CO2 emissions mitigation potential in Vietnam’s power...

28
1 CO 2 emissions mitigation potential in Vietnam’s power sector Minh Ha-Duong Nguyen Thanh Nhan Centre International de Recherche sur l’Environnement et le Développement CIRED/CNRS « Sustainable Development: Demographic, Energy and Inter-generational Aspects » ANR Meeting, Strasbourg, November 28-29th, 2008

Transcript of CO2 emissions mitigation potential in Vietnam’s power...

Page 1: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

1

CO2 emissions mitigation potential in Vietnam’s power sector

Minh Ha-Duong

Nguyen Thanh Nhan

Centre International de Recherche sur l’Environnement et le Développement

CIRED/CNRS

« Sustainable Development: Demographic, Energy and Inter-generational Aspects »ANR Meeting, Strasbourg, November 28-29th, 2008

Page 2: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

2

Motivation

Vietnam is most affected by climate change:• Sea-level rise, 0.3m - 1m over next 100 years, could lead to a capital loss of 17 billion USD every year (WB, 2008).• Flood damage, drought, typhoons will intensify by 2070. About  80-90%  of  populations  directly  affected  by typhoons (UNDP, 2007).

Local health and environmental effects:• Air pollutants brought about 22% of chronic pneumonia cases  and  1/3  of  respiratory  inflammation  in  Vietnam during 2001-2003 (USAID, 2007). 

Page 3: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

3

Outline and key results

1. Vietnam power sector up to 2030.2. Integrated resource planning (IRP) model.3. Results:

• Fossil fuels are expected to dominate: CO2 ++

• Nuclear , wind, and demand-side management

each have >10% reduction potential at 10$/tCO2

Page 4: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

4Next map: power plants being installed in VN by 2010

Source: Institute of Energy of Vietnam, 2006  

1. Present situation and trends

Page 5: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

5

SREPOK 3 (10)

CAMPHA (09-10)

NGCC NTRACH(08-10)

OMON I (09-10)

QNINH (09-10)

D.NAI 1&2 (09)

CUA DAT (09)

P. KRONG (08)

D. RINH (07)

Q. TRI (07)

A VUONG (08)

B.KUOP (08)

T.KONTUM (10)

S.TRANH 2 (10)

D.NAI 4 (10)

SE SAN (07-10)

B.TAUSRA (09)

BAN LA (09)

MAO KHE(09-10)

UBI MR (07)

TBK BA RIA

NADUONG 

CAONGAN (07)

NBINH II (09)

NGHI SON1(10)

HPHONG (08-10)

S.DONG (08)

UBI 

NBINH

P. LAI 1&2

DUNG QUOC(09)

NONG SON (09)

HOA BINH

T.QUANG (07-08)

THAC BA

SON LA 1 (10)

HAM THUAN DA MI

VINH SON SONG HINH

S. BA HA (08)

AKHEKNAK (10)YA LY

TRI AN

DA NHIM SONG PHA

THAC MO

NGCC PHU MY

THU DUC

NGCC CA MAU (07-08)

D.NINH (07)

Existing Coal fired

Legend:

CandidateCoal fired 

ExistingHydro plant

CandidateHydro plant

ExistingOil/gas fired 

CandidateOil/gas fired 

SONG CON 2 (09)

NA LE BAC HA (10)

DAK RTIL (10)

Page 6: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

6

7.4%yr-1 GDP Growth, 2000-2005

Source: General Statistics Department of Vietnam, 2006

8.57.77.247.046.96.8Total

8.27.56.66.56.15.3Service

1110.310.39.410.410.1Industry & Construction

3.83.43.24.13.04.6Agriculture, Forest & Fishing

200520042003200220012000Sector

Page 7: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

7

Power generation grows faster

Source: Institute of Energy of Vietnam, 2006

       22.4%     15.2% 52.05 TWh   11340 MW

Thermal generation (2000-2005)

Total generation (2000-2005)

Average annual growth rateGenerationin 2005

Installed capacityin 2005

Page 8: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

8

Primary sources, 2000-2005Source: Institute of Energy of Vietnam, 2006 

16%

37%

39%

Page 9: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

9

Electricity demand forecast to 2030Source: Institute of Energy of Vietnam, 2006 

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

500.00

1995 2000 2005 2010 2015 2020 2025 2030

(TW

h)

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

(GW

)

Annual electricity energy demand

Peak load demand

Page 10: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

10

Policy Options

* Improve end use energy efficiency

* Develop renewable energy sources

* Develop nuclear power (2020→)

* Import electricity (Laos, Cambodia, China, 2010→)

* Import coal (Australia, Indonesia, 2015→)

* Import natural gas (ASEAN pipeline, 2016→)

Page 11: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

11

2. The IRP model

Name:         Integrated Resource Planning

Structure: Bottom-up technical cost minimization,MILP solved by CPLEX

Institution: Energy  Program,  Asian  Institute  of  Technology, Thailand

Output: Electricity generation capacity expansion plan, i.e.optimal selection of fuels and technologies

Economic potentials of CO2 emissions reduction

Page 12: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

12

Internalizing carbon value

Minimize

where: TC = present value of total generation expansion planning cost

SC = present value of total system costs                  =  {Capital + O&M + Fuels + DSM + Import}

CV = carbon value (assumed constant in time)

EtREF = baseline CO2 emission in year t (optimum with CV=0)

Et = CO2 emitted in year t in the case

r  = discount rate,   T = planning horizon.

+−+= ∑

=

T

t

tREFtt rEECVSCTC

1

)1/()(*

Page 13: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

13

Model: constraints

• Technical:

• Peak demand (2 seasons, 24 demand block/day)

• Plant availability, reliability

• Maximum and minimum operation capacity

• Generating unit availability

• Resources:

• Hydro-energy

• Fossil fuels and resources

• Import availability

Page 14: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

14

Model parameters •Plant types: 15 alternative generation technologies, 

includes 7 renewables

•12 fuel prices, growing 1-4% per year

•5 DSM options in residential & service sectors:+ replace incandescent (IL) by compact fluorescent (CFL) 

     + replace fluorescent lamps (FL) by efficient FL

•Nuclear: <10 GW (over 2020-2030)

•Renewable potentials:− Small and mini hydro: 4 GW

− Geothermal:  0.4 GW; Biomass: 1.54 GW; Solar: 1 GW− Wind: 22 GW (limited to 20% of total system capacity) 

Page 15: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

15

Scenarios

•Baseline: ≈ official plan Few renewables, imports of coal, gas & electricity.

•DSM only: Replace lamps in households and services.

•DSM + Nuclear: 10 GW

•DSM + Renewables: 22 GW wind capacity +others

Nuclear or wind assumed to replace 7.5GW imported gas.Carbon value range from 1 to 30$/tCO2.

Page 16: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

16

3. Results: A fossil baseline

Power sector will rely primarily on fossil fuels:- Coal is expected to dominate the energy mix (41.3%)- Gas (32%), Oil (0.3%)- Import (3.7%)- Hydro (16.3%) and renewables (only 4%)

Large quantities of CO2 will be emitted:- 3.6 Gt CO2 cumulative 2010-2030- 2.4 Mt SO2 and 5.5 Mt NOX

Page 17: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

17

Demand side management (DSM)Potential free lunch

More efficient lamps ⇒ significant emissions reductions:

- CO2  by 14% (over 3.6 Gt)

- SO2, and NOX by 5.6% and 5.5%.

⇒ due to lower coal-fired capacity: 77 < 82 GW by 2030 

The abatement cost is negative

Page 18: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

18

CO2 values that support renewables1. Wood residue and plantation: 1$US/tCO2   2$US/tCO2 Potentially offer CDM-funded project opportunities.

2. Wind:2$US/tCO2 → 5 US cent/kWh sites (small potential)3$US/tCO2  → 5.5 US cent/kWh sites4$US/tCO2  → 6 US cent/kWh sites5$US/tCO2  → 6.5 US cent/kWh sites Wind generation in Vietnam has a large potential

3. Solar: not cost-effective in the modelNeed strong climate policy, technological innovation, or local conditions. 

Page 19: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

19

Nuclear: also a significant potential of CO2 emission mitigation

31.731.622.67.23.8-CO2 reduced (%)

1147.21143.0817.3260.8138.8-CO2 reduced (Mton)

2474.22478.32804.03360.63482.5-Total cumulative CO2 (Mton)

TRP-Renewable

34.434.225.418.212.4-CO2 reduced (%)

1245.51237.9918.2657.6447.4-CO2 reduced (Mton)

2375.82383.42703.22963.83173.9-Total cumulative CO2 (Mton)TRP-

Nuclear

28.628.219.011.411.0-CO2 reduced (%)

1035.41022.3689.7411.5400.0-CO2 reduced (Mton)

2586.02599.12931.73209.83221.33621.3Total cumulative CO2 (Mton)

TRP-Baseline

20105210

Carbon value (US$/tonCO2)EmissionsCases

Page 20: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

200 2 4 6 8 10 12 14 16 18 20

0

500

1000

1500

2000

2500

3000

3500

4000 Vietnam CO2 emissions from electricity generation industry, 2010-2030

IRP simulation model, CIRED

Carbon value, US$/tCO2

Mt C

O2

BAU

Nuclear

Renewables

DSM

Nuclear + DSM

Renewables + DSM

BAU

Nuclear

Renewables

DSM

Nuclear + DSM

Renewables + DSM

Page 21: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

21

Climate policy scenarios

Wind accounts for 23%-91% CO2 mitigation in renewables scenarios. Installing 33 GW of wind capacity with a  $10 carbon value lead to 36% reduction.

Combine energy efficiency, renewables and $10 carbon value for - 45% below baseline, without nuclear.

Page 22: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

22

4. Summary and conclusions

Baseline: 3.6 Gt CO2 emitted between 2010 and 2030.

DSM (efficient lightning)   - 0.5 Gt CO2  14%+ 5 $/tCO2  - 0.9 Gt CO2 30%+ Nuclear or Wind - 1.1 Gt CO2 35%

Page 23: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

23

Page 24: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

24

Towards cleaner optimal generation mix

1 5 10 20

0

500

1000

1500

2000

2500

3000

3500

TRP- Optimal renewable development scenario

Coal Gas Oil Large HydroWind power Other renewables Elec.Import Pump storage

Carbon value ($US/tCO2)

Tot

al e

lect

rici

ty g

ener

atio

n (T

Wh)

1 5 10 200

500

1000

1500

2000

2500

3000

IRP- Optimal renewable development scenario

Coal Gas Oil Large HydroWind power Other renewables Elec.Import Pump storage

Carbon value ($US/tCO2)

To

tal e

lect

rici

ty g

en

era

tio

n (

TW

h)

Page 25: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

25

Optimal plans switch to additional clean generation capacity (GW)

2.412.422.372.760.610.2421.55.651.2220

2.412.422.372.760.610.2421.55.651.2210

2.412.422.292.760.610.2418.35.651.025

2.272.342.292.760.610.24000.051

TRP-Renewable

development

2.412.422.3700000020

2.412.422.3700000010

2.412.422.290000005

2.272.292.290000001

TRP-Nuclear development

32200000020

32200000010

2220000005

2220000001

TRP-Baseline

203020202015203020202015203020202015

HydroOther

renewablesWindCarbon

value

Page 26: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

26

Wind power potential & modeling wind turbines 

227011732051.6898

24775860823.6597

25933490413.466.5

2830101103.5726

304337271.2255.5

32809630.2945

Average hours of full power (h/yr)

Energy production (TWh/yr)

Potential(GW)

Production cost(US cent/kWh)

8.10.280.23Wind turbine 4

15.90.280.23Wind turbine 3

5.20.280.3Wind turbine 2

0.90.320.3Wind turbine 1

Upper bound by 2030 (GW)Capacity factorPeakTechnology

Page 27: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

27

Determination of upper bound of feasible wind capacity development

( )

            )1(*)1(***)1(*

)1(**1*XE

11 1

1 11

1

1

1

rmQLIIEPrm

LSXCYLS

pst

t

t

t

tirpirp

jvjvkpstkv

L

lltsplpst

I

i

R

rirpstirpsZZ

J

j

t

vjpst

K

k

t

Vv

+≥−+

+

∑ ∑+

−+−

∑∑ ∑

∑ ∑∑ ∑

== =

= == −=

=

=

Reliability constraint:

 Σsystem capacity installed (about 100GW)≥ peak demand + reserve capacity

System reserve capacity: 30%-20% of peak demand = 17-25GW

If 20% penetration + 10% additional reserve (22 GW) ⇒ wind peak=5.5 GW

If 30% penetration + 10% additional reserve (33 GW) ⇒ wind peak= 7.4 GW

In most risky case (no wind), maximum loss of wind peak capacity: 7.4 GW

The minimum remaining reserve capacity : 17-7.4=9.6 GW > 7.4 GW

Page 28: CO2 emissions mitigation potential in Vietnam’s power sectorminh.haduong.com/files/HaDuong.ea-20081128-CO2MitigationPotentialInVN... · CO2 emissions mitigation potential in Vietnam’s

28

Characteristics of efficient electricity end use technologies

120002.2636FEF80001.540DSM5

100008.1027CFL8000.6100

120007.6518CFL8000.5575 

120006.7513CFL12000.5560 

100006.759CFL15000.540 DSM1

DSM2

DSM3

DSM4

Residential & Commercial

Life(hrs)

Cost (US$)

Ratings (Watt)

Type of appliance

LifeCost (US$)

Ratings (Watt)

Sector

Efficiency energy using equipmentExisting energy using equipment to be replaced

Note: CLF : Compact Fluorescent LampEFL : Efficient Fluorescent Lamp