APEC Energy Demand and Supply

Outlook 8th Edition 2022

Roadshow in Viet Nam
31 October 2022

Dr Phung Quoc Huy, Senior Researcher

About myshelf
❖ Education
• Undergraduate: Hanoi University of Mining and Geology (Viet Nam), Coal Mining Engineering
• Post graduate: Kyushu University (Japan), Earth Resources Engineering
❖ Work experience
• Senior Researcher, Institute of Mining, Science and Technology (Viet Nam)
• Associate Researcher, Engineering Faculty, Kyushu University (Japan)
• Senior Researcher, Asia Pacific Energy Research Centre (Japan)
❖ Research interest
• Coal mine safety, methane emissions, coal mine methane, carbon storage in
coal seams, gas permeability, gas adsorption, energy system, carbon capture
and storage.
❖ Publications
• International Journal of Coal Geology; Journal of Novel Carbon Resource PHUNG QUOC HUY
Sciences; Journal of Carbon Research; Journal of Canadian Petroleum
Technology.

For detailed publications: https://www.researchgate.net/profile/Phung-Quoc-Huy

2
Contents

• Introduction of APERC
• APEC Energy Demand and Supply Outlook
• Viet Nam Energy Demand and Supply Outlook

3
Introduction of APERC

4
APERC activities overview
:1996- :2012- :2021-
Instruction EMM
:2008- :2014-
Reporting
EWG :2011- :2017-

EGEEC EGNRET EGCFE EGEDA

ER-TF LCMT-TF

(2) APEC Energy

PREE PRLCE (1) Overview
(2) APEC
Topical (3)
Energy
Studies Training
LCMT OGSI Demand &
Supply
Oil/Gas/Coal Outlook (4)
Energy Resiliency Carbon Neutrality Reports Data Network
Enhancement Symposia
Annual Conference LNG Producer-Consumer
Advisory Board Meeting Conference
(5) Policy Cooperative Activities Joint International Symposium with IEEJ with METI

5
Relationship between APERC and APEC Working group

6
APEC Energy Demand and Supply Outlook
• Published every three years

• 8th edition: official launch end of September 2022

• Provides coverage on projected energy demand and

supply trends
• APEC-wide trends (Volume 1)
• Economy-specific trends (Volume 2)
• APEC energy goals

• For the 8th edition:

• EGEDA energy balances (2000-2018)
• Two scenarios: Reference and Carbon Neutrality
• Projections: 2018-2050
• Emissions focus (Kaya Identity)

7
8th Outlook scenarios
Reference (REF) Carbon Neutrality (CN)
Definition Recent trends and current policies. Hypothetical decarbonisation
pathways for each APEC economy.

Purpose Provides a baseline for comparison Additional energy sector

with the Carbon Neutrality scenario. transformations that support
decarbonisation objectives.

Key assumptions Current polices and trends continue. Increased levels of energy efficiency,
Does not include announced carbon behavioral changes, fuel switching,
neutral plans that remain uncertain. and CCS deployment.

Limitations Assumes that recent trends, Does not consider non-energy

including relevant decarbonisation impacts on CO2 or removal.
measures continue.

Note: does not represent APERC’s recommendation or advocacy for a pathway or set of policies.

The analysis was performed prior to March 2022 and does not include current disruptions to international energy markets.
8
APEC Energy Demand and Supply Outlook

9
APEC end-use energy demand increases 14% with current trends (2018-2050)
Energy demand by fuel in REF, 2000-2050 (PJ). Energy demand by fuel in CN, 2000-2050 (PJ).
300 000 300 000
→ Projection → Projection
250 000 250 000 Others
Others
Heat
Heat
200 000 200 000 Electricity
Electricity
Hydrogen
Hydrogen
150 000 150 000 Biomass
Biomass
Other renewables
Other renewables
100 000 100 000 Gas
Gas
Oil
Oil
50 000 50 000 Coal
Coal
REF
0 0
2000 2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050

Sources: EGEDA, APERC analysis

• Additional energy efficiency, electrification, and fuel switching lead to -11% lower demand in CN
(2018-2050).
• Substantial fossil fuels demand remains in CN.

10
Largest energy demand remains in China and the United States
Energy demand by region in REF, 2000-2050 (PJ). Energy demand by region in CN, 2000-2050 (PJ).
250 000 250 000
→ Projection → Projection

200 000 200 000

Oceania
Oceania
Other Americas
Other Americas
150 000 150 000 Southeast Asia
Southeast Asia
Northeast Asia
Northeast Asia
100 000 Russia
Russia 100 000
USA
USA
China
50 000 China 50 000
REF

0 0
2000 2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050

Sources: EGEDA, APERC analysis

• Energy demand increases substantially in

southeast Asia driven by macroeconomic
trends

11
Electricity generation grows in both scenarios
Electricity generation in REF, 2000-2050 (TWh). Electricity generation in CN, 2000-2050 (TWh).
30 000 30 000

→ Projection → Projection
Imports
25 000 25 000
Imports Other
Other Solar
20 000 20 000
Solar Wind
Wind Hydro
15 000 15 000
Hydro Nuclear
Nuclear Oil
10 000 10 000
Oil Gas CCS
Gas Gas
5 000 Coal 5 000 Coal CCS
Coal
0 0
2000 2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050

Sources: EGEDA, APERC analysis

• Growth in electricity generation to meet increased buildings and transport demand.

• Wind and solar provide the most incremental generation in both scenarios.
• Natural gas substitution for coal continues and provides balancing and ancillary services.

12
CO2 emissions by sector
CO2 emissions in REF, 2000-2050 (million tonnes). Emissions changes from REF to CN, 2000-2050 (million tonnes).
25 000 25 000
→ Projection → Projection
Non-specified
20 000 20 000 Agriculture
Non-specified
Buildings
Agriculture
15 000 15 000 Transport
Buildings
Industry
Transport
10 000 10 000 Own use
Industry
Power
Own use
5 000 Power 5 000
Reference
Carbon neutrality
0 0
2000 2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050
Sources: UNFCCC, EGEDA, APERC analysis. Notes: excludes non-energy, land-use, and methane emissions.

• In REF, emissions decline 14% mostly due to a reduction in coal-fired electricity generation.
• In CN, key drivers include a phase-out of coal in the power sector, widespread electrification, CCS
deployment, and hydrogen advancements.
• Industry remains difficult to decarbonise.

13
Coal consumption declines in both scenarios
Coal consumption by sector in REF, 2000-2050 (PJ). Coal consumption by sector in CN, 2000-2050 (PJ).
140 000 140 000
→ Projection → Projection

120 000 120 000

Hydrogen Hydrogen
100 000 Power 100 000 Power
Own-use and losses Own-use and losses
80 000 Non-specified 80 000 Non-specified
Non-energy Non-energy
60 000 60 000
Transport Transport
40 000 Agriculture 40 000 Agriculture
Buildings Buildings
20 000 Industry 20 000 Industry

0 0
2000 2010 2020 2030 2040 2050 2018 2010 2020 2030 2040 2050

Sources: EGEDA, APERC analysis

• Coal phase-down and phase-out policies increase substantially in CN primarily in the power sector.
• Metallurgical coal is difficult to replace for industrial processes.

14
Natural gas consumption increases in both scenarios (2018-2050)
Natural gas consumption by sector in REF, 2000-2050 (PJ). Natural gas consumption by sector in CN, 2000-2050 (PJ).
120 000 120 000
→ Projection → Projection
100 000 Hydrogen 100 000 Hydrogen
Power Power
80 000 80 000
Own-use and losses Own-use and losses
Non-specified Non-specified
60 000 60 000
Non-energy Non-energy
Transport Transport
40 000 40 000
Agriculture Agriculture
Buildings Buildings
20 000 20 000
Industry Industry

0 0
2000 2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050

Sources: EGEDA, APERC analysis

• Power sector remains largest consumer of natural gas.

• Introduction of CCS technology in gas-fired plants and industry prolongs natural gas consumption.

15
APEC becomes a net natural gas importer in both scenarios in 2040s
Natural gas production, imports, and exports in REF, 2000-2050 (PJ). Natural gas production, imports, and exports in CN, 2000-2050 (PJ).
200 000 200 000

150 000 150 000

Stock change Stock change

100 000 100 000
Bunkers Bunkers
Exports Exports
50 000 Imports 50 000 Imports
Production Production
0 0

- 50 000 - 50 000
2000 2010 2018 2020 2030 2040 2050 2000 2010 2018 2020 2030 2040 2050

Sources: EGEDA, APERC analysis

• USA, China, Russia, and Canada account for essentially all the production growth in REF.
• Natural gas production declines at a higher rate than the trade in the 2040s.
• Increased competition and uncertainty are key factors in CN.

16
Uncertain futures: CCS technologies and electric vehicles in APEC
APEC captured CO2 emissions in CN in APEC (million tonnes) Road vehicles stock (freight and passenger) in APEC in REF and CN in 2050 (millions)
2 500 2 000

1 800
2 000 1 600

1 400
1 500 Hybrid
1 200
Gas
1 000
Fuel-cell
1 000
800 BEV
600 ICE
500
400

200
0
2020 2030 2040 2050 0
2018 REF (2050) CN (2050)
Hydrogen Energy sector own use Industy Power

Sources: EGEDA, APERC analysis

• Gas-fired power with CCS accounts for over 90% of CCS in power sector.
→ Viet Nam and Indonesia incorporate CCS with coal-fired power
• Industry CCS for steel, chemicals, and cement begins to accelerate in the 2030s
• Electric vehicles become very prominent in both scenarios
17
Viet Nam Energy Demand and Supply Outlook

18
Energy policies
Policies in place
• The Politburo's Resolution No. 55 on the orientation of Viet Nam National Energy Development Strategy to 2030
with the vision to 2045 (Resolution No. 55)
• The Renewable Energy Development Strategy (REDS)
• The Viet Nam National Energy Efficiency Programme for the 2019–2030 period (VNEEP)
• Viet Nam’s Nationally Determined Contribution
• Viet Nam’s commitment to net-zero emissions by 2050 At COP26 in Glasgow.

Drafting policies
• The Power Development Plan for the 2021–2030 period with the vision to 2045 (PDP8).
• The National Energy Development Strategy for the 2021-2030 period with the vision to 2050 (NEDS)

19
End-use energy demand with current trends is expected to triple by 2050
Energy demand by fuel in REF, 2000-2050 (PJ). Energy demand by fuel in CN, 2000-2050 (PJ).
8 000 8 000
→ Projection → Projection
7 000 7 000

6 000 6 000
Electricity Electricity

5 000 Hydrogen 5 000 Hydrogen

Biomass Biomass
4 000 4 000
Other renewables Other renewables

3 000 Gas 3 000 Gas

Oil Oil
2 000 2 000
Coal Coal

1 000 1 000

0 0
2000 2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050

Sources: EGEDA, APERC analysis. Includes non-energy. Sources: EGEDA, APERC analysis. Includes non-energy.

• Energy demand increases three-fold over 2018-2050, driven by continued GDP and population growth.
• Additional energy efficiency, fuel switching, and electrification lead to 20% lower energy demand in CN (2018-2050).
• Substantial fossil fuels demand remains in CN.

20
Electricity generation robustly grows in both scenarios over 2018-2050
Electricity generation in REF, 2000-2050 (TWh). Electricity generation in CN, 2000-2050 (TWh).
900 900

800 800 → Projection Imports

700 Imports 700 Waste

Waste Bio
600 600
Bio Solar
500 Solar 500 Wind
Wind Hydro
400 400
Hydro Gas CCS
300 300
Gas Gas

200 Oil 200 Oil

Coal Coal CCS
100 100
Coal
0 0
2000 2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050

Sources: EGEDA, APERC analysis. Sources: EGEDA, APERC analysis.

• Fossil fuels-based electricity generation still remains around half of the total generation mix in both scenarios.
• Wind and solar provide the most incremental generation in both scenarios.
• Natural gas-fired power generation partly substitutes coal to play as a based load generation.

21
Generation capacity rises by five-fold in both scenarios
Generation capactity in REF, 2018-2050 (TWh). Generation capacity in CN, 2018-2050 (TWh).
350 350

300 300
Waste
Waste Bio
250 250
Bio Solar

200 Solar 200 Wind

Wind Hydro
150 Hydro 150 Gas CCS
Gas Gas
100 Oil 100 Oil
Coal Coal CCS
50 50
Coal

0 0
2018 2026 2034 2042 2050 2018 2026 2034 2042 2050

Sources: EGEDA, APERC analysis. Sources: EGEDA, APERC analysis.

• Wind and solar capacities increase robustly through to 2050.

• CCS-equipped coal-fired and gas-fired power are expected to deploy in 2035 and 2038 in CN.

22
Coal consumption increases in both scenarios
Coal consumption by sector in REF, 2000-2050 (PJ). Coal consumption by sector in CN, 2000-2050 (PJ).
4 500 4 500
→ Projection → Projection
4 000 4 000

3 500 3 500
Hydrogen Hydrogen
3 000 Power 3 000 Power
Non-specified Non-specified
2 500 2 500
Non-energy Non-energy
2 000 Transport 2 000 Transport

1 500 Agriculture 1 500 Agriculture

Buildings Buildings
1 000 1 000
Industry Industry

500 500

0 0
2000 2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050

Sources: EGEDA, APERC analysis. Sources: EGEDA, APERC analysis.

• Coal is mainly consumed in the power sector.

• Coal phase-down and phase-out policies increase substantially in CN primarily in the power sector.
• Metallurgical coal is difficult to replace for industrial processes.

23
Coal production is almost unchanged, while coal imports rise dramatically
Coal production, imports, and exports in REF, (PJ). Coal production, imports, and exports in CN, (PJ).
5 000 5 000

4 000 4 000

3 000 3 000
Stock change Stock change

2 000 Exports 2 000 Exports

Imports Imports

1 000 Production 1 000 Production

0 0

- 1 000 - 1 000
2000 2010 2018 2020 2030 2040 2050 2000 2010 2018 2020 2030 2040 2050

Sources: EGEDA, APERC analysis. Sources: EGEDA, APERC analysis.

• Coal production remains plateaued over the projection period, mainly mined at the Quang Ninh coal basin.
• Coal imports increase dramatically through to 2050 in both REF and CN scenarios.

24
Natural gas consumption surged after 2035 to partly substitute coal power
Natural gas consumption by sector in REF, 2000-2050 (PJ). Natural gas consumption by sector in CN, 2000-2050 (PJ).
2 000 2 000

1 800 1 800

1 600 1 600

1 400 1 400

1 200 Power 1 200 Power

1 000 Non-energy 1 000 Non-energy

Transport Transport
800 800
Industry Industry
600 600

400 400

200 200

0 0
2000 2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050

Sources: EGEDA, APERC analysis. Sources: EGEDA, APERC analysis.

• Natural gas consumption increases slightly during this decade, but dramatically increases after 2035.
• Gas continues to play a role in fueling the power sector in both scenarios.

25
Viet Nam starts importing LNG since 2023
Natural gas production, imports, and exports in REF, (PJ). Natural gas production, imports, and exports in CN, (PJ).
2 000 2 000

1 800 1 800

1 600 1 600

1 400 1 400
Stock change Stock change
1 200 1 200
Bunkers Bunkers
1 000 1 000
Exports Exports
800 Imports 800 Imports

600 Production 600 Production

400 400

200 200

0 0
2000 2010 2018 2020 2030 2040 2050 2000 2010 2018 2020 2030 2040 2050

Sources: EGEDA, APERC analysis. Sources: EGEDA, APERC analysis.

• Domestic natural gas production remains almost plateaued over the projection period.
• LNG imports account for 82% of the total natural gas supply in REF by 2050.

26
Substantial growth in refined products to meet domestic demand in REF
Refined products consumption by sector in REF, (PJ). Refined product consumption by sector in CN, (PJ).
2 500 2 500

2 000 2 000

Power Power
1 500 Non-energy 1 500 Non-energy
Transport Transport
Agriculture Agriculture
1 000 1 000
Buildings Buildings
Industry Industry
500 500

0 0
2000 2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050

Sources: EGEDA, APERC analysis. Sources: EGEDA, APERC analysis.

• Viet Nam plans to expand refining capacity to 39 Mtpa in 2031-36 and 49 Mtpa in 2040-50.
• Even with increased electrification in transport, gasoline and diesel still account for a prominent share of total oil
products consumption through to 2050

27
Electrification in transport significantly reduces oil products demand
Refined products production, imports, and exports in REF, (PJ). Refined product production, imports, and exports in CN, (PJ).
4 000 2 500

2 000
3 000

1 500
2 000
Stock change Stock change
1 000
Bunkers Bunkers
1 000
Exports Exports
500
Imports Imports
0
Domestic refining Domestic refining
0

- 1 000
- 500

- 2 000 - 1 000
2000 2010 2018 2020 2030 2040 2050 2000 2010 2018 2020 2030 2040 2050

Sources: EGEDA, APERC analysis. Sources: EGEDA, APERC analysis.

• In buildings and industry, petroleum product consumption falls by almost half and one-third below REF levels,
respectively.
• Imports of petroleum products continue to grow in the projection period, tripling by 2050.

28
Electrolysis offers potential to produce green hydrogen in Viet Nam
Hydrogen consumption by sector in REF, (PJ). Hydrogen consumption by sector in CN, (PJ).
6 60

5 50

4 40

3 30 Transport
Transport
Industry

2 20

1 10

0 0
2018 2026 2034 2042 2050 2018 2026 2034 2042 2050

Notes: hydrogen as an industrial feedstock is not considered. Notes: hydrogen as an industrial feedstock is not considered.

• A small amount of hydrogen starts to be used in the transport sector from 2031.
• Resolution No. 55 states Viet Nam’s intent to foster the use of hydrogen in its energy sector.
• Viet Nam has a large potential for offshore wind, which will be fundamental to developing green hydrogen at an
affordable cost.
29
Hydrogen production is expected to increase in CN
Hydrogen production, imports, and exports in REF, (PJ). Hydrogen production, imports, and exports in CN, (PJ).
18 120

16
100
14

12 80

10
60
Electrolysis Electrolysis
8

6 40

4
20
2

0 0
2018 2020 2030 2040 2050 2018 2020 2030 2040 2050

Notes: hydrogen as an industrial feedstock is not considered. Notes: hydrogen as an industrial feedstock is not considered.

• Hydrogen use begins in earlier in CN, as industry starts adopting it in 2025.

• The scale of hydrogen consumption is far larger in CN, reaching approximately 54 PJ in 2050, 10-fold that of REF.
• Hydrogen demand in the transport sector grows modestly over REF to around 5.4 PJ.

30
Modern renewables share in 2019 almost doubled relative to 2010 level
Final energy intensity in REF and CN (2005=100). Modern renewables share in REF and CN, 2000-2050.
120 40.0%

35.0%
100

30.0%

80
25.0%

60 Reference 20.0% Reference

Carbon neutrality Carbon neutrality
15.0%
40

10.0%

20
5.0%

0 0.0%
2000 2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050

Sources: EGEDA, APERC analysis. Sources: EGEDA, APERC analysis.

• Renewables share rose to 26% in 2017 but dropped in recent years due to overcapacity on transmission lines.
• Intensity reductions in the 2035 target year will be 23% in CN.
• The share of modern renewables rises to almost 35%.

Note: Modern renewables include direct consumption of renewables in end-use demand sectors (excluding non-energy and 31
biomass in some sectors) and the share of electricity produced by renewable sources.
CO2 emissions continue to rise in both scenarios
CO2 emissions in REF, 2000-2050 (Mt). Change in CO2 emissions, 2000-2050 (Mt).
700 700

600 600
Agriculture
500 500 Buildings
Agriculture
Transport
400 Buildings 400
Industry
Transport
Own use
300 Industry 300
Power
Own use
200 Power 200
Reference

100 100 Carbon Neutrality

0 0
2000 2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050

Sources: UNFCCC, EGEDA, APERC analysis. Sources: UNFCCC, EGEDA, APERC analysis.

• Unabated coal-fired power plants - the largest single emitter – continue to rise by 2.5-fold in REF.
• Fuel switching, widespread electrification, energy efficiency, and CCS deployment are key drivers to reduce CO2
emissions in CN.
• Industry remains a hard-to-abate sector.
32
Energy intensity offsets a large portion of CO2 emissions in both scenarios
CO2 emissions components in REF, 2018 and 2050 (Mt). CO2 emissions components in CN, 2018 and 2050 (Mt).
1 200 1 200

1 000 1 000

800 800

600 600

400 400

200 200

0 0
Emissions 2018 Population GDP per capita Energy Emissions Emissions 2050 Emissions 2018 Population GDP per capita Energy Emissions Emissions 2050
intensity intensity intensity intensity

Sources: UNFCCC, EGEDA, APERC analysis. Sources: UNFCCC, EGEDA, APERC analysis.

• The modelling results suggest a rise of 0.7% in CO2 emissions for every 1.0% increase in GDP per capita. ​
• Efficiency improvements and carbon abatement help reduce energy-related CO2 emissions by 418 Mt of CO2.
• Viet Nam needs to deploy extensive negative CO2 emissions measures, such as CCUS and carbon dioxide removal.

𝐺𝐷𝑃 𝐸𝑛𝑒𝑟𝑔𝑦 𝑠𝑢𝑝𝑝𝑙𝑦 𝐶𝑂2 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠

Note: the above charts are a representation of the Kaya identity which is 𝐶𝑂2 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 = 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 ∗
𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛
∗
𝐺𝐷𝑃
∗
𝐸𝑛𝑒𝑟𝑔𝑦 𝑠𝑢𝑝𝑝𝑙𝑦
. 33
Thank you.
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