O SLO GROUP ON ENERGY STATISTICS H ELSINKI, F INLAND, O CTOBER 2012 Azerbaijan’s experience in making Energy balance Rauf Gurbanov, Head of the unit on Energy statistics of the State Statistical Committee of the Republic of Azerbaijan 1

Brief history  First decisions for improvement of energy statistics ( )  National methodology and recommendations on energy statistics ( );  National recommendations on energy statistics indicators (2007, 2009, 2010);  Improvement of questionnaires according to energy balance (Eurostat, IRES) ( );  Creating of model of energy balance (on the base of Eurostat from 2007 up to 2010), (since 2011 IRES);  Agreement structure of balance with all relation government organizations, IEA and adaptation ( );  Compilation energy balance (2008);  Publication new energy balance (2008); 2

Step by step for implementation new structure 3 Learning of structure of balance of IEA and Eurostat ( ) Creating of model of energy balance on the base of Eurostat ( February, 2007) Agreement structure of balance with all relation government organization (December, 2007) Submitted to Cabinet Ministries (December, 2007) Reference from IEA, seminars, discussion, creating of working group ( )

Text 1 for chapter 5... Previous structure of Energy Balance 4 ItemBalance items 1.Resources 1.1 Extraction (production) 1.2 Import 1.3 Stock at the beginning of year 2.Distribution 2.1 Consumption inside of the country including: conversion into other type of energy production–technological and other needs 2.2 Losses 2.3 Export 2.4 Stock at the end of year 12 rows Bad practice – wrong way Some countries, especially former soviet union countries, also Republic of Azerbaijan fuel- energy balance has been compiled once in every 5 years. Since 1930, commodity balances of main energy products (oil, gas, electricity) and once in every 5 years from 1950 to 1990 fuel- energy balance were published. After gaining of the independence by the Republic of Azerbaijan there was published fuel-energy balance based on old structure from 1991 to Old structure of the energy balance is given below:

Example previous Energy Balance with data Fuel-energy balances in 2006 (thousand ton conditional fuel) Fuel- energy resources- total Natural fuel Other kind of fuel- energy resources total including: crude oil, including gas condensat e natural gas other Resources Stock to the beginning of the year Production (extraction) Import Distribution Domestic consumption conversion of energy (electricity and heating) as raw material other needs Losses Export Stock to the end of the year

Text 1 for chapter 5 (cont’d) 6 Continuation of the text 1. Bad practice – wrong way The shortages of the previous energy balance are following: - there is a no analog of this balance in the international sphere, as well as lack of transformation sector, re-accounting of data, incorrect accounting of the consumption of energy products between sectors, non- application of consumption principle on several consumption groups, incomplete coverage of energy products, lack of commodity balance conversion factors (TOE) applied in international practice, and above all non-calculation of the “statistical difference” indicator characterizing energy balance data quality. On other hand - previous balance was only data flows, but not energy flows.

Energy balance: Purposes Enhance the relevance of energy statistics by providing comprehensive and reconciled data on the energy situation on a national territory basis; Provide comprehensive information on the energy supply and demand on the national territory in order to understand the energy security situation, the effective functioning of energy markets and other relevant policy goals, as well as to formulate energy policies; Serve as a quality tool to ensure completeness, consistency and comparability of basic statistics; Ensure comparability between different reference periods and between different countries; Provide data for estimation of CO 2 emissions with respect to national territory; Provide the basis for indicators of the energy’s role in the country’s economy; Calculate efficiencies of transformation processes occurring in the country (e.g., refining, electricity production by combustion of fuels, etc.); Calculate the relative shares of the supply/consumption of various products (including renewable versus non-renewable) of the country’s total supply/consumption; Provide an input for modeling and forecasting. 7

Text 2 for chapter 5 8 Best practice Since the energy balance based on international standards (within the framework of recommendations of IEA and Eurostat). The energy balance published in 2011 was compiled on the basis of IRES requirements prepared by Oslo Group and adopted in 42nd session of the UN Statistical Commission. The SSC has adopted the format of the energy balances contained in IRES for the national energy balances and presents information on 23 types of products and 5 product groups. The availability of detailed energy balances has fostered transparency; it has allowed for the assessment and monitoring of the energy sector and it has provided information on the structure of the consumption of energy products. It has overall provided policy makers with necessary statistical information for decisions making and policy planning. SSC compiles energy balances annually and publishes them in the annual publication “Energy balance of Azerbaijan” available online at

Energy balance of Azerbaijan 9 Energy balance in 2011thousand TOE Total all products Crude oilRefinery feed- stocks Petro- leum products, total of which:Natural gas Rene- wables Heat Electri- city Other fuel products Refinery gas LPGMotor gasoline Kerosen e - type jet fuel Other kero- sene Diesel fuel Fuel oil - low sulphur BitumenOther petroleum products Primary production62 541, , ,2326,9--- Import45,3--26,5--1,0-0,30,1--25,1---11,07,8 Export , , ,2--123,9-99,6-81, ,9-216,3-19,6-267, ,6---69,2- International bunkers-517, ,0--79, International marine bunkers-79, International aviation bunkers-438, Stocks changes308,8-60,9-23,5--1,7-26,5-13,20,1-6,494,7-8,3-15,2345,1-0,2--1,3 Total energy supply13 594,96 728, ,4--125,6-125,1-532,50, ,4-121,6-27,9-257,79 249,7326,7--58,29,1 Statistical difference257,2150,7-72,2-4,328,8--29,60,411,0-1,923,1--11,2- Transfers Transformation processes-3 160, , ,5248,6283,01 337,0640,70,32 527,9172,8259,9707, ,7-230,1109,41 745,3-1,4 Electricity plants-1 623,2---4, ,6-2, ,6-230, ,2- CHP plants-1 219,7---81, ,4-32,0604,1- Heat plants-47,2---1, ,3-77,4-- Gas works54,0--66,4-34, ,9-12,4---- Blast furnaces-1, Oil refineries-349, , ,0248,6248,51 337,0640,70,32 530,5257,6259,9648, Petrochemical plants26, Other transformation processes Energy industries own use1 033,18,6-429,0248,6----0,319,2-160,9380,1-22,1193,3- Losses1 235,947, ,7-13,8341,7- Final consumption7 908, ,9-153,11 183,1108,20,71 027,631,6221,0290,63 574,196,673,51 140,97,7 Final energy consumption7 290, ,1-84,71 183,1106,50,71 026,828, ,796,673,51 140,93,6 Industry and construction949,0--87,2-6,8--0,155,025,3--691,20,20,3170,1- Iron and steel64,7--2,2-0,1----2,1--31,0--31,5- Chemical and petrochemical236,3--0,3-0, ,8--30,2- Non-ferrous metal3,9--0, ,1--0,9- Non-metallic minerals194,7--1, ,11,2--179,5-0,013,9- Transport equipment8,3--0, ,1-0,11,0- Machinery24,3--0,7-0,1--- 0,5--13,7-0,19,8- Mining and quarrying19,5--6,2-0,1---5,60,5--6,5-0,16,7- Food and tobacco237,5--12,5-0,6---4,17,8--201,70,1-23,2- Paper, pulp and print1, ,9--0,3- Wood and wood products2,2--0, ,7--0,4- Textile and leather8,5--0, ,30,1--3,0--5,1- Construction127,6--62,1-5,7---44,511,9--23,30,10,042,1- Non-specified20,3--0,4-0,1--- 0,2--14,9--5,0- Transport1 984, ,0-26,11 170,6106,5-630,10,7---0,2-46,93,6 Road1 789, ,01 170,6--592, Rail44,2--2, ,10,7---0,2-37,63,6 Domestic aviation106, Domestic navigation35, Pipeline transport9,4--0, ,3- Non-specified Other fields of economy4 356,7--408,9-51,812,5-0,6341,72, ,596,273,2923,9- Agriculture, forestry and fishing428,0--337,2-0,211,5--325,30,2--26,11,1-63,6- Commerce and public services519,5--9,2-3,4--0,13,62,1--116,218,524,1351,5- Households3 409,2--62,5-48,21,0-0,512, ,276,649,1508,8- Not elsewhere-specified Non-energy use618,3--585,8-68,4-1,7-0,83,3221,0290,628,4---4,1

Text 3 for chapter 5 Data sources and questionaries 10 Data on production of energy products collected with monthly periodicity from large enterprises; quarterly from small enterprises; and annually from natural entities. Data on consumption of energy products collected with monthly from large enterprises, annually from small enterprises. with monthly periodicity from households (sample survey) Data on the sale of fuel are collected from legal and natural entities with monthly periodicity. Data on import-export are obtained from the State Customs Committee with monthly periodicity

Commodity balances 11 Primary Products - 7: Crude oil, Natural bitumen and natural asphalt, Natural gas, Wood, Hydro- energy, Wind energy, Other fuel products (hard coal and etc). Secondary Products - 16: Refinery feed stock, Refinery gas; Oil products: LPG, Motor gasoline, Kerosene – type jet fuel, Other kerosene; Diesel fuel, Fuel oil-low sulphur, Fuel oil-high sulphur, Naphtha, Petroleum coke, Bitumen, Lubricants, Other petroleum products, Electric energy (EP working with fuel), Heat energy. Customary for Azerbaijan, commodity balances are compiled on 23 types of energy products

Conversion factors 12 Commodity balances Conversion factors Energy balance

13 Text 4 for chapter 5 Net Calorific Values for some energy products in Azerbaijan Best practice Main important work that has been carried out in Azerbaijan was the identification of the country specific calorific values for the energy products. This was considered particularly important in order to reflect in the energy balances the higher calorific values of the energy products in the country. The SSC commissioned experts from the scientific institutions to identify the country specific calorific values. In particular, the Institute of Petrochemical Processes of the Academy of National Sciences of Azerbaijan carried out laboratory works and determined the calorific values of 23 energy products which are now used for the compilation of energy statistics and balances.

14 №Kind of energy products Net Calorific Values (Gj/metric tons) By AzerbaijanBy world Lower Upper Lower Upper 1.Crude oil 43,145,340,144,8 2.Gasoline 43,246,342,544,8 3.Aviation gasoline 43,446,542,544,8 4.Jet fuel 43,246,242,044,8 5.Diesel oil 42,745,541,443,3 6.Kerosene 43,146,142,445,0 7.Fuel oil (low-sulphur) 42,545,439,841,7 8.Fuel oil (high-sulphur) 41,243,839,841,7 9.Natural gas (cubic meter)35,938,938,936,039,02 10.LPG47,452,444,852,2 Net Calorific Values for some energy products in Azerbaijan Best practice

Thank you for attention! 15