 136 PART 2 THE COUNTRY REPORTS ........................ 139 IN-DEPTH REVIEWS: SUMMARIES .................... 141 Austria ..................................................... 143 Hungary ................................................... 151 Ireland ..................................................... 159 Italy ........................................................ 169 Japan ...................................................... 177 Switzerland ................................................. 185 STANDARD REVIEWS .............................. 191 Australia .................................................... 193 Belgium .................................................... 203 Czech Republic ............................................. 215 New Zealand ............................................... 223 Norway .................................................... 235 Spain ...................................................... 245 Turkey ..................................................... 253 ENERGY BALANCES AND KEY STATISTICAL DATA OF IEA COUNTRIES ................................ 261 ANNEX A: Energy Balances and Key Statistical Data Tables .. 367 ANNEX B: Government Energy R&D Budgets ............. 393 ANNEX C: International Energy Agency “Shared Goals” .... 419 ANNEX D: Communique ............................... 421 ANNEX E: Measurement of Financial Support for Coal Production .......................... 425 ANNEX F: Glossary and List of Abbreviations.............. 429 ANNEX G: Footnotes to Energy Balances and Key Statistical Data .............................. 433 8 001-Intro 2/12/03 10:59 Page 9 Energy Policies of IEA Countries TABLE OF CONTENTS Tables and Figures (Part 1) TABLES 1. Total Primary Energy Supply in OECD Regions ..................... 17 2. Total Final Consumption in OECD Regions ........................ 23 3. Electricity Consumption ............................................. 24 4. Electricity Generation by Source, 1992 and 2002 ................. 32 5. Quarterly Natural Gas Price Indices ................................ 40 6. Quarterly Steam Coal Price Indices ................................. 43 7. Quarterly Electricity Price Indices ................................... 45 8. Energy-related CO Emissions in IEA Countries .................... 49 2 9. Electricity Market Reform Progress in EU Countries ................ 71 10. Status of US Natural Gas Industry Restructuring at the Retail Level, by State, as of December 2002 .............................. 80 11. Natural Gas Market Reform Progress in EU Countries.............. 83 12. Major Product Areas Covered by Energy Star in Different Countries as of 2003........................................................... 110 FIGURES 1. Total Primary Energy Supply in OECD Countries, 1973 to 2002 .. 18 2. Oil Demand in OECD Countries by Region, 1973 to 2002 ........ 19 3. Consumption of Oil Products by Sector in IEA Countries, 1973 to 2001 ....................................................... 21 4. Natural Gas Demand in OECD Countries by Region, 1973 to 2002 ....................................................... 21 5. Coal Demand in OECD Countries by Region, 1973 to 2002 ...... 22 6. Electricity Demand (Final Consumption) in OECD Countries by Region, 1973 to 2001 ........................................... 24 7. Total Final Consumption in OECD Countries by Source, 1973 to 2001 ....................................................... 25 8. Final Consumption by Sector and by Source in OECD Countries, 1973 to 2001 ....................................................... 27 9. World Oil Production, 1990 to 2002 ............................... 29 10. World Natural Gas Production, 1990 to 2002 ..................... 30 11. World Coal Production, 1973 to 2002 ............................. 31 12. OECD Electricity Supply by Source, 1973 to 2002 ................ 33 13. Crude Oil Prices, 1972 to 2003 .................................... 34 14. Indexed Fuel Prices, First Quarter 1999 to First Quarter 2003 .... 34 15. Gasoline Price Trends inSelected IEA Countries, January 1999 to April 2003 ....................................... 35 16. OECD Unleaded Gasoline Prices and Taxes, First Quarter 2003 .. 36 17. OECD Automotive Diesel Prices and Taxes, First Quarter 2003 ... 37 9