Vietnam Coal Industry analysis and scenarios

Vietnam's coal industry and its roles in the

national energy security in the next 20 years,

which scenario would be taken?

Prepared by Viet Cuong & Hoang Anh

Presented by Le Viet Cuong

Hanoi, 14th November 2011

Photos: Internet source

Content

I. Introduction

II. Vietnam’s coal industry

II.1 Historical picture and current situation

II.2 Coal development plan

III. Vietnam’s power sector: scenarios’ simulation and analysisIII. Vietnam’s power sector: scenarios’ simulation and analysis

III.1 Existing scenarios on power development in Vietnam for the

next 20 years

III.2 LEAP model

III.3 Modelling framework

III.4. Results: Analysis, comparison and assessment

IV. Conclusions and recommendations

Introduction

�Vietnam currently is an energy exporter but it would face many

challenges to energy balance and energy security in the near future.

�Coal industry presently plays a key position in Vietnam’s energy

sector.

�Studies:

� This study firstly gives historical story, current picture and prospect � This study firstly gives historical story, current picture and prospect

of Vietnam's coal industry.

� The study investigates the roles of coal industry in Vietnam's

energy security with focus on power generation sector.

� The study proposes some solutions to the challenges the coal

industry would face.

Historical picture & current situation

� Vietnam’s coal industry was born in 1840 when the Minh Mang

King permitted mining activities in Dong Trieu district (Quang Ninh

province)

� Since 1995 to present coal-mining activities have transited from � Since 1995 to present coal-mining activities have transited from

open-cut to underground.

Historical picture & current situation

During the period 2001 to 2010, Vietnam’s coal production &

consumption has been increasing rapidly.Vietnam’s production, consumption and export from 2000 to 2010

Historical picture & current situation

No. Class / Region

Proven &

probable

reserve

Probable

reserve

Proven

reserve

The country 40 931 34 790 6 141

1 Anthracite and others 40 531 34 626 5 905

Quang Ninh coal basin 10 028 5 907 4 122

Vietnam’s coal proven and probable reserve Unit: million tonnes

Inland (Vinacomin-owned) 181 16 165

Local-managed mines 49 11 37

Red river delta basin (Khoai Chau-Phu Cu-

Tien Hai)30 273 28 692 1 581

2 Peat coal 400 164 235

Coal development plan

Items 2015 2020 2025 2030

A Saleable coal production 55.3 60.6 66.4 75.8

B Coal demand (1+2) 60.4 105.9 147.2 224.8

1 National demand 56.4 101.3 143.8 222.6

1.1 Coal-fired power 30.9 67.3 102.0 171.0

Domestic coal supply

(VINACOMIN-proven)29.9 26.5 27.8 29.8

Vietnam’s coal balance to 2030

� Coal industry would face both challenges in consumption vs.

production balance and challenges in coal price for domestic market,

investment capital, technology....

(VINACOMIN-proven)

1.2 Other industries 25.5 34.0 41.8 51.6

2 Export 4.0 4.6 3.3 2.2

C Imported-coal demand (B-A) 5.1 45.4 80.7 148.9

For coal-fired power 1.1 40.8 74.2 141.2

Unit: million tonnes

Vietnam’s power development planVietnam’s power system would move dependence from

hydropower & gas-fired power to coal-fired power

35%

39%

3% 0%

5%

2010

16%

52%

12%

9%

6%5%

2030

25%

48%

17%

6%

1%

3%

202019%

39%

Hydropower Coal-fired power

Oil & gas-fired power Renewable energy

Nuclear power Imported power

LEAP model

Demand side

LEAP

Environment

Presenting results in LEAP

by: Chart, table, graph, mind-

All costs, externalities

for any pollutants,

decommission costs

and unmet demand

costs …

Fueldemand, costs,

un-it productions, GHG

emission, air-

From bottom-up: end-user accounting techniques (fuel-

device-end user-subsector-sector) to top-down

macroeconomic modeling

The study applies a bottom-up model, the LEAP framework, to simulate

Vietnam’s power system in the next two decades with the base-year 2010.

Exporting results to

MS Excel, Power-point...

Supply side

by: Chart, table, graph, mind-

map... emission, air-

pollutant,…

Accounting and simulation methodologies for electricity

generation system and capacity expansion planning

Scenario definitions�(I) Simulate the power sector’s evolutions for the next 20

years with continuation of current policies in Vietnam.

�(II) Analyze effects of changing energy policies to total

power demand and power generation structures.

�(III) Promote power generation share from renewable

energy in the power sector.

Group Scenarios Demand side Supply side

I

Baseline scenario BS Average demand forecast (PDP VII)Continuation of current policies for

power development in High-demand

scenarioHS High demand forecast (PDP VII)

II

Gas scenario NS Average demand forecast (PDP VII) Increase natural gas and LNG use

Coal scenario CS Average demand forecast (PDP VII)Replace nuclear power by coal

power

Low demand

scenarioLS Lower power demand

No nuclear power, reduce coal

use

IIIRenewable

scenarioRS Average demand forecast (PDP VII)

Increase renewables resources,

reduce coal use

Results & analysis

Diversification of fuels for

power generation: Herfindahl-

Hirschman Index – HHI

Results & analysis

Net energy import dependence:

Results & analysisVulnerability to power sector caused by high share and high price of imported fuel:

Vulnerability index with different coal prices

Results & analysis

Quantities of Green-house gases (GHGs) from power sector

Cumulative GHG emissions 2010-2030 (Million ton CO2e)

Conclusions

�The higher power demand growth would be, the faster

Vietnam would depend on coal power, especially those

using imported coal.

�The current power generation development plan to 2030

could be the least-cost scenario but it could ensure less

security of energy supply than other scenarios.security of energy supply than other scenarios.

�Electricity import ratio in power source structure is

reasonable, which could be increase to 2030 to a higher

value.

�Because of reliance of imported coal which shares for

more 50% capacity of power generation structure,

imported coal price rise could be vulnerable to the

national economy

Recomendations

�To meet increasing power demand while reduce the

vulnerability of the power system and improve security of

energy supply, Vietnam needs a more diversity in energy

supply, particularly power generation structure.

�The government should promote advanced technology

transfers from developed countries both in generation side

and consumption side: USC coal-fired technology, save-

energy consuming equipment…

Recomendations

�Whether or not Vietnam would have to import steam

coal for its power generation. To reduce coal import, it

needs to develop local coal supply at least as scheduled. To

secure coal import supply, it is important to build trade

relations with potential suppliers as soon as possible

�Applying pollutant abatement policies is necessary and it

could lead to high penetration of advanced coal

technologies with emission controllers, even with

deployment of CO2 capture system in the country

Thank you for your attention!

Question and discuss?Question and discuss?