Energy Outlook Report 2018

(1)

Energy Outlook Report 2018

TIMES Data Report

(2)

2 | Energy Outlook Report 2018 - Data report - 31-10-2018

31-10-2018

Report by:

Nguyen Ngoc Hung Nguyen Hoang Anh Nguyen Thanh Hai

Institute of Energy 655 Pham Van Dong Hanoi

Vietnam

T: +84-24-8533351

Email: hungnn76@gmail.com

Web: www.ievn.com.vn

(3)

1 Introduction and background ...5

2 General assumptions ...8

2.1 Reference energy system ... 8

2.2 Time resolution ... 9

2.3 Geography resolution ... 10

3 Resources ... 12

3.1 Coal ... 12

3.2 Crude oil... 12

3.3 Natural gas ... 12

3.4 Hydro ... 13

3.5 Wind ... 14

3.6 Solar ... 16

3.7 Biomass ... 16

Waste ... 17

Others ... Fejl! Bogmærke er ikke defineret. 4 Fuel prices ... 18

5 Power sector ... 19

5.1 Grid setup and interconnections ... 19

5.2 Load curve ... 20

5.3 Existing and committed generation capacity ... 22

Technology catalogue ... 23

6 Refinery sector ... 26

7 Demand sectors ... 27

Agriculture ... 27

Industrial ... 28

Commercial ... 30

(4)

Residential ... 31

Transport ... 32

8 End-use demand projection ... 33

General assumptions ... 33

Agriculture ... 35

Industrial ... 35

Commercial ... 36

Residential ... 37

Transport ... 37

9 Demand devices and mitigation measures... 39

9.1 Demand devices ... Fejl! Bogmærke er ikke defineret. 9.2 Mitigation measures ... Fejl! Bogmærke er ikke defineret. 10 Policies ... 79

References ... 80

Appendix ... 82

Appendix I: Power plant characteristics ... 82

Appendix II: End use demand projections ... 83

Appendix III: End use demand devices ... 83

(5)

1 Introduction and background

The TIMES (The Integrated MARKAL-EFOM System) framework is a widely used least-cost optimization methodology employed to inform energy policy and strategic planning. It was developed and is maintained, advanced and promoted by the IEA-ETSAP consortium, the longest running Implementing Agreement of the IEA (International Energy Agency). Currently 19 countries, the EU and two private sector sponsors are participating to ensure the contin- ual advancement of the methodology. TIMES documentation can be found at iea-etsap.org.

TIMES is a multi-sectoral optimization model generator, herein applied to study long-term energy planning for Vietnam. The TIMES-Vietnam model co- vers all parts of the energy system, from primary energy resources to power plants and other fuel processing plants, ultimately to various demand devices in all five demand sectors. An overview of the basic structure of the TIMES- Vietnam model is illustrated in Figure 1. Primary energy supplies consist of domestic and imported fossil fuels, and a variety of domestic renewable ener- gy sources. These are characterized by cost-supply curves that define how much is available at a particular price. Power plants and fuel processing plants convert the primary energy sources into final energy carriers, such as electricity and refined petroleum products, which are used in the demand sectors. There are both existing and potential future plants grouped by fuel and type, which are characterized by their existing capacity or investment cost, operating costs, efficiency and other performance parameters.

The model contains five demand sectors: Agriculture, Commercial, Industry,

Residential and Transportation. End-use devices specific to each demand sec-

tor are characterized by their existing capacity or investment cost, operating

costs, efficiency and operating parameters delivering end-use services (such

as lighting, cooling, cooking, industrial process heat and motor drive, passen-

ger and freight travel). For most devices there are Existing, Standard, Im-

proved, Better and Advanced options, corresponding to increasing levels of

energy efficiency performance. The demands for energy services are deter-

mined by projecting the energy demands for the base year (2014), which are

derived from the energy balance as part of the calibration process, in accord-

ance with sector-specific drivers, such as GDP growth, GDP per capita growth,

industrial production projections, space cooling growth expectations, etc.

(6)

6 | Energy Outlook Report 2018 - Data report - 31-10-2018 Figure 1: TIMES Basic Components

TIMES-Vietnam will determine the least-cost energy system configuration that will meet the annual end-use demands, adhering to in-country limits on re- sources and any additional policy constraints placed on the model. The total discounted system cost (the TIMES objective function) encompasses all costs arising from the supply (production and import/export) and consumption of energy including fuel expenditures, investments in power plants, infrastruc- ture, purchases of demand devices, and fixed/variable operating and mainte- nance costs associated with all technologies. In addition, it may include poli- cies such as carbon taxes and other more specific measures.

Figure 2 shows how the TIMES-Vietnam model is organized in various sector- based Excel input workbooks containing the model input data. The core tem- plates include the 2014 base year energy balance, the demand projections for each sector, and three files that describe each sector:



Existing technology database and established base year calibration of each sector (Base Year BY templates);



New technology options for the refining and power sector as well as for each end-use application, sub-sector, or mode (New Technology NT templates), and



Constraints on the amount of fuel switching and technology im-

provement allowed over the planning horizon (User-Constraint UC

templates).

(7)

The VEDA-FE

¹

(Front-End) model management software processes these input templates and allows the running of the Baseline and various policy scenarios.

The resulting depiction of the Vietnam energy system is passed to the TIMES model generator (written in GAMS (General Algebraic Modeling System) pro- gramming language) and solved employing linear or mixed-integer program- ming. The TIMES-Vietnam run results are post-processed by VEDA-BE (Back- End), which includes a wide range of customized sets and tables to enable the user to easily examine dynamic pivot tables used for reviewing and analyzing model results. Finally, the Base Year Calibration Check workbook helps with ensuring that the 1

^st

year of the model (2014) replicates the initial Energy Balance, and the DWG Results Analysis graphing workbook provides dynamic comparisons of scenarios in graphs and tables ready for use in presentations and reports.

Figure 2: TIMES-Vietnam Modelling Platform Overall Structure

1 VEDA is a powerful, yet user friendly set of tools required by complex mathematical and economic models. Also, it allows smart exploration of the results created by such models and the creation of reports.

VEDA is under continuous development, driven by a very strong desire to keep increasing the efficiency and transparency of managing input and output of data-intensive models. The VEDA system is composed of two major subsystems - VEDA Front-End (VEDA_FE) which helps input data and VEDA Back-End VEDA_BE) which helps to analyze the output and gain insights.

(8)

2 General assumptions

2.1 Reference energy system

Fejl! Henvisningskilde ikke fundet.3 shows a simplified Reference Energy System (RES) diagram for supply of primary energy carriers to the power and demand sectors. All the first year values for the supply processes come from the 2014 Energy Balance [1]. As the diagram shows, domestic and imported oil products can supply every demand sector, along with biofuels. Solar ener- gy is available to the Power, Commercial and Residential sectors, while solid biomass is available to the Power, Industry and Residential sectors. Coal is available to the Power and Industry sectors, while hydropower, geothermal, and wind are only available to the Power sector.

Figure 3: RES Diagram for Primary Energy Supply

The minimum data needed for each resource supply is an upper annual (and optionally cumulative) limit and a price for that amount of supply over time.

All energy carriers have upper limit for the base year, which is set according to

the Energy Balance as part of the calibration. In addition, future supply limits

have been defined for all sources that are limited based on available resource

potential studies for domestic supplies and import infrastructure limits, when

(9)

appropriate. The future price for a given amount of supply is based on the latest data for Vietnam as in [2].

2.2 Time resolution

The TIMES-Vietnam model is currently designed with a 2014 base year, and several options to set the model milestone years

²

and periods. One option covers the time horizon until 2050 aggregated in 5-year periods. Another option runs until 2030 in 2-year periods, and a third alternative (shown in Table 1) uses a combination of 2- and 3-year periods to hit the key milestone years of 2020, 2025 and 2030. This option provides more detail than the 5- year periods, and is being used as the default milestone years for model runs.

The model can easily be run for different milestone period intervals if desired.

Energy demands and technologies are generally modelled at annual level, except for electricity, which is modelled at the time-slice level. TIMES- Vietnam is structured with twelve (12) time slices: three seasons (Wet, Inter- mediate and Dry) and four divisions of the day (day, morning peak, evening peak and night). Table 1 shows the overall time slice divisions of the load du- ration curve into three (3) seasons and four (4) parts of the day.

Table 1: TIMES-Vietnam Time Slice Resolution

2 Milestone years are the years for which results are obtained, i.e. for which plants’ investments and opera- tions are optimized within the model.

(10)

Season Time Slice Code Fraction of year

Intermediate I 0.329

Intermediate Day ID 0.096

Intermediate Night IN 0.123

Intermediate Morning Peak IA 0.041

Intermediate Evening Peak IE 0.068

Wet W 0.419

Wet Day WD 0.122

Wet Night WN 0.157

Wet Morning Peak WA 0.052

Wet Evening Peak WE 0.087

Dry D 0.252

Dry Day DD 0.074

Dry Night DN 0.095

Dry Morning Peak DA 0.032

Dry Evening Peak DE 0.053

Total 1.000

2.3 Geography resolution

(11)

Owing to the nature of the availability of resource supplies and the long- distance transmission lines in Vietnam, three regions are identified in TIMES- Vietnam: North, Central and South for domestic resources (including re- newables), refineries, and power plants. The existing capacity of the transmis- sion lines between the regions are reflected in the model, along with the cost for expanding the grid in- frastructure in the future. A fourth region (Vietnam) is used to depict the national demand for the five (5)

end-use sectors, as regional data on demand is not complete enough to break

them out by region. Note also that all imports/exports occur in the overall

Vietnam region, except for power trades. Commodities can move between

the individual supply regions and overall Vietnam, as needed.

(12)

3 Resources

Resource supplies are modelled for each of the three regions with supply ca- pability for every year, implemented as upper bounds in TIMES. Supply capa- bilities are based on approved sectoral development plans. Supply capabilities are then kept constant for the future years after the planning horizons until 2050.

3.1 Coal

Domestic coal deposits are located in the North. Domestic anthracite coal production is presented below: (Expanding table till 2050)

Table 2: Coal production to 2030 (PJ)

2016 2017 2018 2019 2020 2025 2030

Total 838.2 861.4 902.0 948.9 975.9 1,076.9 1,144.1

Source: [3]

3.2 Crude oil

Crude oil fields are mainly located in the South with some fields abroad. Crude oil production is presented below:

Table 3: Crude oil production to 2030 (PJ)

2016 2017 2018 2019 2020 2025 2030 2035

Total 721.39 649.83 655.65 655.65 651.88 354.20 177.94 83.32

Source: [4]

3.3 Natural gas

Natural gas fields are mainly located in the South with one major future field

in the Central region.

(13)

13 | Energy Outlook Report 2018 - Data report - 31-10-2018 Figure 4: Natural gas distribution by region

Source: [5]

Natural gas production by region is presented below:

Table 4: Natural gas production to 2035 (PJ)

2016 2017 2020 2025 2030 2035

North 5.46 8.19 10.92 10.92 0 0

Central 0 0 0 241.8 241.8 241.8

South-East 330.33 342.81 385.32 318.24 197.34 51.87

South-West 78 61.62 158.34 207.87 159.9 149.76

Total 413.79 412.62 554.58 778.83 599.04 443.43

Source: [4]

3.4 Hydro

Hydropower is located in all three regions. Large hydropower (>30MW) al-

most reaches to the maximum potential by 2020. Hydropower capacity ex-

pansion under the PDP7 revised is presented below:

(14)

14 | Energy Outlook Report 2018 - Data report - 31-10-2018 Table 5: Hydropower capacity to 2030 (MW)

2016 2017 2018 2019 2020 2025 2030

Hydro

North 8879 9362 9546 9732 9861 10651 10911

Hydro

Central 4736 4772 4924 5144 5504 5564 5564

Hydro

South 2641 2716 2716 2796 2796 2996 2996

Source: [6]

Maximum capacity potentials for small hydro are 4.088 GW in North, 2.316 GW in Central and 0.35 GW in South.

3.5 Wind

Land-based wind resource potential estimates have been based on results of

the wind resource mapping project supported by the GIZ in collaboration with

the Danish Energy Agency, ‘Macroeconomic Cost-Benefit Analysis for Renew-

able Energy Integration’ [7]. Based on the modelled wind speed variation pro-

files for 63 locations in Vietnam [8] and the resource maps below [7], a total

of 18 areas are modelled by considering 6 regions and 3 wind categories. The

three wind categories represent a low, a medium and a high wind speed loca-

tion. For each of the three TIMES regions (North, Central, South), two poten-

tial levels examined are (i) excluding croplands and within 10km distance from

grid and road and (ii) including croplands and within 20km distance from grid

and road.

(15)

Figure 5: Wind resource map and locations of the 63 wind speed locations, left: Before 2030, Right: 2030 and onwards.

Table 6: Onshore wind power potential by region and by class

Region Level

Ave. wind speed (m/s)

Potential (GW) (10km)

Potential (GW) (20km)

FLHs (hrs)

Central

High 6.77 6.90 23.9 3615

Medium 5.78 8.90 44 2683

Low 5.05 3.50 21.7 2240

South

High 6.48 2.60 11.7 3259

Medium 5.78 0.70 23.8 2709

Low 4.94 0.10 6.5 1752

North

High 6.49 3.70 9.7 3050

Medium 5.71 0.70 1.8 2753

Low 4.83 0.10 0.4 1887

Availability factors by region and level are shown below:

(16)

Table 7: Availability factor for wind power by region and by class Availability factor

I-D I-N I-PA I-PE W-D W-N W-PA W-PE D-D D-N D-PA D-PE

North

High 0.3079 0.2217 0.2969 0.3505 0.4284 0.3571 0.4983 0.4188 0.3522 0.2801 0.3208 0.4086 Medium 0.2779 0.2001 0.2679 0.3163 0.3867 0.3223 0.4498 0.3780 0.3179 0.2528 0.2895 0.3688 Low 0.1905 0.1372 0.1837 0.2168 0.2650 0.2209 0.3083 0.2591 0.2179 0.1733 0.1985 0.2528 Central

High 0.4432 0.2486 0.4533 0.5334 0.4522 0.3567 0.6000 0.4471 0.4367 0.3192 0.4490 0.4968 Medium 0.3289 0.1845 0.3365 0.3959 0.3356 0.2648 0.4453 0.3318 0.3241 0.2369 0.3332 0.3687 Low 0.2746 0.1540 0.2809 0.3305 0.2802 0.2210 0.3718 0.2770 0.2706 0.1978 0.2782 0.3079 South

High 0.3954 0.4295 0.3667 0.3505 0.3228 0.2432 0.3403 0.4188 0.4367 0.4637 0.3818 0.4086 Medium 0.3287 0.3570 0.3048 0.3163 0.2683 0.2022 0.2829 0.3780 0.3630 0.3855 0.3174 0.3688 Low 0.2126 0.2309 0.1971 0.2168 0.1735 0.1308 0.1829 0.2591 0.2347 0.2493 0.2053 0.2528

Source: Authors’ calculation from wind hourly profiles and FLHs

3.6 Solar

Solar potential is estimated by Institute of Energy based on solar radiation and land availability for power generation by region, as presented below:

Table 8: Solar power PV potential and FLHs by region

Region FLHs Potential (GWp)

North 1100 132.4

Central 1400 147.1

South 1400 60.2

Source:

Capacity factors by region are shown below:

Table 9: Capacity factor for solar PV by region

Region Availability factor

I-D I-N I-PA I-PE W-D W-N W-PA W-PE D-D D-N D-PA D-PE

North 0.1016 0.0126 0.1568 0.0644 0.2852 0.0684 0.5272 0.2194 0.1344 0.0221 0.2690 0.0625 Central 0.1537 0.0286 0.2811 0.0881 0.2623 0.0740 0.4754 0.2104 0.0932 0.0181 0.1700 0.0455 South 0.3174 0.0493 0.5834 0.2115 0.3311 0.0878 0.6134 0.2478 0.2104 0.0415 0.4122 0.0948

Source: Authors’ calculations from FLHs and hourly solar radiation

3.7 Biomass

Biomass types modelled in TIMES-Vietnam include wood, bagasse, rice husk,

straw and others. Biomass uses in 2014, which were all domestically pro-

duced, are as below:

(17)

17 | Energy Outlook Report 2018 - Data report - 31-10-2018 Table 10: Biomass use in the base year 2014 (PJ)

Purpose

Biomass type Total

Wood Bagasse Rice

husk Straw Others Power

Cogeneration 6.6 326.9 - - - 333.6

Heat

Household cooking 1,118.7 8.5 99.1 91.5 408.2 1,725.9

Boiler & kiln 674.0 - 477.5 - 171.8 1,323.3

Building material 67.1 - 90.7 - - 157.7

Rice drying - - 126.8 - - 126.8

Total 1,866.5 335.4 794.1 91.5 580.1 3,667.4

Source: [9]

Total biomass potential is presented below:

Table 11: Total biomass potential for 2020 and 2030 (PJ)

Region/Year Wood Rice husk Straw Bagasse Others

North 1,181 253 833 56 1,006

Central 1,643 192 632 217 852

South 845 550 1,813 242 629

Total 2020 3,669.28 995.24 3,278.44 514.84 2,487.16

North 1,441 256 844 61 1,191

Central 1,962 194 640 236 1,015

South 982 557 1,836 264 739

Total 2030 4,384.62 1,007.85 3,319.96 560.96 2,944.81

Source: [9]

Waste

Add more information for solid wastes;

(18)

4 Fuel prices

Fuel prices in TIMES-Vietnam are forecasted as in [2] which contains details on price formation, components and assumptions for the projections used.

Table 12: Domestic fuel prices forecasts to 2030 (USD/GJ)

2016 2020 2030 2040 2050

Nuclear 1.000 1.000 1.000 1.000 1.000

East NG 4.925 7.529 10.730 10.816 10.816

West NG 4.925 5.967 5.967 6.014 6.014

Block B gas 0.000 0.000 11.560 11.651 11.651

CVX gas 0.000 0.000 9.694 9.771 9.771

LNG 9.755 10.482 11.815 11.909 11.909

Domestic coal 3.473 3.556 4.090 3.677 4.102

Imp coal 4.180 3.612 3.744 3.823 3.903

Fuel oil 8.707 11.216 17.063 19.907 19.907

Diesel oil 16.553 23.379 29.683 35.869 40.070

Rice husk 1.721 1.863 2.271 2.271 2.271

Straw 0.514 0.605 0.738 0.738 0.738

Bagasse 0.140 0.151 0.185 0.185 0.185

Fire wood 0.358 0.387 0.472 0.472 0.472

Energy wood 1.790 1.937 2.361 2.361 2.361

Biomass 0.140 0.151 0.185 0.185 0.185

Crude oil 7.15 10.2 11.5 10.4 10.4

Source: [2]

Commodities in TIMES (not fuels in Balmorel)

(19)

5 Power sector

5.1 Grid setup and interconnections

Figure 6 shows the RES diagram for the Power sector, depicting the primary energy sources consumed by various power generation technology types to produce grid electricity, which primarily goes to the demand sectors. Imports and exports to/from neighbouring countries are also modelled. The power sector is organized into existing power plants, as specified in the Energy Bal- ance and Vietnam Electricity (EVN) data, and new power plant options that are available to meet future needs.

Figure 6: Power Sector RES

Several types of power plant technologies are modelled, including four (4) kinds of hydro plants – extra-large, large, medium and small; several types of coal, natural gas, diesel and biomass-fired power plants, along with central PV and building distributed PV systems for both Residential and Commercial buildings, plus six types of wind power plants based on wind class and dis- tance from transmission grid.

Each region (i.e. North, Central, South) features the grid setup exemplified in Figure 5. Regions are interlinked by transmission lines in TIMES-Vietnam.

There are two bi-directional links for electricity transmission between regions:

(i) North to Central, (ii) Central to North, (iii) Central to South and (iv) South to Central (Table 13). Electricity imports/exports are also allowed to each of the three supply regions.

Sector fuels Electric Transmission & Distribution System

Electricity Transmission

Grid**

Imports

Exports

Electricity to each Demand

Sector Power Plant Type

Existing & New Hydropower

Existing & New Solar &

Geothermal power plants Existing and New Diesel

Existing & New Wind power plants Existing & New Natural

Gas

Existing & New Coal*

Existing & New Biomass, plus coal co-firing

Wind Hydropower

Solar &

Geothermal Coal Natural Gas

Biomass Diesel/

Biodiesel

(20)

Table 13: Capacities and investment costs for regional transmission links

Connection Residual capacity (GW) Investment cost

(USD/kW) Capacity bounds (GW)

North – Central 2 250 -

Central - South 4 250 -

5.2 Load curve

The load curve for TIMES-Vietnam is built for the base year 2014, with twelve chronological time slices per year. The load duration curve for 2014 is as be- low:

Figure 7: Load duration curve 2014

The TIMES load curve represents an average day considering monthly load curves, as shown below:

Figure 8: Average load curves by month and TIMES load curve for 2014 (GW)

0 5000 10000 15000 20000 25000

1 173 345 517 689 861 1033 1205 1377 1549 1721 1893 2065 2237 2409 2581 2753 2925 3097 3269 3441 3613 3785 3957 4129 4301 4473 4645 4817 4989 5161 5333 5505 5677 5849 6021 6193 6365 6537 6709 6881 7053 7225 7397 7569 7741 7913 8085 8257 8429 8601

MW

Load duration curve 2014

Load

0 5000 10000 15000 20000 25000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Dec Nov Oct Sep Aug Jul Jun

May Apr Mar Feb Jan Average TIMES

(21)

The electricity demand split by sector and time slice is presented below:

Table 14: Electricity demand split by sector and time slices

Sector Demand Split (%)

ID IN IA IE WD WN WA WE DD DN DA DE Total

Agriculture 0.095 0.086 0.049 0.069 0.082 0.074 0.043 0.060 0.140 0.127 0.073 0.102 1.000

Commercial

Industry 0.094 0.091 0.046 0.069 0.081 0.078 0.040 0.059 0.138 0.134 0.068 0.102 1.000

Residential

Transport 0.099 0.070 0.055 0.077 0.085 0.060 0.047 0.066 0.146 0.103 0.080 0.113 1.000

Other

Commercial

Commercial

Cooling 0.105 0.066 0.060 0.069 0.090 0.057 0.052 0.059 0.154 0.097 0.088 0.101 1.000 Commercial

Cooking 0.090 0.060 0.045 0.105 0.077 0.052 0.039 0.090 0.132 0.088 0.066 0.154 1.000 Commercial

Heating

Commercial

Lighting 0.102 0.078 0.030 0.090 0.088 0.067 0.026 0.077 0.150 0.115 0.044 0.132 1.000 Commercial

Standby Gen- eration

Commercial

Office Equip- ment

0.090 0.066 0.060 0.084 0.077 0.057 0.052 0.072 0.132 0.097 0.088 0.124 1.000 Commercial

Public Lighting

Commercial Building Equipment

0.093 0.105 0.030 0.072 0.080 0.090 0.026 0.062 0.137 0.154 0.044 0.106 1.000 Commercial

Ventilation

Commercial Water Heating

0.105

0.060

0.030

0.105

0.090

0.052

0.026

0.090

0.154

0.088

0.044

0.154

1.000

Residential

Residential

Heating

Residential

Cooling 0.090 0.105 0.045 0.060 0.077 0.090 0.039 0.052 0.132 0.154 0.066 0.088 1.000 Residential

Water Heating 0.075 0.105 0.030 0.090 0.065 0.090 0.026 0.077 0.110 0.154 0.044 0.132 1.000 Residential

Refrigeration 0.075 0.105 0.030 0.090 0.065 0.090 0.026 0.077 0.110 0.154 0.044 0.132 1.000 Residential

Heating 0.045 0.150 0.030 0.075 0.039 0.129 0.026 0.065 0.066 0.221 0.044 0.110 1.000 Residential

Cooking 0.105 0.060 0.030 0.105 0.090 0.052 0.026 0.090 0.154 0.088 0.044 0.154 1.000 Residential ELC

Appliances 0.090 0.135 0.030 0.045 0.077 0.116 0.026 0.039 0.132 0.199 0.044 0.066 1.000 Residential

Other Applica- tions

0.105 0.090 0.030 0.075 0.090 0.077 0.026 0.065 0.154 0.132 0.044 0.110 1.000

Source: Authors’ calculation and assumptions

(22)

5.3 Existing and committed generation capacity

Individual power plants are grouped in TIMES by type, fuel type, vintage and region. Existing generation capacity by power plant group is presented below:

Table 15: Existing power generation capacity by type and region

Power plant description Region

Capacity 2014 (MW)

Capacity 2017 (MW) Domestic Coal- Pulverised coal- North- Old North 645 540 Domestic Coal- Pulverised coal- North- Recent North 4230 4230

Domestic Coal- Pulverised coal- North- New North 0 4050

Domestic Coal- Fluidized bed- North- Recent North 1565 2765 Domestic Coal- Pulverised coal- Central- Recent Central 1245 1245 Imported (Steam coal) - Pulverised coal (Captive) Vietnam 310 465

Domestic Coal- Pulverised coal- South- New South 0 1244

Imported Coal- Pulverised coal- South- New South 0 1244

Domestic Coal- Pulverised coal- South- New South 0 1234

Natural gas (East) - CCGT (Existing) South 4160 4160

Natural gas (East) - CCGT (Existing BOT) South 1480 1480

Natural gas (West) - CCGT (Existing) South 1542 1542

Oil-fired (Existing) (Captive) North 97 97

Oil-fired (Existing) South 550 880

Gas turbine (Existing) South 264 264

Gas steam (Existing) South 468 468

Hydro - Hydro (Dam) (Existing) Very large North 4,360 5,560

Large North 1,592 2,372

Medium North 777 1,347

Small North 1,384

Hydro - Hydro (Dam) (Existing) Very large Central 720 720

Large Central 2,841 3,036

Medium Central 963 1,013

Small Central 547

Hydro - Hydro (Dam) (Existing) Very large South - -

Large South 2,005 2,155

Medium South 269 344

Small South 53

Source: Authors’ summary from EVN and NLDC reports

Committed capacities by plant type until 2023 are shown below:

(23)

23 | Energy Outlook Report 2018 - Data report - 31-10-2018 Table 16: RE committed capacities by 2020 (GW)

North Central South Total

Wind 0.000 0.790 0.430 1.220

Solar 0.100 2.860 1.000 3.960

Small hydro 0.213 0.209 0.000 0.422

Biomass 0.106 0.089 0.069 0.264

MSW 0.070 0.015 0.115 0.200

Source: Authors’ summary from various sources

Table 17: Committed capacities up to 2030

Region Plant 2018 2019 2020 2021 2022 2023

North Anthracite (Hard Coal - Domestic) - Steam turbine (PC 0.60 0.00 1.20 0.11 0.11 0.65 Anthracite (Hard Coal - Import) - Steam turbine (PC 0.00 0.00 1.40 0.00 1.80 3.00

Natural Gas - Combined cycle 0.00 0.00 0.00 0.00 0.00 0.00

Hydro - Dam (Medium) 0.18 0.19 0.16 0.25 0.00 0.00

Central Anthracite (Hard Coal - Domestic) - Steam turbine (PC 0.00 0.00 0.00 0.00 0.00 0.00 Anthracite (Hard Coal - Import) - Steam turbine (PC 0.00 0.00 0.00 0.00 0.00 0.00

Hydro - Dam (Medium) 0.00 0.22 0.00 0.00 0.06 0.00

South Anthracite (Hard Coal - Domestic) - Steam turbine (PC 0.00 0.00 0.00 0.00 0.00 0.00 Anthracite (Hard Coal - Import) - Steam turbine (PC 0.00 1.20 1.80 1.80 0.00 0.66

Hydro - Dam (Medium) 0.00 0.00 0.00 0.00 0.00 0.00

Source: Authors’ summary from various sources

Technology catalogue

Technical and economic data for the power generation technologies that the model may invest in can be viewed in table below. The data is based on [10]

as well as some other Vietnamese and international sources. The technology assumptions develop from 2020 to 2050, which means that the costs and efficiencies are assumed to develop depending on the learning curves of the specific technologies.

Technology type Available (Year)

CAPEX incl.

IDC Fixed O&M Variable

O&M Efficiency Technical lifetime (kUSD/MW) (kUSD/MW) (USD/MWh) (%) (Years)

Nuclear 2030 - 2050 6,042 20.33 0.15 33% 50

Coal subcritical 2020 - 2029 1,316 39.40 0.70 36% 30

2030 - 2049 1,422 38.20 0.12 36% 30

2050 1,387 37.00 0.12 36% 30

Coal supercritical 2020 - 2029 1,739 41.20 0.12 37% 30

2030 - 2049 1,598 40.00 0.12 38% 30

2050 1,551 38.70 0.11 39% 30

Coal ultra-supercritical 2030 - 2049 1,739 54.90 0.11 43% 30

(24)

24 | Energy Outlook Report 2018 - Data report - 31-10-2018 Technology type Available

(Year)

CAPEX incl.

2050 1,681 53.20 0.10 44% 30

Coal AUSC 2035 - 2050 2,427 54.90 0.11 50% 30

CCGT^IV 2020 - 2029 881 29.35 0.45 52% 25

2030 - 2049 812 28.50 0.13 59% 25

2050 755 27.60 0.12 60% 25

Small hydro 2020 - 2050 2,586 38.00 0.46 FLHs 50

Wind (Low wind) 2020 - 2024 2,150 79.39 - FLHs 27

2025 - 2029 2,090 76.87 - FLHs 28,5

2030 - 2039 2,030 74.36 - FLHs 30

2040 - 2049 1,954 71.87 - FLHs 30

2050 1,879 69.38 - FLHs 30

Wind (Medium wind) 2020 - 2024 1,850 68.29 - FLHs 27

2025 - 2029 1,767 64.99 - FLHs 29

2030 - 2039 1,684 61.69 - FLHs 30

2040 - 2049 1,584 58.22 - FLHs 30

2050 1,483 54.75 - FLHs 30

Wind (High wind) 2020 - 2024 1,642 60.62 - FLHs 27

2025 - 2029 1,546 56.86 - FLHs 29

2030 - 2039 1,449 53.10 - FLHs 30

2040 - 2049 1,339 49.22 - FLHs 30

2050 1,228 45.34 - FLHs 30

Solar PV (High land

cost) 2020 - 2024 1,312 15.00 - FLHs 25

2025 - 2029 1.143 13,75 - FLHs 25

2030 - 2039 974 12,50 - FLHs 25

2040 - 2049 897 11,50 - FLHs 25

2050 820 10,50 - FLHs 25

Geothermal 2020 - 2029 4.675 20,00 0,37 10% 30

2030 - 2049 4.229 18,50 0,34 11% 30

2050 4.229 16,90 0,31 12% 30

Biomass 2020 - 2029 1.892 47,60 3,00 31% 25

2030 - 2049 1.781 43,80 2,80 31% 25

2050 1.558 38,10 2,40 31% 25

MSW 2020 - 2029 9.949 234,70 24,10 28% 25

2030 - 2049 9.263 224,80 23,40 29% 25

(25)

25 | Energy Outlook Report 2018 - Data report - 31-10-2018 Technology type Available

(Year)

CAPEX incl.

2050 8.234 193,50 22,60 29% 25

Tidal 2020 - 2050 2.961 21,75 4,00 FLHs 30

(26)

6 Refinery sector

There are two existing refineries in Vietnam today, with some other candi- dates for future development. All existing and candidate plants are modelled in Vietnam-TIMES. Production structures of candidate refineries are based on USEPA database for refineries. Table 18 identifies each of the refineries exist- ing or under discussion in Vietnam.

Table 18: Refineries Data Sources

Refinery Binh Son Refinery

Nghi Sơn Refinery

Binh Son Refinery Expansion

II

Vũng Rô Refinery

Nam Vân Phong Refinery

Long Sơn Refinery

Status Existing Existing Candidate Candidate Candidate Candidate

Region Central North Central Central Central South

Start 2009 2018 2026-2030 2021-2025 2021-2025 2026-2030 Crude

Type Local Import Local /

Import

Local / Import

Local / Import Invest-

ment (billion USD)

9 10 10 8 10

Capacity (million tons of crude oil)

6.5 10 8.5 10 8 10

Output share (fraction of crude input)

0.960 0.960

USEPA data

Gasoline 0.388 0.388

Jet fuel 0.032 0.032

Diesel oil 0.433 0.433

Fuel oil 0.018 0.018

LPG 0.069 0.069

Non-

energy 0.021 0.021

Source: Authors’ summary from [4] and other media sources

(27)

7 Demand sectors

Demand sectors in TIMES include agricultural, industrial, commercial, residen- tial and transport. The industrial sector consists of 12 sub-sectors. Transport sector covers road, rail, waterway and airway transports. Residential sector is broken down into urban and rural. The sectoral shares of final energy con- sumption in the base year are shown below:

Figure 9: Sectoral shares of final energy consumption by 2014

Agriculture

The Agriculture and Fishing sector accounts for 3.3% of the base year final energy demand and consists of four (4) end-use services as shown in Figure 10. Diesel, gasoline and electricity are the key energy carriers supplied to the sector, and both biodiesel and bio gasoline can be made available to the sec- tor as blended fuels with diesel and gasoline for possible use in the future.

The other energy carriers are largely used for the Other Services. Data for the determination of the service demand shares and existing technology charac- teristics was primarily derived from Calculator 2050 Vietnam

³

.

3 http://vietnamcalculator2050.atmt.gov.vn

Agricultural 3,3%

Industrial 46,9%

Commercial 4,9%

Residential 20,0%

Transport 22,4%

Non-energy use 2,6%

Sectoral final energy demand by 2014

(28)

28 | Energy Outlook Report 2018 - Data report - 31-10-2018 Figure 10: Agriculture & Fishing Sector RES

Industrial

The Industry sector accounts for 49% of the base year final energy demand, and is comprised of twelve (12) industrial subsectors as shown in Figure 12.

The industrial sector cannot be modelled at the process level, due to the wide variations and detail in the industrial process lines and the lack of data result- ing from concerns over proprietary information. Instead, each subsector is served by four (4) main energy services: process heat, machine drive, facili- ties/other, and feedstocks needed to produce the output products. Data for the initial shares for the subsector energy service demands were elaborated from data contained in several recent reports on industrial energy use con- ducted by the World Bank and MOIT in the form of benchmarking studies and energy audits for various Industry subsectors in [11] [12] [13] [14] [15] [16]

and various energy audit reports. The final energy consumption by sub-sector by 2014 is shown below:

Sector fuels Technology Type Service Demand

Land Preparation Water Pumping

Existing Standard Improved

Diesel/

Biodiesel Electricity

Biomass

Water Pumping

Fishing & Other Tractors

Existing Standard Improved

Combines Existing Standard Improved Coal

Gasoline/

Biogasoline

Fishing & Other Techs Existing Standard Improved

Harvesting

Fuel Oil

(29)

Figure 11: Final energy consumption by industrial sub-sector by 2014 (PJ)

The industry sector is characterized by a wide range of fuel and energy types that can provide the four component energy services. Biomass fuels include bagasse, coffee husk, firewood, straw and other organic residues. Biogas is also available from several sources. Auto-generation and co-generation are already occurring in the Pulp and Paper and Food and Tobacco sub-sectors and is a future option in other subsectors. As with the other demand sectors, biodiesel and biogasoline are available through mixing of these fuels with conventional diesel and gasoline in the future. Some of these options may be restricted in the BAU, while they are made available as mitigation measures in the future.

Iron and

Steel; 55,9 Chemicals; 54,9 Fertilizer; 83,8

Cement; 211,8

Beverage; 11,6 Plastics; 6,7 Food and

Tobacco; 73,1 Paper

Products;

13,0 Pulp and

Printing; 85,3 Building Materials; 78,0

Textile and Leather; 58,2

Industrial others;

202,8

Sector fuels

Kerosene

Fuel Oil Diesel/Biodiesel

Electricity

LPG

Technology type Industry Subsector

Energy Service demand

Mechanical Drives

• Existing

• Improved

• Advanced

• Variable Speed

• Optimal Steam Boilers and Process Furnaces

• Existing

• Improved

• Advanced

Paper Products Building Materials

Other Cement

Auto-generation

• Existing

Co-generation

• New

Biomass Solar

Electricity to the Grid Coal

Facilities/Other

• Existing

• Improved

• Advanced Gasoline/Biogasoline

Chemicals Food & Tobacco

Feedstock

Natural Gas Iron & Steel

Pulp & Printing Plastics Textile and Leather

Beverage

Fertilizer

(30)

30 | Energy Outlook Report 2018 - Data report - 31-10-2018 Figure 12: Industry Sector RES

Commercial

The Commercial sector accounts for 2.8% of the base year final energy de- mand, and consists of eight (8) services demand as shown in Figure 13. There is a variety of energy carriers used in the sector, but electricity is by far the most dominant one. Data for the determination of the service demand shares and existing technology characteristics were derived from the com- mercial building survey work in USAID Vietnam Clean Energy Program–

Promoting Energy Efficiency in the Building Sector Project - Building Energy Performance Baselines Study [17].

For the Commercial sector, TIMES-Vietnam contains a large suite of new tech- nology options for each service demand that represent Standard, Improved, Better and Advanced options, based on USEPA database. Biodiesel and bio- gasoline are also available through mixing of these fuels with conventional diesel and gasoline. Distributed PV systems provide electricity directly to the sector (for internal consumption) as well as feeding any excess electricity to the grid. Finally, building efficiency retrofit options are available that reduce building energy demands – primarily for cooling, lighting and water heating.

Some of these options may be restricted in the BAU, while they are made available as mitigation measures in the future.

Figure 13: Commercial Sector RES

Sector fuels Technology Type Service Demand

Office Equipment Lighting

Movement &

Refrigeration Lighting

Incandescent, fluorescent, CFL & LED

Standby Generation Municipal services, etc.

Gasoline/

Biogasoline Electricity

Fuel Oil

Cooling

Cooking

Building Retrofits Complete, envelope, heat recovery & heat regulation Building Equipment

Elevator/escalator, Refrigerator/Freezer Office Equipment Existing, Standard, and Improved

Space Cooling Central, room AC and heat pump

Biomass Diesel/

Biodiesel

LPG

Stoves LPG, Firewood, Electricity

Space Heating Boiler, furnace, heat pump

Water Heating Tanks and Instant-on Solar

Heating

Hot Water

Building PV systems

(31)

Residential

The Residential sector accounts for 21% of the base year final energy demand, and consists of seven (7) end-use service demands as shown in Figure 14.

Although there is a variety of energy carriers used in this sector, electricity is by far most dominant, followed by important contributions from firewood and LPG. Data for the energy service demand shares and existing technology characteristics were derived from the Vietnam Household Living Standard

Survey 2014, GSO and other sources. Owing to the inherent difference be-

tween urban and rural energy use patterns, as well as fuel and technology options, the Residential sector is split into Urban and Rural subsectors.

For the Residential sector, TIMES-Vietnam contains a large suite of new tech- nology options for each service demand that represent Standard, Improved, Better and Advanced options, based on USEPA database. Biodiesel and bio- gasoline are available through mixing of these fuels with conventional diesel and gasoline. Distributed PV systems provide electricity directly to the sector (for internal consumption) as well as feeding any excess electricity to the grid.

Finally, building efficiency retrofit options are available that reduce building energy demands – primarily for cooling and water heating. Some of these may be restricted in the Main scenario, then loosened for other alternative scenarios that incentive them.

Figure 14: Residential Sector RES

Sector Fuels Technology Type Service Demand*

Lighting

Space Cooling Water Heating

Other Applications Lighting

Incandescent, halogen, fluorescent, CFL & LED

Generic Appliances Washers, dryers & other

appliances Baggasse

Electricity Kerosene / Biokerosene

Cooking

Refrigeration

Building Insulation Existing, new & passive

designs Water Heaters

Electric, Solar Refrigerators Standard, Improved, Better

Air Conditioners Central, room AC and heat

pumps Firewood / Straw

/ Rice husk LPG

Coal

Stoves Existing & new

Solar

Rooftop PV systems

* Each demand is replicated for Urban and Rural areas Electrical Appliances

Miscellaneous Fuel Use Other Biomass

Diesel

(32)

Transport

The Transport sector accounts for 24% of the base year final energy demand.

As the Ministry of Transport (MOT) is already assessing mitigation measures for transport using the EFFECT model, mode and fuel shares are tightly con- trolled in TIMES-Vietnam, based on the scenarios developed through the EF- FECT model. As a result, the transport sector in the TIMES-Vietnam model replicates the results for the BAU and three other mitigation scenarios from the EFFECT model. This will enable TIMES-Vietnam to reflect the integrated impacts of the transport sector measures on the other portions of the overall energy system – specifically, their impacts on upstream supply requirements, electricity generation and fuel competition between the various sectors, as a simulation within the overall optimization.

Figure 15: Final energy demands by transport sub-sector in 2014 (PJ) Air International

Freight Service; 1,2

Air Internation

al Passenger

Service;

58,3

Air National Freight Service; 0,0 Air National Passenger Service;

15,8

Rail High-speed Passenger Rail;

0,0 Rail Mainline &

Suburban Passenger; 1,2

Rail Mainline Goods Rail; 1,2 Rail Metro; 0,0

Road Car; 41,7 Road Heavy Commercial Vehicle - Bus; 9,4 Road Heavy

Commercial Vehicle - Coach; 23,9

Road Heavy Commercial Vehicle - Truck;

20,1 Road Light

Commercial Vehicle - Goods;

5,1 Road Light

Commercial Vehicle - Passanger; 110,1 Road Electric two-

wheeler; 0,1

Road Two-wheeler;

145,4 Water; 13,0

(33)

8 End-use demand projections

General assumptions

The major driver for demands in all sectors is the GDP growth, as assumed in PDP7R. Other important drivers for the different sectors include population, urbanization, sectoral development plans etc.

The primary demand drivers include GDP growth, population growth, GDP per capita growth, and the number of persons per household. There are second- ary drivers for each demand sector, such as the elasticity of energy use to GDP growth, industrial production projections, market penetration rates for space cooling, refrigeration and electric appliances. Table 20Fejl! Henvisningskilde ikke fundet. identifies the main drivers used to project the future demand for energy services that must be met by TIMES-Vietnam in each period.

Table 19: Primary Demand Drivers

Demand Drivers 2014 2016 2020 2025 2030 2035 2040 2045 2050 GDP (US$ billion) 126.6 145.0 190.1 266.6 373.9 524.4 662.9 798.8 917.0 Population (million

persons) 90.7 92.8 96.6 100.9 104.4 107.3 109.7 111.5 112.7 Number of persons

per household 3.80 3.76 3.69 3.60 3.51 3.42 3.34 3.25 3.17

GDP growth 7.00% 7.00% 7.00

% 7.00% 7.00

% 4.80

% 3.80

% 2.80

%

Population growth 1.11% 1.03% 0.87

% 0.69% 0.55

% 0.44

% 0.33

% 0.22

%

Source: GDP in PDP7R and population variables from GSO’s population projec- tions

Data to build and support the calibration of fuel consumption and technology

stock by demand end-uses was derived from the various publications identi-

fied in Table 21?Fejl! Henvisningskilde ikke fundet..

(34)

Table 20: Data for building and calibrating fuel consumption and technology stock by sector

Description Status Main data Sources

Agriculture

 Share of fuel to each demand service, or number of tractors &

irrigation pumps by fuel/type

Ready Calculator 2050 Vietnam

Commercial

 Share of fuel to each demand service, or number of devices by fuel/type

Ready

USAID Vietnam Clean Energy Pro- gram–Promoting Energy Efficiency in the Building Sector Project - Building Energy Performance Baselines Study

Industry

 Share of fuel to each demand service, or nature of the process

equipment by

fuel/type

Data assessment prepared for 12 sectors and incorporated in templates

WB funded studies on benchmarking and audits for various Industry subsectors

National Enterprises Survey program Annual Designated Energy Users Reports

Residential

 Share of fuel to each demand service, or number of devices by fuel/type

Households divided into Urban and Rural types with different energy consumption

Vietnam Household Living Standard Survey 2014, GSO

Summary of studies on bioenergy power in Vietnam, GIZ-GDE/MOIT 2014

Energy Efficiency and Renewable Energy Policy, Jyukanko Research Institute, Waseda University

Transport

 Share of fuel to each transport mode by vehicle fuel/type

Preparing to simulate EFFECT results for both BAU and mitigation measures

EFFECT MOT results

The TIMES-Vietnam model solves for the mix of resources and technologies

(on both the supply and demand sides) that satisfy the projected demands for

useful energy services at the least-cost, considering any additional technical

and policy constraints imposed on the model. The projected demands for the

five (5) demand sectors (Agriculture, Commercial, Industry, Residential and

Transport) represent the economic and demographic development of the

country over time. The future demands for energy services are calculated

(35)

using the base year value, determined by the energy balance decomposition and calibration process, and appropriate drivers of service demand growth.

Agriculture

Main drivers for each sector ()

The Agriculture and Fishing sector will account for less than 2% of final energy consumption in 2030. As shown in Fejl! Henvisningskilde ikke fundet., other end-uses, which include Fishing, account for almost 70% of the agriculture energy demand, while water pumping corresponds to almost 20% of the en- ergy consumption in 2030. Diesel fuel accounts for 70% of the energy con-

sumed followed by electricity at 12%.

Figure 16: Agriculture service demands

Industrial

Check figures and charts ()

The Industry sector will account for more than 55% of final energy consump- tion in 2030. As shown Figure 17, final energy use grows by 217%, led by Building Materials, Cement, Fertilizer and Other industries. Final energy use is primarily composed of coal (30%), electricity (33%), biofuels (14%) and nat- ural gas (10%) in 2030.

0 20 40 60 80 100 120 140 160

2014 2016 2020 2025 2030 2035 2040 2045 2050

PJ

Agriculture

Agriculture/Fishing Other Use Harvesting Land Preparation Water Pumping

(36)

36 | Energy Outlook Report 2018 - Data report - 31-10-2018 Figure 17: Industry sub-sector service demands

Commercial

The Commercial sector will account for less than 3.5% of final energy con- sumption in 2030. As shown in Figure 18, final energy use grows by 250%, led by space cooling, building equipment, and standby generation. Electricity and diesel fuel grow the fastest and account for more than 80% of the energy con- sumed, with LPG accounting for the bulk of the rest.

0 1000 2000 3000 4000 5000 6000

2014 2016 2020 2025 2030 2035 2040 2045 2050

PJ

Industry

Fertilizer Other Textile and Leather Building Materials Pulp and Printing Paper Products Food and Tobacco Plastics Beverage Cement Fertilizer Chemicals Iron and Steel

0 200 400 600 800 1000 1200 1400

2014 2016 2020 2025 2030 2035 2040 2045 2050

PJ

Commercial

Water Heating Building Equipment Office Equipment Standby Generation Lighting Heating Cooking Cooling

(37)

37 | Energy Outlook Report 2018 - Data report - 31-10-2018 Figure 18: Commercial service demands

Residential

The Residential sector will account for about 16% of final energy consumption in 2030, split into urban and rural subsectors. As shown in Figure 19, urban final energy use grows by 180%, led by Cooking, Space Cooling, and Electrical Appliances. Rural final energy use grows by about 80%, dominated by Space Cooling and Appliances, although Cooking still accounts for more than 50% of the energy demand in 2030.

Figure 19: Residential sector service demands

Transport

The Transport sector, as currently modelled in TIMES-Vietnam, accounts for just over 23% of final energy consumption in 2030. As shown in Fejl! Henvis- ningskilde ikke fundet., final energy use grows by 175%, led by gasoline, die- sel and jet fuel. Final energy demand for transport is shown below:

0 200 400 600 800 1000 1200 1400 1600

2014 2016 2020 2025 2030 2035 2040 2045 2050

PJ

Urban Residential

Urban Other Applications Urban ELC Appliances Urban Cooking Urban Lighting Urban Refrigeration Urban Water Heating Urban Cooling

0 200 400 600 800 1000 1200 1400

2014 2016 2020 2025 2030 2035 2040 2045 2050

PJ

Rural Residential Rural Other

Applications Rural ELC Appliances Rural Cooking Rural Lighting Rural Refrigeration Rural Water Heating Rural Cooling

(38)

38 | Energy Outlook Report 2018 - Data report - 31-10-2018 Figure 20: Transport sector final energy demands

0,00 500,00 1000,00 1500,00 2000,00 2500,00 3000,00 3500,00

20142016202020252030203520402050

PJ

Final energy demands - Transport

Water Road Two-wheeler Road Three-wheeler

Road Light Commercial Vehicle - Passanger Road Light Commercial Vehicle - Goods Road Heavy Commercial Vehicle - Truck Road Heavy Commercial Vehicle - Coach Road Heavy Commercial Vehicle - Bus Road Car

Rail Metro Rail Mainline Goods Rail Rail Mainline & Suburban Passenger Rail High-speed Passenger Rail Air National Passenger Service Air National Freight Service Air International Passenger Service Air International Freight Service

Energy Outlook Report 2018