APEC Energy Demand and Supply Outlook 7th Edition€¦ · Outlook 7th Edition OLADE Energy Week, Statistics Workshop, Lima, Peru 11 November, 2019 APEC Overview Diego RIVERA RIVOTA,

APECEnergy Demand and Supply Outlook 7th Edition

OLADE Energy Week, Statistics Workshop, Lima, Peru

11 November, 2019

APEC Overview

Diego RIVERA RIVOTA, Researcher

Asia Pacific Energy Research Centre (APERC)

2

APEC addresses energy challenges

APEC MembersAustralia

Brunei Darussalam

Canada

Chile

China

Hong Kong, China

Indonesia

Japan

Korea

Malaysia

Mexico

New Zealand

Papua New Guinea

Peru

Philippines

Russia

Singapore

Chinese Taipei

Thailand

United States

Viet Nam

Asia Pacific Energy Research Centre

▪ APERC is the energy research arm of Asia-Pacific Economic

Cooperation (APEC)

▪ Researchers from 16 of APEC’s 21 economies

▪ Located in Tokyo, Japan

▪ Two flagship publications

▪ Annual Energy Overview

▪ Triennial Energy Demand

and Supply Outlook

3

APEC Energy Demand and Supply Outlook

Investigates challenges faced by APEC economies:

▪ Affordably meeting growing energy demand

▪ Reducing negative energy-related environmental impacts

▪ Enhancing energy security and resilience

The 7th Edition Outlook provides analysis and insight on the:

▪ Impact of existing and alternative policies on energy demand,

supply, emissions and investments through 2050

▪ APEC energy intensity and renewables doubling goals

▪ Sectoral transitions that support Paris climate ambitions

4

Key APEC-wide trends through 2050

▪ Final energy demand continues to grow, driven mainly by

buildings and transport.

▪ Fossil fuels continue to account for at least half of FED and

TPES in 2050, in all scenarios.

▪ Electricity demand rises in all scenarios.

▪ Under the BAU, the APEC energy intensity goal is met but

the renewable share doubling goal is not

▪ Electrification, efficiency, renewables, nuclear and CCS are

all required to achieve a +2°C world.

5

APEC real GDP grows almost three-fold over the Outlook, despite

population peaking in 2043. World oil prices rise steadily.

6

GDP, population and oil prices all rise

GDP, population and world oil price in all scenarios, 2000-50

Sources: APERC analysis and IEA (2018).

Outlook Scenarios

7

Business-as-Usual

(BAU)

APEC Target

(TGT)

2-Degrees Celsius

(2DC)

Recent trends and

current policies.

Pathway that achieves

APEC-wide goals to

• reduce energy intensity

45% by 2035

• double the share of

renewables by 2030.

Pathway that provides a

50% chance of limiting

the average global

temperature rise to 2°C.

Provides a baseline

for comparison.

Explores implications of alternative scenarios and

identifies gaps to overcome.

1. BAU Scenario

8

Buildings and domestic transport grow most strongly, but industry remains largest.

9

Buildings and transport drive final demand

Final energy demand, by sector and fuel in BAU, 2000-50


Final energy demand in South-east Asia nearly doubles from 2016 to 2050, while China remains the largest region.

10

South-east Asia, China lead demand growth

Final energy demand, by region in BAU, 2000-50


Steady demand growth is met mainly by gas and renewables. Solar capacity grows most strongly over the Outlook

11

Buildings boost electricity demand

Power capacity and electricity generation, by fuel in BAU, 2016-50


Natural gas increasingly substitutes for coal in both power and industry, enabled by growing production and trade.

12


Fossil fuels continue to dominate supply

Total primary energy supply by fuel in BAU, 2000-50

APEC becomes a net oil products importer in 2032 and a net natural gas importer in 2033.

13


APEC remains a net oil importer

APEC net energy imports, by fuel in BAU, 2000-50

2. Alternative Scenarios

14

Slightly more renewables in the TGT Scenario

Energy efficiency and renewables in the BAU and TGT, 2016-50

Final energy demand falls (mainly transport), but renewable supply

increases (mainly solar), which has a two-fold impact on the doubling goal.


Electrification and efficiency improvements are the two key drivers of demand reduction.

16

Sources: APERC analysis and IEA (2018)

Transport and buildings underpin 2DC

Final energy demand by end-use and fuel type in 2DC, 2000-50

Renewables, CCS for fossil fuel and biomass, and nuclear are all key to

decarbonising the electricity sector while storage supports integration.

17

Varied approach required in the 2DC

APEC power capacity and electricity generation by fuel in 2DC, 2016-50

Source: APERC analysis and IEA (2018)

Renewables and gas dominate supply as coal is replaced in power and industry. Still significant oil use in transport though.

18

Source: APERC analysis and IEA (2018)

Lower energy supply with more renewables

Total primary energy supply by fuel in 2DC, 2000-50

The APEC region does not achieve it’s cumulative NDCs under the BAU scenario, but at least achieves unconditional in TGT.

19

Sources: APERC analysis, IEA (2016 and 2018), IPCC (2018) and UNFCCC (2018).

Cumulative APEC NDCs not achieved in BAU

APEC energy-related CO2 emissions by scenario, 2000-50

Total emissions are significantly lower than under the other two scenarios, mostly due to electricity decarbonisation.

20


In 2DC, CO2 emissions more than halve

Energy-related CO2 emissions by sector in the 2DC, 2016-50

More than half of the emissions reduction in the 2DC occurs in electricity, but transport is also a large contributor.

21


Electricity makes the largest contribution

Energy-related CO2 emissions reductions by sector in BAU against 2DC, 2016-50

▪ Growing wealth is the key driver of energy demand.

▪ Renewables are essential to the energy transition, but

improving efficiency and electrification make more of a

difference in buildings, transport and industry.

▪ Renewables, nuclear and CCS are all required to achieve

deep emissions reductions in the electricity sector.

▪ Despite these changes, fossil fuels remain the foundation

of the APEC energy system in all three scenarios.

▪ Opportunity to update NDCs next year should be taken.

▪ Capital expenditure grows in the more ambitious scenarios,

but this is outweighed by larger falls in fuel costs.

22

Key themes

3. Outlook for Peru

23

Strong economic growth sees GDP per capita more than doubling over the Outlook period as GDP outgrows population, driving up energy demand.

24

Key drivers: GDP and population

Peru • GDP, population and GDP per capita, 2000-50

0

5

10

15

20

25

30

35

40

45

0

200

400

600

800

1 000

1 200

1 400

2000 2010 2020 2030 2040 2050

Million2016

USD

billion

GDP (LHS) Population (RHS)

→ Projection

0

10 000

20 000

30 000

40 000

50 000

60 000

2000 2010 2020 2030 2040 2050

2016

USD

PERU APEC

→ Projection

Sources: APERC Analysis and IEA (2018).

4. BAU Scenario

25

Transport almost double and industry largely continue unabated in the BAU

as population and GDP both increase. Traditional biomass still large.

26

FED grows steadily through the Outlook (59%)

Peru • Final energy demand by sector and fuel in the BAU, 2000-50

0

5

10

15

20

25

30

2000 2010 2020 2030 2040 2050

Mtoe

Agriculture Non-energy Buildings

Transport Industry

→ Projection

0

5

10

15

20

25

30

2000 2010 2020 2030 2040 2050

Mtoe

Heat & others Electricity

Renewables Gas

Oil Coal

→ Projection


Road transport leads demand growth, great impact on diesel and gas.

Limited diversification to rail. Electricity grows, but remains very low. 27

Steady growth in domestic transport

Peru • Domestic transport energy demand by fuel and mode, BAU, 2000-50


0

2

4

6

8

10

12

14

16

2000 2010 2020 2030 2040 2050

Mtoe

Fuel split

Other Renewables Electricity Jet fuel

Gas LPG Gasoline Diesel

→ Projection

0

2

4

6

8

10

12

14

16

2016 2050

Mtoe

Modal split2/3-wheelers

Buses

Light vehicles

Light trucks

Heavy trucks

Marine

Aviation

Pipeline

Rail

Capacity grows by 48% to supply rapid increasing demand. Oil and coal are replaced with gas and renewables, mainly hydro and wind. (generation, 70%)

28

Gas and renewables dominate electricity

Peru • Power capacity and electricity generation by fuel in the BAU, 2000-50

0

5

10

15

20

25

2016 2020 2030 2040 2050

GW

Capacity

Coal Coal w/ CCS Oil

Gas Gas w/ CCS Nuclear

Hydro Wind Bioenergy

Bioenergy w/ CCS Solar Geothermal & others

Storage Net imports

→ Projection

0

20

40

60

80

100

2016 2020 2030 2040 2050

TWh

Generation

→ Projection


TPES grows 65% through 2050 with all fuels growing except coal and traditional biomass. Renewables grow but non-hydro REN accounts for 4%.

29

Fossil fuels remains dominant with gas on top…

Peru • Total primary energy supply by fuel in the BAU, 2000-50


0

5

10

15

20

25

30

35

40

45

2000 2010 2020 2030 2040 2050

Mtoe

Other fuels

Renewables

Nuclear

Gas

Oil

Coal

→ Projection

0

20

40

60

80

100

2016 2050

%

Gas production grows fast and peaks following the depletion of the

Camisea field. Hydro, wind and solar electricity generation all expand.

30

But renewables lead energy production growth

Peru • Total primary energy production by fuel in the BAU, 2000-50


0

5

10

15

20

25

30

35

2000 2010 2020 2030 2040 2050

Mtoe

Other fuels

Renewables

Nuclear

Gas

Oil

Coal

→ Projection

0

10

20

30

40

50

60

70

80

90

100

2016 2050

%

Peru continues being a natural gas net exporter until around 2035. Following

economic growth, imports for oil products and gas increase through 2050.

31

Peru remains a major net crude oil exporter

Peru • Net energy trade by fuel in the BAU, 2000-50

- 5

0

5

10

15

20

2000 2010 2020 2030 2040 2050

Mtoe

Bioenergy

Electricity

Gas

Oil products

Crude oil

Coal

Net trade

Imports

Exports

→ Projection


5. Alternative scenarios

32

Like in the BAU and TGT, transport makes the biggest FED

improvements in 2DC. Electricity and gas use still grow robustly.

33

In the 2DC, FED grows moderately despite fast economic and population growth

Peru • Final energy demand by sector and fuel in the 2DC, 2000-50

0

5

10

15

20

25

2000 2010 2020 2030 2040 2050

Mtoe


Transport Industry

→ Projection

0

5

10

15

20

25

2000 2010 2020 2030 2040 2050

Mtoe


Renewables Gas

Oil Coal

→ Projection


Gasoline and diesel remain dominant but its share decreases at the

expense of natural gas. EVs, Rail and other modes remain marginal.

34

Transport grows by 20% in the 2DC

Peru • Domestic transport energy demand by fuel and mode in the 2DC, 2000-50


0

1

2

3

4

5

6

7

8

9

10

2000 2010 2020 2030 2040 2050

Mtoe

Fuel split

Other Renewables Electricity Jet fuel

Gas LPG Gasoline Diesel

→ Projection

0

1

2

3

4

5

6

7

8

9

10

2016 2050

Mtoe

Modal split2/3-wheelers

Buses

Light vehicles

Light trucks

Heavy trucks

Marine

Aviation

Pipeline

Rail

Wind and solar capacity are essential to the 2DC as they interact with

hydropower and some are CCGTs. Oil and coal practically disappear.35

Non-fossil fuel generation accounts for 94%

Peru • Power capacity and electricity generation by fuel in the 2DC, 2000-50

0

5

10

15

20

25

30

2016 2020 2030 2040 2050

GW

Capacity

Coal Oil Gas

Hydro Wind Bioenergy

Solar Geothermal & others Storage

Net imports

→ Projection

0

10

20

30

40

50

60

70

80

2016 2020 2030 2040 2050

TWh

Generation

→ Projection


Lower demand and robust growth on renewables. Gas almost completely

replaced by renewables by 2050. Transport, tougher to decarbonize.

36

TPES in the 2DC is 32% lower than the BAU…

Peru • Total primary energy supply by fuel in the 2DC, 2000-50

0

5

10

15

20

25

30

35

40

45

2000 2010 2020 2030 2040 2050

Mtoe

Other fuels

Renewables

Nuclear

Gas

Oil

Coal

BAU total

TGT total

→ Projection

fasSources: APERC Analysis and IEA (2018).

Gasoline and diesel imports are significantly lower in the 2DC, while Peru remains

as a net gas exporter. Demand efficiency gains enhance energy security.

37

Efficiency gains reduce imports dependency

Peru • Net energy trade by fuel in the 2DC, 2000-50


- 6

- 4

- 2

0

2

4

6

8

10

2000 2010 2020 2030 2040 2050

Mtoe

Bioenergy

Electricity

Gas

Oil products

Crude oil

Coal

2DS net trade

Imports

Exports

→ Projection

6. Emissions and investment

38

Despite progress, current policies are not aligned with Peru’s NDC

and domestic emissions goals and strategies.

39

Peru only achieves its CO2 emission goals in the 2DCPeru • Energy related CO2 emissions by scenario, 2000-50


0

10

20

30

40

50

60

70

80

90

100

2000 2010 2020 2030 2040 2050

MtCO2

BAU

TGT

2DC

NDC range

→ Projection

Following energy demand growth and despite current energy efficiency measures, CO2 emissions rise in all sectors through 2050.

40

Little progress outside electricity in the BAU…

Peru • Energy related CO2 emissions by sector in the BAU, 2000-50


0

10

20

30

40

50

60

70

80

90

2000 2010 2020 2030 2040 2050

MtCO2

Electricity

Energy own-use

Transport

Industry

Buildings

→ Projection

Accelerated decarbonisation efforts via intensive renewable development, and a

profound transformation in the transport sector, bring down CO2 emissions.

41

But massive improvement in electricity and transport in 2DCPeru • Energy related CO2 emissions by sector in the 2DC, 2000-50

0

10

20

30

40

50

60

70

80

90

2000 2010 2020 2030 2040 2050

MtCO2

Electricity

Energy own-use

Transport

Industry

Buildings

→ Projection


▪ Energy demand growth driven by robust economic expansion and

population, but pollutant emissions follow the same path.

▪ This requires an urgent energy transition to a lower-carbon energy system

capable of meeting increasing demand and ensuring affordability. Thorough

assessment on the role of gas in this transition.

▪ Essential to enact energy efficiency measures, such as enhancing fuel

economy standards, developing intermodal transportation (particularly in

public transport) and promoting electric vehicles.

▪ Huge untapped renewable potential, contributing to sustainability, energy

security and energy affordability. Auctions ? Turn-key projects?

▪ Enhancing energy security: increasing transmission capacity, building

storage capacity and diversifying imports. Discrete but indispensable

investments.

▪ Energy efficiency, progress on standards but still much to do, especially in

high-intensity sectors.

42

Final thoughts

Muchas gracias!

[email protected]

▪ Asia Pacific Energy Research Centre (APERC)

▪ www.aperc.ieej.or.jp

43

Demand growth is driven by population and economic expansion as well as

better living conditions, traditional biomass decreases but remains large.

44

Buildings demand grows by 46%

Peru • Buildings energy demand by end-use and fuel in the BAU, 2000-50


0

1

2

3

4

5

6

7

8

2000 2010 2020 2030 2040 2050

Mtoe


Renewables Gas

Oil Coal

→ Projection

0

1

2

3

4

5

6

7

8

2000 2010 2020 2030 2040 2050

Mtoe

Services Residential

→ Projection

‘Gasification’ of the industrial sector, covering demand growth and

substituting oil and coal. Room for efficiency in cement and iron.

45

Growth in industry demand is more subdued

Peru • Industry energy demand by end-use and fuel in the BAU, 2000-50


0

1

2

3

4

5

6

7

2000 2010 2020 2030 2040 2050

Mtoe

Non-specified Pulp & paper

Other Mining

Iron & steel Chemicals

Non-metallic minerals Aluminium

→ Projection

0

1

2

3

4

5

6

7

2000 2010 2020 2030 2040 2050

Mtoe


Renewables Gas w/ CCS

Gas Oil

Coal w/ CCS Coal

→ Projection

Energy production remains almost unchanged across scenarios, with

gas remaining in the lead and…46

But fossil fuels still dominate production…

Peru • Total primary energy production by fuel in the 2DC, 2000-50

0

5

10

15

20

25

30

35

2000 2010 2020 2030 2040 2050

Mtoe

Other fuels

Renewables

Nuclear

Gas

Oil

Coal

→ Projection

0

10

20

30

40

50

60

70

80

90

100

2016 2050

%


Transport (mostly oil) demand flattens. Energy efficiency measures slow-down

growth while electricity and gas replace a significant amount of oil use.

47

FED grows at a slower pace in the TGT…

Peru • Final energy demand by sector and fuel in the TGT, 2000-50

0

5

10

15

20

25

30

2000 2010 2020 2030 2040 2050

Mtoe


Transport Industry

→ Projection

0

5

10

15

20

25

30

2000 2010 2020 2030 2040 2050

Mtoe


Renewables Gas

Oil Coal

→ Projection


Electricity demand increases more slowly than in the BAU, but the share of

renewables reaches 56% (compared with 50% under the BAU).

48

And renewable penetration grows strongly

Peru • Electricity generation by fuel in the TGT, 2016, 2030 and 2050

0 20 40 60 80 100

Renewables

Nuclear

Fossil fuels

Renewables

Nuclear

Fossil fuels

Renewables

Nuclear

Fossil fuels

205

0203

0201

6

TWh

Coal

Oil

Gas

Net imports

Nuclear

Hydro

Wind

Solar

Biomass and

others

56%

56%

50%


Reducing emissions in Industry and buildings is harder. Transportation emissions

reduction requires more attention (efficiency, electrification, rail, etc.).

49

Fundamental changes in transport and further electrification required. Peru • Energy related CO2 emissions reductions by sector, 2016-50


0

10

20

30

40

50

60

70

80

90

2016 2020 2025 2030 2035 2040 2045 2050

MtCO2

Industry

Buildings

Transport

Energy own-use

Transformation

→ Projection

BAU Scenario

2DC Scenario

APEC Energy Demand and Supply Outlook 7th Edition€¦ · Outlook 7th Edition OLADE Energy Week, Statistics Workshop, Lima, Peru 11 November, 2019 APEC Overview Diego RIVERA RIVOTA,

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