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APEC ENERGY OVERVIEW 2023

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The views and opinions expressed in this publication belong solely to

the authors. The expert group on energy data and analysis focal points

and energy working group members of the respective economies were

consulted to ensure the veracity of the information within.

APEC ENERGY OVERVIEW 2023

Prepared by

Asia Pacific Energy Research Centre (APERC)

Inui Bldg.-Kachidoki 11F, 1-13-1 Kachidoki,

Chuo-ku, Tokyo 104-0054, JAPAN

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E-mail: overview@aperc.or.jp

APERC Website: https://aperc.or.jp

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Asia-Pacific Economic Cooperation Secretariat

35 Heng Mui Keng Terrace

Singapore 119616

Tel: (65) 68919 600

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APECENERGYOVERVIEW2023APECENERGYOVERVIEW2023DisclaimerTheviewsandopinionsexpressedinthispublicationbelongsolelytotheauthors.Theexpertgrouponenergydataandanalysisfocalpointsandenergyworkinggroupmembersoftherespectiveeconomieswereconsultedtoensuretheveracityoftheinformationwithin.APECENERGYOVERVIEW2023PreparedbyAsiaPacificEnergyResearchCentre(APERC)InuiBldg.-Kachidoki11F,1-13-1Kachidoki,Chuo-ku,Tokyo104-0054,JAPANTel:+81(3)5144-8551Fax:+81(3)5144-8555E-mail:overview@aperc.or.jpAPERCWebsite:https://aperc.or.jpForAsia-PacificEconomicCooperationSecretariat35HengMuiKengTerraceSingapore119616Tel:(65)68919600Fax:(65)68919690Email:info@apec.orgWebsite:www.apec.org©2023APECSecretariatAPEC#223-RE-01.6APECENERGYOVERVIEW2023iForewordTheAPECEnergyOverview(theOverview)isanannualpublicationthathighlightsthecurrentenergysituationineachofthe21APECeconomies.IthasbeenthepioneerpublicationforAPERCthatshowcasesthelatestAPECenergydatacompiledbytheExpertGrouponEnergyDataandAnalysis(EGEDA)sinceitsfirstpublicationinJanuary2001.TheOverviewreliesonEGEDAdatatomonitorprogresstowardmeetingthetwoAPECenergygoals,namely:1.Energyintensityimprovementof45%by2035(relativeto2005)2.DoublingtherenewableenergyshareintheAPECenergymixby2030(relativeto2010)By2020,APEC-wideenergyintensityhadimprovedby26%,leavinga19%improvementneededtomeetthe2035goal.Therecent8theditionoftheAPECEnergyDemandandSupplyOutlookforecaststhatAPECwillmeetthisgoalinboththeReferenceandCarbonNeutralityscenariosofthatreport.Progresshasalsobeenmadeindoublingtheshareofmodernrenewables.Modernrenewablesintheenergydemandmixhaveincreasedby57%atthehalfwaypointtothe2030goal.Renewablesintheenergysupplymixhaveincreasedataslightlyslowerpace,havingincreasedby53%,whiletheshareofrenewablegenerationhasincreasedby59%.ThiseditionoftheOverviewincludesdatato2020,andsobeginstoshedlightontheextentoftheenergyimpactoftheCOVID-19pandemic.Oneofthehighlightsofsuchatumultuousyearwasthatthegrowthofsolarandwindremainedstrongpostingthehighestannualincreaseseverrecorded.Oneofthehighlightsofsuchatumultuousyearwasthatthegrowthofsolarandwindremainedstrongpostingthehighestannualincreaseseverrecorded.Manyothertrends,issues,policies,initiatives,andnotabledevelopmentsarediscussedineachoftheeconomychapters.ThebasisofthisreportwastheEGEDAdatathateachmembereconomysubmitsonanannualbasis.WethankEGEDAmembersfortheircontinuedsupportinprovidinguswiththesedata.WealsoencourageAPECmembereconomiesandotherstakeholderstomakeuseofthispubliclyavailableresourcetocontinuetodevelop,implement,refine,andanalyseenergypolicy,alongsideotherenergyrelatedanalyses.KazutomoIrie,PhDPresidentAsiaPacificEnergyResearchCentre(APERC)GlenSweetnamChairmanExpertGrouponEnergyDataandAnalysis(EGEDA)APECENERGYOVERVIEW2023iiAcknowledgmentsWewouldliketothankAPECmembereconomiesforthetimelydatainformationprovidedtoensuretheaccuracyandtimelinessofthisreport.WewouldalsoliketothankmembersoftheAPECEnergyWorkingGroup(EWG),APECExpertGrouponEnergyDataandAnalysis(EGEDA),andnumerousgovernmentofficials,fortheirhelpfulinformationandcomments.TheAPECEnergyOverview2023couldnothavebeenaccomplishedwithoutthecontributionsofmanyindividualsandorganisationsinAPEC.Wewouldliketothankallthosewhoseeffortsmadethispublicationpossible.Wewouldalsoliketothankinparticularthosenamedbelowwhocontributedtothesuccessfulcompletionofthispublication.PROJECTMANAGERElviraTorresGELINDONPROJECTCOORDINATORMathewHORNEMAINCONTRIBUTORSDataCollectionandCompilation:ExpertGrouponEnergyDataAnalysis(EGEDA)throughitsSecretariat,theEnergyStatistics&TrainingOffice(ESTO),AsiaPacificEnergyResearchCentre(APERC).EconomyChapters:MathewHORNE(Australia);NabihMATUSSIN(BruneiDarussalam);ChristopherJamesDOLEMAN(CanadaandSingapore);ArioJATI(Indonesia);RisaPANCHO(Japan);ZhichaoLI(China);JeongduKIM(Korea);AsmayatiBtAbMANAN(MalaysiaandHongKong,China);EmilyMEDINA(Mexico);FinbarBartonMAUNSELL(NewZealandandPapuaNewGuinea);ManuelAntonioHEREDIAMUNOZ(PeruandChile);ElviraTorresGELINDON(thePhilippines);AlexanderIZHBULDIN(Russia);Yu-HsuanWU(ChineseTaipei);ThananMARUKATATandPhawidaJONGSUWANWATTANA(Thailand);GlenSWEETNAMandDavidMichaelWOGAN(UnitedStates);QuocHuyPHUNG(VietNam).EDITORSAnchorEnglish;withinternaleditingandreviewfromMathewHORNEofAPERCGRAPHICSANDLAYOUTElviraTorresGELINDONandMathewHORNEADMINISTRATIVESUPPORTHideyukiMAEKAWA,HideyukiFUJISAWA,YoshihiroHATANO,MitsunoriYOKOYAMA,YoshiakiIMAIZUMI,IkunoYAMAGUCHI,TomoyoKUKIMOTO,andEriOSANAIAPECENERGYOVERVIEW2023iiiContentsForeword...........................................................................................iAcknowledgements..........................................................................iiContents.........................................................................................iiiCommonlyusedabbreviationsandterms........................................ivCurrencycodes................................................................................vIntroduction.....................................................................................viEconomychaptersAustralia...........................................................................................1BruneiDarussalam.........................................................................18Canada..........................................................................................28Chile...............................................................................................48China.............................................................................................61HongKong,China..........................................................................72Indonesia.......................................................................................84Japan.............................................................................................99Korea...........................................................................................113Malaysia.......................................................................................127Mexico..............................................................................................144NewZealand....................................................................................161PapuaNewGuinea..........................................................................176Peru.................................................................................................188ThePhilippines.................................................................................202Russia..............................................................................................218Singapore.........................................................................................231ChineseTaipei.................................................................................248Thailand...........................................................................................260UnitedStates....................................................................................272VietNam..........................................................................................284APECENERGYOVERVIEW2023ivAbbreviation2017USDPPPAPECAPERCASEANB/DBcfbcmBtuGWGWhkLkmkm/LktoekVkWkWhMbbl/DMLTerm2017USDpurchasingpowerparityAsiaPacificEconomicCooperationAsiaPacificEnergyResearchCentreAssociationofSouth-eastAsianNationsbarrelsperdaybillioncubicfeetbillioncubicmetresBritishthermalunitsgigawattgigawatt-hourkilolitrekilometrekilometresperlitrekilotonneofoilequivalentkilovoltkilowattkilowatt-hourthousandbarrelsperdaymillionlitres(megalitre)MloeMMbblMMbbl/DMMBFOEMMBtuMMcf/DMMscf/DmpgMtMtceMtoeMWPJTbbl/DtceTcftoetUTWhWWhMillionlitresofoilequivalentmillionbarrelsmillionbarrelsperdaymillionbarrelsoffueloilequivalentmillionBritishthermalunitsmillioncubicfeetperdaymillionstandardcubicfeetperdaymilespergallonmilliontonnesmilliontonnesofcoalequivalentmilliontonnesofoilequivalentmegawattpetajoulestrillionbarrelsperdaytonnesofcoalequivalenttrillioncubicfeettonnesofoilequivalenttonnesofuraniummetalterawatt-hourswattwatt-hoursCommonlyusedabbreviationsandtermsAPECENERGYOVERVIEW2023vCurrencycodesCodeCurrencyEconomyAUDAustraliandollarAustraliaBNDBruneidollarBruneiDarussalamCADCanadiandollarCanadaCLPChileanpesoChileCNYyuanrenminbiChinaHKDHongKongdollarHongKong,ChinaIDRrupiahIndonesiaJPYyenJapanKRWwonKoreaMYRMalaysianringgitMalaysiaMXNMexicanpesoMexicoNZDNewZealanddollarNewZealandPGKkinaPapuaNewGuineaPENnuevosolPeruPHPPhilippinepesoPhilippinesRUBRussianrubleRussiaSGDSingaporedollarSingaporeTWDNewTaiwandollarChineseTaipeiTHBbahtThailandUSDUSdollarUnitedStatesVNDdongVietNamAPECENERGYOVERVIEW2023viIntroductionThisyear’sAPECEnergyOverviewincludesenergydatato2020,whichbeginstoshedlightdefinitivelyontheimpactofCOVID-19,oneofthebiggestglobaleconomic,health,andsocietalshocksofmoderntimes.Inadditiontoenergysupply,transformation,andfinalconsumptiondatafortheperiod2000to2020,anup-to-dateaccountingofenergypoliciesandnotableenergydevelopmentsto2023isprovidedineachoftheAPECmembereconomychapters.EnergysupplyandconsumptionTotalprimaryenergysupplyGlobaleconomicoutputfellby3.0%in2020,thoughtheresilienceofmultipleAPECeconomiestotheinitialhealthemergencymeantthatAPECeconomicoutputonlyfellby1.7%(PPPconstant2017USD).Nevertheless,thecontractionineconomicactivityresultedinAPECenergysupplyfallingbyover8000PJ(2.3%annualdecline)tosettleatjustunder344000PJ(Figure1).Oilsupplyfellbyover6500PJ,accountingformostofthedecline.Energyproduction(3.2%decline)fellfurtherthansupply,withthatdisparitymeaningthatenergystockpileswererelieduponinmanyeconomiestomeettheirenergyrequirementsin2020.Oilproductionfellfurthest(5.1%),andnaturalgasproductionalsodeclined(2.4%),whichrepresentedthefirstpullbackinoilandgasproductionsincetheglobalfinancialcrisisoveradecadeearlier.Figure1:APECenergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)APECcontinuestobeanetenergyimporterfromtherestoftheworld,buttheproportionofnetimportstoenergysupplyhasbeendecliningrapidlyforovertwodecades(Figure2).Thenotablehalttothedeclinein2020ismostlyattributabletoAPECsoutheastAsiaenergyexportsfallingbymorethan70%in2020.MostoftheenergyrelianceontherestoftheworldistiedtomultipleAPECmembereconomiesimportingoilfromMiddleEasteconomies.ButthisrelianceontheMiddleEastisbeingoffsetbytheriseinenergyproductionandexportsfromeconomieslikeAustralia,Canada,Indonesia,Russia(until2021),andtheUS.Renewablesweretheonlysupplycategorytoincreasein2020(up1.8%)thoughfossilfuelsremaindominant,accountingforalmost86%ofAPECenergysupply.050000100000150000200000250000300000350000400000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersAPECENERGYOVERVIEW2023viiFigure2:APECnetenergyimportsasaproportionofsupply,2000to2020Source:EGEDA(2022)TotalfinalconsumptionTotalfinalconsumption(whichincludesconsumptionofenergycommoditiesbythenon-energysector)fell3.0%to224000PJin2020.Borderclosures,reducedmobility,andaslowdowninalleconomicactivitieswerethemainreasonsforthisdecline.Thelargestfallswereinthetransport(11.5%fall)andservices(5.9%fall)sectors.Fuelconsumptioninallmodesoftransportdeclined,ledbyinternationalaviation(down47%)anddomesticairtransport(down30%).Theshifttowork-from-homearrangementsformanyworkersduringthepandemicmeantthatresidentialenergyconsumptionremainedlargelyunchanged(Figure3).Non-energyuseofenergycommoditiesasfeedstockstopetrochemicals,increased2.8%,supportedinpartbyincreasingdemandforpersonalprotectiveequipment(PPE)andothermedicalandhygiene-relatedsupplies.AlmostallAPECeconomieswereseverelyimpactedbythepandemicin2020.ThemostnotableexceptionwasChina,whereenergydemandincreased1.9%in2020.Abriefshutdownperiodandaprominentindustrysector,whichislessimpactedbymobilityconstraints,partlyexplainwhyChinacontinuedtogrowineconomicandenergytermsin2020.Figure3:APECfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)Mirroringsupply,oildemandfellfurthestin2020(down10.1%).Incontrast,coalconsumptionremainedunchanged,mostlysupportedby0%2%4%6%8%10%12%20002005201020152020Netimportsproportion050000100000150000200000250000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyAPECENERGYOVERVIEW2023viiiChina’scontinuedgrowthandresilienceintheinitialstagesofthepandemic.TransformationPowersectorPowergenerationinAPECincreasedmarginally(up0.2%)toalmost17500TWhin2020.Thenatureofthelockdownsmeantthatelectricitydemandremainedrobustduetoincreasedhome-basedactivity.Figure4:APECelectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)Evenwiththepandemic,thegrowthinotherrenewablesgeneration(whichincludessolarandwind),increased14.9%toalmost1700TWhin2020(Figure4).Powergenerationfromgeothermalandhydroalsogrewby3.5%and3.0%,respectively.Renewables’shareoftotalelectricitygenerationrosefrom23.1%in2019to24.7%in2020,withthealmost300TWhincreasebeingthelargesteverobserved.Thermalelectricitygenerationfell2.0%in2020,meaningitsshareofelectricitygenerationwasbelow65%,downfromthemostrecentpeakof73%in2011.EnergytransitionEmissionsTheunusuallylargedropinfossilfuelsconsumptionbroughtaboutbyCOVID-19ledtothelargestyear-on-yeardeclineofcarbondioxide(CO2)emissionsfromfuelcombustion.CO2emissionsinAPECfell3.5%tojustover20000MtCO2,alevellastseenin2012(Figure5).Figure5:APECCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)02000400060008000100001200014000160001800020000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersCO2combustionemissions050001000015000200002500020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW2023ixAPECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective—toimproveenergyintensityanddoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirambitiontoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.Figure6:APECtotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)Asof2020,APEC-widefinalenergyintensityhasimproved26%,leavinganadditional19%improvementneededtomeetthe2035goal(Figure6).APECisontracktoachievethisenergyintensityimprovementifcurrenttrendscontinue.Theobservedimprovementinenergysupplyintensity(notshownhere)isveryclosetotheobservedimprovementinenergydemandintensity.DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Modernrenewablesdonotincludetraditionalbiomass,whichistypicallyreliedoninemergingeconomiesforhouseholdenergyneedsandisassociatedwithnegativehealthoutcomes.ManyAPECeconomiesareenactingpoliciestoreducetraditionalbiomassconsumption,eitherthroughupgradingfuelstoves,orviafacilitatingswitchingtoalternativefuelssuchasnaturalgas,liquefiedpetroleumgas(LPG),orelectricity.Themodernrenewablesshareoffinalconsumptionhasincreasedfrom6.0%in2010toalmost9.5%in2020,whichisa57%improvement.ThismeansthatAPECisaheadofscheduletodoubleitsshareofmodernrenewablesby2030(Figure7).TotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012020002005201020152020202520302035Energyintensityindex(2005=100)APECENERGYOVERVIEW2023xFigure7:APECmodernrenewableenergyshareinfinalenergyconsumption,2010throughto2030Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.Progresshasalsobeenmadeindoublingtheshareofrenewablesintheelectricitymixby2030(relativeto2010).Renewablegenerationaccountsfor24.7%ofAPECelectricitygenerationin2020,upfrom15.6%in2010(Figure8).Figure8:APECmodernrenewableenergyshareintheelectricitymix,2000to2020Source:EGEDA(2022)Intermsofsupply,modernrenewableshaveincreasedfrom4.8%in2010to7.3%in2020,whichisanalmost53%increaseatthehalfwaymarktothegoalyearof2030.APEC-widesharechangeto2020Sharerequiredtomeetdoubling0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%20102010to20202020to2030requirement2030APECtargetRenewablesshareinelectricitymixAPECdoublinggoal20300.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%2000200520102015202020252030ProportionAPECENERGYOVERVIEW2023xiEconomychaptersAPECENERGYOVERVIEW20231AustraliaIntroductionAustraliaupdateditsnationallydeterminedcontribution(NDC)inJune2022,committingtoreducegreenhousegasemissionsto43%below2005levelsby2030.Thisisasignificantexpansionofthepriorcommitmentofa26to28%reductionforthesameperiod.Australiaalsoreaffirmeditslate2021commitmenttoachievenetzeroemissionsby2050.InSeptember2022,Australialegislatedthesenewcommitments.Theseambitiouscommitmentswereovershadowedbyglobalenergymarketturmoilin2022.Energycommoditypriceshadalreadybeenincreasingthroughthelatterhalfof2021asgoodsdemand,andtheenergyrequiredtodeliverthem,surgedonthebackofaCOVID-19recovery.Withsupplyalreadytight,theRussia-Ukraineconflictexacerbatedthesituationandledtoevenhigherenergypricesformostof2022.TheunprecedentedhighenergypricesmeanthatAustralianenergyexportearnings(predominantlythermalcoal,metallurgicalcoal,andLNG)areatrecordlevels.LNGexportearningswereoverAUD70billionin2021–22(JulytoJune),whichismorethandoubletheAUD30billionfromtheyearprior,whichaccompaniedtheverylowenergypricesbroughtonbyCOVID-19.ExportearningsareanticipatedtoclimbtoAUD90billionfor2022–23,withthevolatilemovesinearningsforthelastthreeyearslargelyduetopricemovements;volumeshavebeenrelativelyconsistent(ResourcesandEnergyQuarterly,2022).Australiaaccountsforwelloverhalfofglobalmetallurgicalcoalexports.Exportearningsforthissteel-makingcommodityareanticipatedtoreachoverAUD57billionin2022–23forAustralia,whichisdownfromoverAUD67billiontheyearbefore.ThedeclineinearningsisbecausemetallurgicalcoalpriceshavefallenbackfromtheveryhighpricespikesofmorethanUSD500pertonnethatoccurredfromMarchtoJune2022(REQ,2022).Thermalcoalpricesremainelevated,andasthesecond-largestglobalexporter,AustraliaisanticipatedtoderiveAUD75billioninexportearningsfor2022–23,upfromAUD46billionin2021–22(REQ,2022).Table1:AustraliamacroeconomicdataandenergyreservesKeydataa,bEnergyreservesc,dArea(millionkm2)7.7Oil(billionbarrels)2.4Population(million)26Gas(trillioncubicfeet)84GDP(2017USDbillionPPP)1251Coal(milliontonnes)150227GDPpercapita(2017USDPPP)48679Uranium(kilotonnesU<USD130/kgU)1184Source:aABS(2022);bWorldBank(2022);cBP(2022);dUN(2022)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.DomesticenergyconsumersontheeastcoastofAustraliahavebeensubjecttomuchhigherelectricityandnaturalgaspricesin2022,largelyduetoAustralia’seastcoastgasmarketbeinglinkedtomarketsinAsiaAPECENERGYOVERVIEW20232in2015.HigherenergycostsattributabletothislinkagehavebeenaprominentcontributortoAustralia’srecentboutofdomesticinflation.TheAustralianGovernmentisattemptingtoshieldeastcoastconsumersfromtheongoingglobalenergymarketturmoilbyinstitutingadomesticwholesalenaturalgaspricecapofAUD12pergigajouleforoneyearfromDecember2022.ThermalcoalwillalsobecappedatAUD125pertonne.WesternAustraliaalreadyenjoyssomeofthelowestnaturalgaspricesintheworldduetoapolicyofdomesticreservation.EnergysupplyandconsumptionTotalprimaryenergysupplyAustralia’senergysupply—energythatisultimatelyconsumeddomestically—hasincreasedbyanannualaverageofabout1%forthelasttwodecadesandreachedalmost5500PJin2020.Steadilyincreasingenergysupplyhasbeenoutshonebyrapidlyincreasingenergyexports,andtheproductionrequiredtofacilitatethem.In2000,Australia’snetenergyexportswereroughlyequivalenttotheamountofenergyconsumeddomestically.Whereasin2020,energyexportswerealmost2.5timeslargerthanenergysupply.Australia,China,PNG,andVietNamweretheonlyfoureconomiesinAPECtopostanincreaseinenergysupplyin2020.ForAustralia,itwasa1.3%increase,contrastingwitha3.0%fallinfinalconsumption,discussedlaterinthechapter.Onanenergycontentbasis,Australia’scombinedmetallurgicalandthermalcoalexportsare2.5timeslargerthanitsLNGexports(BP,2022).Australiawasthefourth-largestglobalproducerofcoalandtheseventh-largestglobalproducerofnaturalgasin2021(BP,2022),withtherankingunchangedfrom2020.Almost90%ofAustralia’scoalproductionisexportedtomeetdemandfromcoal-firedpowerplants(thermalcoal)andblastfurnacesforsteelproduction(metallurgicalcoal)thatareinAsia.Metallurgicalcoalaccountsforlessthanone-fifthofAPECcoalconsumption,thoughitaccountsforalmosthalfofAustralia’scoalexports.Figure1:Australiaenergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)AustraliashippeditsfirstLNGcargofromthenorth-westshelf,WesternAustraliain1989.Thenorth-westernregionsofAustraliacontinuedtoaccountforallofAustralia’sLNGexportsuntilunconventionalresourcesfromtheSuratandBowenbasinsweredevelopedinQueensland.ThefirsteastcoastLNGcargowasshippedfromProductionNetimportsTotalPrimaryEnergySupply-15000-10000-5000050001000015000200002500020002005201020152020Production,netimportsandTPES(PJ)APECENERGYOVERVIEW20233Gladstone,Queenslandin2015,andhassinceledAustraliatorivalQatarasthelargestglobalLNGexporter.ThestronggrowthinLNGexportscombinedwithlargequantitiesofthermalandmetallurgicalcoalexportsmeantAustraliapostedanewhighofmorethan13000PJofnetenergyexportsin2020(Figure1).Australia’senergysupplyistheamountofenergyconsumeddomesticallyandwastiedmorecloselytoeconomicgrowthpriortotheglobalfinancialcrisisin2008.Sincethen,theaccumulationofimprovementsinenergyefficiencyhasbeenenoughtooffsetincreasesindemandfromapopulationthathasincreasedbyalmostafifth,andeconomicoutputthathasgrownbymorethanaquarter(Figure2).Figure2:Australiaenergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)Coalsupplyfellforthefourthyearinarow,tolessthan30%ofAustralia’ssupplymixin2020.Oil(whichincludesrefinedproductsimports)increasedby0.6%in2020toremainthemostprominentsourceofsupply.Naturalgassupplyincreasedbyalmost11%toalevelthatisonly40PJlowerthancoal.Naturalgasconsumptionisfallinginmanyend-usesectors,butitisplayinganimportantroleinthepowersector,viagas-firedpeakingturbinestohelpmeetthechallengeofvariablerenewablegeneration.ThereisalsosignificantconsumptionofnaturalgasassociatedwiththeliquefactionprocessrequiredforLNGexports.Renewablessupplyincreasedby5.2%,sothattheynowaccountfor7.6%ofAustralia’senergysupply.Australiamayhaveworld-beatinglevelsofsolarPV,butotherAPECeconomieshaveverysignificanthydrogenerationthatcontributestoAPEChavingarelativelyhighershareofrenewables(8.2%)thanAustralia.Figure3:Energysupplymix–AustraliaandAPEC,2020Source:EGEDA(2022)0100020003000400050006000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersCoalOilGasRenewablesOther0%20%40%60%80%100%AustraliaAPECAPECENERGYOVERVIEW20234WhencomparedtoAPEC,oilismoreprominentduetoAustralia’stransportsector,andtherefinedfuelthatisrequiredtomovepeopleandfreightbetweenthepopulationcentres,mostlyalongtheeastcoast.TotalfinalconsumptionAustralia’senergysupplyof5485PJin2020flowsthroughto3377PJofend-usedemand.Thismeansthatalmosttwo-fifthsisconsumedinthetransformationprocess,whichincludesownuseandlosses.Totalfinalconsumption,whichincludestheconsumptionofenergycommoditiesbythenon-energysector,fellby3.0%in2020,andisalmost4%lowerthanpeakconsumptionin2018.Commercialsectorenergyconsumptionfellbyalmost2%duetoCOVID-19activityrestrictions,thoughthiswasmorethanoffsetbyresidentialenergyconsumptionincreasingbymorethan2.5%.TheincreaseinresidentialenergyconsumptionispartlyexplainedbyCOVID-19andthegreaterlevelofeconomicactivitythatoccurredinhouseholdsin2020.Morethan90%oftheannualfallinenergyconsumptionwasfromafallintransportactivityandassociatedenergyconsumption,whichfell6.7%in2020.Officiallockdowns,lowerlevelsofmobility,andnegativenetmigrationexplainmostofthisfall.ThisfallwaslowerthanforAPEC,whichpostedan11.4%declinein2020.ThemuchsteeperdeclineinmanyotherAPECeconomiesmeantthatAustralia’stransportsectorbecamealmost1.6timeslarger,inarelativesense,thanforAPECin2020(Figure5).Australia’sindustrialenergyconsumptionhasmaintainedasimilarlevelformostofthelasttwodecades(Figure4).Thecommodityboomofthe2000sand2010sledtoincreasedmineralsminingactivity(theenergyconsumptioniscapturedintheindustrysector),butthiswasnotenoughtooffsettheimpactsofastrongAustraliandollarandtheoffshoringofmanyotherindustrialenterprises.Theacceleratingrolloutofrenewablesandbatterieswillrequirelargequantitiesofmineralssuchaslithiumandrareearthelements,thatAustraliaiswellplacedtosupply.TheAustralianGovernmenthasdevelopedaCriticalMineralsStrategy(2023)whichnotonlyprioritisesgreaterminingactivity,butalsoseekstoexpanddownstreamprocessingthatcouldcontributetoanindustrialrevivalinthecomingdecades.Figure4:Australiafinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)Whiletherearestrongprospectsformineralsmining,difficultyinsecuringreliablelong-termgassupplyatacompetitivepricewillprovideanincentivefortheelectrificationofindustrialprocesses.Theriseofrenewablepoweredindustry,suchasgreensteel,willbeanopportunityforAustraliatopursueduetoitsvastrenewablepotential.05001000150020002500300035004000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyAPECENERGYOVERVIEW20235Buttheseprospectsrequiresignificantinfrastructureandtechnologicaldevelopmentthatareunlikelytobeviableuntilatleastthe2030s.Figure5:Finalconsumptionbysector,AustraliaandAPEC,2020Source:EGEDA(2022)FinalenergydemandFinalenergydemandexcludestheconsumptionofenergyproductsbythenon-energysectorandisasubsetoffinalconsumption.Transportenergyconsumptionisstillmostlytiedtooil(refinedproducts)inallAPECeconomies,Australiaincluded.Refinedproductsarealsousedinallotherend-usesectors,suchasdieselinmineralsmining(industry),LPGinresidentialbuildings,anddieselgeneratorsincommercialbuildings.TheseusecasescombinetomeanthatoilaccountedforhalfofAustralia’sfinalenergydemandin2020,whichrepresentedanincreasesince2000(47%),butadecreasefrom2019(52%),duetoCOVID-19.Widescaleelectrificationofend-useapplicationshasyettooccurandsoelectricityhasyettoriseinprominence,maintainingashareofroughlyaquarterformostoftheprevioustwodecades.Withtheriseofelectricvehicles,andamovetoelectrifyingothersectors,electricityisanticipatedtoundergosignificantgrowthinthenextfewdecades.Seethe8theditionoftheAPECEnergyDemandandSupplyOutlookforananalysisanddiscussionofthesetrends.Figure6:Australiafinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproducts.Australia’srelativelysmallheavyindustrysectormeansthatcoalconsumptioninapplicationssuchassteel-making,cement,andIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%AustraliaAPEC0500100015002000250030003500200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersAPECENERGYOVERVIEW20236chemicalsmanufacturingisrelativelylow.Theotherend-usesectorsusealmostnocoalinAustralia.Almostthree-quartersofAustralia’snaturalgasproductionwasexportedin2020.Alargeportionofthisproductionoccursinthenorth-westandisunavailabletodomesticeastcoastconsumers,duetolimiteddomesticpipelinenetworksandnoLNGimportterminals.TherearecurrentlymultipleproposalstobuildLNGimportfacilitiesatlocationsontheeastandsouthcoasts,butitisuncertainwhethertheseplanswillcometofruition.Figure7:Finalenergydemandfuelshare,AustraliaandAPEC,2020Source:EGEDA(2022)Heatingandcookingapplicationswithinthebuildingssectorshavebeenamongthemostprominentsourcesofnaturalgasdemand.Multiplemanufacturingapplicationshavealsoreliedontheconsistentheatingpropertiesofnaturalgasanditsabilitytogeneratehighheat.Buthigherpricesanddifficultyinsecuringlong-termcontractsontheeastcoasthadbeenconstrainingnaturalgasdemandintheleaduptoCOVID-19.In2020,naturalgasconsumptionincreasedby1.2%,whichwaspartlyduetolowerglobaldemandthatfreedupsupplyfordomesticconsumption.Thissmallincreaseislikelytobeafluctuationawayfromthelonger-termdeclineindomesticnaturalgasconsumption.Australia’sdomesticconsumptionofgasislikelytostaylowerthanfortheAPECregion(Figure7).ThesmallsizeofAustralia’sheavyindustrysectorprovidesapartialexplanationfortherelativelylowconsumptionofcoalbyAustralianend-useconsumers.Australia’srelativelylowconsumptionofelectricityalsocorrelateswiththehighrelativeshareofthetransportsector,whichisdependentonrefinedproducts(oil).WiththeriseofEVs,end-useelectricityconsumptionislikelytogrowfasterinAustraliathanforothereconomiesthathavealessprominenttransportsector.TransformationPowersectorCoalremainsthedominantsourceofelectricitygenerationforAustralia.However,coal’sshareinthegenerationmixhasfallenfromwellover80%atitspeakto55%in2020.Therapidriseinrenewablegeneration,particularlysolarPV,hasnegativelyimpactedtheeconomicsofcoal-firedpower,andwithcontinuedrenewablesdeployment,coalislikelytobecompletelyphasedoutbythe2030s,evenwithoutdirectpolicyintervention.Incontrast,naturalgas-firedgenerationhasincreasedbyalmostaCoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%AustraliaAPECAPECENERGYOVERVIEW20237quartersince2010toaccountfor21%ofgenerationin2020.PartofthisincreasedroleistoprovidepowerduringeveningpeakdemandtomakeupforthedeclineinrooftopsolarPVgeneration.Theworld-leadingriseinsolarrooftopPVispartiallyduetoveryfavourablesolarradiationconditions,andpartiallytodowithpolicysupportfromstateandfederalgovernments.Almostoneinthreehomeshadasolarpanelinstalled,asofJune2022.Thecomplementaryriseofutilityscalesolarandwindmeansthatrenewablesincreasedtheirshareofgenerationfrom19.6%in2019to22.5%in2020(Figure8).Figure8:Australiaelectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)The‘otherrenewables’generationcategory,whichincludessolarPV,increasedby24%in2020.Thisamountedtoover8700GWh,whichwaslargeenoughtoalmostoffsetthedeclineincoal-firedpowergeneration.TherelativeshareoftheotherrenewablescategoryforAustraliaisalmostdoublethesizeforAPEC.Australia’shydrogenerationisundertwo-fifthsoftherelativeshareofhydrointheAPECgenerationmix.TheSnowyHydro2.0schemewillprovideanadditionaltwogigawattsofpumpedhydrocapacity,andisdueforcompletionin2027;thus,Australia’srelianceonhydroissettoincrease.However,hydro’ssharewillnevergettothelevelsthatareseeninhydro-dominantAPECeconomieslikeCanadaandNewZealand.Figure9:Electricitygenerationfuelshare,AustraliaandAPEC,2019Source:EGEDA(2022)050100150200250300200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersCoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%AustraliaAPECAPECENERGYOVERVIEW20238RefiningTheAltonarefineryinVictoriaandKwinanarefineryinWesternAustraliawounddownoperationsin2021.Theseclosuresmeanfuelsecurityissueshaveshiftedmoretosourcesofrefinedproductssuppliesinsteadofcrudeoilsupplies.ThefederalgovernmenthasannouncedsupportmeasuresfortheremainingtworefineriesinGeelong,VictoriaandLytton,QueenslandtocontinuetomeetsomeofAustralia’sdemandforrefinedproductsuntilatleast2027.EnergytransitionSinceanewfederalgovernmentwaselectedinMay2022,commitmentsthatsupportAustralia’slegislatednetzero2050commitmenthaveaccelerated.ANationalNetZeroAuthorityhasbeenestablishedtoensuretheopportunitiesaresharedwidely,includingwithworkersandcommunitiesthatareassociatedwithemissionsintensivesectors(PrimeMinisterofAustralia,2023).Attheendof2022,Australianfederal,andstateandterritory,energyministersintroducedtheCommonwealthCapacityInvestmentScheme(CIS).TheschemeaimstodevelopacapacitymarketforcleandispatchablestorageandgenerationtoensurereliabilityandsecuritywhiledeliveringmuchloweremissionsfromAustralia’selectricitygrid.Thefirstauctionisexpectedtooccurin2023,withtheintentionthattheschemewillbecomeoperationalbythesecondhalfof2023.Detailsarebeingfinalised,butakeyaspectisthattheschemewillbelimitedtozeroemissionsdispatchablegenerationandstoragetechnologies.ThisrepresentsanevolutionfromthepreviousEnergySecurityBoardcapacitymechanismproposal,whichconsideredfossilfueltechnology.Newtransmissioninfrastructuretodeliverrenewableenergyandincreasedgenerationisbeingsupportedbylow-costfinance(RewiringtheNation,2022).ThelocationsofthesenewsourcesofpowerwillbeguidedbyrenewableenergyzoneanalysisbytheAustralianEnergyMarketOperator(AEMO),whichincludesOffshoreWindZonesanalysis(AEMO,2022).Australiaissupportingmultiplehydrogeninitiativestocapitaliseonpotentialdemand.Detailsofthesehydrogeninitiativesareavailableintheenergypolicysectionlaterinthechapter.ThenewlyformedDepartmentofClimateChange,Energy,theEnvironmentandWaterhasalsoensuredthatenergypolicyismorecloselyalignedwithenvironmentalconsiderations,tosupportenergytransitionobjectives.EmissionsTheexpertgrouponenergydataandanalysis(EGEDA)fallsundertheumbrellaofAPEC’sEnergyWorkingGroup(EWG).InadditiontoenergydatacompiledbyEGEDA,CO2emissionsfromcombustionactivitiesintheenergysectorarerecorded.Theseemissionsareasubsetoftotalgreenhousegas(GHG)emissionsthatareconsideredinthecontextofclimatechange,suchasundertheUnitedNationsFrameworkConventiononClimateChange(UNFCCC).ForAustralia,CO2combustionemissionshavemaintainedahighplateauformostofthelastdecade,thoughtheyfellin2020.ThisfallwaspartlyduetoadeclineineconomicactivitythatwasbroughtonbytheinitialstagesoftheCOVID-19pandemic.TheEGEDAemissionsdatapresentedhereonlyaccountsforCO2fromenergysupplyandconsumption,calculatedusingdefaultIntergovernmentalPanelonClimateChangeemissionfactorsandenergycontents.Duetothesereasons,thisdatadoesnotcloselymatchAustralia’semissionsreportedunderUNFCCCguidelines.APECENERGYOVERVIEW20239Figure10:AustraliaCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecurityEventhoughAustraliaproducesmuchmoreenergythanitconsumes,energysecurityhasbecomeanincreasinglyprominentissueinrecentyears.TheRussia-UkraineconflictalmostimmediatelyimpactedAustralianconsumersofnaturalgasduetothetightmarketconditionsthathavebeenafeatureoftheeastcoastAustralianaturalgasmarketsinceLNGexportsbeganin2015.Thedifficultyinsecuringnaturalgassupply,andthemuchhigherpricesforthatsupply,meanthatAustralianconsumersareinasimilarpredicamenttomanyEuropeanconsumers.ThemuchhigherglobalpriceforcoalandgashasalsoimpactedAustralia’selectricitymarketsandisaprominentreasonfortheincreasedlevelsofinflationthatAustraliahasexperiencedthrough2022andinto2023.TheunprecedentedspikesinenergypriceshavesparkedsignificantdebateinAustraliaaboutenergypolicysettings.Two-thirdsoftherespondentsofasurveyoftopeconomists(EconomicSocietyofAustralia,2022)advocatedinterventioninresponsetothesechallengingmarketconditions.Theproposedinterventionsincludeacapondomesticprices,ataxonwartimeprofitsthatcanthenbeusedtofinancesubsidies,ordomesticreservation.InDecember2022,theAustralianGovernmentimplementedawholesalepricecapofAUD12pergigajoulefornaturalgasandAUD125pertonneofblackcoalforoneyear.Thepricecapwillprovidegreatersupplycertainty,thoughattheselevels,pricesarestillmuchhigherthantheyhavebeenhistorically.Australiahasbeennon-compliantwiththeInternationalEnergyAgency(IEA)90daysofoilstockrequirementsince2012.ThefederalgovernmentsignedanagreementwiththeUSin2020toleaseaportionoftheUSStrategicPetroleumReserve(SPR)aspartofacommitmenttoreturnAustraliatocomplianceby2026.EconomyownedoilheldintheSPRwasreleasedtothemarketinresponsetotheIEA’sMarchcollectiveaction.Acollectiveactionisacoordinatedreleaseofoilthataimstostabilisethemarketandputdownwardpressureonprices.TheclosureoftwooftheremainingfouroilrefineriesinAustraliain2021meansthatAustraliaisnowmorereliantonsourcesofrefinedproductssupply,andlessreliantonsourcesofcrudeoilsupply.CO2combustionemissions28030032034036038040020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW202310APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective—toimproveenergyintensityandtodoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargetforreducingenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.Figure11:Australiatotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.Australia’sfinalenergydemandenergyintensityhasbeenconsistentlyimprovingatarateofalmost2%perannumforthetwodecadesto2020(Figure11).Thisrepresentsanalmost23%improvementsince2005.Energysupplyintensityhasimprovedbyasimilarmagnitude.DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Therearenoeconomy-levelgoals.Figure12:Australiamodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.TotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012020002005201020152020202520302035Energyintensityindex(2005=100)Changefrom2010to20200%1%2%3%4%5%6%7%8%9%10%2010Change2020APECENERGYOVERVIEW202311TheshareofmodernrenewablesinAustralia’sfinalenergydemandmixincreasedfrom6.3%in2010to9.4%in2020,whichwasa49%increase.In2019,thesharewasmuchlowerat8.6%.Mostofthelargeannualincreasewasduetothecontinuedrapidrolloutinrenewablesgeneration,whichincludedhouseholdsolarPV.Figure13:Australiarenewablegenerationshare,2000to2020Source:EGEDA(2022)Electricitygenerationfromrenewablesincreasedto22.5%inAustraliain2020,whichwasmorethandoublethe2005leveloflessthan9%(Figure13).Thelargepull-backin2015coincidedwiththeendofAustralia’scarbonpricein2014andacollapseinrenewablesinvestment.Theshort-livedcarbonprice,from2012to2014,correlatedwithanincreaseinrenewablegenerationbutitisdifficulttodeterminehowlargetheimpactwasfromtheimpositionofthisshort-livedprice.Thesustainedriseofthelate2010swaslargelyduetotheriseofrooftopsolar,thoughutilityscalesolarandincreasedwindgenerationisacceleratingandcontributingmorewitheachpassingyear.In2020,theannualincreaseinrenewablegenerationwasmorethan15%,whichwaslargeconsideringthathydrogenerationfellbymorethan5%.SolarandwindcapacitycontinuestoaccelerateandissupportingincreasedclimateambitionssuchasAustralia’supdatedNDC,releasedin2022.Renewablesshareinelectricitymix0%5%10%15%20%25%20002005201020152020ProportionAPECENERGYOVERVIEW202312EnergypolicyEnergypolicyDetailsReferenceParisAgreementNationallyDeterminedContributionToreducegreenhousegasemissionsby43%below2005levelsby2030.Toachievenetzeroemissionsby2050.TheseareenshrinedinlawintheClimateChangeAct2022.DepartmentofClimateChange,Energy,theEnvironmentandWaterEnergypricereliefplanTheCommonwealthintroduceda12-monthemergencygaspricecap,atAUD12pergigajouleonnewwholesalegassalesbyeastcoastproducers,thoughitisonlyforcontractedgasandnotforspotmarketgas.TheNewSouthWalesandQueenslandgovernmentshaveeffectivelysetceilingsforthepriceofcoalusedforelectricitygenerationtoAUD125atonne.PrimeMinisterofAustraliaCommonwealthCapacityInvestmentScheme(CIS)TheschemewillprovideanationalframeworktoencouragenewinvestmentincleandispatchablecapacitytosupportreliabilityandreducetheriskofpriceshocksinAustralia’srapidlychangingenergymarket.energy.gov.auPoweringAustraliaPlanTheAustralianGovernment’sPoweringAustraliaplanisfocusedoncreatingjobs,cuttingpowerbillsandreducingemissionsbyboostingrenewableenergy.DepartmentofClimateChange,Energy,theEnvironmentandWaterCriticalMineralsStrategy2023-2030ThisupdatedstrategybuildsonthefirstCriticalMineralsStrategy,publishedin2019.IthasavisiontoputAustraliaatthecentreofmeetingthegrowingdemandforcriticalminerals.Itwillunderpintheeconomy’sprosperityandsecuritybyimprovingaccesstoreliable,secureandresilientsuppliesofcriticalminerals.DepartmentofIndustry,ScienceandResourcesSafeguardmechanismThesafeguardcomplementstheACCUScheme(previouslyERF)byplacingalegislatedobligationonAustralia’slargestgreenhousegasemitterstokeepnetemissionsbelowtheiremissionslimit(orbaseline).ThesebaselineswilldeclineonatrajectoryconsistentwithachievingAustralia’semissionreductiontargetsof43%below2005levelsby2030andnetzeroby2050.ThetargetswerelegislatedintoAustralianlawin2022.CleanEnergyRegulatorACCUScheme(previouslyknownasEmissionsReductionFund)ThislegislatedschemeallowsparticipantstoearnAustralianCarbonCreditUnits(ACCUs)foreverytonneofemissionsreducedorsequesteredthroughaproject.ThesecreditscanbesoldtotheAustralianGovernmentortootherbuyersinthemarket.TheIndependentPanelwhichreleaseditscompletedreviewofACCUsinDecember2022concludedtheschemearrangementsaresound,whilerecommendingsomechangestostrengthenthescheme.TheGovernmentisworkingwithstakeholderstoimplementtherecommendationsfromtheReview.CleanEnergyRegulatorAPECENERGYOVERVIEW202313Australia’sNationalHydrogenStrategyDesignedtoestablishAustralia'shydrogenindustryasamajorglobalplayerby2030.DepartmentofClimateChange,Energy,theEnvironmentandWaterRewiringtheNationRewiringtheNationisAUD20billionprogramtoprovidelow-costfinancetoupgrade,expandandmoderniseAustralia’selectricitygridanddrivedownpowerprices.DepartmentofClimateChange,Energy,theEnvironmentandWaterGrowingAustralia’shydrogenindustry(Multipleinitiatives)Varioushydrogenprojects,withthepotentialtohelprevitalisemanufacturing,supportregionaleconomies,createjobs,investment,andtradeopportunities,whilehelpingAustraliaachieveitsdecarbonisationtargets.DepartmentofClimateChange,Energy,theEnvironmentandWaterTheNationalGreenhouseandEnergyReportingschemeAsinglenationalframeworkformandatoryreportinganddisseminationofcompanyinformationaboutgreenhousegasemissions,energyproduction,energyconsumptionandotherinformationfromtheenergy,wasteandindustrialprocessessectors.CleanEnergyRegulatorandDCCEEWBilateralenergyandemissionsreductionagreementsThefederalgovernmentisdevelopingbilateralenergyandemissionsreductionagreementswithstateandterritorygovernmentstoimproveenergyreliabilityandaffordabilityandsupportthetransitionofenergymarketstolower-emissionstechnologies.DepartmentofClimateChange,Energy,theEnvironmentandWaterEnergyandClimateChangeMinisterialCouncil(ECMC)TheECMCisaforumfortheCommonwealth,Australianstatesandterritories,andNewZealandtoworktogetheronpriorityissuesofnationalsignificanceandkeyreformsintheenergyandclimatechangesectors.ECMCischairedbytheMinisterforClimateChangeandEnergy,theHonChrisBowenMP.ThiscouncilreplacedtheformerEnergyNationalCabinetReformCommitteein2022.DepartmentofClimateChange,Energy,theEnvironmentandWaterNationalEnergyCustomerFrameworkRegulatestheconnection,supply,andsaleofenergy(electricityandgas)togrid-connectedresidentialandsmall-businessenergycustomers.DepartmentofClimateChange,Energy,theEnvironmentandWaterAustralia'sfuelsecuritypackageVariousmeasurestoincreasedomesticstorageandholdasovereignrefiningcapabilitythatmeetsAustralia'sneedsduringanemergency.DepartmentofClimateChange,Energy,theEnvironmentandWaterEnergyemergencymanagementforumsParticipationingas,liquidfuel,andelectricityemergencymanagementforumstoensureeffectivecommunicationandcollaborationbetweengovernmentsandindustryinenergysupplyemergencies.DepartmentofClimateChange,Energy,theEnvironmentandWaterTrustedInformationSharingNetworkTheTrustedInformationSharingNetworkforCriticalInfrastructureResilienceEnergySectorGroupisaforumforsharinginformationonsecurityissuesandpracticalmeasurestoimprovetheresilienceofenergyinfrastructuretoallhazards.CyberandInfrastructureSecurityCentreAPECENERGYOVERVIEW202314EnergysupplypolicyTheAustralianGovernmentisensuringsupplysecurity,reliability,andaffordabilityviacleanenergyandelectricitymarketreforms,deliveringprioritytransmissionprojectsandpumpedhydro,andsupportingtheTasmanianenergytaskforce.DepartmentofClimateChange,Energy,theEnvironmentandWaterSubsidiesforresidential(andcommercial)storageand/orPVState-basedgovernmentprogramsprovidingincentivesforsolarPVinstallations.SolarrebatesinAustraliaLarge-scaleRenewableEnergyTargetTheLarge-scaleRenewableEnergyTarget(LRET)incentivisesthedevelopmentofrenewableenergypowerstationsinAustraliathroughaRenewableEnergyCertificateMarketforthecreationandsaleofcertificatescalledlarge-scalegenerationcertificates(LGCs).CleanEnergyRegulatorSmall-scaleRenewableEnergySchemeIncentivisessmall-scalerenewableenergysystemsthroughlegislateddemandforsmall-scaletechnologycertificates(STCs).TheSTCsactasadiscountofferedtosmallenergyconsumerstoinstallREsystemssuchassolarwaterheatersandsolarPV.CleanEnergyRegulatorSnowy2.0Sponsoringandcommissioningofa2GWpumpedhydrofacilityin2027bythefederalgovernment.SnowyHydroClimateActiveCertificationisawardedtoAustralianbusinessesthatmeettherequirementstoachievenetzerocarbonemissions.ClimateActiveLiddellTaskforceWilladvisegovernmentwhethersufficientdispatchablecapacityhasbeenbuilttomakeupfortheclosureoftheLiddellpowerplantin2023.DepartmentofClimateChange,Energy,theEnvironmentandWaterRetailerReliabilityObligation(RRO)Ifgapsareforecastbetweenenergydemandandsupply,theAustralianEnergyMarketOperatorwillcompelenergyretailerstocontractadditionalgeneration.DepartmentofClimateChange,Energy,theEnvironmentandWaterRegionalAustraliaMicrogridPilotsProgramAnAUD50millionsix-yearprogramthataimstoimprovetheresilienceandreliabilityofpowersupplyforregionalandremotecommunities.AdministeredbyARENA.ARENAGEMSprogramTheGreenhouseandEnergyMinimumStandardsAct2012(GEMSAct)providesforGreenhouseandEnergyMinimumStandardsforspecifictypesofproductsbeforetheycanbesuppliedinAustralia.GEMSDeterminationsCommercialBuildingsDisclosureprogramTheCommercialBuildingDisclosure(CBD)Programrequiresenergyefficiencyinformationtobeprovidedinmostcaseswhencommercialofficespaceof1000squaremetresormoreisofferedforsaleorlease.CommercialBuildingDisclosureNationalElectricVehicleStrategyThestrategypavesthewayforgreaterEVaffordability,accesstochargingstations,andamassivereductioninemissions.InitiativesalsofocusonexpandedEVavailabilityandoptionsforbuyers.energy.gov.auElectricVehiclepoliciesAustralianstatesandterritorieshavemultipletargetsforEVsales,EVrebates,supportforEVcharginginfrastructure,andothersuchpoliciesthataimtosupportelectrificationoftransport.DepartmentofClimateChange,Energy,theEnvironmentandWaterAPECENERGYOVERVIEW202315NotableenergydevelopmentsNotabledevelopmentDetailsReferenceClimatechangeandenergytransformationTheAustralianGovernmentannouncedabudgetofAUD24.9billioninOctober2022,whichincludesthePoweringAustraliaPlan.EnergyMinisterpressreleasePoweringAustraliaPlan-AUD20billioninvestmentintransmission-AUD102millionforcommunitysolarbanks-AUD224millionforinstallationof400communitybatteries-AUD1.9billionforpoweringtheregion’sfundDepartmentofClimateChange,Energy,theEnvironmentandWaterNationalEnergyPerformanceStrategyFrameworktodelivertheenergyefficiencysavingsrequiredtomeetthegovernment's2030and2050emissionsreductiontargets.DepartmentofClimateChange,Energy,theEnvironmentandWaterNationalEnergyTransformationPartnershipOn12August2022,federal,stateandterritoryEnergyMinistersagreedtoestablishanewNationalEnergyTransformationPartnership.ThepartnershipisaframeworkfornationalalignmentandcooperativeactionbygovernmentstosupportthesmoothtransformationofAustralia’senergysector.energy.gov.auGasCodeofConductTheAustralianGovernmenthasimplementedamandatoryGasCodeofConduct,aspartoftheEnergyPriceReliefPlanannouncedinDecember2022,toensurethateastcoastgasuserscancontractforgasatreasonablepricesandonreasonableterms.energy.gov.auHydrogenHeadstartTheAustralianGovernmentwillinvestAUD2.0billioninthenewHydrogenHeadstartprogram,providingrevenuesupportforlarge-scalerenewablehydrogenprojectsthroughcompetitivehydrogenproductioncontracts.TheProgramwillputAustraliaoncourseforuptoagigawattofelectrolysercapacityby2030.DepartmentofClimateChange,Energy,theEnvironmentandWaterAPECENERGYOVERVIEW202316UsefullinksAustralianBureauofStatistics–https://www.abs.gov.au/AustralianCompetitionandConsumerCommission–https://www.accc.gov.au/AustralianEnergyMarketCommission–https://www.aemc.gov.au/AustralianEnergyMarketOperator–https://aemo.com.au/AustralianEnergyRegulator–https://www.aer.gov.au/AustralianRenewableEnergyAgency–https://arena.gov.au/CleanEnergyFinanceCorporation–https://www.cefc.com.au/CleanEnergyRegulator–http://www.cleanenergyregulator.gov.au/DepartmentofClimateChange,Energy,theEnvironmentandWater–https://www.dcceew.gov.au/DepartmentofIndustry,ScienceandResources–https://www.industry.gov.au/Energy.gov.au–https://www.energy.gov.au/ReferencesAustralianEnergyMarketOperator(2022),Appendix3.Renewableenergyzones,Appendixto2022ISPfortheNationalElectricityMarket,https://aemo.com.au/-/media/files/major-publications/isp/2022/2022-documents/a3-renewable-energy-zones.pdf?la=enAustralianEnergyMarketOperator(2022),Appendix3.Renewableenergyzones,Appendixto2022ISPfortheNationalElectricityMarket,https://aemo.com.au/-/media/files/major-publications/isp/2022/2022-documents/a3-renewable-energy-zones.pdf?la=enBP(2022),StatisticalReviewofWorldEnergy,71stedition,https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.htmlDepartmentofIndustry,ScienceandResources(2023)CriticalMineralsStrategy2023–2030,https://www.industry.gov.au/publications/critical-minerals-strategy-2023-2030APECENERGYOVERVIEW202317DepartmentofIndustry,ScienceandResources(2022),ResourcesandEnergyQuarterly.https://www.industry.gov.au/publications/resources-and-energy-quarterlyEconomicSocietyofAustralia(2022),LeadingeconomistsbackFederalGovernmentactiontocurbrisinggasandelectricityprices(poll57),https://esacentral.org.au/polls-item/48855/leading-economists-back-federal-government-action-to-curb-rising-gas-and-electricity-prices/?type_fr=902PrimeMinisterofAustralia(2023),NationalNetZeroAuthoritymediarelease,https://www.pm.gov.au/media/national-net-zero-authorityRewiringtheNation(2023),RewiringtheNationsupportsitsfirsttwotransmissionprojects,https://www.energy.gov.au/news-media/news/rewiring-nation-supports-its-first-two-transmission-projectsAPECENERGYOVERVIEW202318BruneiDarussalamIntroductionBruneiDarussalam(BD)isanetenergyexporterthankstoitsabundanceoftwokeyenergycommodities–oilandgas.Theeconomymaintainsitsstatusasanenergyexporterwhileitsdomesticdemandrisestomeettherequirementsofindustrialdevelopmenttoboosteconomicgrowth.Exportsofsuchaccountedforalmost60%ofthegovernment’stotalrevenuein2020(MOFE,2022).In2020,mostofthecrudeoilvolumeswereexportedtoseveralAPECmembereconomiesplusIndiaandothernon-APECmembereconomies,whileLNGvolumesweremainlyshippedtoJapan,Korea,Malaysiaandothers(MOFE,2022).Economicdiversificationisamainobjectiveforachievingresilienceintheeconomy’sgrowthaspartofBruneiDarussalam’sEconomicBlueprint.Focusisonthegrowthofnon-oilandgassectorsnamelydownstreamoilandgas,food,tourism,info-communicationsandtechnology,andservices(MOFE,2021).InanefforttodriveBDintoasustainableandlow-carbonfuture,theBruneiNationalClimateChangePolicy(BNCCP)waslaunchedin2020,outliningkeystrategiestoreduceemissionsacrosstheenergysectorinprinciple,inadditiontostrengtheningtheroleoftheforestrysectorincarbonsequestration,aswellasenhancingclimateadaptation.TheBNCCPservesasthebasisofBD’supdatedNationallyDeterminedContribution,inwhichtheeconomyiscommittedtoreducingitsgreenhousegas(GHG)emissionsby20%in2030,relativetoitsbusiness-as-usuallevels.TofurtherenhanceBD’sclimateambitions,theeconomyismovingtowardsachievingnet-zeroemissionsby2050,asperitsannouncementatCOP26.Table1:BruneiDarussalam’smacroeconomicdataandenergyreservesKeydataa,bEnergyreservesc,dArea(km2)5765Oil(billionbarrels)1.1Population(million)0.44Gas(trillioncubicfeet)7.9GDP(2017USDbillionPPP)27Coal(milliontonnes)0GDPpercapita(2017USDPPP)62201Uranium(kilotonnesU<USD130/kgU)0Source:a<reference>(2022);bWorldBank(2022);cBP(2022);dUN(2022)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.EnergysupplyandconsumptionTotalprimaryenergysupplyOverthepasttwodecades,BD’stotalprimaryenergysupplyhasbeenincreasingatarateofabove2%perannum,reachingalmost194PJin2020–aslightdeclinefrom195PJin2019(Figure1).ThisdeclineisAPECENERGYOVERVIEW202319attributedmainlytothegassupply,whichdecreasedsignificantlybymorethan21%,asexportedLNGvolumein2020washigherthanitwasin2019,albeitwithalowerlevelofdomesticgasproduction.Coal,sourcedfromIndonesia,increasedbymorethanthree-foldasthefirstphaseofHengyiIndustries’refineryandpetrochemicalcomplexcommenceditsfulloperation,whileoilgrewby16%onthebackofincreasednon-transport-sectoractivitiesin2020.Figure1:BruneiDarussalam’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)BD’sdomesticupstreamproductionincreasedbetween2000and2006,whereitpeakedat953PJ.Sincethen,crudeoilproductionhasbeenonadownwardtrendwhilenaturalgasproductionhasremainedstable.Thedeclineinupstreamcrudeoiloutputwaslargelyattributedtomaturingoilfieldsandlackofnewfindingsinshallowwaters,althoughseveralmaintenanceandrejuvenationworksonthesefieldshavegraduallyincreasedtheproductionincertainyears.In2020,crudeoilproductionreached244PJ,downfrom268PJin2019andfromitspeakoutputof494PJin2006.Gashasbeendominantforthepasttwodecades,asshowninfigure2,feedingBD’spowerandnon-energysectors.However,itsshareintheenergysupplymixdeclinedto57%in2020from72%inthepreviousyear,duetotheprominenceofcoalinBD’senergysupplymix.Coalprovided15%ofBD’senergysupplymixin2020,equivalentto29PJ,whichhasbeenutilisedsolelytogenerateelectricityandheatforthefirstphaseofHengyiIndustries’refineryandpetrochemicalcomplex.Figure2:BruneiDarussalam’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)ProductionNetimportsTotalPrimaryEnergySupply-1000-800-600-400-20002004006008001000120020002005201020152020Production,netimportsandTPES(PJ)050100150200250200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersAPECENERGYOVERVIEW202320WhencomparedwiththeAPECregionshowninfigure3,BDcontinuedtobeplacedwellaboveAPECintermsofgassharein2020.BDandAPEC’soilshareswerenearlyonaparwitheachother,whilethecoalshareinBDwassignificantlybelowAPEC’scoalshare.ThisfigureillustratesthatBD’sfueldiversificationisstillinitsinfancyrelativetotheAPECregion.Figure3:Energysupplymix–BruneiDarussalamandAPEC,2020Source:EGEDA(2022)TotalfinalconsumptionOverthelast20years,finalconsumptioninBDhasbeenincreasingatarateof5%peryearasillustratedinfigure4,reachingcloseto66PJin2020.Asignificantcontributioncamefromthenon-energyandindustrysectors,withannualincreasesofover19%and6%,respectively.Theformer’sconsumption,however,hasbeenindeclinesincereachingitspeakin2012,duetoadecreaseintheproductionofdomesticmethanol,whichisheavilyimpactedbytechnicalissuesaffectingitsplantreliability.Suchproductiondeclineresultedinareductioninthefeedstocknaturalgassupplyrequiredtoproducethechemical.Thenon-energyandtransportsectorsremainedthetwolargestend-usesectors,accountingfor37%and26%ofBD’stotalfinalconsumptionin2020,respectively.Figure4:BruneiDarussalamfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)WithrespecttotheAPECregion,asshowninfigure5,BD’snon-energysectorsharewassubstantiallyhigherthanAPEC’snon-energysectorshare,giventhesizeabledemandfornaturalgasasafeedstockratherthanasafuelwithinBD’ssectoralconsumption.OntheotherCoalOilGasRenewablesOther0%20%40%60%80%100%BruneiDarussalamAPEC020406080100120140200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyAPECENERGYOVERVIEW202321hand,giventhelowlevelofdomesticenergydemandinBD,itssharesofindustry,commercial,residentialandagriculturesectorswerewellbelowthoseofAPEC.BD’stransportsectorshare,however,wasslightlyhigherthanAPEC’sshare,owingtoBD’shighprivatevehicleownershipandlimitedpublictransportsystem.Figure5:Finalconsumptionbysector,BruneiDarussalamandAPEC,2020Source:EGEDA(2022)FinalenergydemandExcludingthenon-energysector,BD’sfinalenergydemandreachedalmost42PJin2020,followinganannual3%growthoverthepasttwodecades,asshowninfigure6.Oilandelectricityhaveconsistentlybeenthemostdominantfuels,accountingfor57%and41%ofBD’sfinalenergydemand,respectivelyin2020.Thetransportsectoristheprimaryrecipientofoil(gasolineanddiesel).Giventhepredominantuseofgasoline-poweredvehiclesinBD,gasolinehasbeenaccountingforabout70%oftheoveralloiluseinthetransportsector,whiletheremaining30%isfromdiesel.Theindustrysectorisalsoasignificantconsumerofoil,intheformofdieseltosupporttheoperationsofvariousindustrysubsectors.Thecommercialsectoraccountedformostoftheelectricityconsumed,followedbytheindustryandresidentialsectors.Figure6:BruneiDarussalamfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsAsillustratedinfigure7,BD’smarginallyhighershareofelectricityconsumptionwithrespecttoAPEC’ssharein2020wasprimarilyIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%BruneiDarussalamAPEC051015202530354045200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersAPECENERGYOVERVIEW202322attributedtothesubstantialelectrificationrateinBD,inadditiontohighelectricityusagepercapita.Theeconomy’shighershareofoilwasduetothedominanceofgasolineanddiesel-poweredvehicles,inadditiontolowfuelprices.Figure7:Finalenergydemandfuelshare,BruneiDarussalamandAPEC,2020Source:EGEDA(2022)TransformationPowersectorNaturalgashasbeentheprincipalsourceofelectricitygenerationforBDsinceagasturbinewasfirstusedintheSeriapowerstationaboutfivedecadesago.Overthelast20years,electricitygenerationfromgashasbeenexpandingatarateofalmost2%,reachingalmost4500GWhin2020,accountingfor78%ofthetotalgeneration(Figure8).Generationfromdiesel,ontheotherhand,constitutedonlyabout1%ofthetotal,aselectricityfromdieselisonlysuppliedtothesmallpopulationintheTemburongdistrict.Electricitygenerationfromcoalmorethandoubledin2020from2019levelstoreachover1TWh,drivenbythefulloperationofthefirstphaseofHengyiIndustries’refineryandpetrochemicalcomplex.Suchgenerationaccountedfor21%ofBD’stotalelectricitygeneration.Theelectricitygeneratedfromcoalisexclusivelyfortherefineryandpetrochemicalcomplexandisthereforenotsuppliedtothepublicgrid.Figure8:BruneiDarussalam’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)CoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%BruneiDarussalamAPEC01234567200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersAPECENERGYOVERVIEW202323WithrespecttoAPEC’sshareinfigure9,fossilfuelsclearlyweredominantinBD’selectricitygenerationin2020,especiallythegas-firedcomponent.Conversely,theshareofBD’selectricitygenerationfromcoalwassignificantlylowerthanAPEC’sshare,giventhatthecoalutilisationinBDisonlywithintheindustrysector.Figure9:Electricitygenerationfuelshare,BruneiDarussalamandAPEC,2020Source:EGEDA(2022)RefiningMostofthecrudeoilisnowrefinedatHengyirefineryandpetrochemicalcomplex(phaseone).Priortotheestablishmentofthecomplex,refiningactivitieswereconcentratedattheBruneiShellRefinerycomplex,witharefiningcapacityof10000barrelsperday.TheHengyirefineryandpetrochemicalcomplex(phaseone)iscapableofrefiningabout175000barrelsofcrudeoilperday,whichisalmost18timeshigherthanthecapacityBruneiShellrefinerycomplexhad.In2020,over1.1millionbarrelsofcrudeoil(380PJofenergyequivalent)wasrefined,yielding318PJofrefinedproductscomprisinggasoline,diesel,jetfuels,keroseneandothers.EnergytransitionEmissionsCO2emissionsinBDhavebeenincreasingsteadilyoverthepasttwodecades.Thesharpincreasein2020relativeto2019levelswasduetothemorethandoublingofcoal-firedelectricitygeneration,whichincreasedtheemissionsbyover30%.Figure10:BruneiDarussalamCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%BruneiDarussalamAPECCO2combustionemissions01234567891020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW202324EnergysecurityTheabundanceofoilandgasresourcesinBDmeansthattheeconomyfaresverywellintermsofitsenergysecurity.In2020,BDenergyself-sufficiencystoodat340%,wellabovethethresholdoftheself-sufficiencyindicator.APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective-toimproveenergyintensityandtodoubletheshareofmodernrenewables.EnergyIntensityGoalIn2011,APECmembereconomiesagreedtoincreasetheirambitiontoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.Asshowninfigure11,BD’senergyintensityhasseenanincreasingtrendsince2005,giventhattherateofincreaseoftotalfinalenergyconsumptionisgreaterthantheincreaserateoftheeconomy’sGDP.Figure11:BruneiDarussalam’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.TotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012014016020002005201020152020202520302035Energyintensityindex(2005=100)APECENERGYOVERVIEW202325Figure12:BruneiDarussalam’smodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.GiventhepredominanceofnaturalgasinBD’selectricitygenerationmix,theshareofmodernrenewablesisstillnegligible(0.01%in2020).Toreducethedependenceonnaturalgasintheeconomy’spowersector,BDisplanningtoexpanditsrenewablessharebyaimingtoinstall200MWoflarge-scalesolarphotovoltaic(PV)plantsin2025,andfurtherincreasingthisto300MWin2035.Figure13:BruneiDarussalam’srenewablegenerationshare,2000to2020Source:EGEDA(2022)Changefrom2010to20200.000%0.001%0.002%0.003%0.004%0.005%0.006%0.007%0.008%2010Change2020Renewablesshareinelectricitymix0.00%0.01%0.01%0.02%0.02%0.03%0.03%0.04%0.04%0.05%20002005201020152020ProportionAPECENERGYOVERVIEW202326EnergypolicyEnergyPolicyDetailsReferenceNationallyDeterminedContributions20%reductionofGHGemissionsrelativetoBusiness-as-Usuallevelsby2030.UNFCCC(2020)BruneiDarussalamNationalClimateChangePolicyThepolicywasestablishedtopavethewayforBD'slow-carbonandclimate-resilientpathwaysforasustainableeconomy,throughadoptionof10keystrategies:Industrialemissions;Forestcover;Electricvehicles;Renewableenergy;Powermanagement;Carbonpricing;Wastemanagement;Climateresilience&adaptation;Carboninventory;Awareness&education.BCCS(2020)Net-ZeroEmissionsBDismovingtowardsnet-zeroemissionsby2050,announcedatUNFCCCCOP26inGlasgow,Scotland,UnitedKingdom.UNFCCC(2021)EnergyEfficiency(StandardsandLabelling)Act,2022TheDepartmentofEnergyatthePrimeMinister'sOfficeintroducedtheOrderin2021,inlinewithitsenergyefficiencyandconservationinitiatives.TheOrderwouldrequiremanufacturers,suppliers,wholesalersandretailersinBDtoimportandsellappliancesthatmeettheminimumenergyperformancestandards.DepartmentofEnergy,PrimeMinister'sOffice(2022)NotableenergydevelopmentsEnergydevelopmentDetailsReferenceRenewableEnergyBSPhasrecentlyfulfilledtheInternationalRenewableEnergyCertificateStandard(I-REC)totrackattributesofsolarenergyproductionfromits3.3MWsolarPVplant.BorneoBulletin(2022)GasBDissettosupplyLNGtoJapanPetroleumExplorationCo.(JAPEX)beginninginApril2023Reuters(2023)ElectricVehicles(EV)BruneiShellMarketing(BSM)launchedthefirstretailEVchargingstationatIBAPetrolStationinLambakintheBrunei-Muaradistrict.TheBruneian(2022)APECENERGYOVERVIEW202327UsefullinksBruneiShellPetroleum–https://www.bsp.com.bn/BruneiLNG–https://www.bruneilng.com/DepartmentofEconomicPlanningandStatistics,MinistryofFinanceandEconomy–https://deps.mofe.gov.bnDepartmentofEnergy,PrimeMinister’sOffice–https://www.energy.gov.bn/APECENERGYOVERVIEW202328CanadaIntroductionCanadacontinuedtomakeprogressontheclimatefrontin2022,releasingits2030EmissionsReductionPlanandbothitsmethanereductionandcriticalmineralstrategies,allofwhichlayoutthemeasuresneededforCanadatoreduceitsemissionsandprogresstowardsitsenhancednationallydeterminedcontribution(NDC)ofreducingemissionsby40to45%below2005levelsin2030enroutetonet-zeroemissionsin2050(ECCC,2022a;ECCC,2022b;NRCan,2022a;UNFCCC,2022).However,theseambitionsarelikelyovershadowedbytherecentturmoilinenergymarkets,whichhasseentheglobalfocusshiftingawayfromlong-termcommitmentsandtowardstheshort-termandimmediatenecessityofenergysupplysecurity.Canadaisnotimmunetothis.Globalmarketsdetermineoilandoilproductsprices,andrisingUSLNGexportsareincreasinglyconnectingNorthAmericagasmarketstoglobalbenchmarks.Thus,theenergycrisisisincreasingboththepricesthatCanadianspayforenergyandthevaluethatproducersreceivefortheirenergyexports.WhilehighpricesbroughtrecordrevenueandcashflowtoCanada’senergysectorin2022,reinvestmenthitarecordlowof30%ascompaniescontinuedtoprivilegeinvestorreturnsoverinvestinginproductivecapacity(ARC,2023).Still,oilproductiongrewtorecordlevelsin2022andgasoutputisapproachingitshighestlevelin20years(CER,2023a;CER,2023b).ThecompletionofseveralenergyexportpipelinesandCanada’sfirstlarge-saleLNGexportterminalwillgiveCanadathepotentialtoplayalargerroleinprovidingoilandgasdiversityforAPECandtosatisfyagrowingglobaldemandforenergy.Nevertheless,withthelasthistoricalyearofdatainthechartsandtablesofthisreportbeing2020,muchofthediscussionwillcentrearoundtheimpactoftheCOVID-19pandemicontheCanadianenergysystem.Table1:CanadamacroeconomicdataandenergyreservesKeydataa,bEnergyreservesc,dArea(millionkm2)10Oil(billionbarrels)168Population(million)38Gas(trillioncubicfeet)83GDP(2017USDbillionPPP)1752Coal(milliontonnes)6582GDPpercapita(2017USDPPP)46064Uranium(kilotonnesU<USD130/kgU)490Source:aDOS(2016);bWorldBank(2022);cBP(2022);dNEA(2023)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.LowereconomicactivitystemmingfromthepandemicreducedCanada’seconomicoutputby5.2%toUSD1752billion(2017USDpurchasingpowerparity[PPP])in2020,andincomeby6.3%toUSD46064(EGEDA,2022).APECENERGYOVERVIEW202329EnergysupplyandconsumptionTotalprimaryenergysupplyCanadaisaself-sufficientandleadingproducerofenergy,withmuchofitsproductiondrivenbydemandinglobalmarkets.Canadaisatop-fourproducerofcrudeoil,gas,hydroanduranium,andatop-sixexporterofcrudeoil,naturalgas,uranium,andelectricity.Assuch,theenergysectorisanimportantcontributortoCanada'seconomy,directlyandindirectlyaccountingforatenthofGDP(NRCan,2022b).With90%ofitsenergyexportslandingintheUS,Canadaistryingtodiversifyitsexportmarket.ThefirstphaseofLNGCanadawillbecomeitsfirstlarge-scaleLNGexportfacilityin2026,andtheTransMountainexpansionwillincreaseoilexportcapacityby0.5Mb/din2023(LNGCanada,2022;TransMountain,2022).BothprojectswillprovideastrategicsourceofenergysupplyforAPECmembers.AlthoughCanada’scrudeoilsourcesvarygeographically,oilpredominantlycomesfromWesternCanada.Almosttwo-thirdsofthetotalproductioncomesfromtheoilsands,whileonshoremethods,throughbothconventionalandunconventionaltechniques,makeupathird,andoffshoremethodstheremainder(CER,2023a).Almost99%ofnaturalgasproductionoccursinWesternCanada(CER,2023b).Whiletheoutputfromconventionalresourcesisdeclining,advancesinhydraulicfracturinghaveenabledthedevelopmentoftightgasresourcesintheMontneyFormationandtheAlbertaDeepBasin.ProductionfromthesebasinsisexpectedtodominatefutureproductiongrowthandallowforsignificantLNGexportslaterthisdecade.Energyproductionfellby4.0%to21682petajoules(PJ)in2020,ascollapsingoilpricesledtocurtailmentinoilsandsproductionduringtheonsetofthepandemic(EGEDA,2022).Coal-to-gasswitchinginthepowersectorandwarmerweatheralsoplayedapartinreducingcoalandgasproduction.Fossilfuelscontinuetodominateproductionwithashareof85%.WhiletheproductionimpactsofCOVID-19wereswift,Canada’soilproductionhasprovingresilientcomparedtootherproducers.Byearly2021,productionreboundedtopre-pandemiclevels,anditiscurrentlysettingnewhighs,near5.0Mb/d(CER,2023a).Figure1:Canadaenergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)Netimportsonlyfell1.9%,asfallingimports,mostlyforcrudeoilandoilproducts,offsetadecliningexportmarket.Lowerimportsstemmedfromlowertotalprimaryenergysupply(TPES)requirements,whichfell7.8%duetolowereconomicactivityandpersonalmovementduringtheonsetofthecoronavirus.Exportsfellbyaround5.6%(EGEDA,2022).ProductionNetimportsTotalPrimaryEnergySupply-15000-10000-5000050001000015000200002500020002005201020152020Production,netimportsandTPES(PJ)APECENERGYOVERVIEW202330Figure2:Canadaenergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)Figures2and3illustratehowpredominantfossilfuelscontinuetobeinCanada’senergymix.However,Canadahassignificantrenewablepotential;whilethisismostlyintheformofhydroelectricity,itcontinuestorealisemoreofitsrenewablepotentialwithahigherdeploymentofsolarandwindgeneratingcapacityacrosstheeconomy.HydroisthemostimportantsourceofrenewableenergyinCanada,supplying59%ofCanada’selectricityin2020fromaninstalledcapacityofover81GW(CER,2021a).Canadaaimstoleveragethathydrocapacityandotheremergingcleanelectricitysourcestodecarboniseitsoil,naturalgas,andLNGoperationsthroughelectrification,drivingdownown-useemissionstoalignwithitscommitmenttoachievenet-zeroemissionsby2050.HydroisalsoakeyfuelsourceforCanada’selectricityexports,makingupnearlythree-quartersofthegenerationinthesixprovincesthatexportelectricitytotheUS.Figure3:Energysupplymix,CanadaandAPEC,2020Source:EGEDA(2022)TotalfinalconsumptionGlobalanddomesticactionstoreducethespreadofCOVID-19duringitsonsethadasignificantimpactonCanada’seconomyandenergysystem.Allsectorssawdemanddeclinesin2020,withtotalfinalconsumptionfalling7.7%to7957PJ,thelowestlevelsincetheGreatFinancialCrisis(EGEDA,2022).Thetransportsectorboremost(54%)ofthisdecline,asgovernmentrestrictionsreducedthemovementofpeopleacrossCanadabyover13%.Lowerindustrialactivity(fromboththeindustryandnon-energysectors)madeupathirdofthedemanddecrease,whilebuildingsandothersectorsprovedmoreresilient.02000400060008000100001200014000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersCoalOilGasRenewablesOther0%20%40%60%80%100%CanadaAPECAPECENERGYOVERVIEW202331Figure4:Canadafinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)Despitethelargedrop,transportstillaccountedforthelargestshareoffinalenergyconsumptionin2020(2365PJ,30%),followedbytheindustrialsector(1879PJ,24%)(EGEDA,2022).Non-energyusemadeup11%(892PJ),andbuildingsalongwithagricultureandnon-specifiedothersmadeuptheremainder(2821PJ,35%).Figure5:Finalconsumptionbysector,CanadaandAPEC,2020Source:EGEDA(2022)FinalenergydemandCanada’sfinalenergydemandparalleledtotalfinalconsumption,falling7.6%to7065PJin2020.Loweroildemandcontributedthemosttothisdecrease,asgovernmentrestrictionsreducedmilestravelledandinturntheuseofoilproducts.Naturalgasalsofellsignificantlyduetolowerindustrialoutputandreducedbusinessactivity.Electricityprovedresilient,dueinparttohigherusagefromresidentialconsumers,whospentmoretimeathomeduringtheonsetofthevirus.0200040006000800010000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%CanadaAPECAPECENERGYOVERVIEW202332Figure6:Canadafinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsIn2020,fossilfuelsaccountedfortwo-thirdsoffinalenergyconsumption1,comprisingoil(2658PJ,38%),gas(1977PJ,28%),andcoal(105PJ,1.5%).Theremainderwasformedbytheshareofrenewables(418PJ,5.9%)andelectricityandothers(1907PJ,27%),ofwhichtheshareofrenewableelectricityandotherswas1267PJ.AlthoughcoalmakesuplessofCanada’sfuelmixthantheAPECregion,Canadareliesmoreonfossilfuels.1NotethatthedemandsintheEGEDAenergybalancedifferthanthoseintheReportonEnergySupplyandDemand(RESD)energybalancesduetoFigure7:Finalenergydemandfuelshare,CanadaandAPEC,2020Source:EGEDA(2022)TransformationPowersectorCanadagenerated652terawatt-hours(TWh)ofelectricityin2020,aslightdecreaseof0.12%fromthepreviousyear.Renewablesconstitutedthelargestshareofthisgeneration(67%),withhydroasthemajorcontributor(59%)andsolar,wind,geothermalandtidalat7.8%combined.Theshareofnuclearenergywas15%,whichincreasesthecombinedshareofnon-emittingpowergenerationto82%.Fossilgenerationmadeup18%,withnaturalgas-firedgenerationclimbingtodifferencesinenergyaccountingframeworks(StatCan,2022).0100020003000400050006000700080009000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersCoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%CanadaAPECAPECENERGYOVERVIEW20233311%andcoalfallingto5.9%.Acombinationofbiomass(woodandspentpulpingliquor)andotherfossilfuelssuchasdiesel,lightfueloilandheavyfueloilaccountedfortheremaining0.84%ofgeneration.Figure8:Canadaelectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)In2016,thefederalgovernmentannounceditsplantophaseoutcoal-firedelectricitygenerationinCanadaby2030.Lownaturalgaspricesandhighercarbonpricesbegantoacceleratethisphase-outin2018,promptingutilitiestoco-firenaturalgasatexistingcoalunits.Economicsandinvestorpressurehassinceculminatedinutilitiesannouncingacompletecoalphase-outinAlbertaby2023.Theremainingcoal-firedgeneratorsinCanadawillbeequippedwithcarboncaptureandstorage(CCS)orcoveredbyanequivalencyagreementtoreducepoweremissions.Ontariointendstocontinuewiththerefurbishmentof10nuclearreactors,albeitonanaltered,morecost-effectiveschedule.Theserefurbishmentswilladdapproximately25–30yearstotheoperationallifeofeachunit.Theemergenceofcleanenergycredits(CECs)asapotentialrevenuestreamcouldjustifyfurtherinvestmentsinextendingthelifeofCanada’snuclearreactors.TheprocurementofCECsfromOntarioPowerGeneration(OPG)byMicrosoftin2022,andthesubsequentextensionandupdatedfeasibilityassessmentofOPG’sPickeringNuclearGenerationStationillustratethis(OPG,2022;Ontario,2022).Canada'swaterresourcesenablesignificantpartsofitseconomytorelyoncleanelectricityandprovidecleanelectricityexportoptionstoseveralstatesintheUS.TheelectricitynetworksofCanadaandtheUSarehighlyintegrated.In2020,Canadaexported243PJofelectricitytotheUSandimported35PJ(EGEDA,2022).ThebulkofCanada'selectricitytradewiththeUSoccursbetweenQuebec,Ontario,ManitobaandBritishColumbiaprovincesandtheirneighbouringAmericanstates.Whilenewinternationalpowerlinescouldincreaseelectricitytradebetweenthetwoeconomies,oppositiontotheconstructionofnewtransmissionlines,ischallenginggrowth.Canada’svariablerenewablecapacitycontinuestogrow.Theinstalledcapacityofmajorgrid-connectedsolarhit2.3GWin2021andincludingoff-gridandrooftopinstallationsmayputthatcloseto5GW(CanREA,2022;PVMagazine,2022).Windinstallationshit14GW,asAlberta,Saskatchewan,Ontario,andBritishColumbiacontinuedtoleadthewayininstallations(CanREA,2022).PolicysupportstemmingfromtheCleanElectricityRegulation,a2035targetof100%net-zeropowerandhighercarbonpriceswilllikelydriverenewabledeploymenthigherthisdecade.0100200300400500600700200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersAPECENERGYOVERVIEW202334Figure9:Electricitygenerationfuelshare,CanadaandAPEC,2020Source:EGEDA(2022)RefiningWhilerefinerycapacityhitanall-timehighin2020,collapsingdemandforoilproductspromptedtheidling,closure,andeventualconversionofNewfoundland&Labrador’sComebyChancerefineryintoaproducerofrenewabledieselandsustainableaviationfuel(BP,2022).EnergytransitionCanadareleasedits2030EmissionsReductionPlanin2030,whichdetailsthereductionsthatCanadaexpectsitssectorstocontributeenroutetoachievingitsgoalofreducingemissionsto40to45%below2005levelsby2030(ECCC,2022a).Intheprospectivepathprovidedinthedocument’sbackgrounder,Canadaexpectstheoilandgassectortomakethelargestreduction(29%),withpower(17%),transport(15%)andbuildings(14%)makingsignificantcontributions.Canadawillimplementadecliningcaponoilandgasemissionstoencouragethedeploymentoflower-emittingtechnologythatenablesproducerstocontinueoutputandprovidetheworldwithlow-carbonenergy.ThiswillbecomplementedbyCanada’sMethaneStrategy,whichwillreduceupstreammethaneemissionsbyatleast30%below2020levelsthisdecade(and75%below2012levels).Canadawillcontinuetoincreasethenon-emittingshareofitspowersystem,byenablingfuel-switchingandtheconstructionofnewbuildrenewablecapacityenroutetoanet-zeropowersystemin2035.Topromotemorerenewableadoption,CanadaisstrivingtodevelopaPan-CanadianGridCouncilandsupportinggridmodernisationprojects.Canadaisinvestinginzeroemissionvehicle(ZEV)chargingandrefuellinginfrastructureandincentivestomakeiteasierandmoreaffordabletoownandoperateZEVs.CanadawillintroducesalesmandatesthatensurethatZEVsconstitute20%oflight-dutyvehicles(LDVs)salesby2026,60%by2030and100%by2035.Formedium-andheavy-dutyvehicles(MHDVs),thegovernmentistargeting35%ofsalesby2030and,forthoseapplicationswhereinitisfeasible,a100%targetby2040.Tosupportbuildingsreductions,Canadawillenableamassretrofitofthebuildingstockanddevelopnet-zeroreadybuildingstandardstoreducetheemissionsofnewbuilds.Severalsupportinginitiatives,liketheCanadaGreenerHomesLoanprogram,willprovidefundstoenablerenovations,suchastheinstallationofheatpumpsandinsulation,whichwillreduceenergyusageandinturnheatingcostsforhomedwellers.CoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%CanadaAPECAPECENERGYOVERVIEW202335EmissionsTheexpertgrouponenergydataandanalysis(EGEDA)fallsundertheumbrellaofAPEC’sEnergyWorkingGroup(EWG).InadditiontoenergydatacompiledbyEGEDA,CO2emissionsfromcombustionactivitiesintheenergysectorarerecorded.Theseemissionsareasubsetoftotalgreenhousegas(GHG)emissionsthatareconsideredinthecontextofclimatechange,suchasundertheUnitedNationsFrameworkConventiononClimateChange(UNFCCC).Canada’sCO2combustionemissionshavemaintainedaplateaunearrecordhighsoverthepast20years,butloweractivityduringtheonsetofCOVID-19ledtoa9.0%dropin2020.Whilethepandemicrecoverywillcauseemissionstoreboundintheshort-term,Canada’sclimatepoliciesshouldprovidedownwardpressureonemissionsthisdecade.Figure10:CanadaCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecurityBecauseCanadaisanet-energyexporter,itgenerallyconsidersitselfasadriverofenergysecuritysolutions,notavictimofenergysecuritydisruptions.However,higherenergypricesarechallengingtheaffordabilityofenergyforCanadians.Provincesacrosstheeconomyareprovidingreliefviataxcuts,subsidies,andretailpricecapsontheend-userpricesforoilproducts,naturalgasandelectricity.Furthermore,Canadianpowersystemoperatorsareworkingtoaddressthechallengesthatintegratinghighamountsofvariablerenewablescouldposeforthereliabilityandaffordabilityoftheirelectricitysystems(AESO,2022).Powersystemoperatorsarebeginningtoincludereliabilityassessmentsintheirplanstotargetanet-zeroelectricitysystemby2035.SeveralinfrastructuredevelopmentstoconnectCanadianoilandnaturalgastoglobalmarketsareinchingtowardscompletion.The14milliontonnesperannum(Mtpa)firstphaseoftheLNGCanadaprojectis80%complete,theconstructionofitsCoastalGaslinkfeederpipelinecontinues,andproductionisexpectedtobeginin2026(LNGCanada,2022).TheTransMountainpipelineisaimingforcompletionin2023.Uponcompletion,bothprojectswillprovideastrategicsourceofenergysupplyforAPECmembersforthecomingdecades.APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective-toimproveenergyintensityandtodoubletheshareofmodernrenewables.CO2combustionemissions010020030040050060020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW202336EnergyIntensityGoalIn2011,APECmembereconomiesagreedtoincreasetheirtargetforreducingenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.Figure11:Canadatotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)Canada’senergyefficiencypolicies,commitmenttoreducingGHGemissions,andothertargetedregulationshavehistoricallyreducedenergyintensity.Figure11illustratesthis,showinga23%reductioninenergyintensitysince2005.Afterplateauingforseveralyears,energyintensityfellfortwoconsecutiveyearsin2019and2020.Theimplementationofeconomy-widecarbonpricesandtheadoptionofenergy-efficienttechnologiesandclimatepolicies(seebelow)couldpromptacceleratedefficiencyimprovementsenroutetoachievingtheaspirationtargetby2035.DoublingofRenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.Figure12:Canadamodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.TotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012014020002005201020152020202520302035Energyintensityindex(2005=100)Changefrom2010to20200.0%5.0%10.0%15.0%20.0%25.0%2010Change2020APECENERGYOVERVIEW202337Canadaishard-pressedtodoubleitsshareto40%,particularlywithitshighshareofrenewableelectricityshareoftwo-thirds(Figure13).However,CanadacanstillcontributetoAPECachievingitsaspirationalgoals.SeveralofCanada’sclimatepolicyannouncements,includingtheCleanFuelStandard,CleanElectricityRegulation,a100%net-zeropowersystemtargetby2035andhighercarbonprices,willcontinuetoincreasetheshareofrenewablesintheCanadianandAPECfuelmix.Canada’srenewablesshareintheelectricitymixhitanewhighof67%in2020onthebackofrisinghydrooutputandrecordgenerationfromwindandsolarassets.Figure13:Canadarenewablegenerationshare,2000to2020Source:EGEDA(2022)Renewablesshareinelectricitymix0%20%40%60%80%100%20002005201020152020ProportionAPECENERGYOVERVIEW202338EnergypolicyThistableisnotanexhaustivelistofenergyandclimatepoliciesinCanada.However,itisalistofpoliciesthatareexpectedtohaveasubstantialimpactonCanada’senergysystemgoingforward.Forthecompletelistofkeyfederalenergyandclimatemeasures,pleaserefertothefollowing:•ThePan-CanadianFrameworkonCleanGrowthandClimateChange(ECCC,2016):ThiswasCanada’sfirst-evereconomy-wideclimateplanthatwasdevelopedwithitsprovincesandterritoriesandinconsultationwithIndigenouspeoples.ItisanimportantfirststepforCanadatoachieveitsParisAgreementtarget.ItisstructuredtocutpollutioninamorepracticalandaffordablewaythananyclimateplaninCanadianhistory.•Canada’sStrengthenClimatePlan:AHealthyEnvironmentandaHealthyEconomy(ECCC,2020):Includesover60newandstrengthenedfederalmeasuresandaninitialCAD15billionininvestments,tomakelifemoreaffordableforCanadians,makecommunitiesmoreliveableand,ateveryturn,focusoncreatingjobs,growingthemiddleclass,andsupportingworkersinastrongerandcleanereconomy.•2030EmissionsReductionPlan:Canada’sNextStepsforCleanAirandaStrongEconomy(ECCC,2022a):Acomprehensiveroadmapthatreflectslevelsofambitiontoguideemissionsreductioneffortsineachsector.Progressundertheplanwillbereviewedinprogressreportsproducedin2023,2025,and2027.Additionaltargetsandplanswillbedevelopedfor2035throughto2050.•Budget2023(DepartmentofFinance,2023):Announcesanewfederaltoolkitforinvestinginthecleaneconomy:asetofclearandpredictableinvestmenttaxcredits,low-coststrategicfinancing,andtargetedinvestmentsandprogramming,wherenecessary,torespondtotheuniqueneedsofsectorsorprojectsofeconomicsignificance.Note:AllmonetaryamountsinthetablesbelowareprovidedinCanadiandollars.EnergypolicyDetailsReferenceCanadianNet-ZeroEmissionsAccountabilityActLegislatesemissionsreductionsaccountabilitytoaddressclimatechange,bysettinglegalrequirementsontheGovernmentofCanadatoplan,report,andcoursecorrectonthepathtonet-zeroemissionsby2050.JusticeCanadaCanada’sEnhancedNDCUndertheParisAgreementIn2021,CanadaupdateditsNationallyDeterminedContributionundertheParisAgreementto40to45%below2005levelsby2030.UNFCCCAPECENERGYOVERVIEW202339Pan-CanadianApproachtoPricingCarbonPollutionSetsa‘federalbenchmark’establishingminimumeconomystandardsofstringencyforcarbonpricingsystemsinCanada,whilealsoprovidingprovincesandterritoriestheflexibilitytoimplementsystemstailoredtotheirjurisdiction.PriceincreasesfromCAD50pertonnein2022byCAD15peryear,reachingCAD170pertonnein2030.InBudget2023,theGovernmentofCanadaannounceditwillconsultonthedevelopmentofabroad-basedapproachtocarboncontractsfordifferencethataimstomakecarbonpricingevenmorepredictable.EnvironmentandClimateChangeCanadaOutput-basedPricingSystem(OBPS)forlargeemittersinindustryandpowersectorsPutapriceoncarbonpollutionthatcreatesanincentiveforlargeemitterstoreduceemissionsperunitofoutput,whilecontinuingtomitigatecompetitivenessimpactsandcarbonleakagerisksoncarbon-intensive,tradeexposedindustries.EnvironmentandClimateChangeCanadaFederalGreenhouseGasOffsetSystemEncouragesbusinesses,municipalities,Indigenouscommunities,forestersandfarmerstoundertakeinnovativeprojectsthatreducegreenhousegas(GHG)emissionscomparedtobusiness-as-usualpractices.EnvironmentandClimateChangeCanadaCanadaGreenerHomesInitiativeProvidesgrantsofuptoCAD5000andloansofuptoCAD40000tohelphomeownersundertakehomeretrofits,anduptoCAD600towardthecostsofpre-andpost-retrofitEnerGuideevaluations.AlsoprovidesanadditionalCAD5000forhelphouseholdswithmedianincomeorlesswhoarecurrentlyheatingtheirhomeswithoilmakethetransitiontoabetter,moreefficientoption.NaturalResourcesCanadaLowCarbonEconomyFundFundtoempowercommunitiestotakeclimateaction.Targetsmunicipalities,businesses,not-for-profits,andIndigenouscommunities.UptoCAD250millionwillhelphomeownerstransitionfromhomeheatingoiltomoreaffordableandgreenerhomeheatingsources,likeelectricheatpumps.EnvironmentandClimateChangeCanadaGreenMunicipalFundInvestCAD1.6billiontoincreaseenergyefficiencyinresidential,commercial,andmulti-unitbuildings.GreenMunicipalFundCMHCEcoPlusApartialinsurancepremiumrefundofupto25%foreligiblehomeinvestmentsthatimproveenergyefficiency.CanadianMortgageHousingCorporationEnergyEfficiencyRegulationsEstablishesenergyefficiencystandardsforawiderangeofenergy-usingproducts,withtheobjectiveofeliminatingtheleastenergy-efficientproductsfromtheCanadianmarket.JusticeCanadaNRCCNationalEnergyCodeofCanadaforBuildings20172017NRRCBuildingCodessetsoutminimumtechnicalrequirementsfortheenergyefficientdesignandconstructionofnewbuildings.NationalResearchCouncilCanadaRenewableFuelsRegulationsRefineriesandimporterstohaveanaverageof5%renewablefuelcontentingasolineand2%indieselfuelandheatingdistillateoilbasedonvolume.JusticeCanadaAPECENERGYOVERVIEW202340RegulationsRespectingReductionintheReleaseofMethaneandCertainVolatileOrganicCompounds(UpstreamOilandGasSector)IntroduceoperatingandmaintenancestandardsfortheupstreamoilandgasindustrytosupportCanada’sgoalsofreducingmethaneemissionsby40-45%below2012levelsby2025and75%by2030;supportstheGlobalMethanepledgetoreducemethaneemissionsto30%below2020levelsby2030.JusticeCanadaOilandgasemissionscapInadditiontomethanereduction,theGovernmentofCanadaisconsultingonanoilandgassectoremissionscaptomaximizeopportunitiestoinvestindecarbonizingthesectorwhileaccountingforevolvingenergysecurityconsiderations.Thecapwillfocusonemissionsandwillnotbeacaponoilandgasproduction.EnvironmentandClimateChangeCanadaLDV,LDTemissionStandards:2017-2025LDVs:5%annualreductioninCO2-epermileforpassengercarsfrom2017to2025.LDTs:3.5%peryear2017-2021,5%2022to2025.CanadaGazetteHeavy-dutyvehicleregulations:2021-2027GHGreductionsinModelYear(MY)2027versusMY2017resultingfromthestandardsinclude:tractortrucks:15%-27%;vocationalvehicles:10%-24%;HDtrucks,vans:16%;commercialtrailers:5%to9%.CanadaGazetteCleanFuelRegulationsRequiresliquidfossilfuel(gasolineanddiesel)supplierstograduallyreducethecarbonintensityfromthefuelstheyproduceandsellforuseinCanadaovertime,leadingtoadecreaseofapproximately15%(below2016levels)by2030.JusticeCanadaCleanFuelsFundCAD1.5billiontoencourageinvestmentintheproductionofcleanfuels,includingcleanhydrogenandbiofuels.NaturalResourcesCanadaZEVpurchaseandleaseincentivesCappedpurchaseandleasesubsidyoneligibleZEVs;uptoCAD5000forlight-dutyZEVsandCAD200000medium-andheavy-dutyZEVs.TransportCanadaZero-EmissionVehicleInfrastructureProgramCAD680milliontoincreasetheavailabilityoflocalizedchargingandhydrogenrefuellingopportunitieswhereCanadianslive,work,andplay.NaturalResourcesCanadaSmartRenewablesandElectrificationPathwaysProgramCAD1.6billiontoadvancerenewableelectricitygenerationandsmartgridprojects.Budget2023announcedarecapitalizationoftheprogramtosupportcriticalregionalprioritiesandIndigenous-ledprojectsandaddtransmissionprojectstotheprogram’seligibility.NaturalResourcesCanadaCleanEnergyforRuralandRemoteCommunitiesProgramCAD520milliontosupportrenewableenergyandcapacitybuildingprojectsandrelatedenergyefficiencymeasuresinIndigenous,ruralandremotecommunities.NaturalResourcesCanadaReductionofCarbonDioxideEmissionsfromCoal-firedGenerationofElectricityRegulationsPhases-outcoal-firedelectricityinCanadaby2030,withexceptionsforcoalpowerequippedwithCCSunits.JusticeCanadaRegulationsLimitingCarbonDioxideEmissionsfromNaturalGas-firedGenerationofElectricityProhibitstheoperationoffacilitiesexceedingthestandards:420tCO2e/GWhfornaturalgasboilers;decliningstandardforcoal-to-gasconversions;550tCO2e/GWhiffacilityunder150MW.JusticeCanadaAPECENERGYOVERVIEW202341RegionalEnergyandResourceTablesThroughtheRegionalTables,theGovernmentofCanadaisseekingtoestablishjointpartnershipswitheachprovinceandterritory,aswellasformalcollaborationwithIndigenouspartners,toidentifyandaccelerateopportunitiestotransformCanada’straditionalresourceindustriesandadvanceemergingones.NaturalResourcesCanadaSustainableJobsPlanThePlanaimstosupportCanadiansandtheircommunitiesinrealizingthenet-zeroeconomyofthefuturebyequippingCanadiansandtheircommunitieswithskillsandtrainingtheyneedtocontinuetothrive.ItalsosupportsthegrowthofnewindustriesandsectorsinwhichCanadianscanfindmeaningfulwork.NaturalResourcesCanadaNotableenergydevelopmentsDetailsReferenceCleanElectricityRegulations(CER)TheGovernmentofCanadaiscurrentlydevelopingtheCERthatwillhelpdriveprogresstowardsanet-zeroelectricitygridby2035.EnvironmentandClimateChangeCanadaCleanElectricityInvestmentTaxCreditInBudget2023,theGovernmentofCanadaannounceditsintentiontointroducea15percentrefundabletaxcreditforeligibleinvestmentsinnon-emittingelectricitygenerationsystems,abatednaturalgaselectricity-firedelectricitygeneration,stationaryelectricitystoragesystems,andequipmentforthetransmissionofelectricitybetweenprovincesandterritories.DepartmentofFinanceSalestargetsforzeroemissionvehicles(ZEVs)TheGovernmentofCanadahascommittedtolight-dutyZEVsalestargets(20%by2026,60%by2030,100%by2035)andmedium-andheavy-dutyZEVsalestargets(45%by2030and100%by2040)EnvironmentandClimateChangeCanadaHydrogenStrategyforCanadaVisionandroadmapforhydrogendevelopmentinCanada.NaturalResourcesCanadaSMRActionPlanCanada'splanforthedevelopment,demonstrationanddeploymentofSMRsformultipleapplicationsathomeandabroad.SMRActionPlanTheCanadaGreenBuildingsStrategyTheGovernmentofCanadaisintheprocessoffinalizingtheCanadaGreenBuildingsStrategy,whichwillsetoutmeasurestoachievenetzeroby2050inthebuildingssector.ActionswillfocusonreducingGHGemissions,creatingmoreclimate-resilientbuildings,increasingskilledjobs,andincreasinginvestment.NaturalResourcesCanadaGreeningGovernmentStrategySetsatargettoreducegreenhousegasemissionsfromfederaloperationsby40%by2025andbyatleast90%below2005levelsby2050.TreasuryBoardofCanadaSecretariatAPECENERGYOVERVIEW202342LNGCanada70%completeThefirst14Mtpafacilityscheduledtobecommissionedin2026;apossiblefinalinvestmentdecision(FID)onasecondphasewouldincreasethisto28Mtpa.LNGCanadaCourtrulesreferendumagainsttheNECECtransmissionprojectunconstitutional;upholdsleaseIfbuilt,theNewEnglandCleanEnergyConnect(NECEC)transmissionprojectwilltransportelectricityfromQuebectoNewEnglandthroughMaineviaa1200MWlink.NECECThermalcoalexportbanAnnouncedanintentiontobanthermalcoalexportsfromCanadaby2030;includesre-exports.EnvironmentandClimateChangeCanadaTheCanadianCriticalMineralsStrategyAimstoincreasethesupplyofresponsiblysourcedcriticalmineralsandsupportthedevelopmentofdomesticandglobalvaluechainsforthegreenanddigitaleconomy.NaturalResourcesCanadaCanada'sMethaneStrategyProvidesapathwaytofurtherreducemethaneemissionsfromacrosstheeconomy.EnvironmentandClimateChangeCanadaCarbonManagementStrategyTheGovernmentofCanadaisleadingthedevelopmentofaCarbonManagementStrategy,whichwillenabletheCanadiancarbonmanagementindustrytorealizeitsGHGreductionandcommercialpotential.NaturalResourcesCanadaUsefullinksAtomicEnergyofCanadaLtd–www.aecl.caCanadaGazette–http://www.gazette.gc.ca/Canada-NovaScotiaOffshorePetroleumBoard–http://www.cnsopb.ns.ca/CanadianCentreforEnergyInformation–https://energy-information.canada.ca/enCanadianEnergyRegulator–https://www.cer-rec.gc.ca/index-eng.htmlCanadianNuclearLaboratories–www.cnl.caCanadianNuclearSafetyAssociation–http://nuclearsafety.gc.caCanadaNewfoundlandandLabradorOffshorePetroleumBoard–http://www.cnlopb.ca/EnvironmentandClimateChangeCanada–www.ec.gc.caNaturalResourcesCanada–www.nrcan-rncan.gc.caAPECENERGYOVERVIEW202343StatisticsCanada–www.statcan.caTransportCanada–www.tc.gc.caReferencesAESO(AlbertaElectricSystemOperator)(2022),Net-ZeroEmissionsPathways,https://www.aeso.ca/market/net-zero-emissions-pathways/ARC(ARCEnergyResearchInstitute)(2023),ArcEnergyCharts,https://arcenergyinst.wpenginepowered.com/wp-content/uploads/230123-Energy-Charts.pdfBP(2022),StatisticalReviewofWorldEnergy,https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2022-full-report.pdfCanadaGazette(2014),RegulationsAmendingthePassengerAutomobileandLightTruckGreenhouseGasEmissionRegulations,http://www.gazette.gc.ca/rp-pr/p2/2014/2014-10-08/html/sor-dors207-eng.html—(2018),RegulationsAmendingtheHeavy-dutyVehicleandEngineGreenhouseGasEmissionRegulationsandOtherRegulationsMadeUndertheCanadianEnvironmentalProtectionAct,1999:SOR/2018-98.http://gazette.gc.ca/rp-pr/p2/2018/2018-05-30/html/sor-dors98-eng.htmlCanREA(CanadianRenewableEnergyAssociation)(2022),Canadainstalledalmost1GWofwindandsolarenergyin2021,driven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adianCriticalMineralsStrategy,https://www.canada.ca/content/dam/nrcan-rncan/site/critical-minerals/Critical-minerals-strategyDec09.pdf––(2022b),EnergyFactBook2022-2023,https://www.nrcan.gc.ca/sites/nrcan/files/energy/energy_fact/2022-2023/PDF/Energy-factbook-2022-2023_EN.pdf––(2022c),CleanFuelsFund,https://natural-resources.canada.ca/climate-change/canadas-green-future/clean-fuels-fund/23734—(2022d),CleanEnergyforRuralandRemoteCommunitiesProgram,https://natural-resources.canada.ca/reducingdiesel—(2023a),CanadaGreenerHomesInitiative,https://natural-resources.canada.ca/energy-efficiency/homes/canada-greener-homes-initiative/24831—(2023b),ZeroEmissionVehicleInfrastructureProgram,https://www.nrcan.gc.ca/energy-efficiency/transportation-alternative-fuels/zero-emission-vehicle-infrastructure-program/21876—(2023c),SmartRenewablesandElectrificationPathwaysProgram,https://www.nrcan.gc.ca/climate-change/green-infrastructure-programs/smart-renewables-and-electrification-pathways-program/23566APECENERGYOVERVIEW202346—(2023d),RegionalEnergyandResourceTables,https://natural-resources.canada.ca/climate-change/regional-energy-and-resource-tables/24356—(2023e),SustainableJobsPlan,https://www.canada.ca/en/services/jobs/training/initiatives/sustainable-jobs/plan.html—(2023f),TheCanadaGreenBuildingsStrategy,https://natural-resources.canada.ca/public-consultations-and-engagements/the-canada-green-buildings-strategy/25009—(2023g),CarbonManagementStrategy(formerlyknownastheCarbonCapture,UtilizationandStorageStrategy),https://natural-resources.canada.ca/climate-change/canadas-green-future/carbon-capture-utilization-and-storage-strategy/23721NRCC(NaturalResourceCouncilCanada)(2021),User’sGuide–NationalEnergyCodeofCanadaforBuildings2017,https://nrc.canada.ca/en/certifications-evaluations-standards/codes-canada/codes-canada-publications/users-guide-national-energy-code-canada-buildings-2017OntarioEnergy(2022),OntarioSupportsPlantoSafelyContinueOperatingthePickeringNuclearGeneratingStation,https://news.ontario.ca/en/release/1002338/ontario-supports-plan-to-safely-continue-operating-the-pickering-nuclear-generating-stationOPG(OntarioPowerGeneration)(2022),OPGandMicrosoftannouncestrategicpartnershiptopoweraNet-ZerofutureforOntario,https://www.opg.com/media_release/opg-and-microsoft-announce-strategic-partnership-to-power-a-net-zero-future-for-ontario/PVMagazine(2022),Canadasettohit5GWmilestone,https://www.pv-magazine.com/2022/11/29/canada-set-to-hit-5-gw-milestone/SMRActionPlan(2020),StatementofPrinciples,https://smractionplan.ca/content/statement-principlesStatCan(StatisticsCanada)(2016),LandandFreshwaterArea,byProvinceandTerritory,https://www150.statcan.gc.ca/n1/pub/11-402-x/2010000/chap/geo/tbl/tbl07-eng.htm––(2022),ReportonEnergySupplyandDemandinCanada,https://www150.statcan.gc.ca/n1/en/catalogue/57-003-XTreasuryBoardofCanadaSecretariat(2022),GreeningGovernmentStrategy,https://www.canada.ca/en/treasury-board-secretariat/services/innovation/greening-government/strategy.htmlTransportCanada(2022),Zero-EmissionVehicles,https://tc.canada.ca/en/road-transportation/innovative-technologies/zero-emission-vehicles.TransMountain(2022),ExpansionProject,https://www.transmountain.com/project-overviewUNFCCC(UnitedNationsFrameworkConventionalonClimateChange)(2022),Canada’s2021nationallydeterminedcontributionUndertheParisAgreement,https://unfccc.int/sites/default/files/NDC/2022-06/Canada%27s%20Enhanced%20NDC%20Submission1_FINAL%20EN.pdfAPECENERGYOVERVIEW202347ChileIntroductionWithoneoftheworld’sfastestvaccinationrates,whichhelpedittonormaliseitseconomicactivities,Chile’seconomyisrecoveringfromthepandemiceffects.Afteragrossdomestic(GDP)growthof12%in2021,theChileaneconomywasexpectedtogrow2.4%in2022.InAugust2022ChilelaunchedtheAgendadeEnergía2022-2026,theenergyroadmapofthenewgovernment.Thisdocumentpresentseightcorethemes:equitableaccesstoqualityenergy,acleanenergymix,secureandresilientenergydevelopment,afairenergytransitionandsustainableinfrastructure,energydecentralisation,citizenempoweringandenergydemocratisation,innovationandinclusiveeconomicgrowth,andmodernisationofpublicmanagement.InMay2022,ChileapprovedthefirstupdatetotheNationalEnergyPolicy2050.Thisupdateincreasedthegoalofrenewableenergyinelectricitygenerationto80%by2030and100%by2050,aimedtoachieve100%accesstoelectricityby2030,establishedgoalsforhydrogenandelectromobility,andmentionedthepotentialroleofChileasagreenhydrogenandderivatesexporterby2030.InJune2022,theFrameworkLawonClimateChange,Law21.455,waspublished.TheobjectiveofthisLawistoachieveandmaintainneutralityingreenhousegasemissionsby2050tohelptheadaptationtoclimatechange,reducevulnerability,increaseresilience,andfulfilinternationalcommitments.InNovember2022,Law21.499,whichregulatestheproductionandtradeofsolidbiofuels,waspublished.Thislawdeclaresfuelwood,pellets,briquettes,charcoal,andagriculturalwastetobefuelsandestablishesrequirementsandstandardsforcommercialisation.Thislawisintendedtoimproveairqualityandprotectthehealthandsafetyofpeoplewholiveinareaswherethesefuelsareused.InApril2023theMinistryofEnergylaunchedtheInitialAgendaforaSecondTimeoftheEnergyTransition,withtheaimoftakingactionsforanaccelerateddecarbonizationoftheelectricitysector.Theagendaconsidersthedeploymentofthefirst10measuresinfourareasofaction:storagepromotion;mitigationofriskstosuppliers;operationalflexibility;andpolitical,regulatoryactionsandurgentworks.Table1:Chile’smacroeconomicdataandenergyreservesKeydataaEnergyreservesb,cArea(millionkm2)0.8Oil(billionbarrels)000Population(million)20Gas(trillioncubicfeet)000GDP(2017USDbillionPPP)496Coal(milliontonnes)000GDPpercapita(2017USDPPP)25400Uranium(kilotonnesU<USD130/kgU)0000Source:aWorldBank(2022);bBP(2022);cNuclearEnergyAgencyandInternationalAtomicEnergyAgency(2022)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.Despitethelackoffossilfuelresources,Chilehasanenormouspotentialforrenewableenergy(Chilehas2.3TWofrenewableenergyAPECENERGYOVERVIEW202348reservefromthe30GWinstalledby2023)thatistryingtodevelopinaccordancewithitsenergypolicy.Inthatdirection,theChileanNationalEnergyCommissionawarded777GWh/yearofrenewableenergytosupplyelectricitytotheeconomy’selectricitysystem,startingin2027.Additionally,severalgreenhydrogenprojectshavebeenannounced.OneisamobilehydrogenpilotplantinAntofagastathatwillestimatetherealpotentialofgreenhydrogenproductionfromsolarenergyunderrealworkingconditions.Anotherannouncedprojectistheinjectionofhydrogenintoanaturalgassystemthatsupplies1800householdsinlaSerenaandCoquimbo.Duringthefirstphase,amixtureof1to5%ofhydrogeninthenaturalgassupplyisconsidered.Theshareofhydrogenisexpectedtoreach20%infurtherphases.EnergysupplyandconsumptionEnergysupplyChilewasaffectedbytheCOVID-19pandemicin2020.Chileimplementedseveralmeasuressuchasacurfewduringthenight-time,buildingoccupancycapacityreductioninpublicareas,andsocialdistancingamongothers,allofwhichimpactedenergyconsumptionintheeconomy.Figure1:Chile’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)In2020,totalprimaryenergyproductionwasreduced8.2%fromthe2019level,afallfrom1730PJto1590PJ.Thisreductionwasmainlyduetoimportsfallingfrom1200PJto1050PJ,orareductionof12%.Domesticenergyproductionalsodecreased6.5%,afallfrom572PJto535PJ.ProductionNetimportsTotalPrimaryEnergySupply020040060080010001200140016001800200020002005201020152020Production,netimportsandTPES(PJ)APECENERGYOVERVIEW202349Figure2:Chile’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)Thesupplyofallfuelswasreducedin2020.Thesupplyofoilandoilproductswasreducedby8.1%,goingfrom692PJin2019to636PJin2020.Thiswastheeffectoftransportrestrictionsduetothepandemic.Thenaturalgassupplywasreducedby8.4%,goingfrom220PJto202PJ,andthecoalsupplywasreducedby18%,goingfrom345PJto282PJ.Thesefuelsaremainlyimported;therefore,theirbehaviourexplainsthedropinnetimportsobservedin2020.Ontheotherhand,therenewableenergysupplywasslightlyreduced,by1.1%.Mostofthisrenewableenergywasbiomassandrenewableenergyusedinelectricitygeneration,andthefallwasduetoadecreaseindemandbecauseofCOVID-19restrictions.Figure3:Energysupplymix–ChileandAPEC,2020Source:EGEDA(2022)TheChileanenergysupplymixshowsagreaterdependencyonoilandoilproductsthanAPECdoes,theoilandoilproductssharebeing40%.Incontrast,renewablessupply30%oftheenergyinChile,almostthreetimestheshareofrenewablesintheAPECenergysupplymix,whichis8.2%.TotalfinalconsumptionTheresidentialsectorwastheonlysectorthatgrewduring2020.QuarantineandteleworkfromhomewereimplementedastransportwasreducedtorestrictthespreadofCOVID-19.Consequently,partoftheenergydemandthatwaspreviouslyconsumedbythecommerceandpublicsectorswastransferredtotheresidentialsector.Residentialenergyconsumptionincreased4.0%,goingfrom194PJin2019to201PJin2020.-2000200400600800100012001400160018002000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersCoalOilGasRenewablesOther0%20%40%60%80%100%ChileAPECAPECENERGYOVERVIEW202350Industry,thelargestenergyconsumer,reduceditsdemandby2.5%,goingfrom442PJin2019to431PJin2020.Transport,thesecondlargestenergyconsumer,reportedadecreaseofenergyconsumptionof11%,fallingfrom403PJin2019to357PJin2020.Commercialenergyconsumptionwasreduced14%,goingfrom79PJin2019to68PJin2020.Activitiessuchashotelandtouristservices,andentertainment,whichwereseverelyrestrictedduring2020,areincludedinthissector.Othersectorsthatconsumedenergy,suchasagriculture,fisheriesandothersalsosawtheirenergyconsumptionreducedin2020,fallingbyaround4.8%.Figure4:Chile’sfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)Itisnotablethat,incomparisontoAPEC,Chile’sfinalenergyfuelconsumptionbysectorshowsagreatershareoftransport:40%inChileversus25%forAPEC.Anotherimportantdifferenceistheshareofnon-energyuses,whichincludestheuseofmainlyoilandoilproductsasrawmaterialsfornon-energyproductssuchaslubricants.InChile,non-energyuserepresents3.7%offinalconsumptionwhileinAPECitrepresents13%.Figure5:Finalconsumptionbysector,ChileandAPEC,2020Source:EGEDA(2022)FinalenergydemandElectricitydemandslightlygrewin2020:0.6%in2020,agrowthof1PJfromthe267PJreportedin2019.Thisgrowthratewaswellbelowthe3.1%averagerateforthedecadeandwasimpactedbytherestrictionsimposedonactivities.Demandforrenewableenergyfell3.18%,goingfrom166PJto160PJ.Ontheotherhand,demandforotherfuelswasreduced.Coaldemandwasreduced37%,goingfrom10PJto6PJ;demandforoilandoilproductsfell7.9%,goingfrom640PJto589PJ;andfornaturalgasthefallwas5.5%,goingfrom67PJto64PJ.0200400600800100012001400200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%ChileAPECAPECENERGYOVERVIEW202351Figure6:Chile’sfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsChile’sfinalenergydemandfuelsharedidnotchangedrasticallyifcomparedwith2019;morethanhalfofthefinalenergydemandinChile,56%,issatisfiedbyoilandoilproducts.Coalsatisfied0.9%offinalenergydemand;renewables,15%;andnaturalgas,5.9%.Additionally,electricityrepresented25%ofthefinalenergydemand,slightlybelowthe33%offinalenergydemandobservedinAPEC.Figure7:Finalenergydemandfuelshare,ChileandAPEC,2020Source:EGEDA(2022)DespitethehighershareofrenewablesifcomparedwithAPEC,Chile’sfinalenergydemandmixshowsthatcarbon-emittingfossilfuelsarethemainsourceofenergy.Naturalgas,sometimesconsideredacleanerfossilfuel,hasalargershareinAPEC’sfinalenergydemandmix,at18%.ChilehasnaturalgasreservesintheSouthernMagallanesregion,buttheyarenotenoughtosignificantlyaffecttheexpansionofnaturalgasintheeconomy.Forthatreason,Chilereliesonimportstosecureitsnaturalgassupply,representingachallengetotheaimofincreasingthenaturalgasshare.0102030405060708090200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersCoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%ChileAPECAPECENERGYOVERVIEW202352TransformationPowersectorChilehasanambitiousgoalofachieving70%ofrenewableenergyintheelectricityfuelmixby2030.Thisgoalwilldrasticallychangetheelectricityin2020mixascoalrepresents32%ofelectricitygeneration,andgas,18%.Figure8:Chile’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)Thecoalsharehasincreasedsince2005asaresponsetorestrictionsonnaturalgasimports,mainlyfromArgentina,thathappenedduringthe2000s.However,Chileannouncedthephaseoutofallcoal-firedpowerplantsby2040,althoughithasexpressedtheintentionofbringingthedateforwardto2030orearlierifthedevelopmentoftheelectricgridallowsit.TheceasingofoperationsoftheTocopillaU12,TocopillaU13andTarapacáin2019,Bocamina1andVentanas1in2020,theBocaminaII,TocopillaU14andU15coal-firedpowerplantsin2022showsadvancementsinthatdirection.Currently,around1.2GWofcoalcapacityhavebeenretired,andtherearestillapproximately4.4GWtoberetiredorconverted.Therefore,aDecarbonizationPlanisbeingdevelopedduring2023,whichwilldefinetheroadmapfordecarbonization,insuchwayastoestablishtechnologicalalternativesthatwillhaveanacceleratedimpactontheprogressivereductionofgreenhousegasemissionsandthusmeettheclimateandenvironmentalcommitments,andinparticulartheeconomy’scarbonbudgetbetween2020and2030.Figure9:Electricitygenerationfuelshare,ChileandAPEC,2020Source:EGEDA(2022)0102030405060708090200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersCoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%ChileAPECAPECENERGYOVERVIEW202353In2020,electricitygenerationgrewonly0.9%,goingfrom82.9TWhin2019to83.6TWhin2020.Thislevelofgenerationestimatestheactivityofelectricityautoproducers.Areductionwasmainlyobservedinthermalpowerplants,withcoal-firedpowerplantsreducingproductionby4.9%,goingfrom28.4TWhin2019to27.0TWhin2020,andgas-firedproductiondecreased2.8%,adropfromthe15.0TWhlevelobservedin2019.Incontrast,hydropowerplantsremainedstableataround21.7TWh,whileotherrenewableenergysourcessuchassolar,windandbiomass,notincludinggeothermal,grewfrom16.6TWhin2019to18.4TWhin2020.Thecombinedshareofhydroandotherrenewablesrepresented49%oftheChileanelectricitygenerationfuelsharein2020,where22%representedjusttheshareofgeothermal,biomass,wind,andsolarenergy.Inthatregard,Chile’selectricitygenerationhasalowercarbonintensitythanAPECdoesbecauseinAPEC,allrenewablesrepresent25%ofelectricitygeneration.EnergytransitionInadditiontothepoliciesmentionedabove,ChileapprovedLaw21.505topromoteelectricitystorageandelectromobilityinlate2022.Thislawwillexpandrenewablesintheelectricitymixbypromotingstoragetechnologies,providinggreatersecuritytothegrid,andfacilitatingtheprocessofdecarbonisation.Thelawalsopromoteselectricmobilitythrougheconomicincentives.EmissionsDuetotheobserveddecreaseofenergydemandandtheincreaseoftheshareofrenewableenergy,emissionsdropped8%in2020.However,areboundintheeconomymightincreaseemissionsinlateryears,althoughthisgrowthmightbecurbedbytheeffectofthepoliciesmentionedabove.Figure10:Chile’sCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecurityTocontributetoenergysecurity,ChileandArgentinasignedanagreementonenergycollaborationthatincludesArgentinasupplying300000m3/dayofgastoChilefromJune2022toSeptember2023.Itisexpectedthatthissupplymightincreaseto4000000m3/dayinthefuture.Inmid-2022,Chilesufferedashortageofwoodpellets,whichareusedforheatinginsouthernregionsinAugust.Thiswasduetoanincreaseinpelletdemandandacontractionofproductionbythewoodindustry.CO2combustionemissions010203040506070809010020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW202354APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective:toimproveenergyintensityandtodoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargettoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.Figure11:Chile’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.Chileanenergyintensityincreased1%in2020,maintainingenergyintensityataround90%ofthe2005level.Thisstabilisationofthelevelofenergyintensityhasbeenobservedsince2016andmightrevealtheeffectofsomechallengesthatChilefacesinincreasingenergyefficiencybecausemostofitsfinalenergyconsumptionisinindustryandtransport,wherefossilfuelsareconsumedforthermalpurposes.Implementationofenergyefficiency,fuelsubstitution,andinnovationcanbechallengingaseconomicfactorsplayamajorroleinthedecision-makingonimplementingactionsthataffectenergyconsumptioninthosesectors.DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.TotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012014020002005201020152020202520302035Energyintensityindex(2005=100)APECENERGYOVERVIEW202355Figure12:Chile’smodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.Chilehasincreaseditsshareofmodernrenewables,whichwentfrom13.1%in2010to19.4%in2020.ThisisthethirdhighestmodernrenewableenergyshareregisteredinAPEC,afterNewZealandandCanada.GivenChile’saspirationtobecomeanimportanthubofgreenhydrogenproduction,thissharemightincreaseduringthisdecade.Figure13:Chile’srenewablegenerationshare,2000to2020Source:EGEDA(2022)Chileshowedgrowthinitsrenewablegenerationsharein2020,movingfrom46.4%in2019to48.5%.Thisincreaseisduetonewsolarandwindprojects.ThegoalsestablishedintheupdatedNationalEnergyPolicy2050suggestthatChilewillseearapidincreaseinitsrenewablegenerationshare.Changefrom2010to20200.0%5.0%10.0%15.0%20.0%25.0%2010Change2020Renewablesshareinelectricitymix0%10%20%30%40%50%60%20002005201020152020ProportionAPECENERGYOVERVIEW202356EnergypolicyEnergypolicyDetailsReferenceFrameworkLawonClimateChangeInJune2022,theChileangovernmentpublishedtheLaw21455The21.455,theFrameworkLawonClimateChange,thatestablishesthegoalofreachingcarbonneutralityby2050.MinistryofEnvironmentCoal-firedpowerplantshutdownAtotalof3.63GWofcoal-firedpowerplantswillshutdownbefore2025,whichisequivalentto65%ofthetotalcoalelectricitycapacity.Operationofcoalpowerplantswillceaseby2040atthelatest.MinistryofEnergyNationalelectromobilitystrategyThisstrategyoutlinesactionstobetakenintheshortandmediumtermstomeetthegovernment'sgoalofhaving40%oftheprivatevehicleand100%ofthepublictransportfleetspoweredbyelectricityby2040.Bytheendof2050,58%ofprivately-ownedvehicleswillbepoweredbyelectricity.MinistryofEnergyLong-termnationalenergyplanning(2018-2022)In2018,thisplanwasapprovedbytheMinistryofEnergy.Themainobjectivesofthisworkaretopresentscenariostoestimatethefutureenergydemand,tobeusedasinputinformationfortheelectrictransmissionplanningandtofunctionasatoolthathelpspolicymakersdevelopenergypolicies.ThelastreportthatupdatedthebackgroundinformationfortheLong-TermNationalEnergyPlanningwasreleasedin2020andthenewLong-TermNationalEnergyPlanning(2023-2027)isunderdevelopment.MinistryofEnergyEnergyAgenda2022-2026Chilelaunchedthisenergyroadmapofthenewgovernment.Thisdocumentemphasisesequitableaccesstoqualityenergyandthedevelopmentofaclean,secure,andresilientenergysystem.MinistryofEnergyUpdatedeconomyenergypolicy2050Thisupdateincreasedthegoalofrenewableenergyinelectricitygenerationto80%by2030andzeroenergyaimedtoachieve100%zero-emissionenergyby2050.100%accesstoelectricityby2030,establishedgoalsforhydrogenandelectromobility,andmentionedtheroleofChileasagreenhydrogenandderivatesexporterby2030.MinistryofEnergyLaw21.499thatregulatesproductionandtradeofsolidfuelsThislawdeclaresfuelwood,pellets,briquettes,charcoal,andagriculturalwasteasfuelsandestablishesrequirementsandstandardsforcommercialisation.Thislawisintendedtoimproveairqualityandprotectthehealthandsafetyofpeoplewholiveinareaswherethesefuelsareused.MinistryofEnergyLaw21.505topromoteelectricitystorageandelectromobilityThislawwillexpandrenewablesintheelectricitymixbypromotingstoragetechnologies,providegreatersecuritytothegrid,andhelptheprocessofdecarbonisation.Thelawalsopromoteselectricmobilitythrougheconomicincentives.MinistryofEnergyInitialAgendaforaSecondTimeoftheEnergyTransitionInApril2023theMinistryofEnergylaunchedtheInitialAgendaforaSecondTimeoftheEnergyTransition,withtheaimoftakingactionsforanaccelerateddecarbonizationoftheelectricitysectorMinistryofEnergyAPECENERGYOVERVIEW202357NotableenergydevelopmentsEnergydevelopmentDetailsReferenceNDCUpdate,EmissionbudgetAnewabsoluteemissiontargetofamaximumemissionlevelof95MtCO2(excludinglanduse,land-usechange,andforestry)in2030hasbeenannounced.Agreenhousesgases(GHG)emissionbudgetof1100MtCO2between2020and2030,andGHGemissionspeakingin2025.Thenewtargetis26%lowerthanthe2016NDCagreement.MinistryofEnvironmentEnergyEfficiencyLawThelaw21.305outlinesalong-termenergyefficiencyplan,tobeupdatedeveryfiveyears.Thenewlawregulatesthemanagementofenergybylargeconsumersanddeliversinformationtohomebuyersregardinghousingenergyrequirements.MinistryofEnergyHydrogenStrategyforChileThedesignandimplementationofadevelopmentpolicyforhydrogenwouldallowthedisplacementoffossilfuelsonalargescaleinthepowergeneration,transport,andindustrysectors.MinistryofEnergyChileandArgentinasignedanenergycollaborationagreementArgentinaagreedtosupply300000m3/dayofgastoChilefromJune2022toSeptember2023.Itisexpectedthatthissupplymightincreaseto4000000m3/dayinthefuture.MinistrydeEnergyTheceasingofoperationsofcoal-firedpowerplantsTocopillaU12,TocopillaU13andTarapacáin2019,Bocamina1andVentanas1in2020,BocaminaII,TocopillaU14andTocopillaU15in2022wereretiredinaccordancewiththeChileanaspirationtophaseoutcoalby2040.Engie,EnelChileSouthernregionssufferedawoodpelletshortageduringAugust.ChilesufferedashortageofwoodpelletsthatareusedforheatinginsouthernregionsduringAugust.Thiswasduetoanincreaseinpelletdemandandacontractionofproductionbythewoodindustry.LaTerceraGreenhydrogenprojectsOneannouncedprojectisamobilehydrogenpilotplantinAntofagastathatwillestimatetherealpotentialofgreenhydrogenproductionfromsolarenergyunderrealworkingconditions.Anotherprojectistheinjectionofhydrogenintoanaturalgassystemthatsupplies1800householdsinlaSerenaandCoquimbo.MinistryofEnergyCleanenergytraceabilityplatformRENOVA(NationalRenewableEnergyRegistry)Platformisaninitiativethatinvolvesthetraceabilityofrenewableenergiesconsideringthefulfillmentofcontractswiththerespectivecustomers,through4.0technologytools(blockchain),incorporatedintoanopenplatform,publicandtransparentaccess,locatedonthewebsiteofthesystemoperator(CEN).CEN-RENOVAReductionofinformationasymmetryintheenergysector-EnergíaAbierta:informationandreportingplatformfortheChileanenergysector,withtheuseofblockchaincertificationandfocusedoncitizens.CNE-EnergiaAbiertaAPECENERGYOVERVIEW202358-Bencinaenlínea:geo-referencedfuelpriceinformationplatform,whichincludesdifferentformatsfortheuseofcitizens.CNE-BencinaenlineaUsefullinksGovernmentInstitutionsChileanNationalEnergyCommission(CNE)–www.cne.clRenewableEnergyNationalRegister(RENOVA)-https://www.coordinador.cl/renova/EnergíaAbiertaBeta-www.energiaabierta.clFuelPricesinRefuellingStationsInformationSystem-http://www.bencinaenlinea.cl/web2/ChileanEnergySustainabilityAgency(ASE)–www.agenciaSE.orgNationalElectricCoordinator–www.coordinador.clGovernmentofChile–www.gobiernodechile.clMinistryofEconomy,DevelopmentandReconstruction–www.economia.clMinistryofEnergy–www.energia.gob.clMinistryoftheEnvironment–www.mma.gob.clNuclearEnergyChileanCommission(CCHEN)–www.cchen.clNationalInstituteofStatistics(INE)–www.ine.clNationalOilCompany(ENAP)–www.enap.clSuperintendenceofElectricityandFuel(SEC)–www.sec.clEnergyAssociationsChileanAssociationofPowerGenerators–www.generadoras.clChileanAssociationforRenewableEnergiesandStorageACERAAG–www.acera.clChileanAssociationofElectricCompanies–www.electricas.clAPECENERGYOVERVIEW202359ChileanAssociationofSolarEnergy–www.acesol.clChileanAssociationforSmallandMid-hydroPowerPlants(APEMEC)–www.apemec.clReferencesBibliotecadelCongresoNacionaldeChile(2022,May2022)DECRETO10APRUEBAPOLÍTICAENERGÉTICANACIONAL2050.PRIMERAACTUALIZACIÓNQUINQUENAL.https://www.bcn.cl/leychile/navegar?idNorma=1176226BibliotecadelCongresoNacionaldeChile(2022,November2022)REGULALOSBIOCOMBUSTIBLESSÓLIDOS.https://www.bcn.cl/leychile/navegar?idNorma=1183783&tipoVersion=0BibliotecadelCongresoNacionaldeChile(2022,November2022)PROMUEVEELALMACENAMIENTODEENERGÍAELÉCTRICAYLAELECTROMOVILIDAD.https://www.bcn.cl/leychile/navegar?idNorma=1184572BP(2022)StatisticalReviewofWorldEnergy.Retrievedfromhttps://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2022-full-report.pdfDatosMarcros.com(2022)PBIdeChile.https://datosmacro.expansion.com/pib/chileEnel(2022)Bocamina:elcaminodeunprocesoinéditohttps://www.enel.cl/es/sostenibilidad/creacion-valor-compartido/bocamina.htmlEngie(2019)EngieenergíaChileretiraprimerasdoscentralesacarbónenTocopilla.https://www.engie.cl/engie-energia-chile-retira-primeras-dos-centrales-a-carbon-en-tocopilla-2/ExpertGrouponEnergyDataAnalysis,APECEnergyWorkingGroup(2021),APECEnergyDatabase.https://www.egeda.ewg.apec.org/egeda/database_info/index.htmlLaTercera(2022)Pellets:Lacrisisdecalefaccióntraselboomdelproducto.https://www.latercera.com/pulso/noticia/pellets-la-crisis-de-calefaccion-tras-el-boom-del-producto/JEN75JXJBNFIHI77SMQV5EXDTI/MinisteriodeEnergía(2022,Jun13)ChileyArgentinaacuerdanintercambioenergético.https://energia.gob.cl/noticias/nacional/chile-y-argentina-acuerdan-intercambio-energeticoMinisteriodeEnergía(2022,August25)AgendadeEnergía2022-2026:ConocelahojaderutaparalatransiciónenergéticadeChile.https://www.gob.cl/noticias/agenda-de-energia-2022-2026-conoce-la-hoja-de-ruta-para-la-transicion-energetica-de-chile/APECENERGYOVERVIEW202360MinisteriodeEnergía(2022,December16)PresidenteBoricyministroPardowinauguranPlantaMóvildeHidrógenoVerdeenAntofagasta.https://energia.gob.cl/noticias/coquimbo/seremi-de-energia-resalta-primera-planta-del-pais-que-inyecta-hidrogeno-verde-en-redes-de-gas-natural-de-la-serena-y-coquimboMinisteriodeEnergía(2022,December16)SeremideEnergíaresaltaprimeraplantadelpaísqueinyectahidrógenoverdeenredesdegasnaturaldeLaSerenayCoquimbo.https://energia.gob.cl/noticias/coquimbo/seremi-de-energia-resalta-primera-planta-del-pais-que-inyecta-hidrogeno-verde-en-redes-de-gas-natural-de-la-serena-y-coquimboMinisteriodeEnergía(2023)Energia2050.https://energia.gob.cl/energia2050MinisteriodeEnergía(2023)AgendaInicialparaunSegundoTiempodelaTransiciónEnergética.https://energia.gob.cl/sites/default/files/documentos/agenda_inicial_para_un_segundo_tiempo_de_la_transicion_energetica.pdfNuclearEnergyAgencyandInternationalAtomicEnergyAgency(2022)Uranium2020Resources,ProductionandDemand.https://www.oecd-nea.org/jcms/pl_52718/uranium-2020-resources-production-and-demandRevistaEnergía(2022)TermoeléctricaBocaminaIIyTocopillaU15cierranoperacioneshttps://revistaenergia.com/?p=34831UnitedNationsClimateChange(2023)NationallyDeterminedContributionsRegistry.https://unfccc.int/NDCREGWorldBank.(2021).Chile.Retrievedfromhttps://data.worldbank.org/country/chile?view=chartAPECENERGYOVERVIEW202361ChinaIntroductionChina’sPresidentXiJinpingannouncedinSeptember2020thatChinaaimstohavecarbondioxideemissionpeakbefore2030andachievecarbonneutralitybefore2060.Sincethisannouncementadditionaldetailswereissuedin2021bytheCentralCommitteeofCommunistPartyofChina(CPC)andtheCouncil.In2022,the20thCPCNationalCongresswassuccessfullyconvenedandcontinueditscommitmenttoproceedwithCarbonPeakingandCarbonNeutrality.TheNationalEnergyAdministration(NEA),localgovernments,andeconomy-ownedenergyenterprisesinareasrangingfromelectricity,thepowergrid,coal,oil,andgas,publishedtheirownroadmapstodecarbonise.Chinaisrelativelyrichinenergyresources,particularlycoal.AccordingtotheBPstatisticspublishedin2022,China’sprovencoalreserveswereover143billiontonnes,provenoilreserveswere3.5billiontonnes,andprovennaturalgasreserveswere8.4trillioncubicmetres(TCM)(BP,2022).Inaddition,Chinahas400gigawatts(GW)ofeconomichydropowerpotential,morethananyothereconomy(IRENA,2014).In2022,accordingtotheupdateofNEA,China’scoalproductionachieved4.5billiontonnes,8%morethanthepreviousyear.Afterseveralyearsofstriving,thecrudeoilannualproductionreturnedto200milliontonnes,andgasannualproductionclimbedto218billioncubicmetres,6.4%morethanthepreviousyear,therebymaintainingastablegrowthrateofaround10billioncubicmetresannuallyforfiveconsecutiveyears.Thefirstroundoflarge-scalewindpower(97GW)intheGobiDesertanddesertificationareaswaslaunched,followedbythesecondandthirdrounds.Allnewlyinstalledwindandsolarpowercapacitieswouldproducemorethan120GW.In2022renewableelectricitygenerationaccountedfor32%ofChina'selectricityconsumption.Table1:China’smacroeconomicdataandenergyreservesin2020Keydataa,bEnergyreservesc,dArea(millionkm2)9.6Oil(billiontones)3.5Population(million)1411Gas(trillioncubicmetres)8.4GDP(2017USDbillionPPP)22996Coal(billiontonnes)143GDPpercapita(2017USDPPP)16297Uranium(kilotonnesU<USD130/kgU)119Source:aUN(2022);bWorldBank(2022);cBP(2022);dUN(2022)EnergysupplyandconsumptionAfteralongperiodofdevelopment,anddespitetheCOVID-19pandemic,ChinahasmaintainedsteadyGDPgrowthandhasbecometheworld’slargestenergyproducerandconsumer,forminganenergysupplysystemthroughthecomprehensivedevelopmentofcoal,electricity,oil,naturalgas,andrenewableenergy.TotalprimaryenergysupplyIn2020,China’stotalprimaryenergysupplyincreasedby3.2%,reaching138509PJ.Energyproductionincreasedby2.7%,whilenetAPECENERGYOVERVIEW202362importsincreasedby7.0%,emphasisingChina’sdependencyoninternationalmarketsforenergy.Thenetimportsshareofenergysupplygrewfrom23%in2019to24%in2020(Figure1).Figure1:China’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)Fromthemacroview,coalssharehasmaintainedasimilarshareofenergysupplyin2020at61%,whereasoil’ssharehasfallenbymorethanonepercentagepointto20%.Incontrast,theshareofgasandrenewableshasincreasedfrom8.5%and6.9%to8.8%and7.2%.Thestructureoftheenergymixismovingawayfromthemostcarbonintensivefossilfuelsonthewaytodecarbonisation(Figure2).Figure2:China’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)Since2000,thetotalconsumptionhasexperiencedthreedifferentstages.2000-2011wasthehigh-speedstage,inwhichtheaverageannualconsumptiongrowthrateremainedataround10%.2012-2016,wastheplateaustage,wheretheaverageannualwasaround1%.Simultaneously,in2012Chinaentereda“NewEra”byshiftingitspolicyto“high-qualitydevelopment”,focusingmoreonenvironmentalprotectionandcommitmenttobuildingacommunitywithasharedfutureformankind.2017-recenthasbeenthelow-speedstage,wherethetotalconsumptiongrewatalowrateofaround4%(Figure1,2).China’slargecoalreserves,coal’sfavourablesituation,andmoreuncertaintiesabouttheoilandgassupplychainmeanthattheshareofcoalinChina’senergysupplyismuchhigherthanthatofAPEC.ProductionNetimportsTotalPrimaryEnergySupply02000040000600008000010000012000014000016000020002005201020152020Production,netimportsandTPES(PJ)020000400006000080000100000120000140000160000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersAPECENERGYOVERVIEW202363However,thissharehasdeclinedasgasandrenewablesbegintoaccountforamoresubstantialshare.China’srapiddevelopmentofrenewableenergyinrecentyearshasmeantthatChina’sshareofrenewableswascomparabletotheAPECregionin2020(Figure3).Figure3:Energysupplymix–ChinaandAPEC,2020Source:EGEDA(2022)TotalfinalconsumptionTotalfinalconsumptionisarepresentationofend-useenergy,includingnon-energyconsumption.China’sfinalconsumptionincreasedby3.8%in2020andtheindustryaccountedfor48%ofthetotal,followedbytransport(15%)andresidential(13%).China’sindustrialsectoristhelargestintheworldandcurrentlyproduceslargevolumesofsteel,cement,aluminium,andmanymanufacturedproducts.Industrialenergyconsumptionincreasedmorethantwicefrom2000to2012,thoughitwasrelativelystableuntil2020,reflectingtheswitchtoamoreservices-intensiveeconomy.China’stransportsectorhasthesecond-largestshareandkeptgrowingfrom2000to2019,butin2020itexperienceditsfirstannualfallof-4.8%,whichwasprobablycausedbytheCOVID-19pandemic-relatedtrafficcontrol.Theconsumptionoftheresidentialsectorcontinuouslygrew,partiallyelevatedbytheimplementationofthe“CleanWinterHeatingPlaninNorthernChina(2017-2021)”,whichhelpedtensofmillionsoffamiliesconvertfromsmallcoalorbiomassstoveheatingtogasorelectricityheating.Figure4:China’sfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)CoalOilGasRenewablesOther0%20%40%60%80%100%ChinaAPEC0100002000030000400005000060000700008000090000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyAPECENERGYOVERVIEW202364Figure5:Finalconsumptionbysector,ChinaandAPEC,2020Source:EGEDA(2022)China’sindustrialenergyconsumptionaccountsfor18%ofthefinalconsumptionfortheentireAPECregion.Acontinuedtransitiontoamoreservice-basedeconomywillbeimportantforChinatoreducetheindustry’sfinalenergyconsumption.However,itisimportanttorecognisethatChinaremainsanimportantsourceofindustrialproductsforalmostallglobaleconomies.AlargedeclineinChina’sindustrialsectormaynecessitateanincreaseinindustrialactivityinothereconomies.FinalenergydemandFrom2000to2020,thefuelcompositionofthefinalenergydemandchangedsignificantly.Themostprominentchangeisthatofcoal,whichincreasedfromjustabove10000PJin2000toapeakofabout31284PJin2012.After2012,coalconsumptiondeclinedbymorethan40%until2020,anditsshareinfinalenergydemandwas25%in2020,downfrom46%whenitpeakedin2012.Incontrast,theshareofelectricityandothers,andgashadincreasedby2020,reaching39%and13%,whiletheshareofrenewablesremainedalmoststableat2.3%.AccordingtotheupdatedNationallyDeterminedCommitment(NDC)submittedinOctober2021andthe14thFive-YearPlan(FYP),Chinawillstrictlylimittheincreaseincoalconsumptionandphasecoalconsumptioninthefuturedecades.The14thFYPsetthetargetsfor2025:theshareofnon-fossilfuelsinfinalenergyconsumptionwillincreaseto20%,CO2emissionsintensitywilldecreaseby18%,domesticoilproductionwillkeepat200milliontonnesandnaturalgaswillproducemorethan230billioncubicmetres.Figure6:China’sfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%ChinaAPEC01000020000300004000050000600007000080000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersAPECENERGYOVERVIEW202365Althoughdemandforcoalanditssharehasdecreasedfromtherecordhighin2012,China’sshareofcoalin2020(25%)wasstillrelativelyhigh(Figure7).FortheentireAPECregion,coal’sshareoffinalenergyconsumptionwas13%.Figure7:Finalenergyconsumptionfuelshare,ChinaandAPEC,2020Source:EGEDA(2022)TransformationPowersectorPowergenerationhasbeenanimportantcomponentfuellingChina’seconomicgrowthandhasincreasedmorethanfive-foldsince2000.China’spowersectorremainsheavilyreliantoncoal,with64%ofChina’selectricitygeneratedfromcoal-firedpowerplantsin2020.However,thissharerepresentsadeclinefrom75%in2000(EGEDA,2022).From2000,theproportionofnon-fossilenergyinelectricityincreasedfrom16%to27%.Withinthatincrease,nucleargenerationisnow20timesgreater(Figure8).Figure8:China’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)Chinaisstringentlycurbingcoal-poweredprojectsandhascommittedtonolongerpursuingnewcoal-firedpowerprojectsabroad.Atthesametime,Chinahascommittedtoestablishinganew-typepowersystemcharacterisedbyahighshareofrenewableenergy.Theconstructionoflarge-scalewindpowerintheGobiDesertanddesertificationareashasbeeninitiatedandaccelerated.Hydropowerandpumpedstoragepowerstationswillalsobedeveloped,dependingonregionalfeasibility.Asfornuclearpower,itwillbeadvancedinanorderlyandsafemanner.CoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%ChinaAPEC0100020003000400050006000700080009000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersAPECENERGYOVERVIEW202366Figure9:Electricitygenerationfuelshare,ChinaandAPEC,2020Source:EGEDA(2022)Securesupplycombinedwithfavourablepriceshasmeantthattheproportionofcoal-firedpowerinChinaishigherthanthatofAPEC,whilethatofgasgenerationislessthanAPEC(Figure9).In2020,China’spowergenerationreached7779TWh.Thermalpowerandhydropowerreached5245TWhand1355TWh,respectively(EGEDA,2022),eachrankingasfirstintheworld.Nuclearpowergenerationreached366TWh,rankingsecondbehindUS.(EGEDA,2022;BP,2022).EnergytransitionEmissionsForthepastdecade,Chinahascontinuedtoexpanditssupply-sidestructuralreformandtoreversetheextensivedevelopmentmodelthatreliesheavilyonresourceconsumptionatthecostofhighpollutionandemissions.Therefore,China’sGDPgrowthremainsrelativelyhighwithrelativelylowCO2emissions.Whileprotectingindustrialandsupplychains,Chinahastakenmeasurestocurbindustriesthatover-exploitresourcesandcauseenvironmentaldamage,suchassteel,cement,andelectrolyticaluminium.Duringthe13thFive-yearPlanperiod(2016-2020),Chinaremovedmorethan150milliontonnesofexcesssteelproductioncapacityand300milliontonnesofexcesscementproductioncapacity.Substandardsteelproductshavebeeneliminatedandalmostalloutdatedproductioncapacityinindustriessuchaselectrolyticaluminiumandcementmanufacturinghasbeenremoved.Tooptimisethestructureoftransportation,Chinahasacceleratedtheconstructionofspecialrailwaylines,promotedtheshiftoffreighttransportfromroadtorailwaysandwaterways,andencouragedintermodaltransport.In2021,therailwayandwaterwayfreightvolumeaccountedfor25%ofthetotalinChina,anincreaseof3.9%over2012.Atthesametime,Chinahasvigorouslypromotedtheuseofnew-energyvehiclesinpublictransport,taxiservices,environmentalsanitation,logistics,distribution,civilaviation,airports,andPartyandgovernmentinstitutions.Bytheendof2021,thenumberofChina'sregisterednew-energyvehicleshadreached7.8million,accountingforabouthalfoftheglobalfigure(China'sEconomyCouncilInformationOffice).CoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%ChinaAPECAPECENERGYOVERVIEW202367Figure10:ChinaCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective-toimproveenergyintensityandtodoubletheshareofmodernrenewables.EnergyintensitygoalEnergyintensityintheAPECregionhasbeencontinuouslyimproving.ChinaiscontributingtoAPEC’saspirationalgoalofa45%energyintensityreductionfromthe2005levelby2035.Since2012,thegrowthrateofChina’senergyconsumptionhasslowedsignificantly,andthe‘dualcontrol’ofenergyintensityandtotalenergyconsumptionhasbeenincludedinChina’s13thFYPand14thFYP.Inthe14thFYPperiod,ChinaaimstolowertheenergyconsumptionperunitofGDPby13.5%.In2020,China’stotalfinalenergyconsumption(excludingnon-energysources)energyintensitydeclinedby43%relativeto2005(Figure11).Figure11:China’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixbetween2010and2030.Modernrenewablesdonotincludetraditionalbiomass,andtheshareisrelativetofinalenergyconsumption.CO2combustionemissions01000200030004000500060007000800090001000020002005201020152020MilliontonnesCO2TotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012020002005201020152020202520302035Energyintensityindex(2005=100)APECENERGYOVERVIEW202368Figure12:China’smodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.Thereisnoeconomy-levelgoalforindividualmembereconomies;however,itispossibletocalculatetherelativeimprovementofindividualeconomiestogetabettersenseofwhetherthegoalwillbeachieved.SincetheimplementationoftheRenewableEnergyLawin2006,Chinahasenteredaperiodofrapiddevelopmentofrenewableenergy.Themodernrenewables’shareoffinalenergyconsumptionin2010was5.2%.In2020,thisproportionalsharewas9.8%,whichrepresentsa4.6%increase(Figure12).TherenewablesshareinChina’selectricitymixincreasedfrom16%in2000to27%in2020(Figure13).Theincreasewasmainlydrivenbywindandsolar.ThecapacityofwindandsolarisexpectedtoexceedtheNDCgoals,withChina’stotalinstalledcapacityofwindandsolarpowerexpectedtogrowtoover1200GWby2030(UNFCCC,2021).Figure13:China’srenewablegenerationshare,2000to2020Source:EGEDA(2022)Changefrom2010to20200.0%2.0%4.0%6.0%8.0%10.0%12.0%2010Change2020Renewablesshareinelectricitymix0%5%10%15%20%25%30%20002005201020152020ProportionAPECENERGYOVERVIEW202369EnergypolicyEnergypolicyDetailsReferenceOpinionsontheComplete,AccurateandComprehensiveImplementationoftheNewDevelopmentConcepttoDoaGoodJobofCarbonNeutralisationTheopinionisimportantforthesystematicplanningandoveralldeploymentfortheimportantworkofcarbonneutralisationTheEconomyCouncilofthePeople'sRepublicofChinaActionPlanforCarbonDioxidePeakingBefore2030Outlinemeasuresforgraduallyslowingtheemissionofcarbon,transitioningtorenewableenergy,andreducingwaste.OffersanoverviewofChina’soverallplanforreachingboththe2030andthe2060goalsPolicylink14thFive-YearPlanforaModernEnergySystemClarifiesthekeytasksforthedevelopmentofChina’senergysectorfrom2021to2025NEAofChina14thFive-YearPlanonRenewableEnergyDevelopment(2021–2025)ClarifiesthekeytasksforthedevelopmentofChina’srenewableenergysectorfrom2021to2025NDRCComprehensiveWorkPlanforEnergyConservationandEmissionReductioninthe14thFive-YearPlanImprovesandimplementsthedualcontrolsystemforenergyconsumptionintensityandtotalvolumeandtotaldischargeofmajorpollutants;organisestheimplementationofkeyprojectsforenergyconservationandemissionsreductionGovernmentlinkAPECENERGYOVERVIEW202370NotableenergydevelopmentsEnergydevelopmentDetailsReferenceChina'sGreenDevelopmentintheNewEraPresentsafullpictureofChina'sideas,actions,andachievementsingreendevelopmentinthenewera,andshareswiththeworlditsexperienceinthisregardChina'sEconomyCouncilInformationOfficeNationalElectricPowerIndustryStatisticsin2022Theinstalledcapacityofwindpowerisabout370millionKW,anincreaseof11%year-on-year;theinstalledcapacityofsolarpowerisabout390millionKW,anincreaseof28%year-on-yearNEAofChinaTopTenLandmarkAchievementsofNationalOilandGasExplorationandDevelopmentin2022TopTenLandmarkAchievementsofNationalOilandGasExplorationandDevelopmentin2022appraisedbytheNationalEnergyAdministrationNEAofChinaEnergyDevelopmentAchievementsinthePast10yearsintheNewEraEnergyDevelopmentAchievementsinthePast10yearsintheNewErareleasedbytheNationalEnergyAdministrationNEAofChinaUsefullinksNationalDevelopmentandReformCommission-https://www.ndrc.gov.cn/NationalEnergyAdministration–http://www.nea.gov.cn/NationalBureauofStatisticsofChina–http://www.stats.gov.cn/english/APECENERGYOVERVIEW202371ReferencesNationalEnergyAdministration,PressConference,13Feb2023.http://www.nea.gov.cn/2023-02/13/c_1310697026.htmEGEDA(ExpertGrouponEnergyDataAnalysis,APECEnergyWorkingGroup)(2021),APECEnergyDatabase.https://www.egeda.ewg.apec.org/egeda/database_info/index.htmlAPECENERGYOVERVIEW202372HongKong,ChinaIntroductionHongKong,China(HKC)announceditsgoaltoachievecarbonneutralitybefore2050duringthereleaseoftheClimateActionPlan2050(CAP2050)inOctober2021.TheCAP2050compriseslong-termdecarbonisingtargetsandactionplans,coveringenergysupplyanddemandaspectsandincludingtheroadmaptowardscarbonneutrality.TheCAP2050isoneofthemajorenvironmentalpolicyplans.ItsetsacarbonneutralitytargetfollowingtheissueoftheClimateActionPlan2030+(CAP2030+)releasedin2017afterChinaaccededtotheParisAgreementin2016.TheCAP2050bringstogethertheoverallstrategies,plans,targetsandactionsforHKCtoachievecarbonneutralitybefore2050.OtherthanCAP2030+,variouspolicieshavebeenreleasedbyHKC,explicitlydetailingthetargetsandactionplansforthreekeyareas,namelyelectricitygeneration,transport,andwaste,aimedatreducingCO2emissionswhilesimultaneouslysustainingtheuseandsourceofenergy.Theimplementationhorizonofthesepoliciesisbetween2012and2035.In2022,HKCfocusedonimplementingtheactionplansthroughfourkeystrategiestotracktowardsachievingitscarbon-neutralgoal.Inaccomplishingnet-zeroelectricitygeneration,thestructuralshiftfromcoaltogasforthepastfewyearshasreflectedtheenergytransition.Fourunitsofacoal-firedpowerplantatCastlePeakAPowerStationwillbeclosedinthenextfewyears,whileanewunitofagas-firedpowerplantwithacapacityof600MWatBlackPointPowerStationwillbeginoperationsbytheendof2023.DespitethehillyterraininHKC,effortstoincreasetherenewablesshareinelectricitygenerationhavecontinuedbyexploringthedevelopmentofrenewableenergy.Anoffshorewindfarmproject,withatotalcapacityof150MW,isexpectedtobeoperationalby2027.Theunder-constructionwaste-to-energyfacilityatShekKwuChau(I•PARK1),withatreatmentcapacityof3000tonnesofmunicipalsolidwaste,istargetedforcommissioningin2025andwillsubsequentlyincreasethecontributionofrenewablestoelectricitygeneration.Table1:HongKong,China’smacroeconomicdataandenergyreservesKeydataaEnergyreservesArea(km2)1110Oil(billionbarrels)-Population(million)7.5Gas(trillioncubicfeet)-GDP(2017USDbillionPPP)418Coal(milliontonnes)-GDPpercapita(2017USDPPP)55918Uranium(kilotonnesU<USD130/kgU)-Source:aWorldBank(2022);GovernmentHKC(2022)HKCisalsointheprocessofaddingthreehouseholdappliances,namelygascookers,gasinstantaneouswaterheaters,andlight-APECENERGYOVERVIEW202373emittingdiodelamps,totheMandatoryEnergyEfficiencyLabellingSchemeaspartofthemeasurestoreduceresidentialbuildings'electricityconsumptionby20%to30%fromthe2015levelby2050.Forcommercialbuildings,KaiTakDevelopment(KTD)hasadoptedadistrictcoolingsystemasitsenergy-efficientair-conditioningsystem,whichconsumes20%to35%lesselectricitythanstandardair-conditioningsystems.KTD'sdistrictcoolingsystembeganitsoperationsin2013,andthefinalphaseisexpectedtocomeintoeffectinDecember2025.Electrificationofvehicleshasbecomethekeyinitiativetoreachzerovehicularemissionsandzerocarbonemissionsinthetransportsectorbefore2050.Inthenextthreeyears,HKCwillprovideanadditional7000parkingspaceswithelectricvehiclechargersingovernmentbuildingsandwillcollaboratewithfranchisedbuscompaniesandotherstakeholdersforcommencingtrialsofhydrogenfuelcellelectricbusesandheavyvehicles.Atthesametime,HKChassetatargetofintroducingabout700electricbusesand3000electrictaxisbytheendof2027.EnergysupplyandconsumptionTotalprimaryenergysupplyHKChasbeenrelyingalmostentirelyonimportedfuelstomeetitsenergydemands,eitherintheformofoilandcoalproductsortransformedintosecondaryenergyforfinalconsumption,suchaselectricityandgas.Energysupplyfromrenewableshasbeenproduceddomesticallythroughsmall-scalewindpowerprojects,waste-to-energyprojectsandgovernment-fundedandnon-fundedsolarphotovoltaic(PV)projects.HKC'stotalprimaryenergysupplyhadremainedstableatabout600PJsince2000beforeitdroppedto535petajoules(PJ)in2020,declining11%or64PJfromthepreviousyear(Figure1).HKCwasamong14economiesintheAPECregionthatexperiencedadropinsupplyduetolowerenergydemandduringtheCOVID-19lockdownin2020.Renewablesourceaspartofthetotalprimaryenergyproduction,hasremainedstableatabout5PJsince2016.Apartfromlowenergydemandacrossend-usesectorsexceptfortheresidentialsector,the23%significantdropinnetimportsin2020wasalsopartiallyduetothegradualreductionofcoalconsumptioninelectricitygeneration.In2020,46%ofoilproductsinHKCwasimportedfromChina,aswellas100%ofLPGandgas.73%ofcoalproductswasimportedfromIndonesia.Figure1:HongKong,China’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)FossilfuelshavedominatedHKC'stotalprimaryenergysupplyfortheProductionNetimportsTotalPrimaryEnergy…0200400600800100012001400160020002005201020152020APECENERGYOVERVIEW202374pasttwodecades,withchangesinstructureovertheperiod(Figure2).Coal'ssharerosefrom31%in2000to57%atthepeakin2014,andgraduallydecliningto26%in2020.Inmeanwhile,gas'sshareincreasedfrom16%in2014to36%in2020toreplacecoalinelectricitygeneration.Oil'sshareshowedasimilartrendasgas,butataslowerrate,from22%to29%overthesameperiod.Renewablesandothersgrewfrom5.6%in2000to9.4%in2020,asthegeographicalconstraintlimitedthelarge-scalerenewablesourcesinHKC.Figure2:HongKong,China’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)HKC'stotalprimaryenergysupplystructureshowedarelianceonfossilfuelsabout5%higherthantheentireAPECregionin2020,partlybecauseofalargershareofgas(Figure3).Thecoalsharewas8.8%lower,whiletheoilsharewasalmostthesame.TheshareofrenewableswassignificantlylowerthantheAPECregion.Figure3:Energysupplymix–HongKong,ChinaandAPEC,2020Source:EGEDA(2022)TotalfinalconsumptionHKC'stotalfinalconsumptiondeclinedbyaboutaquarterfrom374PJin2000to282PJin2005,drivenbyfallingdemandfromtheindustrysectorduetotherelocationoflabour-intensivemanufacturingindustrytoChinaorothereconomies(Figure4).EconomicgrowthinHKChadledtoasteadygrowthoffinalconsumptionbeforeitwasimpactedbythefinancialcrisisin2008.Sincethen,thefinalconsumptioninHKChasstabilisedatanaverageof277PJ.Thecommercialandtransportsectorswerethemainend-usesectorsforthepast20years,accountingfor42%and29%ofallend-useenergyconsumptionin2020.Thecommercialsectorhasexperienced0100200300400500600700200020012002200320042005200620072008200920102011201220132014201520162017201820192020CoalOilGasRenewablesOthersCoalOilGasRenewablesOther0%20%40%60%80%100%HongKong,ChinaAPECAPECENERGYOVERVIEW202375steadyenergygrowthsince2000,whilethetransportsectorhasslowlydeclinedinenergyconsumption.In2004,theformersurpassedthelatterforthefirsttime,becamethelargestconsumptionsector,andhasbeenrisinggraduallysincethen.LimitedeconomicactivitiesduetotheCOVID-19lockdownin2020causedadropinenergyconsumptionacrosssectors,exceptfortheresidentialsector.Figure4:HongKong,China’sfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)HKC'scommercialsectorenergyconsumptionsharewasfivetimeslargerthantheAPECregionin2020(Figure5),asservicesactivitieshavecontributedthelargestshareofeconomicoutputsincetheearly2000s.Thetransportsector'ssharewasslightlyhigherthantheAPECregion,whileindustryandagricultureandothersectors'sharesweremuchsmaller.Figure5:Finalconsumptionbysector,HongKong,ChinaandAPEC,2020Source:EGEDA(2022)FinalenergydemandHKC'sfinalenergydemandwasstableataround280PJfrom2010to2019beforedecliningby4.3%to268PJ(Figure6).Thefinalenergydemandhasbeendominatedbytheelectricityandotherscategorysince2004.Theshareofelectricityandothersrosefrom50%in2004to60%in2020.Theelectricityandothers’shareincreasedby1.7%in2020comparedtothepreviousyear,asmostpeopleinHKCworkedfromhomeduringtheCOVID-19lockdown.Demandforoil,gas,renewables,andelectricityandothersdroppedin2020,reflectinglimitedmobilityandsloweconomicactivitiesduetotheCOVID-19lockdown.050100150200250300350400200020012002200320042005200620072008200920102011201220132014201520162017201820192020IndustryTransportCommercialResidentialAgriculture&othersNon-energyIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%HongKong,ChinaAPECAPECENERGYOVERVIEW202376Figure6:HongKong,China’sfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsAsaservices-basedeconomy,HKC'selectricityandothers’sharewasalmostdoublecomparedtotheAPECregionin2020(Figure7),withtheenergymostlyconsumedbythecommercialandresidentialsectors.Thesharesofoil,gasandrenewablesweresmallerthanintheAPECregion,whileend-usersinHKCdidnotconsumecoalin2020.Figure7:Finalenergydemandfuelshare,HongKong,ChinaandAPEC,2020Source:EGEDA(2022)TransformationPowersectorInthetotalprimaryenergysupply,HKC'selectricitygenerationreliesheavilyonfossilfuels,specificallycoalandgas.However,thestructurehasgraduallychangedbetweenbothfuelsforthepasttenyears,followingtheHKCdecarbonisationplaninthepowersector.OntopofitscommitmenttotheParisAgreement,HKCreleasedtheClimateActionPlan2030+(CAP2030+)in2017,whichcomprisesatargetandmitigationstoreducecarbonemissionsby2030.OneofthemitigationsinCAP2030+istophasedowncoalconsumptiongraduallyin050100150200250300350400200020012002200320042005200620072008200920102011201220132014201520162017201820192020CoalOilGasRenewablesElectricityandothersCoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%HongKong,ChinaAPECAPECENERGYOVERVIEW202377electricitygeneration.Asaresultofdecarbonisationcommitment,thecoalshareinelectricitygenerationdeclinedbymorethanhalf,from80%in2013to35%in2020(Figure8),whiletheshareofelectricitygenerationfromgasincreasedfrom19%in2013to66%in2020.ItreflectstheshiftfromcoaltogasinHKC'spowersector.Allotherfuelsasidefromcoalandgasaccountedforlessthan1%ofthefuelmixin2020.Otherrenewablesandothersincreasedbyabout51%inayear,increasingfrom0.11TWhin2019to0.17TWhin2020.Aboutonequarterofotherrenewablesandotherswasgeneratedfromsolarphotovoltaicsin2020.HKCwillgraduallyreducetheuseofcoalinelectricitygenerationandfinallyceasecoaluseby2035,asstatedinHongKong,China’sClimateActionPlan2050.Gaswillbetheprimaryfueltoreplacecoal,supportedbyotherrenewables.Otherrenewables’sharewillbeincreasedto7.5%to10%ofthefuelmixinelectricitygenerationby2035andfurtherincreasingto15%by2050.Figure8:HongKong,China’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)HKCreliesheavilyonimportedfossilfuelstogenerateelectricityandmeetdemands.Mostoftheimportedcoalandgasin2020wastransformedintoelectricityforfinalconsumption.ThedominanceofbothfuelsinthepowersectorisapparentcomparedtotheAPECregion'sgenerationmixin2020(Figure9).05101520253035404550200020012002200320042005200620072008200920102011201220132014201520162017201820192020CoalOilGasHydroOtherrenewablesOthersAPECENERGYOVERVIEW202378Figure9:Electricitygenerationfuelshare,HongKong,ChinaandAPEC,2020Source:EGEDA(2022)EnergytransitionEmissionsHKCCO2emissionsincreasedbyaboutathirdbetween2000to2014,peakingat40milliontonnesin2014.Sincethen,CO2emissionsdecliningto29milliontonnesin2020whichisevenlessthanin2000.VariousdecarbonisationmeasuresfromboththesupplyanddemandsideshavesupportedthereductionofCO2emissionsinHKC,includingpromotingelectricvehiclesandenergy-savingmeasures,introducinginnovativewaste-to-energyandwaste-to-resourcesfacilities,andreducingcoaluseinelectricitygeneration.Figure10:HongKong,China’sCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecurityHKCwillstartdiversifyingitsgassourcesbyimportingliquefiednaturalgas(LNG)throughtheoperationofitsfirstoffshoreLNGreceivingterminalinmid-2023.Besidesfuelsourcediversificationpurposes,theoffshoreLNGreceivingterminal,withamaximumregasificationcapacityof800millionstandardcubicfeetperday,isexpectedtomeetthegrowinggasdemandmainlyfromthepowersector.Thefirstfloatingstorageandregasificationunit(FSRU)vesselarrivedinHKCon13April2023,andpreparesgotfinalcommissioningtogointoservice.CoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%HongKong,ChinaAPECCO2combustionemissions05101520253035404520002005201020152020APECENERGYOVERVIEW202379APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective-toimproveenergyintensityandtodoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargettoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.HKChassetitsownenergyintensitytargettoreduceitsenergyintensityby40%in2025,relativetoa2005baseline,asstatedintheEnergy-SavingPlanforHongKong'sBuiltEnvironment2015-2025+.HKC'sfinalenergyconsumptionintensitydeclinedby32%from2005to2020,about2.6%annuallyreduction.TheenergyintensityreductioninHKChasalsocontributedtothepositiveprogresstowardsachievingAPEC'senergyintensitygoal.Figure11:HongKong,China’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.HKC'sshareofmodernrenewablesinfinalenergyconsumptionreached0.9%in2020,increasingbyabout50%in10years(Figure12).Therenewablesshareinelectricitygenerationisrelativelylow.Havingsaidthat,therewasarisingfrom0.11%to0.35%overthesameperiod(Figure13).TotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012014016018020002005201020152020202520302035APECENERGYOVERVIEW202380Figure12:HongKong,China’smodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.HKCcommittedtoincreasingtheshareofrenewablesinthefuelmixforelectricitygenerationto7.5%to10%by2035and15%by2050throughdevelopingmoreadvancedwaste-to-energyfacilitiesandoffshorewindfarmsandintroducingaFeed-inTariff(FiT)Schemetoencouragethecommunitytodevelopdistributedrenewables,specificallysolarenergy.Figure13:HongKong,China’srenewablegenerationshare,2000to2020Source:EGEDA(2022)Changefrom2010to20200.0%0.1%0.2%0.3%0.4%0.5%0.6%0.7%0.8%0.9%1.0%2010Change2020Renewablesshareinelectricitymix0.00%0.05%0.10%0.15%0.20%0.25%0.30%0.35%0.40%20002005201020152020APECENERGYOVERVIEW202381EnergypolicyEnergypolicyDetailsReferenceGreenTechFund(GTF)HKD400millionhasbeenallocatedforsettinguptheGTFtoprovidebetterandmorefocusedfundingsupportforenvironmentalprotectionGTFEnergyEfficiencyInitiativesMandatoryEnergyEfficiencyLabellingScheme(MEELS),VoluntaryEnergyEfficiencyLabellingScheme(VEELS),BuildingEnergyEfficiencyOrdinance(BEEO),DistrictCoolingSystem(DCS),Retro-CommissioningMEELS,VEELS,BEEO,DCS,RCxRenewableEnergyInitiativesFeed-inTariffandRenewableEnergyCertificate,Installingrenewableenergysysteminvariousgovernmentschoolsandwelfarenon-governmentorganisations,Waste-to-energyinfrastructuresGOVHK,HKRENetSchemeofControlAgreements(SCAs)PromotesthedevelopmentofqualityservicebypowercompaniesandimprovesenergyefficiencyandenergyconservationEnvironmentandEcologyBureauAmemorandumofunderstandingbetweentheNationalEnergyAdministration(NEA)andHKCChinaprovidesHKCwithastablesupplyofnaturalgasandnuclearelectricityEnvironmentandEcologyBureauEnergy-SavingPlanforHongKong'sBuiltEnvironment2015-2025+Comprisesanenergy-savingpolicyandstrategiestoachieveenergyintensityreductionby40%fromthe2005levelby2025EnvironmentandEcologyBureauClimateActionPlan2030+reportPlansandmeasuresacrosssectorstoreducecarbonintensityby65%to70%fromthe2005levelby2030,equivalenttoa26%to36%absolutereductionandareductionto3.3–3.8tonnesonapercapitabasis.CLIMATEREADYClimateActionPlan2050Comprehensiveplansandmeasuresacrosssectorstoachievecarbonneutralitybefore2050EnvironmentandEcologyBureauHKCRoadmaponPopularisationofElectricalVehiclesMeasuresrelatedtoelectricvehiclestoachievezerovehicularemissionsbefore2050EnvironmentandEcologyBureauAPECENERGYOVERVIEW202382CleanAirPlanforHKC2035Comprehensivepolicies,measuresandlong-termdecarbonisationstrategiestoimprovetheairqualityEnvironmentandEcologyBureauBuildingaLiveableCityStrivingtowardscarbonneutralitybefore2050PolicyAddress2021NotableenergydevelopmentsEnergydevelopmentDetailsReferenceGreenTechFund(GTF)GTFAssessmentCommitteeapproved22projectsfrom288applicationsreceivedduringthefirstandsecondroundsoftheGTFapplicationwithatotalgrantofaroundHKD100million.ThethirdroundofGTFapplicationswillbeclosedon14March2023.GreenTechFundTaxIncentivesSchemeforEnvironment-friendlyCommercialVehiclesHKCreleasedaQualifyingStandardforEnvironment-friendlyCommercialVehicles,whichwilltakeeffectfrom1April2023to31March2024.EnvironmentalProtectionDepartmentLNGReceivingTerminalThefirstHKCLNGreceivingterminalisexpectedtocommenceitsoperationin2023.Thefloatingstorageandregasificationunit(FSRU)vesselhasastoragecapacityof263000cubicmetres,aregasificationcapacityof800millionstandardcubicfeetperday.CLPHKEOffshoreWindFarmTheproposedoffshorewindfarmisfourkilometresfromLammaPowerStation.Itwillcompriseabout13to19windturbineswithatotalcapacityofabout150MWandistargetedforcommissioningin2027.HKElectricUsefullinksTheHKCGovernment–www.gov.hk/enElectricalandMechanicalServicesDepartment–www.emsd.gov.hkEnvironmentandEcologyBureau-https://www.eeb.gov.hkEnvironmentalProtectionDepartment–www.epd.gov.hkCouncilforSustainableDevelopment–https://www.eeb.gov.hk/en/susdev/council/pastreports.htmClimateReady–www.climateready.gov.hkInformationonRenewableEnergy(RE)Technologies-https://re.emsd.gov.hk/APECENERGYOVERVIEW202383LowCarbonLivingCalculator–https://www.carboncalculator.gov.hkReferencesAsianPower(2022),WhathappenstoCLPPowerasHongKongtransitionstocarbonneutrality,https://asian-power.com/ipp/exclusive/what-happens-clp-power-hong-kong-transitions-carbon-neutralityAssociationofProjectManagement(APM)(2022),SiteVisit–ChinaLightandPower’s(CLP)CombinedCycleGasTurbinePlant(CCGT)D2Project,ArticleRelease,9August2022,https://www.apm.org.uk/news/site-visit-china-light-and-power-s-clp-combined-cycle-gas-turbine-plant-ccgt-d2-project/CensusandStatisticsDepartment,HongKongSpecialAdministrativeRegion(2021),HongKongEnergyStatistics–2020AnnualReport,https://www.censtatd.gov.hk/en/data/stat_report/product/B1100002/att/B11000022020AN20B0100.pdfElectrical&MechanicalServicesDepartment(EMSD)(2022),HongKongEnergyEnd-useData2022,https://www.emsd.gov.hk/filemanager/en/content_762/HKEEUD2022.pdfHongKongSpecialAdministrativeRegionofthePeople'sRepublicofChina(2022),TheChiefExecutive's2022PolicyAddress,https://www.policyaddress.gov.hk/2022/en/index.htmlLNGPrime(2023),HKElectricexpectstolaunchHongKong'sfirstLNGimportfacilityinmid-2023,ArticleRelease,9January2023,https://lngprime.com/asia/hk-electric-expects-to-launch-hong-kongs-first-lng-import-facility-in-mid-2023/70433/NikkeiAsia(2021),AsianpowercompanyCLPvowstodropcoalby2040infastertransition,PressRelease,23September2021,https://asia.nikkei.com/Business/Energy/Asian-power-company-CLP-vows-to-drop-coal-by-2040-in-faster-transitionPinsentMasons(2022),HongKongtargetsfirstoffshorewindplantin2027,ArticleRelease,13May2022,https://www.pinsentmasons.com/out-law/news/hong-kong-targets-first-offshore-wind-plant-in-2027APECENERGYOVERVIEW202384IndonesiaIntroductionIndonesiaistheworld’slargestarchipelagiceconomy,locatedtothesoutheastofmainlandSoutheastAsia,betweenthePacificOceanandtheIndianOcean.Theeconomy’stotallandarea(25%ofitsterritory)isapproximately1.9millionkm2,andthepopulationwasaround273millionin2021(BPS,2022b).Indonesiahadagrossdomesticproduct(GDP)ofUSdollar(USD)3130billionandaGDPpercapitaofUSD11445in2020(2017USDpurchasingpowerparity[PPP]),recordinganannualdecreaseof2.1%and3.1%since2019,respectively(WorldBank,2021),primarilyduetotheCOVID-19pandemic.Indonesia’seconomyreboundedin2021,withamodestgrowthof3.7%(CoordinatingMinistryforEconomicAffairs[MOE],2022).In2022,Indonesia’seconomygrewattherateof5.7%(quarterthreey-on-y)(BPS,2022a),anditisprojectedtogrowby5.3%in2023(MOE,2022a).Indonesiaisanetenergyexporter,withcoalasthemainenergyexportcommodity.In2021,coalexportsreached435milliontonnes,withtheexportdestinationsincludingChina,India,Japan,andKorea(MEMR,2021a).Indonesiaupdateditsnationallydeterminedcontribution(NDC)inSeptember2022.InthisnewenhancedNDC,Indonesiaincreaseditscommitmenttotheemissionreductiontargetin2030comparedtothe2010levelfrom29%intheFirstNDCandtheUpdatedNDCto31.89%unconditionallyandfrom41%intheUpdatedNDCto43.20%conditionally.ThisenhancedNDCandtheLong-TermLowCarbonandClimateResilienceStrategy(LTS-LCCR)2050containedIndonesia’svisiontoachievenet-zeroemissionsby2060orsooner(UNFCCC,2022).In2022,IndonesiaandtheInternationalPartnersGroup(IPG)launchedtheJustEnergyTransitionPartnershiptoaccelerateIndonesia’stransitiontowardscleanerenergyinthefuture.Theaimofthislong-termpartnershipistomobiliseaninitialUSD20billioninpublicandprivatefinancingoverthreetofiveyearsforIndonesia’senergytransitionandtoachievetheclimateenergytarget(EU,2022).Table1:IndonesiamacroeconomicdataandenergyreservesKeydataa,bEnergyreservesc,dArea(millionkm2)1.9Oil(billionbarrels)2.4Population(2021million)273Gas(trillioncubicfeet)44GDP(2017USDbillionPPP)3130Coal(milliontonnes)34869GDPpercapita(2017USDPPP)11445Uranium(tonnesU<USD130/kgU)5300Source:aABS(2022);bWorldBank(2022);cBP(2022);dOECD(2020)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.Indonesiahassubstantialanddiverseenergyresourcesofoil,naturalgas,coalandrenewables.In2020,theprovenoilprovenreserveswere2.4billionbarrels,andtheprovennaturalgasreservesamountedtoover44trillioncubicfeet(tcf).Inthesameyear,Indonesia’scoalreservewasestimatedatalmost35billiontonnes(Table1),withmoreAPECENERGYOVERVIEW202385than60%ofthereserveinKalimantan,andtherestmainlyinSumatra(MEMR,2021b).In2015,renewableenergypotentialincluded29.5gigawatts(GW)ofgeothermal,75GWofhydropower,208GWofsolar,33GWofbioenergy,61GWofwindpowerand17.9GWofoceanenergy(NationalEnergyPlan,2017).EnergysupplyandconsumptionTotalprimaryenergysupplyIn2020,Indonesia’stotalprimaryenergysupply(TPES),productionandnetimportsdeclined.Comparedtopreviousyear,TPESdeclinedby5.7%toreach10139petajoules(PJ),whereasannualenergyproductiondeclinedmoresteeplyby7.9%andreached19115PJ(Figure1;ExpertGrouponEnergyDataAnalysis[(EGEDA,2022).Indonesiaisstillanetenergyexporter,thoughthenetexportdeclinedin2020.Indonesiaisanetexporterofenergy,withthermalcoalandnaturalgasarebeingthemosttwopredominantexportcommodities(MEMR,2021a).Indonesiaisoneoftheworld’sbiggestthermalcoalexporters.In2020,coalproductionwas8.5%lowerthanin2019duetodecreasingcoaldemandcausedbytheCOVID-19pandemic.Nonetheless,in2021,coalproductionandexportreboundedtoalmostthesamelevelasitwasin2019,withproductionamountingto613milliontonnesandexportsreaching435milliontonnes(MEMR,2021a).Indonesia’snaturalgasproductionisdecreasing.Inthepastdecade,gasproductionhasshownadecliningtrend;itfellfrom2.9millionMMSCFin2011to2.1millionMMSCFin2021(MEMR,2021a).Nevertheless,gaswasstillIndonesia’ssecond-largestenergyexportin2020,amountingto184000MMSCFexportedviapipelineand507000thousandMMBTUviaLNG(MEMR,2021a).Indonesia’ssecond-largestenergyexportin2019wasgas,with252000MMSCFexportedviapipelineand513000MMSCFexportedviaLNG(MEMR,2021b).Figure1:Indonesiaenergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)Indonesia’senergymixisstillheavilyreliantonfossilfuels,especiallycoalandoil(Figure2).In2020,Indonesia’sTPESdecreasedbyabout6%fromthepreviousyeartobecomearound10139PJ,withthebiggestdropinTPESbeingfromoil,whichdecreasedby15%comparedtothepreviousyear.ThishighdecreaseinoilsupplyispartlyexplainedbyasignificantdropinoildemandfromthetransportsectorduetotheCOVID-19pandemic.ProductionNetimportsTotalPrimaryEnergySupply-15000-10000-5000050001000015000200002500020002005201020152020Production,netimportsandTPES(PJ)APECENERGYOVERVIEW202386Figure2:Indonesiaenergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)Naturalgassupplyalsodeclinedin2020byabout13%comparedtothepreviousyear,amountingtoabout1417PJ,whichisthelowestlevelofgassupplyinTPESinthepastdecade(EGEDA,2022).Coalsupplyslightlyincreasedin2020anditisstillthedominantfuelinTPES(41%).CoalinIndonesiaismainlyusedforpowergeneration,andin2020,from131milliontonnesofdomesticcoalconsumption,around105milliontonnes(80%)wereconsumedbythepowersector(MEMR,2021a).Ontheotherhand,therenewableenergysupplyshowedasignificantincreaseofabout7%in2020,withtheresultthatitsshareinTPESincreasedfrom14%inthepreviousyearto15%in2020.Figure3:Energysupplymix–IndonesiaandAPEC,2020Source:EGEDA(2022)Asof2020,fossilfuelsaccountedformorethan80%ofIndonesia'senergysupplyandthatoftheAPECregionatlarge(Figure3).InIndonesia,coalaccountedforaslightlyhighershareofthefuelmixthaninAPEC.TheamountofoilwasproportionallylargerinIndonesiaat29%,comparedwith27%intheAPECregion.Highdemandfromthetransportsectordroveuptheproportionofoilto29%.RenewableenergyinIndonesia(15%)wasalmostdoublethatofAPEC(8%),while,gaswasrecordedat14%inIndonesiaasopposedto24%inAPEC.TotalfinalconsumptionIndonesia’sfinalenergydemanddecreasedbyalmost8%in2020comparedto2019(Figure4).Totalfinalconsumptionwas6542PJin2020.Thetransportsector’senergyconsumptiondecreasedbymore020004000600080001000012000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersCoalOilGasRenewablesOther0%20%40%60%80%100%IndonesiaAPECAPECENERGYOVERVIEW202387than16%in2020,fallingbymorethan360PJ,whichwasthebiggestdropcomparedtoothersectorsin2020.TheofficiallockdownandlowerlevelsofmobilityduetotheCOVID-19pandemicexplainmostofthisfall.Thefinalenergydemandforindustryalsofell,thoughasnotdeeplyasinthetransportsector,decreasingby6%in2020comparedtotheyearbeforetothelevelof2879PJ.Nevertheless,withthisdropin2020,industrystillhasconsistentlybeenthelargestenergyconsumingsectorformultipledecades.Figure4:Indonesiafinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)In2020,thecommercial,agricultural,andothersectorsconsumedaround300PJ,representingalsosignificantpercentagedecreasecomparedtotheyearbefore,thoughFigure4showsthatthesesectorsonlyaccountedforasmallproportionofallend-useconsumption.Incontrast,theresidentialsector’sfinalenergydemandincreasedbyaround3.5%in2020.TravellimitationsandanincreasingtrendofworkingfromhomeduringtheCOVID-19pandemicboostedthefinalenergydemandintheresidentialsector.Figure5:Finalconsumptionbysector,IndonesiaandAPEC,2020Source:EGEDA(2022)Thetransport,industryandresidentialsectorsaccountedforthelargestproportionoffinalenergydemandinIndonesiaandtheAPECregionin2020(Figure5).Industryenergyconsumptionwasthemostprominent,followedbytransportandresidential,inbothIndonesiaandAPEC.Theindustrysharewasaround44%oftotalconsumptioninIndonesia,whileinAPECthesharewasaround33%.Thetransportsector’sshareforIndonesia(28%)wasalittlehigherthanAPEC(24%)in2020.Itwas010002000300040005000600070008000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyIndustryTransportCommercialResidentialAgriculture&…Non-energy0%20%40%60%80%100%IndonesiaAPECAPECENERGYOVERVIEW202388thesamestoryfortheresidentialsector’sfinalenergydemand,wherethefigureforIndonesiawas19%whileinAPECitwas16%.Thesignificantdifferencewasthatthenon-energyshareinAPECwassignificantlyhighcomparedtoIndonesiain2020.FinalenergydemandOverthepastseveraldecades,oilhasrepresentedthebulkofIndonesia'sfinalenergyconsumptionmainlyconsumedinthetransportsector,thoughitsshareinfinalenergydemandhasbeenfallingsince2018.In2020,theoildemanddroppedbyaround12%comparedtothepreviousyearasthetransportdemanddecreasedsignificantlyandasaresulttheoildemandsharebecame44%in2020(Figure6).Figure6:Indonesiafinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproducts.Coalinfinalenergydemand(FED)ismainlyconsumedintheindustrysectorapplications.Astheindustry’sactivitieswereslowingdownduetotheCOVID-19pandemic,thecoaldemandinFEDdeclinedby8%in2020.RenewableconsumptioninFEDalsofellin2020,reducingitsshareofthefinalenergydemandto5.8%.Naturalgasconsumptionincreased,accountingforabout554PJin2020,withitsshareincreasingonlymarginallyto8.8%ofIndonesia’sfinalenergydemand.Electricityandothersectors’demandalsoslightlyincreasedin2020,increasingslightlytheirshareto15%(EGEDA,2022).Figure7:Finalenergydemandfuelshare,IndonesiaandAPEC,2020Source:EGEDA(2022)Indonesia’sfinalenergydemandisdominatedbyoil(44%)andcoal(26%)withbothtogetherrepresentinga70%sharein2020(Figure7).Incontrast,oilandcoalinAPEC’senergysharerepresentedabout010002000300040005000600070008000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersCoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%IndonesiaAPECAPECENERGYOVERVIEW20238945%.ElectricityandothersinAPEChadasignificantlyhighshareofabout33%,whileinIndonesiaitwasjust15%.Nevertheless,ascanbeseeninFigure7,therenewablessharewasslightlyhigherinIndonesiathaninAPECin2020;around6%forIndonesiaandabout4%inAPECgenerally.TransformationPowersectorIn2020,290terawatt-hours(TWh)ofelectricitywasgenerated,aslightdeclineofabout1.1%comparedto2019.Indonesia’spowersectorhasbeenincreasinglyreliantoncoal(Figure8),withcoal’sshareinelectricitygenerationincreasingfrom37%in2000to62%in2020(EGEDA,2022).Indonesia’sinstalledelectricitygenerationcapacityin2020wasabout73GW,whichcomprisedbothon-andoff-gridgeneration(MEMR,2021a).Thiscapacityincreasedby3.1GWcomparedtototalcapacityinthepreviousyear,dominatedbycoalcapacityadditionsofabout1.9GW(MEMR,2021a),andthisexplainedtheincreasingcoalgenerationin2020,whilethetotalelectricitygenerationwasslightlydecreasedin2020(Figure8).Coalsupplyforpowergenerationismainlyproduceddomestically.In2020,eventhoughthecoalproductiondecreased,thedomesticcoalforpowergenerationincreased,amountingto105milliontonnes(MEMR,2021a).Electricitygenerationfromgasdecreasedsignificantlyby18%in2020,resultinginafallofthegasshareinelectricitygenerationfrom21%in2019to18%in2020(EGEDA,2022).However,renewableenergygenerationfromhydro,geothermalandothersourcesisrelativelysmallinitsshare,butincreasedsignificantlybyaround11%,withthegreatestincreasefromhydropower(EGEDA,2022).Thenewadditionofhydropowergenerationcapacityofaround144MW(MEMR,2021a)partlyexplainedtheincreasedoverallgeneration.Figure8:Indonesiaelectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)IncontrasttothegenerationmixforAPECin2020,coaldominatesIndonesia'spowersector(Figure9).Indonesiaproduced62%ofitselectricityfromcoal,comparedwith42%inAPEC.TherewerealmostthesamepercentagesofgasinIndonesiaandAPEC,at18%and21%respectively.AproportionatelyloweramountofhydropowerisgeneratedinIndonesiathaninAPEC(8%asopposedto15%).GeothermalgenerationinIndonesiaaccountedfor5%ofitstotal050100150200250300350200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersAPECENERGYOVERVIEW202390energygeneration,whichwaslargeincomparisontootherAPECeconomies'negligibleshares.Otherrenewables’generationinIndonesiaisexpectedtogrowduetoabundantrenewablepotentialandincreasinglycost-competitivetechnologies.Figure9:Electricitygenerationfuelshare,IndonesiaandAPEC,2020Source:EGEDA(2022)RefiningIn2021,theywereeightoperatingoilrefineriesinIndonesia,withatotalrefinerycapacityof1151MBSD(millionbarrelsofsteamperday),withthebiggestrefinerycapacityislocatedinCilacap(MEMR,2021a).Thecrudeoilinputfortherefineriescomesbothfromdomesticsourcesandimports.Importedcrudeoilfulfilledaroundone-thirdofrefinerydemandin2021(MEMR,2021a).Thecurrentlyoperatingrefineriesproducedintotalaround255048thousandBOE(barrelsofoilequivalent)in2021,whichsatisfiedaround60%ofthefuelfinalenergyconsumptionin2021(MEMR,2021a).EnergytransitionIn2021,Indonesiaannounceditsnet-zerointentionsbyissuingitsLong-TermStrategyonLowCarbonandClimateResilientDevelopment(LTS-LCCR)2050documents,containingitsintentionsforachievingtowardsnet-zeroemissionsby2060.In2022,Indonesiaupdateditsnationallydeterminedcontribution(NDC).InthisnewenhancedNDC,Indonesiaincreaseditscommitmenttotheemissionreductiontargetof2030.Intheenergysector,MEMRandIEAlaunchedIndonesia’sNetZeroEmission(NZE)roadmapinSeptember2022(MEMR,2022a).TheroadmapidentifiesseveralmitigationactionstoachieveIndonesia’sNZEtarget,whichincludemassivedevelopmentofrenewableswithafocusonsolar,hydro,andgeothermal,thegradualphasedownofcoalpowerplants,improvingtransmissionconnectivityandCCS/CCUS,conversiontoelectricvehicles,improvingenergyefficiencyandtheuseanddevelopmentofnuclear,hydrogen,andammoniaintheenergysector(MEMR,2022a).TheJustEnergyTransitionPartnership(JETP)isexpectedtobeabletoacceleratetheenergytransitioninIndonesia.TheJETPisalsoaimingforamoreambitiousenergytransitiontargetinIndonesia,whichincludesapeakingdateforpowersectoremissionsby2030andacceleratedcoalplantretirement(Embassy,2022).CoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%IndonesiaAPECAPECENERGYOVERVIEW202391EmissionsBasedontherecordedCO2emissionsfromcombustionactivitiesintheenergysector,Indonesia’sCO2combustionemissionshavemaintainedanincreasingtrendforthepasttwodecades(Figure10).Onaverage,theCO2combustionemissionsincreasedby4.7%CAGRfrom2000,thoughwecanseethatin2020theemissionsdecreasedbyabout6%comparedto2019.Figure10:IndonesiaCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecurityCoal,oilandgashavedominatedIndonesia’senergysupply.In2020,thethreefossilfuelsrepresentedan85%shareofTPESwithcoalhavingthebiggestshareof41%(EGEDA,2022).MostofthefossilfuelsupplyisproduceddomesticallyinIndonesia,ascurrentlyIndonesiaisanetenergyexporter,securingtheavailabilityofenergyfortheeconomyespeciallyfromcoalandgas.However,foroil(crudeoilandoilproducts),Indonesiahasshiftedfrombeinganetoilexportertobeinganimporter(EGEDA,2022),exposingfurthertheIndonesia’soilsupplysecuritytotheglobalmarketfluctuation.Nevertheless,Indonesia’sself-sufficiencyrate(energyproduction/TPES)wasstillconsiderablyhighat189%in2020(EGEDA,2022).Tomaintainaffordabilityoftheenergydemand,Indonesiahasregulatedtheenergypricefordomesticconsumption.In2022,theeconomystillcontinuedthedomesticmarketobligationpolicyforcoal,whichimposedthecoalminerstoallocate25%oftheircoalproductionfordomesticconsumptionandcappedthecoalpriceat70USD/tonforelectricityand90USD/tonfortheindustry.Thesameistrueforgas,sinceIndonesiahassetfixedpricesforgasusedforelectricityandspecifictypeofindustriesfrom2021to2024(MEMR,2022b).APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetcollectively:improvingenergyintensityandincreasingtheshareofrenewablesintheirenergymix.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirambitionstoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.APECisontracktomeetthisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotrackindividualAPECeconomies’progressinrelationtotheoverarchingproportionalimprovement.CO2combustionemissions010020030040050060070080020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW202392In2020,Indonesia’stotalfinalenergyconsumptionintensity(notincludingnon-energy)improvedbyaround33%relativeto2005.ThishascontributedtoAPEC’soverallcommitmenttoimproveenergyintensityby45%by2035,asshowninFigure11.Figure11:Indonesiatotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)DoublingofRenewablesThesecondenergygoalinvolvesdoublingmodernrenewables’shareintheAPECenergymixfor2010–2030.Modernrenewablesdonotincludetraditionalbiomass,andtheshareisrelativetofinalenergyconsumption(excludingnon-energyconsumption).Thereisnoeconomy-levelgoalforindividualmembereconomies.However,itispossibletocalculatetherelativeimprovementofindividualeconomiestounderstandhowtheycancontributetowardsthedoublinggoal.Figure12:Indonesiamodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.Indonesia’sshareofmodernrenewablesinitsfinalenergyconsumptionin2010was7.3%.In2020,thatproportionalsharewas7.1%(Figure12).Inthepastdecade,useoffossilfuels,especiallycoalandoil,hasincreasedinIndonesiatomeetthefast-growingenergydemand(EGEDA,2022).Themodernrenewablesharesinthe2020shaveactuallybeenbiggerthanin2019.ThedecreasingfossilfuelTotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012020002005201020152020202520302035Energyintensityindex(2005=100)Changefrom2010to20200.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%2010Change2020APECENERGYOVERVIEW202393demand,especiallyfromoilinfinalenergyconsumptionandincreasingrenewablesinelectricitygenerationcontributedtotheincrease.Indonesia’spolicytowardsachievingnet-zeroemissionsby2060orsoonerwillprobablyincreasetheshareofrenewablesintheeconomy.Figure13:Indonesiarenewablegenerationshare,2000to2020Source:EGEDA(2022)BasedontheEGEDAdata,theshareofelectricitygenerationfromrenewablesinIndonesiaincreasedto18%(Figure13),whichwasasignificantincreasefrompreviousyearofaround16%(EGEDA,2022).Hydroandgeothermalwerestillthetwodominantformsofrenewableelectricitygenerationin2020(MEMR,2021a).WithIndonesia'sintentiontoachievenet-zeroemissions,combinedwithitsextensivedeploymentofrenewablepowergeneration,Indonesiaislikelytoincreaseitsrenewableshareofpowergeneration.Renewablesshareinelectricitymix0%2%4%6%8%10%12%14%16%18%20%20002005201020152020ProportionAPECENERGYOVERVIEW202394EnergypolicyEnergypolicyDetailsReferenceGeneralPlanofNationalEnergyIndonesiahasrenewableenergytargetsintheenergymixof23%in2025and31%in2050.MinistryofEnergyandMineralResourcesGeneralPlanofNationalElectricityElectricitygenerationtargetsare23%renewables,22%naturalgas,55%coal,0.4%oilby2025.For2038,targetsare28%renewables,25%naturalgas,47%coal,0.1%oil.MinistryofEnergyandMineralResourcesEnhancedNationallyDeterminedContributionofIndonesiaReductiontargetof31.89%andconditionalreductiontargetupto43.2%ofthebusinessasusualscenarioby2030,withreductiontargetsfortheenergysector12.5%andconditionally15.5%.UNFCCCoalgasificationProgramIndonesiaisprioritisingcoalgasificationasakeyenergysecurityprogram.Thefirstpilotprogramisdeliveryofthecoal-to-dimethyletherprojectinSumatera.Theconstructedplantcanproduce1.4tonsofDimethylEther(DME)peryearfrom2027.MinistryofEnergyandMineralResourcesOnemillionbarrelsofoilproductionProgramtoincreasedomesticoilproductionthroughinvestmentinnewoilfieldsandtheuseofenhancedoilrecovery.Throughthisapproach,oilproductionisexpectedtoincreasefrom705000bpdcurrentlyto1millionbarrelsperdayandgasproductionto12BSCFDby2030.MinistryofEnergyandMineralResourcesTheRefineryDevelopmentMasterPlanTherefinerydevelopmentmasterplanimprovesIndonesianenergysecuritybymandatingdomesticprocessingofoilproducts.Thisistargetedtoincreaseto1.3millionbpdby2025.PertaminaGreenRefineryProjectTheoilcompanyproduces100%dieselfrompalmoilafterconvertingtheexistingCilacaprefinery,producing6000bpdfrom2021.PertaminaNewSimplifiedGrossSplitproductionsharecontractIndonesianplanttointroducenewproductionsharecontract,simplifiedgrosssplit,foroilandgasdevelopmentinIndonesia.DirectorateGeneralofOilandGasGaspricingpolicyforindustryThegaspricefortheindustrialsectorwillbereducedtoorclosetoUSD6/MMBTUfor2020-2024MinistryofEnergyandMineralResourcesGaspricingpolicyforelectricitygenerationThegaspriceforelectricitygenerationwillbereducedtoorclosetoUSD6/MMBTUfor2020-2024MinistryofEnergyandMineralResourcesFuelconversiontoLPGforsmallfisheryboatsIndonesiacontinuesitsprogramtoconvertoilfueltoLPGforsmallfisheryboatsasanefforttoreduceemissions.DirectorateGeneralofOilandGasCitygasexpansionprogramIncreasestheshareofgassupplytobuildings,mostlyresidentialbuildings.Citygasnetworkexpansionincreasesfromupto662.431by2021.DirectorateGeneralofOilandGasBiodieselblendingrateprogramincreasedfrom30%to35%Mandatorybiodieselblendingprogramstartingfroma10%blendratein2016toa20%ratein2019andtoa30%ratein2020,anda35%ratefromFebruary2023onward.MinistryofEnergyandMineralResourcesAPECENERGYOVERVIEW202395EnergypolicyDetailsReferenceCoalDomesticMarketObligationImplementationoftheCoalDomesticMarketObligationrateat25%ofeachcoalminingcompany'sproduction,withasellingpriceofUSD70pertonforpowerproductionin2022MinistryofEnergyandMineralResourcesElectricVehicle(EV)DevelopmentProgramTargetforlightdutyEVstoreach2millionunitsandelectricmotorcyclestoreach13millionunitsby2030.DirectorateGeneralNewandRenewableEnergyandEnergyConservationThe2-wheelerInternalCombustionEngine(ICE)motorcycleconversionprogramCurrently,121millionunitsofICEtwo-wheelermotorcyclesareinoperationinIndonesia.Toacceleratetheelectrificationinthetransportsector,IndonesiaplanstolaunchanICEtoEVconversionprogramfortwo-wheelermotorcycles.MinistryofEnergyandMineralResourcesMandatoryEnergyEfficiencyMandatoryefficiencystandardsforhomeappliances(LED,lighting,aircirculatingandairconditioning)MinistryofEnergyandMineralResourcesEnergyEfficiencyImprovementProgramTheIndonesiangovernmentputforwardatargettoimproveenergyefficiencyby17%ofenergysavingin2025andby39%in2050againstbusinessasusualenergyconsumption.MinistryofEnergyandMineralResourcesIndonesiaNZERoadmapIndonesiawithcooperationwithIEAlauncheditsNZEroadmapfortheenergysectorof2060.MinistryofEnergyandMineralResourcesAcceleratingrenewableenergydevelopmentIndonesiahasissuedanewpresidentialregulationtoacceleratethedevelopmentofrenewableenergyandphaseoutitscoalpowergenerationplants.MinistryofEnergyandMineralResourcesIndonesiaaimstoincreasemineral-addedvaluebydevelopingdownstreamindustriesIndonesiaaimstoincreasemineral-addedvaluebydevelopingdownstreamindustries(notonlyproviding/exportingrawmaterials)andthebatteryindustrytosupportelectrification,especiallyinthetransportsector(EV)MinistryofEnergyandMineralResourcesNotableenergydevelopmentsEnergydevelopmentDetailsReferenceAbadiLNGProjectIndonesiamayformaconsortiumtotakeoverShellafterShell(35%)pulledoutfromtheMaselaBlock(AbadiLNGProject).Inthisproject,INPEXcontrols65%andhopestomakeafinalinvestmentinMaselainthelatterhalfofthisdecade.REUTERSAPECENERGYOVERVIEW202396EnergydevelopmentDetailsReferencePertaminabeginstheyear2023withdiscoveryofthousandsofbarrelsofoilreserves.PertaminamanagedtofindpotentialoildepositsandproducethousandsofbarrelsofnewoilreservesintheRokanWorkingArea.Therearefourmainstaywellsthatarecurrentlyinfocusbecausetheyhavesizeableoilreserves,namelyintheMinas,Petani,Benar,andBekasapfieldswhichproducebetween1000and1400barrelsperdayPertaminaBio-CNGfrompalmplantationIndonesiastartedtoproduceBio-CNGfrompalmplantations.Forthefirstphase,25installationsstartedtobeconstructedtoproduce387000M3Bio-CNG.MinistryofEnergyandMineralResourcesExtensionofOperation2055:BPLNGTangguhTerminalTheoperationcontractofLNGTangguhTerminaloperatedbyBPisextendedfrom2035to2055withanexpectednewinvestmentofUSD4.6billion.MinistryofEnergyandMineralResourcesCoal-to-DimethylEther(DME)ConversionProgramTheCoal-to-DMEconversionprogramisastrategytoreduceLPGimportsreliedonbythebuildingssector.DMEproductionisexpectedtobe1.4milliontonsperyearin2027,withatotalinvestmentvalueofaroundUSD2.1billionMinistryofEnergyandMineralResourcesJustEnergyTransitionPartnershipCommitmentwithIndonesiaTheEUandtheIPGlaunchedJETPwithIndonesia.ThislongpartnershipaimstomobiliseinitialUSD20billionoverathree-tofive-yearperiodtoachievefutureambitiousclimateandenergytargets.EuropeanCommissionAsiaZeroEmissionCommunity(AZEC)JapanandIndonesiainitiatedtheAZEC.Withthisinitiative,IndonesiaisprioritisedtoreceiveUSD500millioninfundingtoimplementtheenergytransition.MinistryofEnergyandMineralResourcesCCGT275MWinSumateraCCGTRiau,withatotalcapacityof275MW,starteditsoperationin2022.DirectorateGeneralofElectricityUsefullinksBPHMigas,DownstreamOilandGasRegulatoryAgency–www.bphmigas.go.idorwww.silvia.esdm.go.idDirectorateGeneralofElectricity–www.djk.esdm.go.idMinistryofEnergyandMineralResources(KESDM)–www.esdm.go.idAPECENERGYOVERVIEW202397MinistryofTransportation–www.dephub.go.idMinistryofIndustry–www.kemenperin.go.idNationalEnergyCouncil–www.den.go.idPTPertamina–www.pertamina.comPTPertaminaGas–www.pertagas.pertamina.comPTPGN(Persero)–www.pgn.co.idPTPLN(Persero)–www.pln.co.idSKKMIGAS,SpecialTaskForceforUpstreamOilandGas–www.skkmigas-esdm.go.idStatisticsIndonesia(BPS)–www.bps.go.idUNDPIndonesia–www.id.undp.orgWorldBank–www.worldbank.orgReferencesBPS.(2022a).BadanPusatStatistik-EkonomiIndonesiaTriwulanIII-2022Tumbuh5,72Persen(y-on-y).https://www.bps.go.id/pressrelease/2022/11/07/1914/ekonomi-indonesia-triwulan-iii-2022-tumbuh-5-72-persen--y-on-y-.htmlBPS.(2022b).StatisticalYearbookofIndonesia2022.StatistikIndonesia2022,1101001,790.https://www.bps.go.id/publication/2020/04/29/e9011b3155d45d70823c141f/statistik-indonesia-2020.htmlEGEDA.(2022).APECEnergyDatabase.ExpertGrouponEnergyDataAnalysis,APECEnergyWorkingGroup.https://www.egeda.ewg.apec.org/egeda/database_info/index.htmlEmbassy,U.(2022).UnitedStatesSupportstheLaunchoftheJustEnergyTransitionPartnership(JETP)inIndonesia-U.S.Embassy&ConsulatesinIndonesia.https://id.usembassy.gov/united-states-supports-the-launch-of-the-just-energy-transition-partnership-jetp-in-indonesia/EU.(2022).JustEnergyTransitionPartnershipwithIndonesia.https://ec.europa.eu/commission/presscorner/detail/en/IP_22_6926NationalEnergyPlan,(2017).https://www.esdm.go.id/en/publication/ruenAPECENERGYOVERVIEW202398MEMR.(2021a).HandbookEnergy&EconomicStatisticsIndonesia2021.MinistryofEnergyandMineralResourcesRepublicofIndonesia,23–26.https://www.esdm.go.id/en/publication/handbook-of-energy-economic-statistics-of-indonesia-heesiMEMR.(2021b).HandbookofEnergy&EconomyStatisticsofIndonesia2020.Book,1–111.https://www.esdm.go.id/en/publication/handbook-of-energy-economic-statistics-of-indonesia-heesiMEMR.(2022a).EnergyMinistry,IEALaunchNZERoadmap.https://www.esdm.go.id/en/media-center/news-archives/energy-ministry-iea-launch-nze-roadmapMEMR.(2022b).InformasiHukumESDM.https://jdih.esdm.go.id/index.php/web/result?q=MOE.(2022a).SiapkanBerbagaiLangkahdanStrategi,PemerintahOptimisJagaEkonomiNasionalDiatasPertumbuhanGlobalpadaTahun2023-KementerianKoordinatorBidangPerekonomianRepublikIndonesia.https://www.ekon.go.id/publikasi/detail/4794/siapkan-berbagai-langkah-dan-strategi-pemerintah-optimis-jaga-ekonomi-nasional-diatas-pertumbuhan-global-pada-tahun-2023MOE.(2022b).SiaranPersKemenkoEkonomi:PertumbuhanEkonomiNasionalTahun2021BerikanSinyalPositifTerhadapProspekEkonomiTahun2022.https://www.ekon.go.id/publikasi/detail/3692/pertumbuhan-ekonomi-nasional-tahun-2021-berikan-sinyal-positif-terhadap-prospek-ekonomi-tahun-2022UNFCCC.(2022).NationallyDeterminedContributionsRegistry.https://unfccc.int/NDCREGWorldBank.(2021).GDP,PPP(constant2017international$)-IndonesiaData.https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.KD?locations=IDAPECENERGYOVERVIEW202399JapanIntroductionJapan,locatedinnortheastAsia,comprisesseveralthousandislands,thelargestonesbeingHonshu,Hokkaido,KyushuandShikoku.Mostofitslandareaismountainousandthicklyforested.Ithasthethird-largesteconomyintheworldafterfellowAPECeconomies,theUnitedStatesandChina.In2020,Japan’srealgrossdomesticproduct(GDP)wasapproximatelyUSD5040billion(2017USDpurchasingpowerparity[PPP])(WorldBank,2022).Thepopulationof126millionpeopleenjoyedapercapitaincomeofalmostUSD40000,whichaccountedfora-4.2%decreasein2020comparedto2019.TheCOVID-19infectionspreadresultedinthesuppressionofhumanflowsandadeclineinproductionactivities,affectingpercapitaincome.Japan’senergyresourcesaremodest,whichmeansthatitimportsnearlyallitsfossilfuelstosustainitseconomicactivities.Itsprovenreservesincludeapproximately44millionbarrelsofoil,738billioncubicfeet(bcf)ofnaturalgasand350milliontonnes(Mt)ofcoal.Everyseveralyears,theJapanesegovernmentformulatesitsStrategicEnergyPlantoshowthedirectionofJapan’senergypolicy.TheSixthStrategicEnergyPlan,releasedin2021,wasformulatedwithtwokeythemes:(1)makingappropriateenergypoliciesthatwillensurecarbonneutralityby2050andreducegreenhousegas(GHG)emissions,and(2)presentinginitiativestoensureastableenergysupplyandreduceenergycostsinordertoensuresafetyandmeetJapan’senergydemandswhileactingagainstclimatechange(MinistryofEconomy,TradeandIndustry[METI],2021).TheActonRationalizingEnergyUseamendmentwaspassedinthePlenarySessionoftheHouseofCouncillorsandenactedon13May2022.ThemostremarkablerevisionoftheactisexpandingtheActontheRationalizationofEnergyUse(e.g.,improvingenergyconsumptionperunit)toincludenon-fossilenergy.TheActonRationalizingEnergyUseamendmentwillbecomeeffectivefromApril2023.Table1:Japan’smacroeconomicdataandenergyreservesKeydataa,bEnergyreservesc,d,eArea(millionkm2)a378Oil(millionbarrels)c44Population(million)b126Gas(billioncubicfeet)c738GDP(2017USDbillionPPP)b5040Coal(milliontonnes)d350GDPpercapita(2017USDPPP)b39940Uranium(kilotonnesU<USD130/kgU)e6.6Source:aGIS(2022);bWorldBank(2022);cConglinXuandLauraBell(2021);dBP(2022);eOECD(2020)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.EnergysupplyandconsumptionTotalprimaryenergysupplyJapan’stotalprimaryenergysupplywas16110petajoules(PJ)in2020,whichrepresentsanannualdecreaseof6.9%(EGEDA[ExpertGrouponEnergyDataAnalysis],2022)(Figure1).AftertheGreatEastJapanAPECENERGYOVERVIEW2023100Earthquake,theroleoffossilfuelsbecamemoreimportantthanthatofnuclearpower.Since2013,thankstotheintroductionofrenewableenergyandtherestartingofnuclearpowerplants,thepercentageofoilinthetotalprimaryenergysupplyhasbeendecreasingforeightyears(METI,2022).Figure1:Japan’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)In2020,oilcontributedthemost(38%)toJapan’senergysupply,followedbycoal(27%)andnaturalgas(24%).Japan’senergysupplyishighlydependentonimports.Thenetenergyimportscomprised90%ofthetotalprimaryenergysupply(EGEDA,2022).Japanwasthesixth-largestoilconsumerintheworldfollowingtheUnitedStates,China,India,SaudiArabiaandRussianFederationandthefourthamongAPECeconomiesin2021(BP,2022).Infact,almostallofJapan’soilrequirementsaremetthroughimports.DependencyonMiddleEasternoildeclinedintheearlyandmid-2010sduetooilimportsfromRussiaviatheexpansionoftheEasternSiberiaPacificOceanpipelines.However,morerecently,oilimportsfromRussiaandotherAsianregionshavedecreased,causingJapan’sdependencyontheMiddleEastbouncetobackto92%inFY2020(METI,2022).Figure2:Japan’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)SaudiArabia,theUnitedArabEmiratesandKuwaitwerethethreelargestsuppliersofoiltoJapaninFY2020(METI,2022).In2020,theprimaryoilsupplywas6190PJ,adecreaseof7.9%fromthepreviousyear(EGEDA,2022)(Figure2).In2020,theprimarycoalsupplywas4270PJ,adecreaseof8.8%fromthepreviousyear(EGEDA,2022).AlmostallofJapan’scoalwasimported,makingitoneoftheworld’sProductionNetimportsTotalPrimaryEnergySupply050001000015000200002500020002005201020152020Production,netimportsandTPES(PJ)0500010000150002000025000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersAPECENERGYOVERVIEW2023101largestcoalimporters.Powergeneration,steelproductionandthecementindustriesarethemainusersofcoal.Japan’smainsteam(orthermal)coalsuppliersareAustralia(68%),Russia(15%)andIndonesia(12%),asofFY2020.ThetopsuppliersforcokingcoalareAustralia(50%),Indonesia(21%)andtheUnitedStates(10%)(METI,2022).Likecoalandoil,naturalgasresourcesarescarceinJapan.InFY2020,itsdomesticproductionstoodat2.3billioncubicmetres(bcm)andwasmainlylocatedinNiigata,ChibaandHokkaidoPrefectures(METI,2022).Figure3:Energysupplymix–JapanandAPEC,2020Source:EGEDA(2022)InFY2020,liquefiednaturalgas(LNG)importsmetalmostallofJapan’sdomesticdemands.TheseimportswerefromAustralia(37%),Malaysia(14%),Qatar(12%)andRussia(8.4%).TheLNGimportstoJapanaccountedfor21%ofthetotalglobalLNGtradein2020.ElectricitygenerationandcitygasarethemainusecasesfornaturalgasinJapan(METI,2022).Theprimarynaturalgassupplywas3860PJin2020,anincreaseof0.2%fromthepreviousyear.Japanhasalargershareofoil(+11%)andasmallershareofcoal(-8%),andtherewasalmostnochangeforgasandrenewableswhencomparedtotheentireAPECregion(EGEDA,2022)(Figure3).TotalfinalconsumptionJapan’sfinalenergyconsumption(excludingnon-energyuses)decreasedby5.1%to9770PJin2020fromthepreviousyear.Includingnon-energywouldplacethefinalconsumptionatjustover11000PJ.Figure4:Japan’sfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)CoalOilGasRenewablesOther0%20%40%60%80%100%JapanAPEC0200040006000800010000120001400016000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyAPECENERGYOVERVIEW2023102Japan’sconsumptionhasbeendecliningafterpeakingin2005.Thenon-energyusesamountedtoanadditional1240PJoffinalconsumptionwithadecreaseof12%in2020from2019.InFY2020,restrictionsonthemovementofpeopledomesticallyandinternationallyduetothespreadingofCOVID-19drasticallyaffectedeconomicactivities.Owingtothis,Japan'sfinalconsumptionfellbymorethan650PJfromFY2019toFY2020(EGEDA,2022)(Figure4).In2020,theindustrysectoraccountedfor29%ofJapan’sfinalconsumption,followedbythetransportsector(24%),thecommercialsector(18%)andtheresidentialsector(17%).ThepercentageoffinalconsumptioninthecommercialsectorofJapanismorethantwicecomparedtothatofAPECasawhole(8%)(EGEDA,2022)(Figure5).Intermsoffinalenergyconsumptionbysector,acomparisonbetweenFY2019andFY2020showsthatthemanufacturingindustry,whichaccountsfor70%oftheindustrialsector,experiencedadecreaseofapproximately10%.Thetransportationsectordroppedbyroughly10%,whiletheresidentialsectorconverselyexperiencedanincreaseofabout5%duringtheperiod.Thechangesinfinalenergyconsumptioninthesetwosectorsarethoughttobebecausedemandfortransportandotherservicesfellduetothepublic’svoluntaryrestraintsontravel.Followingthedeclarationofastateofemergency,thespreadofteleworkingandonlineclassesledtopeoplespendingmoretimeathome,whichinturnresultedinmoredomesticenergyuse(METI,2022).Figure5:Finalconsumptionbysector,JapanandAPEC,2020Source:EGEDA(2022)FinalenergydemandRegardingJapan’sfinalenergydemand,in2020,oilconstitutedthelargestshareat45%,electricityandothersaccountedfor35%,gasconstituted11%,andcoalconstituted7.7%.Therenewablesshareinthiswasstilllowat1.9%.ComparedwiththeentireAPECregion,Japanhadalargeshareofoil(+12%),electricityandothers(+2%),andasmallershareofcoal(–5%),gas(–7%)andrenewables(–2%)(EGEDA,2022)(Figure7).IndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%JapanAPECAPECENERGYOVERVIEW2023103Figure6:Japan’sfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:Finalenergydemandexcludesthenon-energysectorFigure7:Finalenergydemandfuelshare,JapanandAPEC,2020Source:EGEDA(2022)Note:Finalenergydemandexcludesthenon-energysectorTransformationPowersectorJapanhad265gigawatts(GW)ofinstalledgeneratingcapacitybyelectricityutilitiesasofNovember2022(METI,2023a).Itgenerated1009terawatt-hours(TWh)ofelectricityin2020.Fossilfuels–coal,oilandgas–constituted73%ofthegeneratedelectricity.Renewables,includinghydro,solar,windandgeothermal,accountedfor20%ofthegeneration.Theremainingsharewasaccountedforbynuclearenergy(3.8%)(EGEDA,2022)(Figure8).02000400060008000100001200014000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersCoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%JapanAPECAPECENERGYOVERVIEW2023104Figure8:Japan’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)ComparedwiththeentireAPECregion,Japanhasalargerpercentageoffossilfuels(+8%),significantlymoregas(+18%),andasmallershareofhydro(–7%)(EGEDA,2022)(Figure9).In2021,theMihamaUnitsthreenuclearpowerplantsresumedoperations(METI,2022).ItisworthnotingthatmanyofthereactorshavenotbeenoperatingsincetheFukushimaDaiichinuclearpowerplantaccidentin2011.AsofDecember2022,10commercialreactorshadbegunoperatingagain(METI,2023b).Since1995,theJapaneseelectricitymarkethasbeenundergoingaprocessofliberalisationtoensurefaircompetitionandtransparency.Liberalisationdiminishesmonopolypowerbyfacilitatingcompetitionintheelectricitymarket,wherepractical.Japan’spartialliberalisationenabledbusinessesotherthanelectricitycompaniestosellelectricity.Independentpowerproducerswereintroducedin1995,andasystemofpowerproducersandsuppliers(PPSs)andpartialretailcompetition(forpurchasesover2000kW)wasestablishedin2000.Thescopeoftheretailcompetitionwasexpandedtoincludecontractslargerthan500kWin2004andlargerthan50kWin2005(METI,2011).Figure9:Electricitygenerationfuelshare,JapanandAPEC,2020Source:EGEDA(2022)AsaresultoftheearthquakeandnuclearpoweraccidentinMarch2011,duetolimitationsinthecapacityoftheeast-westfrequencyconversionfacilitiesandinter-regionalinterconnectionlines,itwasnotpossibletosufficientlyoperatethewide-areagridandsupplyelectricity.Afterwards,Japan’selectricitysectorfacedmountingpressuretoderegulateevenmoretocreateamorecompetitiveandtransparent0200400600800100012001400200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersCoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%JapanAPECAPECENERGYOVERVIEW2023105system.Finally,in2016,theretailelectricitymarketwasfullyliberalised.AsofDecember2021,thesalesshareofPPSreachedaround22%(METI,2022).EnergytransitionSecuringastableenergysupplyisvitalforJapan,whichhasfewnaturalenergyresources.Butinsecuringthisenergysupply,emissionsconsiderationsarebecomingincreasinglyimportant.EmissionsInJapan,achievingcarbonneutralityby2050hasbeenmadeafundamentalprincipleinlaw.Inaddition,thegovernmentsetanambitioustargetofa46%reductioningreenhousegasemissionsby2030comparedto2013,withafurtherchallengetoreachthe50%reduction,whichitsubmittedtotheUnitedNationsFrameworkConventiononClimateChange(UNFCCC)asthe'NDCofJapan'.(MoE,2022)Japan’sCO2combustionemissionshavereducedremarkablyinthelastfewyears.ThetotalCO2combustionemissionswerereducedby21%in2013from2020(EGEDA,2022)(Figure10).Inaddition,indevelopingeconomieswhereenergyconsumptionisexpectedtoincreasesignificantly,itisessentialtoimprovetheirenergyefficiencytoreducetheincreasingCO2emissionsassociatedwithfossilenergyuse.Therefore,developedeconomies,includingJapan,areexpectedtosupportthat.(METI,2022)Figure10:Japan’sCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecurityJapanisstrengtheningitsenergysecuritybybuildingcooperativesystemswithothereconomiesandacceleratingtheintroductionofrenewableenergythatcanbeproduceddomestically.Atthesametime,Japancontinuesoperatingnuclearpowerplantsanddevelopingthermalpowerplantsthathavethepotentialforlowemissionsbyusingammoniaco-combustionintheboiler,andothertechniques.Moreover,carboncaptureandutilisation(CCU)andcarboncapture,utilisationandstorage(CCUS)projectshavebeenimplementedtoensureenergysecurityalongsideachievingcarbonneutrality(METI,2022).CO2combustionemissions020040060080010001200140020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW2023106APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective-toimproveenergyintensityandtodoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargettoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.Figure11:Japan’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.WhileenergyintensityinJapanhasimprovedremarkablyinthelastfewdecades,thetotalfinalenergyconsumption(excludingnon-energyuses)intensityimprovedby0.5%from2019to2020(EGEDA,2022).TheEnergyConservationLaw,establishedin1979aftertheoilcrisis,isthebasisofallenergyconservationpoliciesinJapan.Itrequiresenergyefficiencyimprovementsfortheindustrial,building(commercialandresidential)andtransportsectors(METI,2019).Duetothis,Japanachieveda26%improvementinenergyintensityfrom2005to2020(EGEDA,2022)(Figure11).DoublingofRenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfrom2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyrespectiveeconomieswillcontributetothedoublinggoal.TherehasbeenamassiveimprovementintherenewableenergyshareoffinalenergyconsumptionforthelastdecadeinJapan.Japan'srenewableenergyshareoffinalenergyconsumptionwas7.9%in2020,whichmeansitimprovedby84%from2010to2020(EGEDA,2022)(Figure12).Thisimprovementwascausedbytheintroductionofthefeed-intariff;asystemunderwhichthegovernmentcommittedtopurchaseelectricitygeneratedfromrenewableenergysourcesforacertainperiodataspecificpricefromutilitycompaniesinJuly2012.Consequently,theintroductionofrenewableenergyexpandedrapidly,withtheamountofTotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012020002005201020152020202520302035Energyintensityindex(2005=100)APECENERGYOVERVIEW2023107renewableenergyintroducedapproximatelyfourtimeshigherthanbeforetheprojectstarted(METI,2022).Figure12:Japan’smodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.Japan'srenewablegenerationshareintheelectricitymixincreasedfrom9%to20%between2000and2020.Thismeanstherenewableshareintheelectricitymixhasincreasedby2.1timeswithin20years(EGEDA,2022)(Figure13).AlthoughthecostofrenewablegenerationinJapanhasbeensteadilydeclining,itisstillhighcomparedwithinternationalstandards.Toachievearenewableenergytargetofabout36-38%oftheelectricitymixinFY2030,itwillbenecessarytoreducethegenerationcostofrenewableenergy(METI,2022).Figure13:Japan’srenewablegenerationshare,2000to2020Source:EGEDA(2022)Changefrom2010to20200.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%20102020Renewablesshareinelectricitymix0%5%10%15%20%25%20002005201020152020ProportionAPECENERGYOVERVIEW2023108EnergypolicyEnergypolicyDetailsReferenceJapan’sNationallyDeterminedContribution(NDC)In2021,attheLeaders’MeetingontheClimate,theEconomicLeaderdeclaredanewtargetofa46%GHGemissionreductionbyFY2030,comparedtoFY2013.MOEThePlanforGlobalWarmingCountermeasuresThisprovidesmeasuresthatbusinesses,citizens,andmultiplelevelsofgovernmentsshouldimplementtoachievethetargetofa46%reductioninGHGemissionsbyFY2050.METITheLong-TermStrategyundertheParisAgreementThestrategyisformulatedbytheGovernmentofJapanasalong-termlowGHGemissiondevelopmentstrategyinaccordancewiththeprovisionsoftheParisAgreement.UnitedNationsClimateChangeTaskForceonClimate-relatedFinancialDisclosures(TFCD)GuidanceMETIreleasedtheTCFDGuidancein2018.Theguidancehassincebeenrevisedand‘GreenInvestmentGuidance2.0’wasreleasedbyaprivatesector-ledinitiative.TCFDConsortiumPlanforGlobalWarmingCountermeasuresoftheMinistryofAgriculture,ForestryandFisheriesThisincludesvariousmeasurestoreduceandabsorbGHGandtoadapttoclimatechange.ThiswasrevisedinOctober2021toensurecarbonneutralityby2050.MAFFClimateChangeAdaptationPlanoftheMinistryofAgriculture,ForestryandFisheriesThispromptsleadingproductionfieldstodisseminateadaptivetechniquestoavoidorlesseninfluencesofhightemperature(causedbyclimatechange)andintroducebreedswithhigh-temperaturetolerance.ItwasrevisedinOctober2021.MAFFJ-CreditSchemeThegovernmentcertifiescarbondioxide(CO2)reductionorabsorptionvolumesascredit.Creditcreatorscanselltheircredits,whilebuyersusepurchasedcreditsforvariouspurposessuchasCorporateSocialResponsibilityandcarbonoffset.METITheBiomassTownPlanJapaneselocalgovernmentsandprivatecorporationshaveestablishedbiomasstownsusingagriculturalresidues,livestockwaste,forestryresidues,foodwasteandsewagesludge,whichareconvertedintoelectricity,heat,ethanol,etc.MAFFAPECENERGYOVERVIEW2023109ActontheRationalUseofEnergyThissecurestheeffectiveutilisationoffuelresourcesinaccordancewitheconomicandsocialconditionsrelatedtoenergyinandoutsideJapanbytakingthenecessarymeasuresfortherationalisationofenergyuse.METI(OnlyinJapanese)TranslationFITLawanditsrevisionThiscreatesanewauthorisationsystem,arevisedmethodofsettingpurchaseprices,achangeofthepurchaserofrenewableenergy(fromtheretailelectricpowercompanytothepowertransmissionanddistributioncompany)andarevisionofthearrangementsforreducingsurchargesonelectricityrates.METIIntroductionofFeed-inPremium(FIP)IntroductionofFIPstartedfromApril2022.METIElectricitySystemReformThisaimstoexpandnationwidecoordinationoftransmissionoperators,achievefullliberalisationofelectricityretailbusinessandgeneration,andsecuretheneutralityofthepowertransmissionanddistributionsectors.METIBaseloadMarketThisensuresequalaccesstocheappowersuppliesfornewpowerretailcompaniesaspartofreformstofostercompetitioninthemarket.METIEstablishingResilientandSustainableElectricitySupplySystemsThisaimstosecuresustainableelectricitysupplysystemsbyimplementingvariousmeasures,includingrequiringelectricitytransmission/distributionbusinessestoformulateactionplansontheircollaborationindisasterresponses,establishinganewschemeforsupportingbusinessesinintroducingrenewableenergy,andaddingnewfunctionstothoseprovidedbytheJapanOil,GasandMetalsNationalCorporation(JOGMEC).METIJOGMEC’sFinancialAssistancetoJapaneseCompaniesThisencompassesmultipleprojectswithequitycapitalandliabilityguarantees.JOGMECJapanBankforInternationalCooperation(JBIC)SupportThisprovidesexportloans,overseasinvestmentloans,importloans,unitedloans,equityparticipationandguarantees.JBICRoadmapforCarbonRecyclingTechnologiesTakingintoaccounttheconceptofcarbonrecyclingtechnology,CO2isconsideredasasourceofcarbon.Inthisregard,CO2willberecycledintoconcretethroughmineralisation,intochemicalsthroughartificialphotosynthesisandintofuelsthroughmethanationtoreduceCO2emissionsintotheatmosphere.METILocalGovernments’InitiativestoachieveNet-zeroCarbonEmissionsby2050InJapan,asofMarch2022,679localgovernments,includingthoseofTokyo,KyotoandYokohama,haveannouncedtheircommitmenttoachievenet-zerocarbonemissionsby2050.MOEAPECENERGYOVERVIEW2023110JointStatementonJapan–UnitedStatesStrategicEnergyPartnershipBotheconomiesagreedtoestablishafreeandcompetitiveenergymarket,strengthenpartnershipsbetweenprivatecorporations,andworkontheintegrationoftheenergymarketinthisregion.METIBasicPlanforthePromotionofBiomassUtilisationPromotingutilisationofbiomassasenergyorproductstocontributetoresolvingtheissuesJapanfaces,suchastherevitalisationofruralareas,thepreventionofglobalwarmingandtheformulationofarecycling-orientedsociety.MAFFANewStrategicRoadmapforHydrogenandFuelCellsUnderthisroadmap,arevisedversionoftheStrategicRoadmapforHydrogenandFuelCellswasreleased,whichincludednewgoalsandspecificexplanationsoftheeffortstobemade.METILNGProducer–ConsumerConference2022Since2012,theLNGProducer–ConsumerConferencehasbeenheldeveryyearinJapanbyMETIasaplatformforexchangingideasandenhancingcooperationamongproducers,consumersandallthekeystakeholdersoftheLNGmarket.LNGProducer–ConsumerConferenceFourthHydrogenEnergyMinisterialMeetingDelegatesfrom29economies,regions,internationalorganisations(amongthem18leaders)andcompanyrepresentativesdeliveredmessagesandsharedinformationabouttheirefforts,challengesandpolicydirectionstohelpfurtherthecauseofusinghydrogengloballyinthefuture.METINotableenergydevelopmentsEnergydevelopmentDetailsReferenceAmendmenttotheActonRationalisingEnergyUseOn13May2022,theamendmenttotheActonRationalisingEnergyUsewaspassedinthePlenarySessionoftheHouseofCouncillorsandenacted.TherevisionsandadditionsoftheamendedActareasfollows.・ExpandstheActontheRationalisationofEnergyUse(e.g.,improvingenergyconsumptionperunit)toincludenon-fossilenergy.・Callsonlarge-scaleenergyconsumerstoreporttheirnon-fossilfuelusageandsubmittheirplantotransitionfromfossiltonon-fossilenergy.METIAPECENERGYOVERVIEW2023111・Describeshighvolumeenergyusers'obligationtoreporttheirdemandresponseeffortsandelectricityutilitiestoprepareelectricityfeeprograms.Andpromotedemandresponse-readyappliances.ThesewillbecomeeffectivefromApril2023.AmendmenttotheEnergyConsumptionPerformanceofBuildingsAct・Therewasanimprovementtoincludetherequirementthatallhousingandsmall-scalebuildingsshouldmeetenergyefficiencystandardsbyFY2025.MLITTokyoGX(GreenTransformation)Week・Thiswasheldfrom26Septemberto7October2022,andaimedtoshifteconomic,socialandindustrialstructuresthathavedependedonfossilfuelstostructuresdrivenbycleanenergy.METIUsefullinksAgencyforNaturalResourcesandEnergy–https://www.enecho.meti.go.jp/en/MinistryofEconomy,TradeandIndustry–https://www.meti.go.jp/english/index.htmlMinistryoftheEnvironment–http://www.env.go.jp/en/index.htmlInstituteofEnergyEconomics,Japan–https://eneken.ieej.or.jp/ReferencesBP(2022),BPStatisticalReviewofWorldEnergy,https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2022-full-report.pdfConglinXuandLauraBell(2021),‘2021worldwideoilandgasreservesdown,oilproductionupmodestly’,Oil&GasJournal,Vol.119,Issue12,Dec2021.EGEDA(ExpertGrouponEnergyDataAnalysis,APECEnergyWorkingGroup)(2022),APECEnergyDatabase,https://www.egeda.ewg.apec.org/egeda/database_info/index.htmlGIS(GeospatialInformationAuthorityofJapan)(2022),TheSurveyofLandArea,https://www.gsi.go.jp/KOKUJYOHO/MENCHO/backnumber/GSI-menseki20221001.pdfAPECENERGYOVERVIEW2023112METI(MinistryofEconomy,TradeandIndustry)––(2011),EnergyWhitePaper2011,https://warp.da.ndl.go.jp/info:ndljp/pid/11194359/www.enecho.meti.go.jp/about/whitepaper/2011/––(2019),OverviewoftheEnergyConservationLaw,https://www.enecho.meti.go.jp/category/saving_and_new/saving/summary/pdf/20181227_001_gaiyo.pdf––(2020),ElectricitySystemReform,http://www.enecho.meti.go.jp/category/electricity_and_gas/electric/system_reform.html––(2021),CabinetDecisionontheSixthStrategicEnergyPlan,https://www.meti.go.jp/english/press/2021/1022_002.html––(2022),EnergyWhitePaper2022,https://www.enecho.meti.go.jp/about/whitepaper/––(2023a,accessedon15March2023),PowerGeneratingSourcesandOutputData,https://www.enecho.meti.go.jp/statistics/electric_power/ep002/xls/2022/1-1-2022.xlsx––(2023b,accessedon27January2023),ConditionofJapaneseNuclearPowerPlants,https://www.enecho.meti.go.jp/category/electricity_and_gas/nuclear/001/pdf/001_02_001.pdfMoE(MinistryoftheEnvironment)(2022),WhitePaperontheEnvironment,theSoundMaterial-CycleSocietyandBiodiversityinJapan2022,https://www.env.go.jp/policy/hakusyo/r04/pdf.htmlOECD(TheOrganisationforEconomicCo-operationandDevelopment)(2020),Uranium2020:Resources,ProductionandDemand,https://www.oecd-nea.org/jcms/pl_52718/uranium-2020-resources-production-and-demandWorldBank(2022),OpenData,https://data.worldbank.orgAPECENERGYOVERVIEW2023113RepublicofKoreaIntroductionTheRepublicofKorea(Korea)isinNortheastAsia,situatedbetweenChinaandJapan.Ithasanareaof100413squarekilometres(km2)andhadapopulationof52millionasof2020.Korea’spopulationdensityisveryhigh,withanaverageofmorethan516peopleperkm2.Around20%ofthepopulationlivesinSeoul,Korea’slargestcityandcapital,anditspopulationdensityreaches15839peopleperkm2.Theeconomy’sgeographyconsistsofhillsandmountainswithwidecoastalplainsinthewestandthesouth.Theclimateisrelativelymoderate,withfourdistinctseasons.Airconditioningisnecessaryduringthetropicalhotsummers,andheatingisrequiredduringthebitterlycoldwinters.Overthepastfewdecades,KoreahasbecomeoneofAsia’sfastestgrowingandmostdynamiceconomies.Grossdomesticproduct(GDP)reachedUSD2195billion(2017USDpurchasingpowerparity[PPP])in2020.GDPpercapita(2017USDPPP)in2020wasUSD42336,approximatelythreetimeshigherthanin1990.Korea’smajorindustriesincludesemiconductors,shipbuilding,cars,petrochemicals,digitalelectronics,steel,andmachinerypartsandmaterials.Manufacturingaccountedforabout28%ofGDPin2021,andeconomicactivityhasbeendrivenbyanexport-orientedmanufacturingsector.Forexample,Korea’sEV(ElectricalVehicle)batterymanufacturingindustryisexpandingitscapabilitywithemergingnewmobilities.BeforeandsinceanewgovernmentwaslaunchedfollowingthepresidentialelectioninMay2022,theKoreangovernmenthasfacedglobalenergysupplyinstabilitywiththeUkrainecrisisandpost-COVIDconditions.Asitbecomesmoreimportanttobalancecarbonneutralityandenergysecurity,thenewgovernmentcontinuestomonitorthedirectionofchangesintheglobalenergysupplychaininordertoderiveanapplicableandreasonableenergymix,releasingthenewenergypolicygoalsanddirectionsinJuly2022.ThisconsiderationispartlyduetothefactthatKoreahasfewdomesticenergyresources.Ithasnooilresourcesexceptforasmallamountofcondensate,only359milliontonnesofrecoverablecoalreservesand0.3trillioncubicfeetofnaturalgas.Tosustainitshighlevelofeconomicgrowth,Koreaimportslargequantitiesofenergyproducts.Table1:Korea’smacroeconomicdataandenergyreservesKeydataa,b,cEnergyreservesdArea(km2)100413Oil(billionbarrels)-Population(million)52Gas(trillioncubicfeet)0.3GDP(2017USDbillionPPP)2915Coal(milliontonnes)359GDPpercapita(2017USDPPP)42336Uranium(kilotonnesU<USD130/kgU)-Source:aKOSIS(2022);bEGEDA(2022);cWorldBank(2022);dEIA(2021)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.APECENERGYOVERVIEW2023114EnergysupplyandconsumptionTotalprimaryenergysupplyKorea’stotalprimaryenergysupply(TPES)almosttripledbetween1990and2020,from3890PJto11560PJ.From1990to2000,energysupplyincreasedatanaverageannualgrowthrateof7.3%,exceedingtheeconomicgrowthrateof7.1%forthesameperiod.After2000,TPESincreasedbyaround50%,from7811PJto11560PJ.However,intherecentthree-yeartrendfrom2017to2019,therewasaslightdecreaseof0.8%(Figure1).In2020,therewasa1.4%decreaseinenergysupplycamefromcoalandoilwiththeCOVID-19pandemic,comparedto2019(EGEDA,2022).Figure1:Korea’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)SinceKoreahaslimiteddomesticenergyresources,asignificantportionofKorea’sTPESisimported.Koreaimportedapproximately89%ofitsTPESin2018.Inthesameyear,itwastheworld’sfourth-largestimporterofcrudeoil,thefifth-largestimporterofnaturalgasandthefourth-largestimporterofcoal(IEA,2020).Korea’sTPESfuelmixfocusedonastableenergysupplyfrom2000to2020,thoughitdidnotundergoadrasticchangeintermsofthefuelshare(Figure2).Renewablesshowedthefastestgrowthratefrom34PJin2000to246PJin2020,havinggraduallyincreasedbyasmallrelativeamountfrom0.4%to2.1%forthesameperiod.Naturalgasalsoexpandedfrom9%in2000to18%in2020.Naturalgashascontinuouslyexpandeditsvolumefrom1809PJin2017to2072PJin2020.Whereasrenewablesandnaturalgashaveincreased,coalpeakedin2017andoilpeakedin2018withadecreasingtrenduntil2020(EGEDA,2022).Figure2:Korea’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)ProductionNetimportsTotalPrimaryEnergySupply0200040006000800010000120001400020002005201020152020Production,netimportsandTPES(PJ)02000400060008000100001200014000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersAPECENERGYOVERVIEW2023115Asof2020,theshareofcoal,oilandgasinKoreaaccountedformorethan80%,similartothatofAPEC(Figure3).However,Korea’sTPESfuelmixhadsomedifferencesintheshareofenergysourcescomparedtothatoftheentireAPECregion.Specifically,oilsupplywasproportionallyhigher,whereastheothercategorieswerelower.Korea’soilshareofTPESwas37%.Coalandgasfollowedat27%and18%respectively,lowerthanthefiguresforAPEC.Meanwhile,theportionofrenewablesinAPECwasfourtimesthatofKorea.TheshareofrenewableenergysupplyinAPECis8.2%,whereastheshareofrenewablesinKoreais2.1%.Figure3:Energysupplymix–KoreaandAPEC,2020Source:EGEDA(2022)TotalfinalconsumptionTotalfinalconsumptionisarepresentationofend-useenergy,includingnon-energyusesofenergyproducts.Korea’stotalfinalconsumption(includingnon-energy)in2020was7313PJ,whichwasa3.9%decreasefromthepreviousyear.Thedecreaseinenergyconsumptionwassignificantcomparedtothe0.5%decreasein2018comparedto2017andthe0.3%decreasein2019comparedto2018.2020wasthefirstyeartheCOVID-19pandemicaffectedandthusitisestimatedthattherewasareductioninenergyconsumptionasaresult.Thenon-energyandindustrialsectors,respectively,accountedforthelargestsharesofKorea’sfinalconsumptionat28%and26%,whilethetransportsectoraccountedfor20%.Theremainder(26%)wasassociatedwiththeothersectors(combinedcommercial,residentialandagriculturesectors).Consumptionintheagriculturesectorhasgenerallyweakenedsincethelate1990sandrecorded163PJin2020,downslightlyfrom164PJin2019.Exceptforresidential,consumptioninalltheothersectorsdeclinedin2020comparedtothepreviousyear.Figure4:Korea’sfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)CoalOilGasRenewablesOther0%20%40%60%80%100%KoreaAPEC0100020003000400050006000700080009000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyAPECENERGYOVERVIEW2023116RelativetoAPEC,Korea’sindustryandtransportsectorsconstitutealowerportionoffinalconsumption,whereasthenon-energysectoraccountsformoreuse(Figure5).APEC’sfinalconsumptionshareintheindustryandtransportsectorswas34%and25%respectivelyin2020,whereasKorea’srespectiveconsumptionaccountedfor26%and20%inthesameyear.Non-energygenerallyreferstoenergyproductsthatareusedasrawmaterialsandnotconsumedasfuelortransformed.Thesearegenerallyoilproductsusedinthechemicalandpetrochemicalsubsectortomakeplasticsorlubricants.In2020,Korea'snon-energysectoraccountedfor28%offinalconsumption,morethandoublingitsrelativeshareinAPECat13%.Figure5:Finalconsumptionbysector,KoreaandAPEC,2020Source:EGEDA(2022)FinalenergydemandKorea’sfinalenergydemandhadanincreasingtrendfrom2009to2017.However,with2018asthepeakyear,finalenergydemandshowedadecliningtrendthrough2020(Figure6).Thedeclinewasevengreaterin2020duetotheunexpectedCOVID-19pandemic.Whenexaminedbyfuelfrom2000to2020,theshareofcoalandoildemandin2020comparedtothatofthe2000datarevealedthattheproportioninthetotalsharedeclined.Specifically,theproportionofthetwofuelsaccountedfor40%in2020,comparedto63%in2000.Ontheotherhand,between2000and2020,therewasanoverallupwardtrendintermsoftheproportionofothersectorslikegas,renewables,electricityandothersinthetotalshareoftheyear.Figure6:Korea’sfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%KoreaAPEC0100020003000400050006000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersAPECENERGYOVERVIEW2023117RelativetoAPEC,Korea’selectricitydemandisrelativelylarge.Korea’selectricityandothersshareoffinalenergydemandis41%,whileAPEC’sshareis33%(Figure7).Korea’seconomicgrowthhassignificantlyincreasedelectricitydemandoverthepastfewdecades.Power-basedapplianceshavealsocontinuouslyincreased,contributingtoelectricity’shighershareinthefinalenergydemand.The10thBasicPlanforLong-termElectricityDemandandSupply(2022–36),finalisedbytheMinistryofTrade,IndustryandEnergy(MOTIE),projectsthatelectricityconsumptionwillgrowby1.5%peryearfrom2022to2036.Meanwhile,asof2020,theproportionofcoalinKoreaislowerthanthatofAPEC.Figure7:Finalenergydemandfuelshare,KoreaandAPEC,2020Source:EGEDA(2022)TransformationPowersectorEnergyuseinKorea’stransformationsectorshasgrownrapidlysince2000,drivenbyasteadyexpansionofelectricitygenerationcapacities.Between2000and2020,thetotalpowergenerationincreasedtwo-fold,from289terawatt-hours(TWh)in2000to575TWhin2020(Figure8).In2011,apoweroutagegaverisetoelectricitysupplyrestrictionsinselectareas.Forthesereasons,securingastablesupplyofelectricitywasoneofKorea’stopenergypolicypriorities.Lookingintoeachsourceoffuelgeneration,36%ofKorea’selectricitywasgeneratedbycoalin2020whereasthecoalgenerationportionintotalelectricityaccountedfor43%in2019.Withtheriseofcarbonneutralityambitions,theshareofcoalpowergenerationisexpectedtoconsiderablydecreaseinthelong-term.Ontheotherhand,thegenerationofgas,nuclearandrenewablesexpandedtheirsharesinthegenerationmixin2020,comparedtothepreviousyear.InJanuary2023,theKoreangovernmentannouncedthe10thBasicPlanforLong-termElectricityDemandandSupplyasa15-yearoutlookestablishedeverytwoyears.Accordingtotheplan,facilitiesofnuclearpower,LNGandrenewablesareexpectedtoincrease,whilecoalpowerplantsaresteadilyreduced.Specifically,thereplacementofoldcoalwithLNGwilloccurandnuclearpowerandrenewableswillcontinuetobeinvestedwhileconsideringsafetyandfeasibility.Therefore,underthepremiseofhighvolatility,itiscautiouslypredictedthattheshareofnuclearpowerandrenewablesintotalelectricitygenerationwilleachincreasetomorethan30%by2036.CoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%KoreaAPECAPECENERGYOVERVIEW2023118Figure8:Korea’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)InKorea’selectricitygenerationmix,oilhadsimilarproportionswhencomparedtothegenerationmixforAPECin2020(Figure9).Meanwhile,otherpowergenerationfuelsshowedsomedifferenceinacomparisonbetweentheKoreaandAPEC.CoalpowergenerationwaslowerinKoreathanAPEC,withashareof36%inKoreaand42%inAPECin2020,whereastheshareofcoalpowergenerationforKoreaandAPECwassimilarin2019.TheproportionofgasinKorea’spowersectorwashigherthanthatofAPEC’s.TheKoreanshareofnuclearwas28%,morethandoublethatofAPEC,whichwas10%.Incontrasttogasandnuclear,theshareofrenewableswashigherforAPECthanKorea.Additionally,theproportionofhydro,accountingfor1%inKoreaand15%inAPEC.Figure9:Electricitygenerationfuelshare,KoreaandAPEC,2020Source:EGEDA(2022)RefiningKoreahassteadilypromotedinvestmentsinlarge-scalerefineriesandfacilityimprovementstoenhanceproductquality.Asaresult,asof2021,Korea'soilrefiningcapacitywas3572thousandbarrelsperday,ranking5thintheworld(BP,2022).Specifically,theglobalsharewas3.5%,followingtheUS(18%),China(17%),Russia(6.7%)andIndia(4.9%).SinceKoreaexportsabout40%ofoilproductsrefinedbyimportingcrudeoilfromabroad,andthereisnotmuchpressureonsupplyagainstincreaseddomesticdemandintermsofvolume.Koreanoilrefiningcompaniesrecordedhugeoperatinglossesin2020duetotheCOVID-19pandemic,butsincethentheyhaveachievedgreateroperatingprofitsintheshorttermduetoimprovedrefining0100200300400500600700200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersCoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%KoreaAPECAPECENERGYOVERVIEW2023119marginsfollowingthepandemic.Despitethisshort-termperformancerecovery,carbonneutralityisconsideredaverychallengingtaskforKoreanoilrefineriesandtheyhavebeencontemplatingportfolioreorganisationthroughbusinessdiversificationalongwithpersistentimprovementoffacilities.EnergytransitionSincetheclimatecrisisgoesbeyondanenvironmentalissueandbecomesaglobalcommonproblem,theKoreangovernmentcontinuestopayattentiontotheenergytransition.The'2050CarbonNeutralityCommittee',apresidentialbodyforcontrollingdomesticcarbonneutralpolicies,wasofficiallylaunchedinMay2021andchangeditsnametothe‘PresidentialCommissiononCarbonNeutralityandGreenGrowth’inMarch2022.Additionally,energysecuritytorespondtoglobalenergysupplychaininstabilityisemergingasakeyvariabletobeconsideredinenergytransitionpolicies.EmissionsKorea’sCO2emissionsperGDPhavedeclinedingeneralbuttheemissionsgrowthitselfhasnotreversedintoadecline.AccordingtoEGEDAdata,theemissionshavegenerallyrepresentedanincreasingtrendsince2000andhistoricallypeakedin2018(Figure10).Thismeansthatstakeholders'effortstoreduceCO2emissionsineachsectorneedtobeaccompaniedbypolicytargets.InOctober2021,theKoreangovernmentannouncedanewproposaltorevisethenationallydeterminedcontribution(NDC)goalstocutCO2emissionsby40%from2018levels,adrasticincreasefromtheoriginaltargetof26%.UnderthenewgovernmentlaunchedinMay2022,thePresidentialCommissiononCarbonNeutralityandGreenGrowthreleasedvisionandpromotionstrategiesforcarbonneutralityandgreengrowthinOctober2022.Inthereport,fourmajorstrategiesand12majortasksweresuggestedunderthethreemajorpolicydirectionsof(1)responsiblepractice,(2)orderlytransformation,and(3)innovation-drivencarbonneutralityandgreengrowth.Inaddition,acarbonneutralityandgreengrowthtechnologyinnovationstrategywasalsopresented,includingthreedirections:(1)technologicalinnovationtowardscarbonneutralitymainlythroughprivate-sector-ledmissions,(2)enhancedinvestmentinrapidandflexiblecarbonneutralR&D,and(3)pre-emptivebuildingofinfrastructureforinnovativetechnologydevelopment.Figure10:Korea’sCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecuritySinceKoreaisoneoftheworld'slargestimportersofoilandgas,CO2combustionemissions010020030040050060070020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW2023120energysecurityhascontinuouslybeenasubjectofinterestintermsofstableenergysupply.AstherecentUkrainecrisishasincreasedenergymarketuncertainty,theemphasisonenergysecurityhasbeenintensifiedevenintheprocessofenergytransition.Inresponsetorecentenvironmentalchanges,theKoreangovernmentannouncednewenergypolicygoalsanddirectionsinJuly2022tobetterreactagainstglobalenergysupplychainuncertaintiesandaccomplishthecarbonneutralgovernmentproject.Theseenergypolicydirectionsseekafeasibleandreasonableenergymix,meaningthatconstructionoftheShin-HanulNo.3andNo.4nuclearreactorsistoresumewiththegoalofexpandingthenuclearenergyratiotoaminimumof30%by2030.Theadjustmentoftheenergymixincludespowergridconstructiontoaccommodatethechangeinthepowersupplymix,andapowersystemstabilityplanalignedwithhigh-renewableenergygeneration.Inaddition,thesupplychainisbeingstrengthenedthroughincreasedstrategicstockpiling.Internalandexternaleffortsarealsobeingmadetoalleviateburdensontheindustrialsectorandthepeople.Importchanneldiversificationthroughinternationalcooperationiscontinuouslypursued.Forexample,KoreaparticipatesinaMineralSecurityPartnership(MSP)tostabilisethesupplychainforcriticalmineralswithothereconomies.Torelievethefinancialburdenforthosevulnerabletoenergypoverty,energyvouchersandsupportforenergyefficiencyimprovementarebeingincreased.APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective-toimproveenergyintensityanddoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargettoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.Figure11:Korea’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)Since2005,Korea’stotalfinalenergyconsumption(notincludingnon-energy)intensityhascontinuedtoimprove,thoughitretreatedonlyTotalfinalenergyconsumptionenergy…APEC-widegoal…02040608010012014020002005201020152020202520302035Energyintensityindex(2005=100)APECENERGYOVERVIEW2023121slightlyin2010(Figure11).In2020,thisimprovementwas29%relativetothe2005baseline.Thisisa2%improvementcomparedtolastyear,andan8%improvementovertherecentfiveyears(2016-2020).SincetheCOVID-19pandemicstartedgloballyfrom2020,APECmembers'economicgrowthandenergyconsumptionmayshowadifferenttrendthanbefore.Therefore,itisnecessarytocarefullymonitorwhethertheenergyintensityimprovesoverthenextfewyearsinKoreaaswell.DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.Koreahascontinuouslypromotedpoliciestoexpandrenewableenergyinresponsetoclimatechangeandforsustainablegrowth.In2017,theKoreangovernmentreleasedthe3020RenewableEnergyInitiativeImplementationPlan.Accordingtotheplan,theshareofrenewablesintheenergymixwillincreasefrom7%in2016to20%in2030.Asaresult,whileAPECincreasedfrom6.0%to9.5%in2020comparedto2010,Koreahadahigherrateofincrease,morethandoublingfrom1.3%to3.5%.Figure12:Korea’smodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.Between2000and2020,Korea'srenewableenergyshowedasteeperincreasefromaround2015(Figure13).Koreaispromotingvariousdistributionprojectsforthestablesupplyofrenewables,includingtheRenewableEnergyPortfolioStandards(RPS).RPSisasystemthatmakesitmandatoryforpowergenerationcompaniestosupplyacertainamountofannualelectricityproductionasrenewableenergy.ItisexpectedthattheKoreangovernmentwillcontinuetopromotetheexpansionofrenewablesinordertoachievestablepowersupply.TheChangefrom2010to20200.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%2010Change2020APECENERGYOVERVIEW202312210thBasicPlanforLong-termElectricityDemandandSupply(2022–36)announcedthatitwouldpromotephasedrenewablesupplyalongwithrenewableenergyback-upfacilities,keepinginviewthefeasibilityofrenewableenergysources.Accordingtothisplan,theshareofrenewablesinthetotalgenerationmixispresumedtoreacharound30%in2036.Figure13:Korea’srenewablegenerationshare,2000to2020Source:EGEDA(2022)Renewablesshareinelectricitymix0%1%2%3%4%5%6%7%20002005201020152020ProportionAPECENERGYOVERVIEW2023123EnergypolicyEnergypolicyDetailsReferenceFrameworkActonCarbonNeutralityandGreenGrowthforCopingwithClimateCrisisThispurposeoftheActistoadapttoclimatechangeforpreventingseriousimpactsoftheclimatecrisisandtoresolveeconomic,environmental,andsocialdisparitythatmayariseinthecourseoftransitiontoacarbonneutralsociety.NATIONALLAWINFORMATIONCENTER3rdEnergyMasterPlanTheplanwasannouncedinJune2019toprovideamid-tolong-term(2019–2040)frameworkforcoordinatingenergypoliciesthroughouttheeconomy,identifyingseveralproblemareasaffectingKorea’senergysystem.MOTIE(2019)3020RenewableEnergyInitiativeImplementationPlanMOTIEreleasedinDecember2017thisplaninwhichrenewables’shareoftheenergymixwouldbeincreasedfromits7%ratein2016to20%in2030throughtheprovisionof49GWinnewgeneratingcapacity.MOTIE(2017)SupportforRE100MOTIEannouncedinJanuary2021thatitwillallowdomesticelectricityconsumerstopurchaseelectricityfromrenewablesourcesaspartoftheRE100initiative,aglobalcampaignfortransitionto100%RE.MOTIE(2021)14thPlanforLong-termNaturalGasDemandandSupplyMOTIEreleasedinApril2021thisplantomaintainastablegasdemandandsupplyandsupporttheenergytransitionpolicybyincludingalong-termnaturalgasdemandforecastfrom2021to2034.MOTIE(2021)NewEnergyPolicyGoalsandDirectionsThesenewenergypolicydirectionswereannouncedinJuly2022,includingthatafeasibleandreasonableenergymixmustbere-establishedandsupportforlow-incomehouseholdswillbeexpandedinresponsetorecentenvironmentalchanges.MOTIE(2022)VisionandPromotionStrategiesforCarbonNeutralityandGreenGrowthThePresidentialCommissiononCarbonNeutralityandGreenGrowthannouncedmajorstrategiesinOctober2022withregardtoreestablishmentoftheenergymix,optimisationofenergyefficiency,establishmentofalocal-ledimplementationsystemandpromptsupportacrossgovernmentdepartments.CarbonNeutralityandGreenGrowthCommission(2022)CarbonNeutralityandGreenGrowthTechnologyInnovationStrategyThistechnologyinnovationstrategywasreleasedwith‘VisionandPromotionStrategiesforCarbonNeutralityandGreenGrowth’,includingpromotionof100maincarbonneutralitytechnologiesneedforrapidcommercialisation.CarbonNeutralityandGreenGrowthCommission(2022)ResourcesDevelopmentPlanMOTIEreleasedinMay2020thisplantoincreasethegovernment’sinvestmentinprivate-sectorcompanies’resourceexplorationprojectsandproposedanewpolicygoalcoveringresourcessecurity.MOTIE(2020)APECENERGYOVERVIEW20231245thBasicPlanonIntegratedEnergySupplyTheplanwasannouncedinFebruary2020toprovideamid-tolong-term(2019–2023)frameworktoexpandcombinedheatandpowerplant(CHP)by2023,targetingatotalof4.8millionunits,anincreaseofabout31%from2018.MOTIE(2020)NotableenergydevelopmentsEnergydevelopmentDetailsReference10thBasicPlanonElectricityDemandandSupplyTheplanfor2022–2036wasreleasedinJanuary2023toprovideamid-tolong-termpowerdemandforecastandexpansionofpowerfacilities,proposingafeasibleandreasonableenergymixforenergysecurityandcarbonneutralgoals.MOTIE(2023)ActionPlanforaCleanHydrogenEcosystemTheplanwasreleasedinNovember2022toprepareforlarge-scaledemandforhydrogenbypreparingacleanhydrogenecosystemintermsoftheestablishmentofacleanhydrogensupplychain.MOTIE(2022)HydrogenTechnologyStrategyfortheFutureMSITreleasedinNovember2022thisplanwiththeActionPlanforaCleanHydrogenEcosystemtohelpsecurehydrogen-relatedtechnologiessuchasdevelopmentofcleanhydrogenproductiontechnology.MSIT(2022)TheKoreanGreenTaxonomyGuideline(Revision)Thisguidelineprovidesprinciplesandstandardsonwhattypesofeconomicactivitiesareconsideredgreenactivitiesandservestoassistinallowingmorefundstobeallocatedtogreenprojectsandgreentechnologies.EditedversionwasreleasedinDecember2022.ME(2022)MetalStockpilingContemporaryPlanMOTIEreleasedinDecember2022thisplantosupportthestablegrowthofthedomesticindustryandtorespondpromptlytoglobalsupplychainuncertainties.MOTIE(2022)UsefullinksKoreaElectricPowerCorporation–https://home.kepco.co.kr/kepco/main.doKoreaEnergyEconomicsInstitute–http://www.keei.re.kr/main.nsf/index.htmlAPECENERGYOVERVIEW2023125KoreaEnergyAgency–http://www.energy.or.kr/web/kem_home_new/new_main.aspKoreaGasCorporation–https://www.kogas.or.kr:9450/portal/index.doKoreaNationalOilCorporation–https://www.knoc.co.kr/PresidentialCommissiononCarbonNeutralityandGreenGrowth–https://www.2050cnc.go.kr/base/main/viewMinistryofTrade,IndustryandEnergy–http://english.motie.go.kr/www/main.doMinistryofEnvironment–http://eng.me.go.kr/eng/web/main.doStatisticsKorea–http://kostat.go.kr/portal/eng/index.actionReferencesEIA(EnergyInformationAdministration)(2021),InternationalEnergyStatistics2021,https://www.eia.gov/international/data/country/KOREGEDA(ExpertGrouponEnergyDataAnalysis,APECEnergyWorkingGroup)(2022),APECEnergyDatabase,https://www.egeda.ewg.apec.org/egeda/database_info/index.htmlKOSIS(KoreaStatisticsInformationService)(2019),EnergyandMineralResourcesStatistics,http://kosis.kr/statisticsList/statisticsListIndex.do?menuId=M_01_01&vwcd=MT_ZTITLE&parmTabId=M_01_01ME(MinistryofEnvironment)(2022),TheKoreanGreenTaxonomyGuideline(Revision),https://www.me.go.kr/home/web/board/read.do?pagerOffset=110&maxPageItems=10&maxIndexPages=10&searchKey=&searchValue=&menuId=10525&orgCd=&boardId=1569770&boardMasterId=1&boardCategoryId=&decorator=MOTIE(MinistryofTrade,IndustryandEnergy)––(2017),3020RenewableEnergyInitiativeImplementationPlan,http://www.motie.go.kr/motie/py/td/energeitem/bbs/bbsView.do?bbs_seq_n=210230&bbs_cd_n=72&currentPage=21&search_key_n=title_v&cate_n=4&dept_v=&search_val_v=––(2019),TheThirdEnergyMasterPlan,http://www.motie.go.kr/motie/py/td/energeitem/bbs/bbsView.do?bbs_seq_n=210252&bbs_cd_n=72&currentPage=11&search_key_n=title_v&cate_n=4&dept_v=&search_val_v=––(2022),TheNewEnergyPolicyGoalsandDirections,http://www.motie.go.kr/motie/ne/presse/press2/bbs/bbsView.do?bbs_seq_n=165751&bbs_cd_n=81&currentPage=11&search_key_n=title_v&cate_n=&dept_v=&search_val_v=%EC%83%88%EC%A0%95%EB%B6%80APECENERGYOVERVIEW2023126––(2023),10thBasicPlanonElectricityDemandandSupply,https://www.motie.go.kr/motie/ne/presse/press2/bbs/bbsView.do?bbs_seq_n=166650&bbs_cd_n=81&currentPage=1&search_key_n=&cate_n=&dept_v=&search_val_v=MSIT(2022),(MinistryofScienceandICT)(2022),TheHydrogenTechnologyStrategyfortheFuture,https://www.msit.go.kr/bbs/view.do?sCode=user&mId=113&mPid=238&pageIndex=1&bbsSeqNo=94&nttSeqNo=3182333&searchOpt=ALL&searchTxt=%EC%88%98%EC%86%8C%EA%B8%B0%EC%88%A0PresidentialCommissiononCarbonNeutralityandGreenGrowth(2022)––(2022a),VisionandPromotionStrategiesforCarbonNeutralityandGreenGrowth,https://www.2050cnc.go.kr/base/board/read?boardManagementNo=3&boardNo=1049&searchCategory=&page=2&searchType=&searchWord=&menuLevel=2&menuNo=17––(2022b),CarbonNeutralityandGreenGrowthTechnologyInnovationStrategy,https://www.2050cnc.go.kr/base/board/read?boardManagementNo=3&boardNo=1049&searchCategory=&page=2&searchType=&searchWord=&menuLevel=2&menuNo=17UNFCCC(UnitedNationsFrameworkConventiononClimateChange)(2020),2050CarbonNeutralStrategyoftheRepublicofKorea,https://unfccc.int/documents/267683APECENERGYOVERVIEW2023127MalaysiaIntroductionMalaysiasubmitteditsrevisedIntendedNationallyDeterminedContributiontotheUnitedNationsFrameworkConventiononClimateChange(UNFCCC)SecretariatinJuly2021,increasingitsmitigationambitionwithanunconditionaltargettoreducegreenhousegas(GHG)emissionsintensityagainstGrossDomesticProduct(GDP)by45%by2030comparedtothe2005level.AdesiretocomprehensivelydealwiththeissueofclimatechangewasfurtherstrengthenedbytheannouncementinSeptember2021oftheaspirationtobecomeacarbon-neutraleconomyby2050,whichisalsosupportedbythepolicyofzeronewcoal-firedplantsinelectricitygeneration.TheannouncementwasreleasedtogetherwiththeTwelfthMalaysiaPlan2021-2025(RMK12),comprisingtheenergysector'splantoaddresstheenergytrilemma,especiallyonenergysecurityandsustainability.Apartfromthemedium-termenergysecurityandsustainabilityplanstatedinRMK12,theMalaysiaRenewableEnergyRoadmap2022-2035wasreleasedinDecember2021.Theroadmaphighlightstheroleofrenewablesandthedetailsofprogramsandtargetsfordecarbonisingtheelectricitysectorthrough2035.InSeptember2022,Malaysiaemphasiseditscommitmenttowardsacarbon-neutraleconomyby2050byreleasingacomprehensivelong-termNationalEnergyPolicy(NEP)coveringtheperiodfrom2022to2040.RealisingthattheglobaleconomicsituationandhighenergypricesresultingfromtightsupplyandgeopoliticalissuescouldaffectMalaysia'sdecarbonisationeffortsandenergytransitionpace,theNEPlaysouttheroadmap,includinginitiativesandkeyactionplanswiththeparticipationofstakeholdersinenergy-relatedsectorstoachievetheenvironmentalsustainabilityandenergysecuritytargets,whileatthesametimeenhancingmacroeconomicresilienceandachievingsocialequitabilityandaffordability.Malaysiashowedastrongeconomicperformancein2022despiteslowedglobaleconomicgrowth,includingtheenergycrisis.ItsGDProseby8.7%toMYR1507billion(GDPatconstant2015prices),morethandoublethepreviousyear'sgrowthandthehighestsince2000.GDPpercapitaalsoshowedanimprovementin2022,increasingby7.5%perannumtoMYR44413andsurpassingthepre-COVID-19level.Thestronggrowthwassupportedbytherevenueincreaseinalmostalleconomicactivitiesexceptagriculture,whichremainedatthesamelevelasthepreviousyear.Servicesactivityaccountedfor58%ofthetotalGDP,followedbymanufacturingat24%,agricultureat6.6%,miningandquarryingat6.4%,andconstructionat3.5%.In2021,Malaysiawasthesecond-largestoilproducerinSoutheastAsiaandthefifth-largestgloballiquefiednaturalgas(LNG)exporter.However,Malaysia'sannualoilandgasprovedreserveshavedecreasedslightlyforthelastdecade,partlyreflectedbythelackofnewhydrocarbondiscoveriesduetolowupstreamexplorationactivities.Thedecliningprovedreserveshaveledtoalowerlevelofoilproductionfromtheexistingmaturedfieldsoverthesameperiod,whilegasproductionremainsstableduetolong-termsupplycommitments.Ontopofdecliningoilproductionfromthematuredfields,Malaysia'soilproductionisexpectedtodecreasefurtherin2023asMalaysiadecidedtocutitsoilproductionby27000to567000barrelsperday,effectiveAPECENERGYOVERVIEW2023128inNovember2022,inlinewiththeOrganizationofthePetroleumExportingCountriesandalliedproducers(OPEC+)decisioninOctober2022.Table1:Malaysia’smacroeconomicdataandenergyreservesKeydataa,bEnergyreservescArea(millionkm2)330441Oil(billionbarrels)4.4Population(million)33Gas(trillioncubicfeet)76GDP(2017USDbillionPPP)857Coal(milliontonnes)1938GDPpercapita(2017USDPPP)26472Uranium(kilotonnesU<USD130/kgU)-Source:aDOSM,EPU(2022);bWorldBank(2022);cEC(2022)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.HighglobaloilandnaturalgaspricescontributedtotheincreaseinupstreamexplorationactivitiesinMalaysiain2022,leadingtotendiscoveriesofoilandgasfieldsoffthecoastofPeninsularMalaysia,SabahandSarawak.Thediscoverieswillhelptosustainthelevelofoilandgasproduction,prolongtheproductionperiodandimprovetheannualvolumesofprovedreservesinthenextfewyears.EnergysupplyandconsumptionTotalprimaryenergysupplyThetotalenergysupplyinMalaysiahasshownagrowingtrendsince2000atanannualaveragerateof3.4%,reaching3879PJin2020(Figure1).LowenergydemandduetotheoutbreakoftheCOVID-19pandemiccauseda6.2%dropintotalprimaryenergysupplyin2020comparedtothepreviousyear.Figure1:Malaysia’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)Asimilartrendhasbeenobservedintotalenergyproductionforthepasttwodecades,increasingatanannualaveragerateof0.9%,reaching3766PJin2020.Totalenergyproductiondeclinedin2020,9.7%lowerthanin2019,duetoreducedoilandnaturalgasproductionasaresultoflowglobalanddomesticoil,naturalgasandelectricitydemand.Malaysiaremainedanetenergyimporterin2020.Totalenergytradevolumecontractedfortwoconsecutiveyears,decreasingby4.1%inProductionNetimportsTotalPrimaryEnergySupply-2000-100001000200030004000500020002005201020152020APECENERGYOVERVIEW20231292019and10%in2020duetodecliningimportsandexportsofcrudeoilandpetroleumproducts,andexportsofLNG.In2020,theAsiaregionremainedthemajorexportdestinationforMalaysiancrudeoil,pipednaturalgasandLNG,whileMalaysiadiversifieditssourcesofimportedcrudeoilfromaroundtheworld,wheremorethanhalfofitsimportswerefromEurope,theMiddleEastandAfrica.ThetrendofthefossilfuelmixinelectricitygenerationinfluencedthechangesinMalaysia'stotalenergysupplymixinthepasttwodecades,aselectricitygenerationconsumedalmostaquarteroftheannualenergysupply.Fossilfuelsremaineddominantoverthesameperiod,eventhoughtheirsharedeclinedslightlyfrom99%in2000to96%in2020(Figure2).Coalsupplyhasgrownsubstantiallyat13%perannumsince2000,increasingmorethantenfoldby2020.Thetotalcoalsupplyinthelastdecadedoubledfromthepreviousdecade,triggeredbyfuelsupplysecurityissuesinelectricitygenerationattheendof2010andsupportedbystablecoalpricesandlowergenerationcostscomparedtonaturalgasandoiloverthesameperiod.TheintroductionoftheFive-FuelDiversificationPolicyin2000andMalaysia'scommitmenttowardsclimatechangetargetshavedriventherapidgrowthofrenewablesintotalenergysupplyat9.5%perannumsince2000,reachingabout157PJin2020.Gasandoilholdthetoptwolargestsharesinthetotalenergysupplymix,althoughbothhavegrownslowerthancoalandrenewablessince2000,2.1%and1.5%perannum,respectively.In2020,oilandnaturalgassupplydeclinedby21%and7.5%perannum,respectively,causedbyfallingdemandfromthetransportationandpowersectorsduetomovementcontrolordersandtheretirementofthreegaspowerplantsinPeninsularMalaysia.Incontrast,coalandrenewablesincreasedby17%and10%perannum,partlyduetoahigherdispatchofbothfuelsforelectricitygeneration.Figure2:Malaysia’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)TheavailabilityofindigenousoilandgasresourcesinMalaysiaandthelowglobalfossilfuelpricesin2020continuedtobecontributingfactorstohigherrelianceonfossilfuelsthantheAPECregion(Figure3).Oilandgasshareswereabout18%higherthanintheAPECregion,whilecoalwaslowerasMalaysiaimportedabout90%ofitscoalsupply.Renewablesandothers’shareswerealsobelowthatintheAPECregion.050010001500200025003000350040004500200020012002200320042005200620072008200920102011201220132014201520162017201820192020CoalOilGasRenewablesOthersAPECENERGYOVERVIEW2023130Figure3:Energysupplymix–MalaysiaandAPEC,2020Source:EGEDA(2022)TotalfinalconsumptionMalaysia'stotalfinalconsumptiongrewabout1.8timesfrom1307PJin2000to2393PJin2020,representingthesignificantroleofenergyinsupportingthegrowingeconomicactivitiesandpopulation(Figure4).Eventhoughannualtotalfinalconsumptiondroppedafewtimesoverthepast20years,the14%perannumdropin2020duetotheoutbreakoftheCOVID-19pandemicwasthelargestrecorded.Allsectorsrecordedadropinenergyconsumptionin2020exceptfortheresidentialsector,asworkingfromhomebecamethenewnormduringtheimplementationofcontrolmovementorders.Thetransportsectorwastheonemostaffectedbythecontrolmovementorders,fallingby25%from2019.Thiswasfollowedbythenon-energyandcommercialsectors,whichbothdeclinedat13%,theindustrysectordecliningby6.5%,andagricultureandothersby6.4%.Figure4:Malaysia’sfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)LiketheAPECregion,thetransportandindustrysectorsrepresentedthemostsignificantportionofMalaysia'sfinalconsumption,about60%in2020(Figure5).Thenon-energyconsumptionsharewaslargerinMalaysiathanintheentireAPECregionin2020,asMalaysiahasasignificantnumberofpetrochemicalplants,includingfertiliserplantslocatedinPeninsularMalaysia,SabahandSarawak.Thegrowthinenergyconsumptionbythenon-energysectorwasmainlydrivenbyfeedstockavailability,includingnaturalgasandpetroleumproducts,atacompetitiveprice.CoalOilGasRenewablesOthers-20%0%20%40%60%80%100%MalaysiaAPEC0500100015002000250030003500200020012002200320042005200620072008200920102011201220132014201520162017201820192020IndustryTransportCommercialResidentialAgriculture&othersNon-energyAPECENERGYOVERVIEW2023131Figure5:Finalconsumptionbysector,MalaysiaandAPEC,2020Source:EGEDA(2022)FinalenergydemandMalaysia'sfinalenergydemandgrewby2.5%perannum,from1149PJin2000to1899PJin2020(Figure6).Fossilfuelsaccountedforalmost70%ofthefuelshareconsumedbyend-usersin2020,whichdecreasedby14%fromthepreviousyear.Oilintheformofpetroleumproductsdominatedslightlyabovehalfoftheend-userfuelsharein2020.Thetransportsectorconsumed70%ofthetotaloildemand,followedbytheindustrysectorat10.4%,thenon-energysectorat10.3%,andothersectorsat7.0%.Electricitywastheseconddominantfuel,increasingfrom26%oftheend-userfuelsharein2019to29%in2020.In2020,electricitydemandwaslessaffectedduringtheCOVID-19pandemic,representedbyaslightdecreaseinvolumefollowingasignificantrisefromtheresidentialsectorandoffsetbyalargedropfromothersectors.Figure6:Malaysia’sfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsGasandcoalaccountedfor19%ofthefuelshareconsumedbyend-usersin2020.Bothfuelsexperiencedadeclineinvolumefortwoconsecutiveyearsduetodecreasingdemandfromtheindustrysectorasaresultofhighregulatedgaspricesin2019andtheimpactofCOVID-19in2020.Gasdemandshowedarecoverytrendfromtheeffectsoftheglobalfinancialcrisisin2008,whilecoalwasstableatanaverageof74PJbeforedecliningin2019and2020.HighconsumptionofpetroleumproductsinthetransportsectorcontributedtoalargershareofoilinMalaysia'sfinalenergydemandIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%MalaysiaAPEC05001000150020002500200020012002200320042005200620072008200920102011201220132014201520162017201820192020CoalOilGasRenewablesElectricityandothersAPECENERGYOVERVIEW2023132thantheAPECregionin2020(Figure7),eventhoughtheshareshrankfrom55%in2019to50%in2020.Meanwhile,otherfuels'shareswerelowerthanthoseofAPEC,rangingbetween1.8%and9.5%.Figure7:Finalenergydemandfuelshare,MalaysiaandAPEC,2020Source:EGEDA(2022)TransformationPowersectorMainlyfossilfuelshavefuelledMalaysia'selectricitygenerationsince2000(Figure8).CoalandgashavecontinuedtodominateMalaysia'selectricitygenerationwithatotalshareof85%in2000,increasingsteadilyandpeakingat93%in2010.Thecoalandgasshareinelectricitygenerationbegantofallin2011.Itdecreasedto82%in2020asMalaysiaisstrivingtoachievethetargetofa20%renewableenergycapacitymixby2025,asstatedintheNationalRenewableEnergyPolicyandActionPlan(NREPAP),andtofulfilthecommitmenttoreducecarbonemissionintensityperGDPunconditionallyby35%in2030relativetothe2005levelandconditionallyby45%asannouncedinJuly2017followingthepledgeduringthe21stConferenceofParties(COP21)in2015.Asaresultofthementionedrenewableenergytargetandclimatechangecommitment,theelectricitygenerationsharefromrenewablestripled,from6%in2010to18%in2020.Ontheotherhand,theoilshareremainedthesmallestinelectricitygenerationforthepasttwodecades.In2020,electricitygenerationinMalaysiarecordedadropof2.5%perannum,beinglessaffectedbyCOVID-19comparedtoothersectors.Electricitygenerationfromgasdroppedthemostin2020,falling26%fromthepreviousyear.However,theimpactofthedropwasreducedbytheincreaseincoalat17%perannum.Apartfromlowercoalpricesin2020,decommissioningofthreegas-firedpowerplantslocatedinPeninsularMalaysia(i.e.PowertekBerhad,SultanIsmailPowerStationandPahlawanPower)andthedelayofthecommercialoperationdatefortwonewgas-firedpowerplants(i.e.SPGBlock1andSPGBlock2)from2020to2021contributedtotheincreaseofcoalinelectricitygeneration.TherewerenosignificantchangesintheelectricitygenerationmixinSabahandSarawakin2020.NaturalgasandoilaccountedforthelargestshareinSabahat86%,whilehydrohadthelargestshareinSarawakat79%.CoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%MalaysiaAPECAPECENERGYOVERVIEW2023133Figure8:Malaysia’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)InMalaysia'selectricitygeneration,theshareofcoal,gasandhydrowaslargerthanintheAPECregion.Oilwashalf,whileotherrenewableswasmuchsmallerin2020(Figure9).ThecomparisonshowedthatMalaysia'selectricitygenerationreliedmoreheavilyonfossilfuelscomparedtotheAPECregion.Figure9:Electricitygenerationfuelshare,MalaysiaandAPEC,2020Source:EGEDA(2022)RefiningMalaysiahassevenrefinerieswithanestimatedtotallicensedcapacityof792000barrelsofcrudeoilperday,includingthePengerangrefinery,whichrestartedinMay2022afterafireincidentinMarch2020.TheadditionalcapacityatPengerangwillsupportMalaysia'stargettoachieveself-sufficiencyinrefinedproductsupplyandtoproducegasolineanddieselthatcomplywithEuro4andEuro5specifications.020406080100120140160180200200020012002200320042005200620072008200920102011201220132014201520162017201820192020CoalOilGasHydroOtherrenewablesCoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%MalaysiaAPECAPECENERGYOVERVIEW2023134EnergytransitionEmissionsCO2emissionsinMalaysiahavebeenescalatingsteadilyoverthepasttwodecades,reflectingtheincreasingtrendforfossilfuelsinthetotalenergysupply.However,thegrowthofCO2emissionswashigherthanfossilfuelgrowthinenergysupplyduetoasignificantincreaseincoaluseforelectricitygenerationoverthesameperiod.Figure10:Malaysia’sCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecurityHigherglobaloilandgaspricesduringtherecoveryperiodfromtheCOVID-19pandemichasstimulatedMalaysia'soilcompany,PETRONASandinternationalinvestorstofocusonexplorationactivitiesinMalaysiaforthepasttwoyears.Theexplorationactivitiesresultedinatotalof10hydrocarbondiscoveriesin2022,doublingthenumberof2021discoveries,whichweremostlylocatedoffshoreofeastMalaysia.Otherthanprolongingtheestimatedoilandgasproductionperiod,thediscoverywillstabilisethegrowingrelianceonimportedoilandnaturalgas.APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective-toimproveenergyintensityandtodoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargettoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.Malaysia'stotalfinalenergyconsumptionenergyintensity(excludingnon-energy)hasbeenimprovingatanaveragerateof2.0%annually,reachingatotalreductionof26%in2020comparedto2005(Figure11).CO2combustionemissions05010015020025020002005201020152020APECENERGYOVERVIEW2023135Figure11:Malaysia’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.Malaysia'sconsumptionofmodernrenewableshasbeenincreasingsincetheintroductionoftheNREPAPin2010.In2020,theproportionalsharewasincreasedto6.8%,representingamorethanfourfoldincreaseinmodernrenewablescomparedto2010(Figure12).Figure12:Malaysia’smodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.Malaysia'selectricitygenerationfromrenewablesgrewto18%in2020,whichwasalmosttripledthe2010level(Figure13).Furthermore,theelectricitygenerationfromrenewablesgrewsubstantially,from7TWhin2010to31TWhin2020,drivenbyNREPAP2009andsupportedbyvariousrenewablesenergy(RE)plansandinitiatives,includingtheFeed-inTariff(FiT)scheme,solarauctioningandtherooftopsolarquotathroughtheLarge-ScaleSolar(LSS),NetEnergyMetering(NEM)andSelfConsumption(SELCO)Programme.TotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012020002005201020152020202520302035Changefrom2010to20200.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%2010Change2020APECENERGYOVERVIEW2023136Otherthantheincreaseinelectricitygenerationfromrenewablesin2020,theannualriseinrenewablessharewasalsopartlydueto4.1%lowerelectricitygenerationfromfossilfuels,specificallyfromoilandgas.Figure13:Malaysia’srenewablegenerationshare,2000to2020Source:EGEDA(2022)Renewablesshareinelectricitymix0%2%4%6%8%10%12%14%16%18%20%20002005201020152020APECENERGYOVERVIEW2023137EnergypolicyEnergypolicyDetailsReferenceNationalPetroleumPolicy1975Toensuretheefficientutilisationofindigenouspetroleumresourcesandtofacilitateindustrialandeconomicdevelopmentwhileensuringeffectiveregulationandeconomymajoritycontrolintheownership,managementandoperationoftheoilandgasindustry.MinistryofEconomyNationalEnergyPolicy1979Toachieveanefficient,secureandenvironmentallysustainablesupplyofenergy.•Supply:Toensureadequate,secureandcost-effectiveenergysupply.•Utilisation:Topromoteefficientenergyutilisationanddiscouragewastefulandnon-productiveenergyconsumptionpatterns.•Environment:Tominimisethenegativeimpactontheenvironmentofenergyproduction,transportation,conversion,utilisationandconsumption.MinistryofEconomyNationalDepletionPolicy1980Toprolongthelifespanofeconomy’soilandgasreservesbysafeguardingagainstover-exploitationandprioritisingdomesticneedsforfutureenergysecurity,withproductioncapsimposedonoiland,subsequently,naturalgasreserves.MinistryofEconomyFour-FuelDiversificationPolicy1981Toenhancethereliabilityandsecurityofenergysupplybyreducingover-dependenceonoilasthesinglefuelsourcebydiversificationtofourprimaryfuels:oil,naturalgas,hydroelectricityandcoal.MinistryofNaturalResources,EnvironmentandClimateChangeFive-FuelDiversificationPolicy2000TointroduceREasanalternativefuelsourcetocomplementtheexistingfourfocusfuelsourcesidentifiedintheFour-FuelDiversificationPolicy1981andtoencourageefficientenergyutilisation.MinistryofNaturalResources,EnvironmentandClimateChangeNationalPolicyontheEnvironment2002Topromotecontinuouseconomic,social,andculturalprogressandenhancethequalityoflifeofMalaysiansthroughenvironmentallysoundandsustainabledevelopment,includingstewardshipoftheenvironment,continuousimprovementofenvironmentalqualityandsustainableuseofnaturalresources,patternsofenergyconsumptionandproduction.MinistryofNaturalResources,EnvironmentandClimateChangeAPECENERGYOVERVIEW2023138NationalBiofuelPolicy2006Topromotetheuseofbiofuels,inalignmentwiththeFive-FuelDiversificationpolicy,asanenvironmentallyfriendly,sustainableandviableenergysource,andtoreducedependencyonfossilfuelsandpromotethewell-beingofallstakeholdersinagriculturalandcommodity-basedindustriesthroughstableandremunerativeprices.MinistryofPlantationandCommoditiesNationalGreenTechnologyPolicy2009Topromoteenergyefficiencywhileenhancingeconomicdevelopmenttofacilitatethegrowthofthegreentechnologyindustry,increaseeconomiccapabilityandcapacityingreentechnologydevelopment,ensuresustainabledevelopmentandconservationoftheenvironmentforfuturegenerations,andenhancepublicawarenessofgreentechnology.MinistryofNaturalResources,EnvironmentandClimateChangeNationalRenewableEnergyPolicyandActionPlan2009ToenhancetheutilisationofindigenousREresourcesandcontributetowardseconomicsupplysecurityandsustainablesocioeconomicdevelopmentbyincreasingtheREcontributionintheeconomy’spowergenerationmix,facilitatingthegrowthoftheREindustry,ensuringreasonableREgenerationcosts,conservingtheenvironmentforfuturegenerationsandenhancingawarenessoftheroleandimportanceofRE.MinistryofNaturalResources,EnvironmentandClimateChangeNationalPolicyonClimateChange2010Topromotetheeffectivemanagementofresourcesandenhancedenvironmentalconservation,strengtheneconomiccompetitivenessandimprovequalityoflife,integrateclimatechangeconsiderationsintoeconomypolicies,andstrengtheninstitutionalandimplementationcapacitiestoaddresschallengesandopportunitiesrelatedtoclimatechange.MinistryofNaturalResources,EnvironmentandClimateChangeNewEnergyPolicy2010Topromoteenergysecurity,economicefficiency,andenvironmentalandsocialobjectivesthroughthefivekeypillarsofenergypricing,energysupply,energyefficiency,governanceandchangemanagement.Highlightsincludethegradualreductionofenergysubsidies,suchasgradualgaspricerevisionstoconvergewithmarketpricing,initiativestosecureandmanageareliableenergysupplywiththird-partyaccessandthebuildingofregasificationterminals(RGTs)andRAPID.ItalsohighlightsFiTforREsourcesandencouragingstudiesonalternativeenergiesforincreasedenergysourcediversification,increasedenergyefficiencyandvariousenablerssuchasenergysectorgovernance.MinistryofEconomyNationalBiodieselProgramToutilisepalmoilinthedomesticbiodieselmix,whichwillboostdomesticconsumptionandactasameansforthepalmoilindustrytomanagetheexcesspalmoilstock.MinistryofPlantationandCommoditiesNationallyDeterminedContributiontotheUNFCCC2015TounconditionallydecreasetheGHGemissionintensityofGDPby35%in2030comparedtothe2005levelandbyafurther10%ontheconditionofreceiptofclimatefinance,technologytransferandcapacitybuildingfromdevelopedeconomies.MinistryofNaturalResources,EnvironmentandClimateChangeAPECENERGYOVERVIEW2023139NationalEnergyEfficiencyActionPlan2016-2025Toenhanceenergyefficiencywithatargetofan8%reduction(savingupto594MWh)inelectricitydemandby2025throughenergyefficiencyinitiatives,enabledbyimplementationoftheenergyefficiencyplan,strengtheningoftheinstitutionalframeworkandcapabilitydevelopment,implementationofasustainablefundingmechanismandpromotionofprivatesectorinvestmentinenergyefficiencyinitiatives.MinistryofNaturalResources,EnvironmentandClimateChangeGreenTechnologyMasterPlan2017–2030Outlinesthestrategicplans/immediatecourseforgreentechnologydevelopmenttocreatealow-carbonandresource-efficienteconomy.MinistryofNaturalResources,EnvironmentandClimateChangeGreenTechnologyFinancingScheme1.0,2.0and3.0Aspecialfinancingschemetosupportthedevelopmentofgreentechnologyintheenergy,building,manufacturing,transport,wastemanagementandwatersectors.MalaysiaGreenTechnologyandClimateChangeCorporationMalaysia'sRoadmapTowardsZeroSingle-UsePlastics2018–2030Towardszerosingle-useplasticsforacleanerandhealthierenvironmentby2030.MinistryofNaturalResources,EnvironmentandClimateChangeNationalAutomotivePolicy2020ToencouragenewgrowthareasthroughtheintegrationoftechnologiessuchastheNextGenerationVehicle(NxGV),MobilityasaService(MaaS)andIndustrialRevolution4.0(IR4.0)thatareinlinewiththedevelopmentoffuturetechnologies.MinistryofInvestment,TradeandIndustryPeninsularMalaysiaGenerationDevelopmentPlan2020(2021–2039)Electricitydemandisprojectedtogrowby0.6%p.a.forthe2021–2030periodand1.8%p.a.forthe2030–2039period.ToachievetheREcapacitymixtargetfrom20%to31%by2025,largehydroresourceswillbeincludedaspartoftheREforconsistency,and1178MWofnewREcapacitywillbedevelopedinPeninsularMalaysiafrom2021onwards.ToincreaseREcapacityto40%by2035,anadditional2414MWofREcapacitywillbedeveloped.ThetotalnewREcapacitywouldthenconsistof93%solarand7%non-solarenergy.Todevelop6077MWofnewcapacity(thermalenergyandRE)by2030and9924MWofnewcapacity(thermalenergyandRE)beyond2030.EnergyCommissionLow-CarbonMobilityBlueprint2021–2030Tofocusonimprovingvehiclefueleconomyandemissions,adoptingelectricvehicles(EVs),low-emissionvehiclesandalternativefuels,andreducingGHGemissionsandenergyviamodeshifts.MinistryofNaturalResources,EnvironmentandClimateChangeAPECENERGYOVERVIEW2023140NationalLow-CarbonCitiesMasterplan2021Toguidetheimplementationoflow-carbondevelopmentsandinitiatives.MinistryofNaturalResources,EnvironmentandClimateChangeNationallyDeterminedContributiontotheUNFCCC2021TodecreaseGHGemissionintensityoftheGDPunconditionallyby45%in2030comparedtothe2005level.MinistryofNaturalResources,EnvironmentandClimateChangeTheTwelfthMalaysiaPlanAmedium-termplanforSharedProsperityVision2030,withtheobjectiveof'AProsperous,Inclusive,SustainableMalaysia'.Undertheplan,theenergysectorwilladdresstheenergytrilemma,especiallyonenergysecurityandsustainability.MinistryofEconomyMalaysiaRenewableEnergyRoadmap2022–2035TosupportfurtherdecarbonisationoftheelectricitysectorinMalaysiathroughthe2035milestone,from2022to2035.MinistryofNaturalResources,EnvironmentandClimateChangeSabahGasMasterPlanAcollaborativeeffortbetweentheSabahStateGovernmentandPETRONAStosustainablypursuethefullpotentialofSabah'sdomesticnaturalgasindustry.SabahStateGovernmentandPETRONASNationalEnergyPolicy2022-2040Toenhancemacroeconomicresilienceandenergysecurity,achievesocialequitabilityandaffordability,andensureenvironmentalsustainability.Thedocumentissubjecttoperiodicreviewseverythreeyearstoensurethatthetargetsareachievableandtokeepinlinewithinternationaldevelopmentintheenergytransitionpace.MinistryofEconomyAPECENERGYOVERVIEW2023141NotableenergydevelopmentsEnergydevelopmentDetailsReferenceLNGPlantatSipitangOilandGasIndustrialParkA2.0milliontonnesperannumLNGfacilitytobeoperatedin2026.SabahStateGovernmentGreenElectricityTariffProgramAvoluntaryprogramofferedtoTenagaNationalBhdcustomerstopurchasegreenelectricitygeneratedfromREsources.TheprogramstartedinJanuary2022withaquotaof4500GWhandatthepremiumrateof3.7sen/kWh.In2023,thequotahasbeenincreasedto6600GWhatthesamepremiumrate.mGATSBursaCarbonExchangeMalaysia'sVoluntaryCarbonMarketExchangeorBursaCarbonExchange(BCX)waslaunchedinDecember2022,withthefirstauctionisscheduledinMarch2023.BCXprovidesaplatformforcompaniestopurchasecarboncreditsformeetingtheiremissionstargetseitherimmediatelyorinfuture.BursaMalaysiaRAPIDRefineryRAPIDrefinerywithacapacityof300000bblperdaycameonlineinMay2022afteratwo-yearshutdownduetoafireincidentin2019.ReutersFLNG2Malaysia'ssecondFloatingLiquefiedNaturalGaswascommissionedinFebruary2021andsentitsfirstLNGcargotoitscustomerinMarch2021.APERCGasReport2022APECENERGYOVERVIEW2023142UsefullinksBankNegaraMalaysia—www.bnm.gov.myBursaMalaysia—www.bursamalaysia.comDepartmentofStatisticsMalaysia—www.dosm.gov.myEnergyCommission—www.st.gov.myGridSystemOperator—www.gso.org.myMalaysiaEnergyInformationHub—www.meih.st.gov.myMalaysiaGreenTechnologyCorporation—www.mgtc.gov.myMalaysianPalmOilBoard—www.mpob.gov.myMinistryofEconomy—www.epu.gov.myMinistryofNaturalResources,EnvironmentandClimateChange—www.ketsa.gov.myandwww.kasa.gov.myMinistryofFinance—www.mof.gov.myMinistryofInvestment,TradeandIndustry—www.miti.gov.myMinistryofPlantationandCommodities—www.mpic.gov.myMinistryofScience,TechnologyandInnovation—www.mosti.gov.myMyHIJAU—www.myhijau.myPETRONAS—www.petronas.comPrimeMinister'sOffice—www.pmo.gov.mySabahElectricitySdn.Bhd.—www.sesb.com.mySarawakEnergyBerhad—www.sarawakenergy.comSingleBuyerDepartment—www.singlebuyer.com.myAPECENERGYOVERVIEW2023143SustainableEnergyDevelopmentAuthority—www.seda.gov.myTenagaNasionalBerhad—www.tnb.com.myReferencesDepartmentofStatisticsMalaysia(DOSM)(2021),Malaysia@aGlance,https://www.dosm.gov.my/v1/index.php?r=column/cone&menu_id=dDM2enNvM09oTGtQemZPVzRTWENmZz09DepartmentofStatisticsMalaysia(DOSM)(2022),CurrentPopulationEstimates,Malaysia,2022,https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=155&bul_id=dTZXanV6UUdyUEQ0SHNWOVhpSXNMUT09&menu_id=L0pheU43NWJwRWVSZklWdzQ4TlhUUT09EconomicPlanningUnit,PrimeMinister'sDepartment(EPU)(2022),TheMalaysianEconomyinFigures2022,https://www.epu.gov.my/sites/default/files/2022-08/MEIF2022.pdfEnergyCommission(EC)(2022),AnnualReport2020,https://www.st.gov.my/en/contents/files/download/87/Laporan_Tahunan_ST_2020.pdfEnergyCommission(EC)(2023),NationalEnergyBalance2020,https://meih.st.gov.my/documents/10620/2923c46a-8324-4133-a0df-aba45dee3a92FitchSolutions(2023),GrassrootsRefineriesShapingTheFutureofMalaysia'sDownstreamIndustry,https://www.fitchsolutions.com/oil-gas/grassroots-refineries-shaping-future-malaysias-downstream-industry-30-12-2022MinistryofNaturalResources,EnvironmentandClimateChange(NRECC)(2022),FourthBiennialUpdateReportUndertheUnitedNationsFrameworkConventiononClimateChange,https://unfccc.int/documents/624776OEC(2023),CrudePetroleuminMalaysia,https://oec.world/en/profile/bilateral-product/crude-petroleum/reporter/mysPETRONAS(2022),MalaysiaDoublesExplorationSuccessin2022with10Discoveries,https://www.petronas.com/mpm/press-release/malaysia-doubles-exploration-success-2022-10-discoveriesSarawakEnergy(2021),AnnualandSustainabilityReport2020,https://www.sarawakenergy.com/assets/pdf/INTERACTIVE-Sarawak-Energy-ASR20.pdfAPECENERGYOVERVIEW2023144MexicoIntroductionMexico’sfavourablegeographiclocation,i.e.closetotheUnitedStatesandwithaccesstotheAtlanticandPacificcoast,allowsittoimportnaturalgasproducedintheUSthroughitsrobustandinterconnectedpipelinesystem.In2022,ahighdemandfornaturalgasandariseingaspricesacceleratedtheconstructionandannouncementsofliquefiednaturalgasexportprojectsinMexico.IncreaseddemandforUSnaturalgasgloballyhaspositionedMexicoasafutureexporterofimportedUSgas.Theeconomy’sComisiónFederaldeElectricidad(CFE),whichholdsmostofthepipelinecapacity,isakeyplayerinthedevelopmentoftheseprojects,togetherwiththeprivatesector.Despitehavingabundanthydrocarbonresourcesandbeingoneofthetop10economiesintermsofshaleoilandgasreserves,Mexico’soilandgasproductionhasbeeninsufficienttosatisfyagrowingenergydemand.In2014,Mexicoenactedenergyreformstoopenthesectortoprivatesectorparticipationandtherebyincreaseenergyproductiongrowth.In2021,Mexico’snaturalgasproductionfelltoitslowestlevelin45years.In2022,naturalgasdomesticproductionsawarebound,increasingby1.3%toavolumeof4804millioncubicfeet,whichwasstillslightlybelowits2019level.Privatesectornaturalgasproductionfromthecontractsawardedduringtheoilandgasbiddingroundsoverfiveyearsagohascontributedtothisgrowthtrajectory,increasingtheparticipationoftheseindustriesfrom0.38%to5.6%ofdomesticproduction.In2022,oilproductiondroppedto1.62millionbarrelsperday,itslowestlevelsince1979,and2.5%lowercomparedto2021.Theprivatesectorsawa31%growthincrudeoilwhilePEMEXsawadropinproduction,largelydrivenbythedeclineinitsmaturefields,whichrepresentthelargestshareinproduction.Thegovernmenthasanenergyself-sufficiencystrategywiththeobjectiveofincreasingdomesticproductionofcrudeoilandrefinedproducts.Mexico’soilcompany,PetróleosMexicanos(PEMEX),isthekeypillarofthisstrategy.TheEnergyMinistry’skeyinfrastructureprojectconsistsofanewrefinerywithacapacityof340000barrelsperday,whichisunderconstructioninthestateofTabascoandisscheduledtobeginoperationsinJuly2023.Table1:Mexico’smacroeconomicdataandenergyreservesKeydataa,bEnergyreservesc,dArea(millionkm2)2.0Oil(billionbarrels)6.1Population(million)127Gas(trillioncubicfeet)6.3GDP(2017USDbillionPPP)2569Coal(milliontonnes)1211GDPpercapita(2017USDPPP)19086Uranium(kilotonnesU<USD130/kgU)0000Source:a<reference>(2022);bWorldBank(2022);cBP(2022);dUN(2022)Note:Reservesaretotalprovedreservesandidentifiedrecoverableresourcesforuranium.InNovember2022,duringCOP27,Mexico’sgovernmentmadetheAPECENERGYOVERVIEW2023145commitmenttoincreaseitsNationallyDeterminedContributionsby5%inordertoreducegreenhouseemissionsbyatotalof35%.Mexicoseekstodeploymorethan30additionalgigawattsofcombinedwind,solar,geothermal,andhydroelectricitycapacityby2030,reachingmorethan40gigawattsofcombinedwindandsolarpower(USEmbassy,2022).EnergysupplyandconsumptionTotalprimaryenergysupplyMexico’senergyproductionhasdeclinedby44%sincereachinganoilproductionpeakof11058PJin2004.Totalprimaryenergysupply,whichincludesimports,exceededdomesticproductionforthefirsttimein2016,anditisexpectedthatthistrendwillcontinueduetoalackofdomesticproductionandasubstantialgrowthinenergyimportsanddemand.From2000to2015,Mexicowasanetenergyexporter,mainlyofcrudeoilexports.Thevolumeofexportshasgraduallydeclined,togetherwithadeclineinoilandgasproduction.In2016,Mexicobecameanetenergyimporter.Thevolumeofnetimportsincreasedby72%from2016to2020.MexicoreceivesrelativelyaffordableoilandgasimportsfromtheUnitedStates.TheUnitedStates-Mexico-CanadaAgreement(USMCA),istheframeworkforenergytradebetweenNorthAmericaneconomies.Overthenextdecades,naturalgasimportsareexpectedtocontinuegrowing,tosatisfyagrowthindomesticdemand,andtobere-exportedfromMexicototheinternationalmarket.Duetoitsgeographiclocationandlogisticaladvantages,ithasbecomemoreefficientandcompetitivetoexportUSgasfromMexicothanfromtheUS,insomecases.MostoftheseprojectsaregearedtotheAsianandEuropeanmarkets.Severalliquefiednaturalgas(LNG)exportprojectshavebeenannouncedandareunderconstruction,suchasSempra’sCostaAzulprojectinBajaCalifornia.Overthelongterm,astheAsianandEuropeanmarketspursuedecarbonisationstrategies,Mexicocouldbecomewellpositionedtoexportlow-carbonenergysourcessuchasgreenandbluehydrogen,aswellasLNGusingcarbonsequestration.Figure1:Mexico’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)From2010to2019,Mexico’stotalprimaryenergysupplyvolumegrewmodestly(4%).Intermsofcomposition,fossilfuelsstillrepresentthelargestshare(89%),withoilaccountingforthelargestshare(45%)in2020.ProductionNetimportsTotalPrimaryEnergySupply-6000-4000-200002000400060008000100001200020002005201020152020Production,netimportsandTPES(PJ)APECENERGYOVERVIEW2023146In2020,TPESsawa3%annualcontraction.Duringthisperiod,thecoalandoilsupplyreduced,whilenaturalgascontinuedtoincrease.Oilsawa17%drop,dueinlargeparttoconfiningmeasuresthatreducedthetransportsectoroildemand.Inthepowersector,coalhasreduceditsparticipation,whilenaturalgashasincreased.Althoughthereissignificantpotentialforrenewableenergygeneration,from2000to2020thevolumeofrenewablessupplysawamarginaldecrease.Figure2:Mexico’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)Naturalgasandrenewablessupplyincreasedby14%and3.7%from2019to2020,whileoilandcoalreducedby17%and25%,respectively.AfuelswitchinpowergenerationisincreasinglydisplacingcoalfromMexico’senergymix,aslesscarbon-intensivenaturalgasincreasesitsparticipation.Naturalgasisincreasinglyreplacingoilinelectricpowergeneration.From2010to2020,theshareofoilsupplyreducedfrom53%to39%,whiletheshareofnaturalgassupplyincreasedfrom30%to45%.Sincemid2000s,ahostoffactors,includinganabundanceofnaturalgasintheUS,afallindomesticproduction,betteraffordability,increasedefficiency,andanaturalgasinfrastructurebuild-outhaveincreasedtheflowofnaturalgasfromtheUSintoMexico.AsignificantexpansionofnaturalgasinfrastructurewithflowsfromtheUStoMexicohasincreasedMexico’simportsofUSgas.ThroughoutMexicothereisaneconomyintegratedpipelinenetworkthatincreasinglyallowsnaturalgastoreachdemandcentrestosatisfyindustrialandpowersectordemand.Figure3:Energysupplymix–MexicoandAPEC,2020Source:EGEDA(2022)0100020003000400050006000700080009000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersCoalOilGasRenewablesOther0%20%40%60%80%100%MexicoAPECAPECENERGYOVERVIEW2023147OneofthemaindifferencesbetweenMexico’senergymixandAPEC’sisthevolumeofcoalconsumption.IncomparisontotheAPECregion,Mexicohasreadilyavailabledomesticandimportednaturalgas.InMexico,naturalgasisamorecompetitivefuelsourcethancoal.InMexico,theshareofoilintheenergysupplymixislarger(39%)thaninAPEC(28%).ThisisduetoMexico’sdomesticproductionandimportsofrefinedproducts.Mexicohassixoilrefineries,anditisbuildingaseventh,calledDosBocas,locatedinthestateofTabascointhesouthernregionofMexico.Thenewrefinerywillhaveacapacityof340000barrelsperday.ThecurrentgovernmentaimstoincreaseMexico’senergyself-sufficiency,byincreasingdomesticfuelproduction.Currently,about60%ofMexico’srefinedproductsareimportedfromtheUnitedStates.TotalfinalconsumptionMexico’senergyconsumptionhasbeenlargelydrivenbythetransportsector.ThetransportsectorinMexicoislargelydependentonoilandotherrefinedproductssuchasdiesel.Mexico’stransportsectorhasalargeenergyconsumptionincomparisontootherAPECeconomies.PopulationgrowthandincreasedpurchasingpowerhaveledtoincreasedvehicleownershipinMexico,whichhascontributedtoincreasedenergyconsumption.From2000to2019,thetransportationsectorfinalenergyconsumptiongrewatacompoundannualgrowthrateof3.7%.From2019to2020,duetoCOVID-19,andreducedmobility,oilconsumptionsawthelargestyearlydrop,decliningby29%.Totalconsumptiondeclinedby17%whichwasthelargestannualdropseensince2000.Since2000,industrialenergyconsumptionhasincreasedby17%,whileresidentialenergyconsumptiongrowthhasremainedflat.Figure4:Mexico’sfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)InMexico,thetransportsectoristhelargestenergy-consumingsector,followedbytheindustrysector.ThetransportsectorinMexicohasa38%shareinfinalenergyconsumption(FEC),whichishigherthanAPEC'sshareof25%.Mexico'sindustryFECrepresentsa32%shareoftotalconsumption,whichiscomparabletoAPEC'sindustryconsumptionshareof34%.Theresidentialsector'sshareinMexicoisalsosimilartoAPEC’s,withsharesof17%and16%,respectively.0100020003000400050006000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyAPECENERGYOVERVIEW2023148Figure5:Finalconsumptionbysector,MexicoandAPEC,2020Source:EGEDA(2022)FinalenergydemandIn2020,finalenergydemandinMexicofelltoitslowestlevelsince2003,atavolumeof3843PJ.Oilsawthelargestannualdropof25%,largelyduetotheconfinementmeasuresandreducedmobility.Naturalgasconsumptiondeclinedby8.7%asaresultofreducedindustrialactivity,whichwaspartlyoffsetbyanincreaseinresidentialdemandfornaturalgas.Renewables’finalenergydemandremainedsteadyat322PJin2019.Figure6:Mexico’sfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsHistorically,Mexicohasbeenanenergyproducer,althoughsinceitsoilproductionpeakedin2004,ithasbecomeafuelimporter.Mexicoreliesheavilyonpetroleumandotherliquidsandnaturalgasformobilityandeconomicactivity.However,comparedtoAPECitconsumeslesscarbonintensivefossilfuellikecoal.InMexicotheshareofcoalis2.5%,whileinAPECcoalrepresentsashareof13%offinalenergydemand.Mexico’srenewablesrepresenta24%shareinfinalenergydemand,whileinAPECtheyaccountfor33%.RelativelyaffordablenaturalgasinMexicohasunderminedrenewablesdemandgrowth.Anincreaseinthepriceofnaturalgascouldacceleraterenewablesdemandgrowth.IndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%MexicoAPEC0100020003000400050006000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersAPECENERGYOVERVIEW2023149Figure7:Finalenergydemandfuelshare,MexicoandAPEC,2020Source:EGEDA(2022)ElectricityinMexicocomesmostlyfromcombinedcycleturbinesthatrunonnaturalgas.Theprivatesectoraccountsforalittlelessthanhalfofthetotalelectricitygenerationanditsmainsourcesofelectricitygenerationarenaturalgasandrenewables.CFE,isresponsibleforthemajorityofelectricitygeneration.Ithasalargepowergenerationfleetthatrunsoncoal,oil,andnaturalgasmostly.CFEhasrecentlyannouncedthedevelopmentofnewrenewableenergyprojects,andithasalsosetouttheobjectiveofincreasinginvestmentinrenewablesinits2023-2027businessplan.In2023,Mexico’seconomy-ownedutilitycompanyannouncedtheconstructionofa300MWsolarprojectinthestateofSonora,whichseekstoincreaserenewableenergysupplyandexportrenewableenergytotheUnitedStates.TransformationPowersectorSince2000,Mexicohasbeengraduallydisplacingoilfromitselectricitygenerationmix.Theshareofoilreducedbyhalffrom2000to2020.Conversely,naturalgashasgrownsignificantly,andithasbecomethemostprominentfuelsourceforelectricitygeneration,atrendthatislikelytocontinueoverthelongterm.NaturalgasforpowerinMexicohasseveralbenefits,includingincreasedefficiencyandreducedenergyintensity,relativelyaffordablecostsanddispatchability.Forthesereasons,naturalgashasbeenincreasinglydisplacingcoalandoilforelectricitygeneration.Figure8:Mexico’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)CoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%MexicoAPEC050100150200250300350400200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersAPECENERGYOVERVIEW2023150InMexico,oilisstillanimportantsourceofelectricitygeneration,accountingforashareof15%in2019,comparedtoAPEC’sshareof1%.Mexicoimportsabout70%ofitsnaturalgasfromtheUnitedStatesandthisaccountsfor57%oftotalelectricitygeneration.Sincethe2000s,Mexico’spipelinecapacityhasexpanded,anditsabilitytoimportnaturalgasatarelativelyaffordablecosthascontributedtoafuelswitchfromcoalandoiltonaturalgas.Sincethemid-2000s,Mexico’spipelinecapacityhasexpandedsignificantly,anditsabilitytoimportnaturalgasatarelativelyaffordablecosthascontributedtoafuelswitchfromcoalandoiltonaturalgas.IntheAPECregion,highdomesticavailabilityforcoalandcompetitivepriceshaveledtohigherusethaninMexico.Figure9:Electricitygenerationfuelshare,MexicoandAPEC,2019Source:EGEDA(2022)InMexicoincomparisontotheAPECregion,thedomesticavailabilityofhydrocarbonsandrenewableshasdiscouragednuclearcapacityadditions,asitismorecompetitivetouseothersourcesofenergyovernuclear.ThevolumeofrenewablesinMexicoandintheAPECregionisverysimilarataround9%oftotalelectricitygenerationfuelshare.RefiningMexicohasthepolicypriorityofincreasingitsdomesticrefineriesanditisbuildingaseventhrefineryinthestateofTabascocalledDosBocasthatwillhaveacapacityof340000barrelsperday.Inrecentyears,Mexico’soilcompanyPetróleosMexicanos(PEMEX),acquiredtheTexasDeerParkrefinerytohaveincreasedcontroloveritsrefinedproductimportsfromtheUS.EnergytransitionEmissionsInNovember,duringCOP27,Mexico’sgovernmentmadethecommitmenttoreducegreenhouseemissionsby35%by2030.Increasedinvestmentsinrenewableenergyareexpectedtohelpmeetthisgoal.AdeclineincoalandoiluseinthepowersectorhasbeenthelargestdriverofCO2emissionsreductionsinMexico.From2000to2010,oiluseinthepowersectordeclinedbyhalf,whilenaturalgassawa70%increase.Coalincreasedby40%,offsettingemissionreductiongainsfromaswitchfromoiltonaturalgasduringthatperiod.Afterpeakingin2017withavolumeof34PJ,coaldeclinedbyalmost26%through2019.From2019to2020,coalsawthelargestannualfall,decliningbyalmost36%.From2010to2020,electricitycapacityadditionscamefromlessCoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%MexicoAPECAPECENERGYOVERVIEW2023151intensivecarbonsourcesthanduringthepriordecade,reducingcarbondioxideemissionsby20%.Naturalgasincreasedby18%,oil-firedgenerationremainedflat,andrenewablesincreasedby90%.In2020,theshareofrenewablesforpowergenerationreachedarecord20%,whilecoalaccountedfor5%.Figure10:MexicoCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecurityMexicohasabundanthydrocarbonresourcesandrenewableenergypotential.OilandnaturalgasproductioninMexicohavebeenonadecliningtrendduetolackofinvestmentinupstreamactivityandanaturaldepletionofitslargeoilfields.Atthesametime,macroeconomicfactorshavebeenincreasingdemandforenergyinMexico.Adeclineindomesticproductionandincreaseddemandisincreasingtheneedforenergyimports.OverthelastdecadeMexico’soilandgasimportshaveincreasedsignificantly.AriseinimportdependenceandalackofnaturalgasstorageiscompromisingMexico’senergysecurity.ToincreaseenergysecurityinMexico,anincreaseinnaturalgasstorage,increaseddomesticenergyproductionanddiversificationofitssupplybasewillbeimportant.APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective-toimproveenergyintensityandtodoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargetfortoreducingenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.CO2combustionemissions05010015020025030035040045050020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW2023152Figure11:Mexico’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.Figure12:Mexico’smodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.From2010to2020,therewasa2.9%increaseinMexico’smodernrenewableshare,reachingatotalof6.7%in2020.Increasedprivatesectorparticipationinelectricitygenerationcontributedtoanincreaseinwindandsolarelectricitygenerationgrowth.Mexicoisoneofthemostcompetitiveproducersofwindandsolarenergy.Goingforward,itisexpectedthattheCFE,willplayanincreasedroleinthedevelopmentofmodernrenewableenergyprojects.Mexico’srenewablegenerationsharein2020wasatthesamelevelasTotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012020002005201020152020202520302035Energyintensityindex(2005=100)Changefrom2010to20200.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%2010Change2020APECENERGYOVERVIEW2023153in2000,at60%.OneofthereasonswhyMexico’srenewablesshareinelectricitymixhasremainedflathasbeentheuseofefficientnaturalgas,aswellaslimitedprivatesectorparticipationuntil2015whentheenergyreformwasimplemented.ThegovernmentofMexicohasbeencautiousinitsapproachtoincorporatinglargervolumesofrenewableenergy,dueinparttogridreliabilityconcerns.Therewasapolicytoexpandtransmissionanddistributionnetworkstogetherwithrenewableenergygeneration,butthispolicyhasbeendiscontinuedbythecurrentgovernment.Itislikelythatnewinvestmentsacrosstheenergysectorwillcomefromcloseprivate-publicsectorpartnerships.Thegovernmentisincreasinglyinterestedindevelopingnewrenewableenergyprojectstosatisfyitsgrowingenergydemand,althoughthereisnotacleartimeframeorscalefortheseprojects.Figure13:Mexico’srenewablegenerationshare,2000to2020Source:EGEDA(2022)Renewablesshareinelectricitymix0%5%10%15%20%25%20002005201020152020ProportionAPECENERGYOVERVIEW2023154EnergypolicyEnergypolicyDetailsReferenceNationalDevelopmentPlan2019–2024Thisplanoutlinesthemainpolicyobjectivesandprioritiesofthecurrentsix-year(2018–2024)presidentialadministration.OfficeofthePresidentEnergySectorProgram2020–2024(PROSENER)PROSENERisaplanninginstrumentthatdeterminesthecurrentadministration'sstrategiesandactionstowardsachievingsixpriorityobjectives:toensureenergyself-sufficiency,strengtheneconomy-ownedcompanies,organiseresearchanddevelopmentactivities,attainenergyefficiencyandsustainability,ensureuniversalenergyaccessandmaketheenergysectoraleverofdevelopment.OfficialFederalGazetteTransitionStrategytoPromotetheUseofCleanerTechnologiesandFuelsTheTransitionStrategyservesasthemedium-andlong-termguidinginstrumentfortheeconomicpolicyregardingcleanenergyobligations,sustainableenergyuseandenergyproductivityimprovements.OfficialFederalGazetteParisAgreementNationallyDeterminedContribution(NDC)2022UpdateInNovember2022,duringCOP27,theMexicangovernmentsubmittedanupdatedNDC.ThesubmissionincludesanunconditionalemissionsreductiontargetfromBAUbyupto35%in2030forallgreenhousegases.MinistryofEnvironmentandNaturalResources(SEMARNAT)ParisAgreementNationallyDeterminedContribution(NDC)2020UpdateMexicoupdateditsNDCin2020,butitdidnotimproveupontheambitionsofitsoriginalNDC,inwhichtheeconomypledgedtoreducegreenhousegasemissionsby22%by2030,comparedtoabusiness-as-usual2013baseline.Noadditionalemissionreductionordecarbonisationplanshavebeenpublishedtodate.MinistryofEnvironmentandNaturalResources(SEMARNAT)NationalElectricitySystem’sDevelopmentProgram2021-2034(PRODESEN)Thisprogramdetailstheannualplansforthepowersectorwitha15-yearhorizon.Itincludeskeyelementsforgenerationcapacityadditionsandretirementsaswellasforgridextensionsandmodernisation.MinistryofEnergy(SENER)Oilandgasexplorationandproductionfive-yearplan2020–2024Thisisaplanninginstrumentthatidentifiesthepriorityareasforoilandgasexplorationandproduction,emphasisingthepotentialforonshoreandshallow-waterresources.Itexcludesthedevelopmentofanyunconventionalresourcesforthetimebeing.Thedocumentalsoreaffirmstheadministration’smoratoriumonoilandgasauctions.MinistryofEnergy(SENER)APECENERGYOVERVIEW2023155Five-yearplanfortheexpansionoftheeconomy’sintegratedtransportationandstoragesystemofnaturalgas(SISTRANGAS)2020–2024Thisfive-yearplanprovidesanoverviewofthenaturalgastransportationandstorageinfrastructureaswellastheconsumptionandsupplyobservedinrecentyears.Theplanningdocumentdetailsasetofinfrastructureprojectsthatcanhelpexpandthestorageandtransportationnetworks.MinistryofEnergy(SENER)NationalProgramfortheSustainableUseofEnergy2020–2024(PRONASE)Thisinstrumentestablishesactions,projectsandactivitiesderivedfromtheTransitionStrategyfortheaccomplishmentofthestatedenergyefficiencygoals.OfficialFederalGazetteEnergyEfficiencyRoadmapThisroadmaponenergyefficiencydetailstheenergyefficiencygoals,potentialandsectoralscenariosandthesectoralbarrierstotappingintothefullenergyefficiencypotential.NationalCommissionfortheEfficientUseofEnergy(CONUEE)EnergyTransitionLaw(LTE)TheLTEprovidesaframeworkforcleanenergy,energyefficiencyandgreenhousegasemissionreduction.Itestablishesfourplanninginstruments:astrategytomeetthecleanenergyandenergyefficiencygoals,twospecialprogramstoimplementthisstrategyandaprogramfocusedonsmartgrids.Thecleanenergygoalsforpowergenerationareasfollows:25%in2018;30%in2021;35%in2024.OfficialFederalGazetteSecondRegulationoftheEnergyTransitionLawThissecondaryregulationorreglamentospecifies,ingreaterdetail,theobligationsgivenintheLTE.Amongotherissues,itprovidestherequirementsforthemethodologiesinvolvedinplanningandpublishingprogressreportsandothercleanenergybenchmarkingdata.OfficialFederalGazetteRoadmapforBuildingEnergyCodesandStandardsforMexicoThisdocumentprovidesapathwayandpolicyframeworkforincreasingenergyefficiencyinMexico'sbuildingsector.MinistryofEnergy(SENER)Minimumenergyperformancestandardsfor12appliancegroupsThissetofstandardsregulatestheenergyconsumptionofappliancesthat,duetotheirenergydemandandmassiveuse,offersubstantialenergyandcostsavingstoendusers.NationalCommissionfortheEfficientUseofEnergy(CONUEE)NationalProgramforEnergyManagementSystems(PronasgeN)ThisprogramaimstosupportandbringtogetherEnergyManagementSystems(EnMS),contributingtoEnMSmarketconsolidationinMexico.Casestudieshavedemonstratedenergyefficiencyimprovementsofatleast10%inindustrialfacilitiesuponimplementingEnMS.OfficialFederalGazetteAPECENERGYOVERVIEW2023156GuidelinesforthePreventionandComprehensiveControlofMethaneEmissionsfromtheOilandGasSectorTheseguidelinesapplytonewandexistingsourcesacrossthevaluechain.Undertheregulation,facilitiesmustdevelopaProgramforPreventionandIntegratedControlofMethaneEmissions(PPCIEM).Asastartingpoint,facilitiesmustidentifyallsourcesofmethaneandcalculateanemissionsbaseline(baseyearmustbewithinthelastfiveyears).MinistryofEnvironmentandNaturalResources(SEMARNAT)PilotEmissionsTradingSystem(ETS)In2020,thispilotETSbeganitsoperationsaspartofatwo-phaseprocesstograduallyestablishafully-fledgedETS.ThepilotETScoversthepower,oilandgasandindustrialsectors,whichaccountforapproximately40%ofMexico’sgreen-housegasemissions.Entitieswithannualemissionsfromdirectsourcesgreaterthan100ktCO2werecoveredunderthepilot.NationalCommissionfortheEfficientUseofEnergy(CONUEE)MunicipalEnergyEfficiencyProject(PRESEM)PRESEMfocusesonmakingenergyefficiencyinvestmentsinselectedmunicipalsectors(pumpingwatersystems,streetlightingandpublicbuildings).DepartmentofIndustry,Science,EnergyandResourcesElectricitySubsidiesfortheResidentialandAgriculturalSectorsTheMinistryofFinance(SHCP)providessubsidisedelectricityratestomostusersintheresidentialandagriculturalsectors.Thefinalratesvaryduetoinflationbutremainconstantinrealtime.Thisratewasroughly0.12USD/kWhin2020,whichwasabout46%ofthetotalcostoftheservice.Inter-AmericanDevelopmentBank(IADB)StatisticalRecord2021Thisisacompendiumofdataonnaturalgasandpetrochemicals,anditispresentedinaclearlysummarisedandaccessibleformatonamonthlybasis.MinistryofEnergy(SENER)NotableenergydevelopmentsEnergydevelopmentDetailsReferenceAmendmenttotheElectricityIndustryLawAfterapprovalinbothlegislativechambers,thisamendment–proposedbythePresident–waspublishedinMarch2021.TheultimatepurposeofthelawistostrengthentheComisiónFederaldeElectricidad(CFE).SomeofthechangedprovisionsinthelawincludegrantingadispatchpreferenceforCFEpowerplants,removingtheobligationforservicesupplierstoprocureelectricity,andrevokingself-supplypermits.OfficialFederalGazetteAPECENERGYOVERVIEW2023157ElectricityIndustryLawCourtSuspensionTherecentlyapprovedamendedelectricitylawisinanongoingjudiciaryprocess.ItwasgrantedadefinitivesuspensionbyaMexicancourt,citingcompetitionconcernsandirreparableenvironmentaldamage.Accordingly,thenewamendmentcannottakeeffectuntilatribunalortheSupremeCourtofJusticemakesadecision.OfficialFederalGazetteAmendmenttotheHydrocarbonsLawThispresidentialinitiativewaspassedintolawinMay2021.AmongotherprovisionsaimedatenhancingPEMEX(theeconomy-ownedcompany),thelawgrantstheMinistryofEnergyandtheEnergyRegulatoryCommission(CRE)powertosuspendorrevokepermitsforoilandgasmidstreamactivities,includinginternationaltrade,shouldtheyposeany‘imminentdanger’tosecurity;energysecurityortheeconomy.OfficialFederalGazetteHydrocarbonsLawPartialSuspensionAswiththeElectricityIndustryLaw,thisamendmentwasalsochallengedincourt.However,unliketheElectricityIndustryLaw,acourtgrantedapartialsuspensionofcertainprovisionsofthelaw.Theprocessisongoing,andatribunalortheSupremeCourtofJusticecanoverturnsucharuling.ReutersRevocationofAsymmetricalRegulationtoPEMEXThislawamendmenttakesawaytheCRE’sfacultytoimposeasymmetricalregulationsforPEMEX'soil,gas,fuelandpetrochemicalactivates.AsymmetricalregulationmeasureswereinitiallyaimedatlimitingPEMEX'sformermonopolyofstorageandsalesoftheseproducts.OfficialFederalGazetteReliabilityEnergyPolicyTheMinistryofEnergypublishedthe‘PolicyonReliability,Stability,ContinuityandQualityintheNationalElectricSystem’inMay2020,imposingstricterrulesfornewnon-CFEgenerationpermitsandadditionalrestrictionsforwindandsolarplants.Afteraseriesofinjunctions,afederaljudgeordereditsgeneralsuspension.InMarch2021,SENERcancelledtheapplicationofthepolicyaheadofthelegislativevoteforamendingtheElectricityIndustryLaw,whichcontainsmanyofthesameprovisions.OfficialFederalGazetteSupremeCourt'sInvalidationoftheReliabilityEnergyPolicyTheabove-mentionedReliabilityEnergyPolicywasthesubjectofaconstitutionalcontroversypromotedbytheFederalEconomicCompetitionCommission.Mexico'sSupremeCourtofJusticeinvalidatedsomeofthekeypointsofthispolicy,consideringthemunconstitutional.SupremeCourtofJusticeNationalCentreforEnergyControlofMexico(CENACE),ResolutiontoGuaranteetheEfficiency,Quality,Reliability,ContinuityandStabilityoftheNationalElectricGridInApril2020,CENACE,thegridoperator,indefinitelysuspendedpre-operationaltestsfornewsolarandwindprojectsandmodifiedtherulesforgridaccess.CENACEtriedtojustifytheseaspartofaseriesofmeasurestoassuregridstabilityamidstdecreasesindemandcausedbytheCOVID-19pandemic.Privategeneratorsbeganlegalproceedings,andtheprocedurewasdefinitivelysuspendedbyacourtinJune2020.NationalCentreforEnergyControlofMexico(CENACE)APECENERGYOVERVIEW2023158PEMEX’sPurchaseoftheDeerParkRefineryTheeconomy-ownedoilcompanyPEMEXagreedtoaUSD596milliondealtobuyShell'smajorityinterestinthejointventure340000b/drefineryinDeerPark,Texas.PEMEXhasacquiredfullownershipoftherefinery,thusincreasingitsshareofgasolineanddiesel.PEMEXConstructionoftheDosBocasRefineryAkeyaimofMexico’soilpolicyistoboostdomesticrefining.TheconstructionoftheemblematicDosBocasrefinerywasoneofthelandmarkinfrastructureprojectsofthisadministration.The340000b/drefinery,withawhollygovernment-fundedinvestmentofoverUSD8billion,isexpectedtobeoperationalby2024andtoincreaserefiningcapacityby25%.DosBocasRefineryLakatchdrynaturalgasoffshorefieldLocatedinthestateofVeracruz.JointventurebetweenNewFortressEnergyandPEMEX.Potentialproductioncapacityof300millioncubicfeetperdayover10yearsstartingin2024.190millioncubicfeetperdaywillbesoldtoNewFortressEnergywhowillliquefyandsellthegastotheinternationalmarket.InitialLNGproductionof1.4milliontonnesperyearwillincreaseto7milliontonnesperyear.ArgusMediaAnnouncementofCoatzacoalcosLNGexportprojectCFEnergia,CFE,gascommercialisationunit.Capacity:4.5milliontonnesperyear.ExportprojectfromtheportofCoatzacoalcosintheGulfofMexico,tosellgastotheinternationalmarket.MinistryofEnergy(SENER)AltamirafloatingstorageregasificationunitexportprojectLocatedinthestateofTamaulipas.USfirmNewFortressEnergyandCFEjointventure.Totalcapacityestimated:4.2milliontonnesperyeartocomeintooperationnextyear.ToexportgastoEurope.ECALNGAnnouncementofCFESolarparkinSonoraEconomy-ownedutilitycompanyCFEwithprivatesector.LocatedinthestateofSonora,intheportofPenasco.NewFortressEnergyAPECENERGYOVERVIEW2023159UsefullinksBancodeMéxico(Banxico)–www.banxico.org.mxCentroNacionaldeControldeEnergía(CENACE)–www.cenace.gob.mxCentroNacionaldeControldelGasNatural(CENAGAS)–www.cenagas.gob.mxComisiónFederaldeElectricidad(CFE)–www.cfe.gob.mxComisiónNacionalparaelUsoEficientedelaEnergía(CONUEE)–www.conuee.gob.mxComisiónNacionaldeHidrocarburos(CNH)–www.cnh.gob.mxComisiónRegulatoriadeEnergía(CRE)–www.cre.gob.mxComisiónNacionaldeSeguridadNuclearySalvaguardias(CNSS)–www.cnsns.gob.mxInstitutoMexicanodelPetróleo(IMP)–www.imp.mxInstitutodeInvestigacionesEléctricas(IIE)–www.iie.org.mxInstitutoNacionaldeInvestigacionesNucleares–www.inin.gob.mxInstitutoNacionaldeEstadísticayGeografía(INEGI)–www.inegi.org.mxPetróleosMexicanos(PEMEX)–www.pemex.comPresidenciadelaRepública–www.gob.mx/presidenciaRondasMéxico–https://rondasmexico.gob.mx/SecretaríadeEnergía(SENER)–www.gob.mx/senerSecretaríadeHaciendayCréditoPúblico(SHCP)–www.gob.mx/haciendaSecretaríadelMedioAmbienteyRecursosNaturales(SEMARNAT)–https://www.gob.mx/semarnatSistemadeInformaciónEnergética(SIE)–http://sie.energia.gob.mxAPECENERGYOVERVIEW2023160ReferencesUSEmbassy(2022),https://mx.usembassy.gov/united-states-welcome-mexicos-commitments-announced-during-cop-27/APECENERGYOVERVIEW2023161NewZealandIntroductionDuringtheCOVID-19pandemic,NewZealandemployedstrictbordercontrolstotakeadvantageofbeinganislandeconomyandeliminatethevirusuntilvaccineswererolledout.In2020,therewerestillafewlockdowns,includingonestricterone,whichwasaboutamonthlonginApril.Thedatafortheyearshowssignificanteffectsonenergysupplyanddemandbecauseoftheseactions;however,theeconomywaslessaffectedthanotherAPECeconomies.RenewablesmadeupalargeshareofNewZealand'senergysupplyandaccountedforapproximately80%ofelectricitygenerationin2020.Hydrogenerationisthedominantrenewableenergysource,followedbygeothermalandwind.NewZealand'swindresourceshaveexcellentpotentialbuthavenotbeenfullyutilisedyet.ThepossibleclosureoftheTiwaiPointAluminiumSmelter,whichaccountsfor13%oftheeconomy'sannualelectricityconsumption,remainsamajorfactorinshapingNewZealand'selectricitygenerationlandscape.Itisstillnotclearwhetheritwillclose,buttheincreaseindemandforlow-carbonaluminiumisimprovingitsprospects.CoalandnaturalgasarethemostabundantfossilenergyresourcesinNewZealand.However,in2018,thegovernmentbannednewoffshoreexplorationforoilandgasexceptforonshoreTaranaki.Effortsarebeingmadetoensuretheexistingnaturalgasreservesareenoughtomeetcurrentandfutureconsumption.NewZealand’seconomicsituationisliketherestoftheworld.ItsReserveBankisraisinginterestratestocurbinflation,andtheTreasuryforecastsexpectashallowrecessionin2023.Thisishavingsignificanteffectsonenergytransitionplans,suchastheneedtoscrapaproposedbiofuelmixingmandatetohelpkeepfuelpricesdownforconsumers.Table1:NewZealand’smacroeconomicdataandenergyreservesKeydataa,bEnergyreservesc,dArea(thousandkm2)268Oil(billionbarrels)63Population(million)5.1Gas(trillioncubicfeet)2074GDP(2017USDbillionPPP)219Coal(milliontonnes)7580GDPpercapita(2017USDPPP)42900Uranium(kilotonnesU<USD130/kgU)-Source:aStatsNZ(2022);bWorldBank(2022);cMBIE(2021);dBP(2021)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.EnergysupplyandconsumptionTotalprimaryenergysupplyTPES(Totalprimaryenergysupply)inNewZealandin2020was824PJ,whichwasa4%decreasecomparedto2019.ThedecreasewasmainlyCOVID-related,andledtoreducedactivity,especiallyintheindustrialandtransportsectors.Productionofallfossilfuels(about260PJ)continuestostagnate,APECENERGYOVERVIEW2023162largelybecauseoftheoilandgasexplorationban,whichmeansthatoffshoreoilandnaturalgasexplorationandproductioncanonlyoccurwithinapermittedarea.NewZealand’scrudeandcoalproductionisalsomostlyusedforexportsothetransitiontorenewableenergytypesinNewZealandhaslittleeffectontheproductionofthosefueltypes.ThemajorityofNewZealand’senergyexportsarecrudeoil(39PJ,55%)andcoal(32PJ,45%).In2020,totalenergyexportsfellby24%.OnemajorcauseofthiswascoalminesshuttingdownforaboutamonthduringaCOVID-19lockdown.Figure1:NewZealand’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)NewZealand’simportsaremostlymadeupofcrudeoil(159PJ),petroleumproducts(128PJ)andcoal(43PJ).TheoilismainlyusedfortransportandthecoalismostlyusedforelectricitygenerationattheHuntlyPowerStation.Theeconomymaintainsahighshareofrenewablesinitsenergymix,withthemmakingup40%ofTPES,and80%ofitselectricitygenerationin2020.ThepotentialclosureoftheTiwaiPointAluminiumSmelterin2024couldhavesignificant,unknownimpactsonthesenumbers.In2020,NewZealand'snetenergyimportswere243PJ,nearlydoubletheamountin2010,butalso10%lowerthan2019.Thislargedropwasmostlyfromcrudeandoilproducts,whichdroppedbyabout50PJ,aresultofCOVID-relatedtravelrestrictions.Theeconomy'sonlyoilrefinery,atMarsdenPoint,shutdowninApril2022,soallrefinedpetroleumproductsmustbeimported.NewZealandexportsallitscrudeoilproduction(40PJ).Themainsourcesofrenewableenergysupplyarehydro(26%)forelectricity,biomass(10%)fordirectuseinmanufacturing,andgeothermal(60%)forelectricitygeneration.WhilegeothermalmakesupalargeportionofTPES,itsconversionefficiencyislow(15%)resultinginamisleadingviewofavailablerenewableenergyintheeconomy.Ofthegeothermalenergy,only29PJisconvertedtousableelectricity,andaverysmallamountisusedfordirectheatinindustryandbuildings.Gassupplycanbesplitintotransformation(33%),consumption(39%)andnon-energyuse(22%).Thegasusedfortransformationisalmostallforelectricityproduction.Thegasforconsumptionismostlyindustrialprocessheat,includingheatforfoodprocessingandchemicalproduction(ureaandmethanol).Thenon-energyuseisasafeedstockforchemicalproduction.Fluctuationsduetochangesinthedomesticgaspriceandinternationalmethanolpricescancausechangesindemandfromthechemicalsector.ProductionNetimportsTotalPrimaryEnergySupply0100200300400500600700800900100020002005201020152020Production,netimportsandTPES(PJ)APECENERGYOVERVIEW2023163Issueswiththeeconomy’slargestgasfield,Pohokura,causedastrainingassupply.Oneeffectofthiswastocausetheeconomy’smethanolproducertodropproductionto76%oftotaloperatingcapacity.Theshortagealsocausedanincreaseinelectricityandgasspotprices.Figure2:NewZealand’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)ComparedtotheAPECaverage,NewZealandhasalargerproportionofrenewableenergysources.Eventhoughgeothermalelectricitygenerationinflatesthisfigure,NewZealandstillhasalargersupplyofhydroandbiomass.ThesupplyofcoalinNewZealandislowerthantheAPECaverage,duetoagreaterrelianceonrenewableenergysourcesforelectricitygeneration.Figure3:Energysupplymix–NewZealandandAPEC,2020Source:EGEDA(2022)TotalfinalconsumptionIn2020,thetotalfinalconsumptionofenergyinNewZealandwas563PJ,followingan8.5%dropinusesince2019.ThiswasmostlyaresultofCOVID-19restrictions,especiallyadecreaseintheamountoftransportenergyuse(about15%),andinsomeindustrialenergyuse(about9%).01002003004005006007008009001000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersCoalOilGasRenewablesOther0%20%40%60%80%100%NewZealandAPECAPECENERGYOVERVIEW2023164Figure4:NewZealand’sfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)Transportationcontinuestobetheleadingenergyconsumersector,accountingforoverone-thirdoftotalenergyconsumption.Therehasbeenarapidriseintransportactivityinthelastfiveyearsbut2020sawa15%dropinenergyuseduetotravelrestrictionsbecauseofCOVID-19lockdownstowardsthelatterhalfoftheyear.Thefallintransportactivitywasmostseverelyseenintheaviationsector,causingdomesticandinternationaljetfuelusetoeachdropbyabouthalf.NewZealand'sresidentialenergyconsumptionislowercomparedtoothereconomiesinAPEC.Thisdisparityisaresultoftheeconomy'slowpopulationandhighGDPpercapita,aswellasimprovedenergyefficiencyinhousing.In2020theresidentialsectorsawanincreaseinenergyuseof1.6%,whichwasgreaterthanthe0.6%averageincreasesince2010.ThiswaslargelyaresultofCOVID-19lockdowns,asmoredaytimeresidentialelectricityusewasobserved.Theindustrialsectorsawalmosta9%dropindemand.ThiswasconnectedtotheimpactofCOVID-19lockdowns,asonlythefoodprocessingandchemicalssectorsweredeemedessentialandcontinuedoperationduringcertainlockdownsinthe2ndquarteroftheyear.Figure5:Finalconsumptionbysector,NewZealandandAPEC,2020Source:EGEDA(2022)TheTiwaiPointAluminiumSmelterdecreaseditsoutputbyabout9%,whichledtoadropinelectricityconsumptionbyabout1PJ.Thiscameatthesametimeasanear25%fallininternationalaluminiumprices0100200300400500600700200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%NewZealandAPECAPECENERGYOVERVIEW2023165overtheprevious18months,butCOVID-19restrictionswerecitedasthereason.Thesmelteralsomanagedtosecureadiscountonitselectricitypriceuntil2024,whichiswhenithasannouncedthatitmayclosetheplantduetofallingprofits.TheagriculturalsectorwasdeemedtobeanessentialserviceduringtheCOVID-19lockdowns.This,counteractedbylower-than-normalsoilmoisturelevels,ledtoa14%(1PJ)riseindemandfromtheagriculture,forestryandfishingsector.FinalenergydemandOilconsumptioninNewZealandishigh,accountingfor48%oftheeconomy'senergyuse,comparedtotheaverageintheAPECregionof33%.Mostoftheoil,over80%,isusedfortransport.ElectricityconsumptioninNewZealandrepresentsalldemandinthe"Electricityandothers"category.TheuseofelectricityinNewZealandiscomparabletootherAPECeconomiesintheindustrial,residential,andcommercialsectors.TheTiwaiPointAluminiumSmeltercurrentlyconsumesabout13%ofNewZealand'selectricitygenerationandisasignificantfactorintheeconomy'senergygenerationplanning.AlmostallcoalconsumptioninNewZealand(whichexcludescoaluseforelectricitygeneration)isintheindustrialsectorforprocessheat.Withintheindustrialsector,18PJ(77%)ofthisisusedinfoodandbeveragemanufacturing,mainlybydairiesfordryingmilkintomilkpowder.Thisyearsawcoalusefornon-metallicmineralproductmanufacturing(glass,ceramics,lime,plasterandconcretes)decreasedfromabout4to2PJ.Mostoftherenewableenergyuse(excludingtransformation)inNewZealandisintheindustrialsectorforprocessheat,whiletherestisutilisedintheresidentialandcommercialbuildingsectors.Figure6:NewZealand’sfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsMostofNewZealand'send-usegasconsumption(excludingtransformationandnon-energyconsumption)in2020wasintheindustrialsectorforprocessheat,withhalfofthatcomingfromthechemicalssubsector.Thechemicalssubsectorsawfluctuatingconsumptionbasedonglobalpetrochemicaldemandanddomesticgasprices,whichhavebeenlowerinthepast.Theremaininggasisusedinresidentialandcommercialapplicationsincludingforheatingbuildings,waterheatingandcooking.Thegovernmentisfocusingonreducingtheeconomy'sfossilfuelconsumptionintheshorttomediumtermandseesindustrialprocessheatasaprimeopportunity,asitaccountsfor80%ofindustrialenergy0100200300400500600200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersAPECENERGYOVERVIEW2023166use.Thiscouldleadtoashiftawayfromcoaland(toalesserextent)naturalgastolow-emissionenergysourcessuchasbiomass,electricity,andgeothermalheat.Figure7:Finalenergydemandfuelshare,NewZealandandAPEC,2020Source:EGEDA(2022)InNewZealand,energydemandisdividedamongfuelssimilarlytootherAPECeconomies,butwithsomevariations.Theuseofcoal,gasandelectricityislowerwhiletheuseofoilandrenewablesishigher.Thelowerconsumptionofelectricity,gasandcoalcanbeattributedtoreducedenergydemandintheindustrialsector,whichisakeydriverofenergyuse.Additionally,theindustrialsectorinNewZealandreliesmoreheavilyonrenewables,whichfurtherreducestheprominenceofotherfueltypes.Inaddition,thehightransportactivityinNewZealandresultsinahigherproportionofoiluse.TransformationPowersectorInNewZealand,hydropoweristheleadingsourceofelectricitygenerationduetotheeconomy'sfavourablenaturallandscapeforhydropower.However,dryyears,whichoccurwhenthereisashortageofrainorsnowmeltandthewaterlevelsinlakesbecomelow,poseachallenge,andrequirebackupgeneration,whichiscurrentlyprovidedbyfossilfuels.GeothermalenergyplaysasignificantroleinNewZealand'sgenerationmix,accountingfor1035MW(about10%)ofinstalledcapacity.Thisenergysource,likehydro,providesbaseloadgeneration,whichmeansitoperatescontinuously,andhelpstocounteracttheunpredictabilityofnewergenerationsourcessuchaswindandsolar.Whilegeothermalenergyisarenewableresource,itcanresultinemissions,dependingonthegeologyandtechnologyused.Theseemissionsaregenerallylowercomparedtothosefromfossilfuelgeneration.Solarandwindpowerarequicklybecomingmajorplayersinthegenerationmix,withwindenergyaccountingforabout5%oftotalgenerationandsolarmakingup0.05%.NewZealandhasfavourablewindconditions,whichhavecontributedtoitsgrowthwithouttheneedforsubsidiesandisexpectedtodosointhefuture.Gasmadeup14%ofNewZealand'sgenerationin2020andisusefulforflexiblegeneration,particularlyduringhydrodryyears.Coalalsoservesthispurpose,butonlyprovides5%ofgeneration.TheHuntlyPowerStationistheonlycoal-firedpowerstationintheeconomyandaccountsforabout5%ofthetotalinstalledcapacity.CoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%NewZealandAPECAPECENERGYOVERVIEW2023167Figure8:NewZealand’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)In2020theshareofrenewablesingenerationfellto80%.Thiswasmainlyduetoa5%declineinhydrogenerationbecauseofbelow-averagerainfall.Asaresult,electricitygeneratedfromnaturalgasandcoalincreasedby10%and2%respectively.Gassupplystrain,causinganincreaseingasspotpricesalsomeantthatcoaluseincreasedmorethanexpected,tomakeup5%oftotalgeneration,thehighestsharesince2013.Figure9:Electricitygenerationfuelshare,NewZealandandAPEC,2020Source:EGEDA(2022)RefiningTheclosureofNewZealand’sMarsdenPointRefinerycameasaresultofdwindlingprofitsandincreasedcompetitionfromoverseasrefineries.Thedecisionwasfinalisedhalfwaythrough2021andtherefineryclosedon31March2022.Inthelasttenyearstherefineryhasbeenproducingaroundhalfofthepetrolanddieselusedbytheeconomy,andalmostallthejetfuel.However,NewZealand’sindigenouscrudeproductionistoosweettoberefinedatMarsdenPoint,soimportedcrudewasused.ThismeantthatNewZealandwasstillentirelyreliantontheinternationaloilmarket.Fuelwasalsotradedatinternationalparityprices,sotheclosurewilllikelyhavenoeffectonconsumers.Thegovernmentisworkingonanewbillforminimumfuelstockholding05101520253035404550200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersCoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%NewZealandAPECAPECENERGYOVERVIEW2023168obligationsforfuelimporters.Thisisexpectedtoimprovefuelsecurityabovewhatitwaswhiletherefinerywasinuse.EnergytransitionNewZealand’sshareofrenewablesinelectricitygenerationisamongthehighestintheworld,at80%.Thismakesittoughfortheeconomytoachieveadditionalgainsinitsrenewablegenerationshare,sincethecheapestandbestsourcesarealreadybeingutilised.Mostofthefuturegrowthingenerationisexpectedtobeseeninwindandsolar.ThistopicisexploredfurtherintheAPECEnergyOutlook,8thEdition.NewZealand’sEnergyEfficiencyandConservationAuthority(EECA)ismakingeffortstodecarboniseprocessheat2sinceaboutone-thirdoftotalenergyuseisforthis.Justoverhalfofprocessheatissuppliedbyfossilfuels(mainlygasandcoal),andthemajorityofthisisintheindustrialsector.Thebestopportunitiesareinlowandmedium-temperatureprocessheat(two-thirdsofprocessheatenergyuse)sincethosetemperaturesareeasiertoreachwithcurrenttechnologiesandrenewablefuels(orelectricity).TheNewZealandgovernmentisinvestigatingsolutionstoachievedecarbonisationinhightemperatureprocessheat.EmissionsTheCOVID-19pandemicbroughtaboutasignificantfallinCO2emissionsofabout6%in2020.However,largelybecauseofincreasedoiluseintransport,emissionshadbeentrendingupwardbeforehand.Futureemissionsareexpectedtobeaffectedmajorlybyeffortstodecarbonisetransportandprocessheat.ThereissignificantuncertaintyrelatedtothepotentialclosureoftheTiwaiPointAluminiumSmelterin2‘Processheat’referstoheatcreatedfromenergy,foruseinindustrial2024,whichcouldfreeupasignificantportionofNewZealand’sgenerationcapacity,resultinginlessneedforcoalandgasgeneration,whicharealsothemostexpensiveformsofvariablegeneration.Figure10:NewZealand’sCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)On16May2022,thegovernmentreleasedNewZealand’sfirstEmissionsReductionPlan(ERP),whichoutlinesthedetailsformeetingtheeconomy’sfirstemissionsbudget(2025)andsetsthecourseformeetingfutureemissionsbudgets.Chapter11oftheERPoutlinesNewZealand’splanstoreduceemissionsintheenergyandindustrysectors.ThesesectorsmakeupjustoveraquarterofNewZealand’stotalgrossgreenhousegasemissions.IntheERP,thegovernmentsetsoutitslong-termvisionfortheenergysectorin2050–forNewprocessesandheatinginbuildings.CO2combustionemissions25262728293031323320002005201020152020MilliontonnesCO2APECENERGYOVERVIEW2023169Zealandtohaveahighlyrenewable,sustainable,andefficientenergysystemthatsupportsalowemissionseconomy.EnergysecurityWithincreasinggrowthinwindandsolar,anddecreasingsharesofnaturalgasandcoalgeneration,hydroandgeothermalarebecomingmoreimportantsourcesofbaseloadgeneration.Assuchthereisincreasingriskandcostfromhydrodryyears,whichareboundtooccur.Basedonanalysisofthecomparativecostsofnewcapacitysources,NewZealandhasafewoptions.Duetothegovernment’saspirationtoreach100%renewablegenerationby2030,fossilfuelsarenotconsideredasanoption.However,solutionsarebeingexploredbytheNZBatteryProject,whichismostfocusedonanNZD15.7billion,3to8.5TWhpumpedhydroscheme(calledLakeOnslow)thatwouldtakeabout7to9yearstobuild.However,otheroptionsarebeingexploredforusetogetheroralone,theseare:•Woodpelletsorwoodchipstoreplacecoalandgasinelectricitygeneration.•Geothermalenergy,includingnovelapproachestousingit.•Hydrogenorothergreenvectors(e.g.greenammonia)AnothersignificantrisktoNewZealand’senergytransitionisitsdecliningsupplyofnaturalgas.Duetotheoffshoreexplorationban,futureoffshoreexplorationisunlikely,butuncertaintyaroundthefutureoftheindustryisalsodiminishingprospectsonthedemandside.BasedonforecastsfromtheClimateChangeCommission(CCC)andtheMinistryofBusiness,InnovationandEmployment,NewZealand’sdemandforgascouldbebetween2290and3170PJfrom2022to2050.Thesescenariosrepresentanaverageannualusageofbetween79and109PJ(ascomparedto2020totalusageof182PJ).WhilethislevelofuseexceedsNewZealand’s2Pnaturalgasreservesof1970PJ,contingentresourcesof2920PJcouldprovidesufficientgasifpartiallydeveloped.ThereislikelynonegativeeffectofNewZealand’sclosureofitsMarsdenPointOilRefinery(itsonlyrefinery)onenergysecurityoraffordability.ThisisexplainedintheRefiningSectionabove.Thegovernmentisalsoworkingonanewbillforminimumfuelstockholdingobligationsforfuelimporterswhichwillimprovefuelsecuritybeyondwhatitwasbeforetheclosure.APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective-toimproveenergyintensityandtodoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargettoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.In2020,NewZealand’senergyintensitywas76PJperbillionUSDpurchasingpowerparity(PPP)ofGDP,whichrepresentsa24%improvementsince2005.ThisimprovementisoccurringatasimilarpacetothatofthewiderAPECregion.APECENERGYOVERVIEW2023170Figure11:NewZealand’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.Figure12:NewZealand’smodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.NewZealandhasthehighestproportionofrenewablesinitsenergymixofallotherAPECmembereconomies.Despitethis,therehasbeenaslightdecreaseinNewZealand'srenewablesharesince2010,whenitwasat30%.In2019,NewZealand'srenewablesharewas28%,lowerthanAPEC'soverall9.1%renewablesshare.AlthoughNewZealandhasthepotentialtocontributetoAPEC'sgoalofdoublingTotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012014020002005201020152020202520302035Energyintensityindex(2005=100)Changefrom2010to20200.0%5.0%10.0%15.0%20.0%25.0%30.0%2010Change2020APECENERGYOVERVIEW2023171renewablesby2030,itscurrenthighlevelsofpenetrationmakeitchallengingtoachievefurthergrowthcomparedtoeconomieswithlowerrenewablepenetrationrates.Theuseofrenewablesinelectricitygenerationhasbeenincreasinginrecentyearsduetotheinstallationofnewrenewableenergycapacity.However,dryweatheraffectingthelevelsofwaterinhydrostoragelakeshascausedsomefluctuations.Forinstance,in2020theshareofrenewablesingenerationfellto80%,mainlyduetoa5%declineinhydrogenerationbecauseofbelow-averagerainfall.Asaresult,electricitygeneratedfromnaturalgasandcoalincreasedby10%and2%respectively.Figure13:NewZealand’srenewablegenerationshare,2000to2020Source:EGEDA(2022)Renewablesshareinelectricitymix0%5%10%15%20%25%30%35%40%20002005201020152020ProportionAPECENERGYOVERVIEW2023172EnergypolicyEnergypolicyDetailsReferenceClimateChangeResponse(ZeroCarbon)AmendmentActIn2019,theClimateChangeResponse(ZeroCarbon)AmendmentActsetintolawnewdomestic2050targetsofnetzeroemissionsofallgreenhousegasesotherthanbiogenicmethaneby2050,and24to47%below2017biogenicmethaneemissionsby2050,including10%below2017biogenicmethaneemissionsby2030.MinistryfortheEnvironmentNDC2030Target(2021-2030)Updatedin2021,theNDCsetsaheadlinetargetofa50%reductionofnetemissionsbelowthegross2005levelby2030.MinistryfortheEnvironmentEmissionstradingschemeThisiscurrentlylimitedtodomesticcreditsandexcludesagriculture;theemissionslimitsaresetonafive-yearbasis.Thefirstperiodrunsfrom2021to2025,withabudgetof354MtCO2-e.Itcontainspriceceilingandpricefloormechanismstomaintainmarketstability.Currently,itexcludesemissionsfromtheagriculturalsector.MinistryfortheEnvironmentElectricVehiclesProgram,incl.exemptionforEVsandhybridsfromroaduserchargesAmongotherdevelopmentswhichwillbeapartofthis,theexemptionfromroaduserchargeswillbeavailableforelectriclightvehiclesuntil2024,andheavyvehiclesuntil2025.NZTransportAgencyRenewableenergytargetThegovernmenthassetatargetthat50%oftotalenergyconsumptionwillcomefromrenewablesourcesby2035,andanaspirationaltargetof100%renewableelectricitygenerationby2030MinistryofBusiness,InnovationandEmploymentOilandgasexplorationbanTheCrownMineralsAmendmentBillhasendedallnewoffshoreoilandgasexplorationandlimitedonshoreexplorationtoasmallregion.MinistryfortheEnvironmentNewZealandenergyefficiencyandconservationstrategy(NZEECS)Between2017and2022ithadtheaimofdecreasingtheintensityofindustrialemissions.In2022anewfive-yearenergyefficiencyandconservationstrategybegandevelopment.ItisintendedthatthenewNZEECSwillcomplement,andintegratewith,thebroadergovernment-ledenergystrategy.NZEECSNZBatteryProjectIn2020thegovernmentannouncedaninvestigationintopumpedhydroandotherpossibleenergystoragesolutionsforNewZealand’sdryyearelectricityproblem.Around2023,thegovernmenthopestomakefinalfeasibilitydecisionsaboutwhichoptionorcombinationofoptionstotakethroughforfurtherinvestigationaspartofadetailedplan,whichwillcostuptoNZD70million.MinistryofBusiness,InnovationandEmploymentGovernmentInvestmentinDecarbonisingIndustry(GIDI)NZD69millionworthofcapitalgrantco-investmenthasbeenmadeavailabletosupportprojects.ThefundisavailabletoNewZealand-basedprivatesectorbusinessesthathavecommittedtodecarbonisingtheirbusinessandindustrialprocessesandwheregovernmentco-investmentwillhelpremovebarrierstoacceleratingtheirdecarbonisationgoals.EnergyEfficiencyandConservationAuthorityAPECENERGYOVERVIEW2023173MāoriandPublicHousingRenewableEnergyFundThegovernmenthasallocatedNZD28milliontotrialsmall-scalerenewableenergytechnologiestohelpdecreaseenergybillsandencouragegreateruseofheating,leadingtowarmerandhealthierhomes.MinistryofBusiness,InnovationandEmploymentFundingforheatersandinsulationWarmerKiwiHomesisagovernmentprogramofferinggrantscoveringtwo-thirdsofthecostofceilingandunderfloorinsulation.EnergyEfficiencyandConservationAuthorityPublicsectordecarbonisationTheCarbonNeutralgovernmentprogramrequirespublicsectoragenciestomeasureandpubliclyreporttheiremissionsanddeliveroffsets.TheprogramisbackedbytheNZD200millionSectorDecarbonisationFund.EnergyEfficiencyandConservationAuthorityTheGasAmendmentAct2021ParliamenthaspassedanActthatwillimproveinformationdisclosureandincreasethemaximumfinancialpenaltyforbreachinggasregulations.MinistryofBusiness,InnovationandEmploymentNotableenergydevelopmentsEnergydevelopmentDetailsReferenceMarsdenpointoilrefineryconvertedintoanimportterminalIn2022,RefiningNZshutdownNZ'sonlyoilrefineryanditisbeingconvertedintoanimportterminalwiththepotentialtoimproveNewZealand'ssecurityofsupply.ArgusMediaNewZealandAluminiumSmeltersNewZealandAluminiumSmeltersissupposedtoremaininoperationuntilatleast2025.Thisisanimportantissueforthegovernmentasitmustweighupthelossofjobsandeconomicactivitywiththesubsidisationofrenewableelectricityforamultinationalcompany.BusinessWireEmissionsReductionPlan(ERP)releasedin2022Chapter11oftheERPoutlineshowNewZealandwillmeetitsfirstemissionsbudget(2022-2025)andalsosetsoutthegovernment'slong-termvisionfortheenergysectorin2050.TheTransportchapter(10)isalsorelatedtoenergy.MinistryfortheEnvironmentHydrogendevelopmentNumeroushydrogenprojectsarecurrentlyunderdevelopmentorinvestigationinNewZealand,includingpartnershipswithSingapore,JapanandKorea,signallingtheirintentiontojointlydevelophydrogentechnologyandsupplyinthefuture.MinistryofForeignAffairsandTradeGeothermalresearchfundingGNS(GeologicalandNuclearSciences)wasawardedaNZD10milliongrantbytheMinistryofBusiness,InnovationandEmployment(MBIE)EndeavourFundResearchProgramin2019toundertakeafive-yearprojectonsupercriticalgeothermalresourcesinNewZealand.GNSScienceInvestigationintopoweroutagesAninvestigationwascompletedregardingthepoweroutagesthatleftmorethan34000householdswithoutelectricityon9August2021.MinistryofBusiness,InnovationandEmploymentAPECENERGYOVERVIEW2023174ResourceStrategyformineralsandpetroleumIn2019thegovernmentdevelopedaResourceStrategyformineralsandpetroleum,intendedtocover2019to2029.MinistryfortheEnvironmentReviewoftheenergyefficiencyregulatorysystemforproductsandservicesInDecember2021,theEnergyandResourcesMinisterdecidedanewfive-yearenergyefficiencyandconservationstrategywastobedeveloped.ThiswillreplacethecurrentNewZealandEnergyEfficiencyandConservationStrategy2017-2022(NZEECS),whichsetstheoverarchingpolicydirectionforgovernmentsupportandinterventionforpromotingenergyefficiency,energyconservationandtheuseofrenewablesourcesofenergy.MinistryofBusiness,InnovationandEmploymentNewenergyresearchdevelopmentcentre(AraAke)MBIEhasfundedAraAke,whichprovidessupportandfundingforenergyinnovatorstohelpthemcommercialiseandenterthemarket.AraAkeElectricityPriceReview(EPR)TheEPRinvestigatedwhetherthecurrentelectricitymarketdeliveredafairandequitablepricetoconsumers.Followingthegovernment’sresponse,agenciesarenowprogressingseveralworkstreamsrelatedtoit.MinistryofBusiness,InnovationandEmploymentHuntlyCoalPowerStationtransitionplanTheHuntlyPowerStation,NZ'sonlycoalpowerstation,hasbeendeterminedtobeabletobemaintainedto2030andcouldbeextendedtoatleast2040.Thereisanintentiontotrialbiomassasanalternativefueltocoal.GenesisAnnualReport2022NewZealandEnergyStrategyMBIEwilldeveloptheNewZealandEnergyStrategybytheendof2024.Itwillsetouthowtheenergysectorwilldecarboniseandensurethatstepsarecoordinatedacrossthewholeenergysystem.Itwillhelptosignalpathwaystoreducerelianceonfossilfuels,andtowardsgreaterlevelsofrenewableenergyandotherlow-emissionalternatives.MinistryofBusiness,InnovationandEmploymentGasTransitionPlanTheGasTransitionPlanwilloutlinethenecessarystepstodecarboniseandreducerelianceonnaturalgas,whilestillprovidingforsomenaturalgasusein2035.MinistryofBusiness,InnovationandEmploymentNewZealand’sBatteryProjectNewZealand’sparliamentarycabinethasapprovedfundingtoinvestigatepumpedhydroagainstotherpossiblesolutionstoNewZealand’sdryyearelectricityproblem.MinistryofBusiness,InnovationandEmploymentUsefullinksEmissionsReductionPlan-https://environment.govt.nz/what-government-is-doing/areas-of-work/climate-change/emissions-reduction-plan/Energystatisticsandmodelling(MinistryofBusinessInnovationandEmployment[MBIE])-https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/energy-statistics-and-modelling/energy-statistics/APECENERGYOVERVIEW2023175EnergyandNaturalResourceshomepage(MBIE)-https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/EnergyinNewZealandannualreport(MBIE)-https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/energy-statistics-and-modelling/energy-publications-and-technical-papers/energy-in-new-zealand/Industrialheatpumpsforprocessheat-https://www.eeca.govt.nz/insights/eeca-insights/industrial-heat-pumps-for-process-heat/ReferencesEGEDA(ExpertGrouponEnergyDataAnalysis,APECEnergyWorkingGroup)(2021),APECEnergyDatabase.-https://www.egeda.ewg.apec.org/egeda/database_info/index.htmlAPECENERGYOVERVIEW2023176PapuaNewGuineaIntroductionPapuaNewGuinea(PNG)isaPacificOceanislandeconomyconsistingofroughly600islandsstretchingfromjustsouthoftheequatortonearCapeYork,Australia.ItisthelargestofthePacificIslandeconomies,withalandareaof462840squarekilometres,themajorislandsbeingNewBritain,NewIreland,andBougainville.Thecapital,PortMoresby,islocatedinsouth-easternNewGuineaontheCoralSea.PNGliesonthe"RingofFire,"aregionpronetoearthquakesandtsunamis.Theeconomyisrichinnaturalresources,includinggold,copper,oil,gas,timber,andcropsforexport(coffee,cocoa,tea,palmoil,andcopra),andhasmountainousterrainandtropicalrainforests.Theeconomyhasahotandhumidclimatewithwetanddryseasons.In2020,PNG’srealgrossdomesticproduct(GDP)wasUSdollars(USD)36billion(2017USDpurchasingpowerparity[PPP]).TheGDPgrowthratehasbeenincreasingatanaveragerateof1.8%everyyearsince2000.3imf.org/en/Countries/PNGPNGwashithardbytheCOVID-19pandemic,andthisisprobablythecauseofa3.5%decreaseinGDPbetween2019and20203.PNGexportsalmosthalfofitstotalenergyuseasLiquidnaturalgas(LNG)(438PJ),ofwhichthemajorityissenttoChinaandJapan.ItisimportantthatPNGcanmaximiseitsreturnontheseexportstoincreasetheireconomicgrowth.Assuch,theprivategascompanieshaveagreedtosupply15%ofgasoutputtotheeconomy,which,accordingtotheNationalEnergyPolicy,isplannedtobeusedforindustrialpurposesinthe2030s.PNGhasahighrateofpovertyandpoorinfrastructure.Thepoorinfrastructurecanbeseeninthelowrateofaccesstoelectricity.Onlyabout20%ofthepopulationhasaccesstothegrid,andsohouseholdsusealternativeenergysources,especiallyfirewoodwhichisveryinefficient.Asignificantpartoftheeconomy’sdevelopmentplanistheNationalElectrificationRolloutPlan,whichwillincreaseaccesstoelectricityto70%ofthepopulation.Thiswillhavesubstantialimpactsontheeconomy’senergysupplyanddemand.PNGhassubstantialdifficultyinestimatingthedataforitswiderangeofinformalenergyuse.ToimprovethequalityoftheirenergydatathePNGgovernmenthasenactedtheNationalEnergyAuthorityAct2021forenergyproducerstostartreportingtheirenergyusebacktothegovernment.Thiswillhelpimprovepolicyanalysisandresearch.PNGalsohassignificantreservesofcobalt,whichisanimportantmaterialfortheenergytransition.Theyproduced3thousandtonnesin2021,whichwas2.2%oftheworldtotal.Theyhave47thousandtonnesofreservesremaining,whichagainis2.2%oftheworldtotal.APECENERGYOVERVIEW2023177AlthoughPNGhasnoprovencoalreserves,itisexpectedthatthereissomepotential.Table1:PNG’smacroeconomicdataandenergyreservesKeydataa,bEnergyreservesc,dArea(km2)462840Oil(billionbarrels)0.16Population(million)8.8Gas(trillioncubicfeet)5.6GDP(2017USDbillionPPP)38Coal(milliontonnes)-GDPpercapita(2017USDPPP)4350Uranium(kilotonnesU<USD130/kgU)-Source:a<reference>(2022);bWorldBank(2022);cBP(2022);dUN(2022)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.EnergysupplyandconsumptionTotalprimaryenergysupplyIn2020,theTotalPrimaryEnergySupply(TPES)was209PJ,aquarterhigherthan2010.Thegrowthwasdrivenbyincreasedoilandgassupplyinthetransportandindustrysectors.Renewableenergysupplyremainedsteadywithmostdemandcomingfromresidentialfirewooduse.OilwasthelargestcontributortoTPESin2020,makingup40%.Itwasusedinthetransport,industry,andelectricitygenerationsectors.Renewablesmadeup43%ofTPES,whilenaturalgasaccountedfor17%.Figure1:PNG’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)MostofPNG'soilsupplyissplitbetweendieselandheavyfueloil,whichismainlyusedforpowergeneration.PNGhasabundantgasresources,withsignificantproductionstartinginthemid-2010s.MostofthisgasisexportedasLNG.In2020,96%oftheproductionwasexportedasLNG,totalling438PJ,comparedto35PJofTPESfordomesticuse.Thehighvolumeofexportedgasresultsinalargenegativenetimportbalance.ProductionNetimportsTotalPrimaryEnergySupply-600-400-200020040060080020002005201020152020Production,netimportsandTPES(PJ)APECENERGYOVERVIEW2023178Figure2:PNG’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)ThePNGLNGplant(475PJcapacitypa.)whichisnearPortMoresbyusesabout24PJofgasintheproductionprocess,includingownuseandlosses.Thismakesuptwo-thirdsofthetotalgassupplyforthedomesticeconomy.Theotherthird(10PJ)isforelectricitygeneration,ofwhich5PJisforthegridconnectingPortMoresbyGasPowerPlantnearPortMoresbyandtheLNGplant.Theother5PJisusedbyautoproducers(non-grid-connectedindustrialproducers).Totalgassupplyhasdoubledsince2019.TPESofrenewablesinPNGismostly(75%)traditionalbiomass,whichismostlyusedforresidentialuse,whileasmallamountisusedforindustry,mainlypalmoilplant/susingtheirownwasteforheatandelectricityproduction.Besidestheuseofbiomass,16%ofrenewablesTPESisgeothermalforelectricitygeneration,and4%ishydroforelectricitygeneration.ThegeothermalTPESisslightlyexaggeratedbecauseofthelowconversionefficiencyofgeothermalenergytoelectricity.PNG'sTPEScompositiondifferssignificantlyfromthewiderAsia-PacificEconomicCooperation(APEC)regionsincetheeconomylackscoal-firedelectricitygenerationandanysignificantcoalconsumption.OilandrenewableshavealargershareofTPEScomparedtotheAPECaverage.Figure3:Energysupplymix–PNGandAPEC,2020Source:EGEDA(2022)TotalfinalconsumptionIn2019,PNG'stotalfinalenergyconsumptionwasaround141PJ.Theresidentialsectoraccountedforabouttwo-fifthsofenergyuse,followedbytheindustrialsector(aboutathird)andthetransportsector(abouta050100150200250200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersCoalOilGasRenewablesOther0%20%40%60%80%100%PapuaNewGuineaAPECAPECENERGYOVERVIEW2023179fifth).Theagriculturalsectoraccountedfor5PJ(4%)ofenergyuse,ofwhichthemajority(about90%)wasdiesel.EnergydemandinPNGhasbeengrowingsince2000,albeitataslowerpacethanGDP.Thetransportandindustrialsectorshavealmostdoubledtheirenergyuse,highlightingthecrucialroleofenergyindrivingeconomicgrowth.Figure4:PNG’sfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)Thepoorinfrastructureintheeconomydoesnotjustaffectelectricityaccessbutalsomakestransportcostly.Theeconomyhasfewroads,andmanyofthemgetnomaintenance.ThisproblemisexacerbatedbytherelativelyhighruralpopulationproportioncomparedtotherestofAPECandotherPacificeconomies.Thisinturnleadstoalowamountoftransportactivityandenergyuse,especiallyforroadvehiclescomparedtotherestofAPEC.Thecombinedresidentialandcommercialbuildingssectoristhelargestenergyconsumer,despiteseeingonlyabouta20%increasesince2000.Thisisduetotheinefficiencyoftraditionalbiomass,whichmakesupmostoftheresidentialsector'senergyuse.Thisleadstohigherenergyconsumptioncomparedtoifmoreefficientfuelswereused.Themountainousareas,calledtheHighlands,haveanespeciallylowrateofaccesstoelectricity.This,andbeingrelativelycoldcomparedtotheshorelineareas,resultsinanincreaseinfirewoodusethereforheat.Figure5:Finalconsumptionbysector,PNGandAPEC,2020Source:EGEDA(2022)FinalenergydemandPNG'senergydemandin2020wasdominatedbyoil(39%)and020406080100120140160200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%PapuaNewGuineaAPECAPECENERGYOVERVIEW2023180renewables(51%ofwhichisfirewood).Theresidentialsectoraccountedfor43%offinalenergyconsumption,whiletheindustrialsectoraccountedfor27%andthetransportsector17%.Electricityconsumptionwas10%offinalenergydemandandismostlyconsumedbytheindustrialsector.Renewableenergy,mostlyfirewood,contributesthelargestshareoffinalenergyconsumption,partiallyduetolimitedaccesstoelectricity.TheNationalElectrificationRolloutPlanisexpectedtoreducetraditionalbiomassuseasaccesstoelectricityincreases.Figure6:PNG’sfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsComparedtotherestofAPERC,PNG’senergyusecomprisesmuchmoreoilandrenewables.Thislargelystemsfromhavingnouseofcoal,andanegligibleamountofgasuse,sotheotherfueltypestaketheirplace.UseofrenewablesisespeciallyhighbecausePNGreliesmoreonfirewoodforheatingandcookinginbuildings,comparedtoelectricity,gasandcoal,whicharemuchmoreefficient,inothereconomies.Figure7:Finalenergydemandfuelshare,PNGandAPEC,2020Source:EGEDA(2022)TransformationPowersectorPNG’selectricitynetworkisrelativelyundeveloped.Onlyaround15%ofthepopulationhaveaccesstothegrid,anditisalsoknowntohavereliabilityissues.Theelectricitynetworkissplitintodifferentgridsbecauseoftheroughtopologyoftheland.ThemaingridsarethePortMoresbyandRamu020406080100120140160200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersCoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%PapuaNewGuineaAPECAPECENERGYOVERVIEW2023181grids,whichthegovernmentintendstoconnectinthefuture.Oneofthegovernment’smostimportantprojects,TheNationalElectrificationRolloutPlan,4withfinancialassistancefromotherAPECeconomies,istoincreaseaccesstoelectricityto70%ofthepopulationby2030.Thiswillhelptostimulateeconomicactivityandqualityoflifethroughouttheeconomy.Partlyduetothepoorinfrastructure,PNG’selectricityuseislowcomparedtotheAPECaverage,andtotalelectricitygenerationisalsolow.Electricityismostlygeneratedusingdieselandheavyfueloil(50%),butthereisonegaspowerplantwhichusesgasfromtheLNGprojectandprovides19%oftotalgeneration.Hydropoweristhelargestsourceofrenewableenergy(20%)andgeothermalcontributes9%.Mostoftheelectricityconsumptionisbytheindustrialsector(70%).Theuseoffirewoodisprevalentintheresidentialandcommercialsectorswherethereisnoaccesstoelectricity,oritistoounreliable,whichisacommonissue.Dieselandheavyfuelgeneratorsareusedalotbecauseoilcanbeeasilytransportedandtheycanbeturnedoffandoneasilywhenthereareblackouts,whichoccuroften.However,theuseofoilforelectricitygenerationisexpectedtodecreaseinfutureyearswithmoreinvestmentinPNG'slargereservesofrenewableandnaturalgasresources.Abouttwo-thirdsofelectricitygenerationinPNGiscarriedoutbyautoproducers,suchasminingfacilities,whicharequitefarawayfromurbancentresandarethereforenotconnectedtothegrid.Oneareaofimprovementhasbeenthedevelopmentofoff-gridsolarforlighting,whichmeansthataround60%ofthepopulationhasaccess4TheNationalElectrificationRolloutPlan,toelectricityifoff-gridsolar(forlighting)isconsidered.However,firewoodisstillneededforcookingandheating.Figure8:PNG’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)PNGusesalargeproportionofoilforgenerationcomparedtotheAPECaverage,asitreliesheavilyonoilgeneratorsforelectricitygeneration.TheprominenceofhydroandgeothermalgenerationinPNGispartlyduetothesmallamountofgenerationcapacityneededtomakethosesourcessignificant,relativetotheAPECaverageandtheeconomy’stotal.012345200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersAPECENERGYOVERVIEW2023182Figure9:Electricitygenerationfuelshare,PNGandAPEC,2020Source:EGEDA(2022)RefiningPNGhasanoilrefiningcapacityof33thousandbarrelsperday(73PJperyear),andtheeconomyproduced59PJofpetroleumproductsin2020.Thisisnotenoughtosatisfydomesticconsumption,sotheeconomyimportsthemajorityoftherefinedoilituses,andmostofitsproductionisactuallyexported.Furthermore,thecrudeoilthatisrefinedinPNGisimportedbecausethecrudeoilextractedindigenouslyistoosweet.Theeconomy’sLNGplant,justoutsideofPortMoresby,hasacapacityof8.3Mtpa,whichisequivalentto475PJofnaturalgas.Thereisa5EnergyoutlookmentionstheNationalEnergyPolicywhichstipulates15%ofnewproject,thePapuaLNGproject,expectedtobecompletedbytheendof2027,whichwillincreasethistoalmost14Mtpa.OnebenefitofthedevelopmentoftheLNGplantisthatthelocalshavebeenabletoaccesscheapLPG(liquidpetroleumgas),whichisamuchcleaneralternativetokerosene(kerosenemakesupabout1.3PJoftotalenergyuse)orfirewoodforheatingandcooking.EnergytransitionPNG’senergytransitiongoeshand-in-handwithitsgrowth.OneofPapua’sbiggestchallengesisbuildingtheinfrastructureitneedstoenablethesupplyofnewenergytypestothemajorityofitspopulation.Thisismadeevenharderbytheroughtopographyoftheeconomy.Themajorprojectofincreasingaccesstoelectricitywillhelptogive70%ofthepopulationalternativestofirewoodandkerosene(kerosenemakesupabout1.3PJoftotalenergyuse).Increasedaccesswillprobablyalsoresultinanincreaseinthereliabilityoftheelectricitynetwork.Thesetwoimprovementsmayhelptocountertherelianceonoilgenerators,whichareespeciallywidelyusedbecausetheycanbetransportedtoremoteareas,aswellasprovidebackupcapabilities.Theeconomyhasabundantgasresources,andcurrentlyexportsmostofitsgasasLNG.Therearepotentialareaswherethisgascouldbeuseddomestically,suchaselectricitygenerationandammoniaproduction,orforindustrialpurposes5.EventheuseofLPGasacleaneralternativetokeroseneinhouseholdsisbecomingprevalent.Conversely,astherestoftheworldtransitionstogasinsteadofcoalandoil,LNGexportscouldbecomemoreprofitablefortheeconomy.Althoughahighshareoffinalenergyconsumptioniscurrentlycomingallnaturalgasoutputshouldgotoindustrialuseinthefuture.CoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%PapuaNewGuineaAPECAPECENERGYOVERVIEW2023183fromtraditionalbiomass,theeconomyalsohassignificantpotentialfornon-traditionalrenewableenergy,especiallyrenewableelectricitygenerationtypes.Asthegovernmentcontinuestoinvestinelectrificationandrenewableenergy,theenergymixinPNGisexpectedtoshiftawayfromimportedoilandtowardsrenewableenergiesandnaturalgaswhicharemoreeconomicallyandenvironmentallysustainableenergysourcesforthefuture.EnergytransitiontopicsarefurthercoveredinthePNGchapteroftheAPERCEnergyOutlook.EmissionsPNGemittedabouteightmilliontonnesofCO2in2020,butthisisonlyaboutonethousandthofAPERC’stotalemissions.PNG’slowamountofemissionsisexpectedtogrowquicklyovertimeastheeconomyincreasespowergeneration,aswellasindustrialandtransportactivity.Figure10:PNG’sCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)ThemajorityofPNG’semissionscurrentlycomefromelectricitygeneration(40%),transport(20%)andindustry(20%).Theemissionsfromburningfirewoodarenotconsidered.EnergysecurityPNG’senergysecurityissuesaredefinedbyitsrelianceonimportsforthemajorityofitsoiluse(40%oftotalconsumption).In2023therewasa30-dayshortageofaviationfuelinPNG,forcinglocalairlinestosuspendflights.Thiswasverycostlyfortheeconomy,especiallysincemuchdomestictransportisbyplane.Forexample,thecapital,PortMoresby,isnotconnectedbyroadtothesecondlargestcity,Lae,andthenearby,highlypopulated,Highlandsregion.Meansofimprovingtheeconomy’senergysecuritycouldincludeincreasingtheoilstockholdinglimitsordiversifyingthesourcesofenergysupply.PNG’sefforttoimproveaccesstoandreliabilityofitselectricitynetworkcanbeconsideredanimportantprojectforincreasingenergysecurityasitwilldecreaserelianceonoilforelectricitygeneration.Thiswillinturndecreasethenegativeeffectsofsupplyshocks.APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective-toimproveenergyintensityandtodoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargettoreduceenergyintensityby45%in2035,relativetoa2005baseline.CO2combustionemissions012345678920002005201020152020MilliontonnesCO2APECENERGYOVERVIEW2023184Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.Figure11:PNG’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)PNGhasimproveditsenergyintensityoverthepasttwodecadesandthisimprovementisexpectedtocontinue,particularlywiththeimplementationoftheNationalElectrificationRolloutPlanwhichaimstoincreaseaccesstoelectricityandwillreplacetheuseofinefficientfirewood.Theeconomy'senergyintensitywas65PJperbillionUSDPPPin2020,whichwasa34%improvementfrom2000.TheimprovementinenergyintensityisalsodrivenbythegrowthoftheeconomythroughLNGexportssince2014.TheAPECregionhassetagoalofreducingenergyintensityby45%by2035,comparedtothe2005baseline,butthistargetisnotapplicabletoindividualeconomies.DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.Figure12:PNG’smodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.TotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012020002005201020152020202520302035Energyintensityindex(2005=100)Changefrom2010to20200.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%2010Change2020APECENERGYOVERVIEW2023185PNGhasamodernrenewableenergyshareof5.8%.Thishaschangedverylittlesince2010,whichisbecauseallenergytypesincreasedbyaboutthesameamount.TraditionalbiomassconsumptionisnotincludedinPNG'smodernrenewablesshare,butifitwasincluded,therenewablessharewouldbearound50%.PNGhasarenewablegenerationshareof31%andthemajorityofthiscomesfromhydroandgeothermalelectricitygeneration(60%).Therestcomesfrommodernbiomassgenerationintheindustrialsector(40%).Thissharehasremainedataboutthesamelevelsince2000.TheintermediatevariationwasduetonewcapacitydevelopmentssuchastheexpansionoftheLihirGoldMinegeothermalgenerationscheme.Figure13:PNG’srenewablegenerationshare,2000to2020Source:EGEDA(2022)Renewablesshareinelectricitymix0%5%10%15%20%25%30%35%40%20002005201020152020ProportionAPECENERGYOVERVIEW2023186EnergypolicyEnergypolicyDetailsReference100%renewableenergyThisisatargettoachieve100%renewableelectricityby2050.Vision2050Economy-wideelectrificationElectrificationrateof70%by2030and100%by2050.Vision2050EnhancedNationallydeterminedcontribution(NDC)((2020)TheNDCwasrevisedtotargeta78%shareofinstalledcapacityofrenewableenergyby2030.EnhancedNationallyDeterminedContributionDomesticresourceutilisationThegovernmentwillensure15%ofgasreservesinnewoilandgasprojectswillbemadeavailablefordomesticgasutilization.NationalEnergyPolicy2017-2027EnergyEfficiencyDevelopandenforceenergyefficiencystandards.NationalEnergyPolicy2017-2027GovernanceBuildstrongerinstitutionsandgovernanceframeworksfortheenergysector.NationalEnergyPolicy2017-2027NationalEnergyAuthorityAct2021PassedinApril2021,itwilldecommissionalltheregularitypowersandfunctionsofPNGPowerLimitedandvestthemwiththeNationalEnergyCommission.TheNationalEnergyAuthorityActalsogivesgovernmentspowersforcollectingenergydatafromprivategroupsforstatistics.EnergyAuthorityActNotableenergydevelopmentsEnergydevelopmentDetailsReferenceAmendmenttotheMiningActandtheOilandGasActTheMiningAmendmentsintroducea'livedata'reportingobligationandgiveentitiespriorityintenementapplicationsover'reservedland'.TheO&GAmendmentsgivetheministergreaterflexibilityindeterminingwhethertograntorrefusepetroleumdevelopmentlicencesandaffectthesanctityofpetroleumagreementsandgasagreements.NewPNGEnergylawscommencePapuaLNGProjectTheprojectparticipantsandthegovernmenthavere-affirmedtheircommitmenttothisproject,anditisexpectedtoproceed.WhencompleteitwilladdsixMptaofLNGproduction.NASDAQAPECENERGYOVERVIEW2023187PNGElectrificationPartnershipUSD1.7billionofinternationalfundingfromAustralia,Japan,NewZealand,andtheUnitedStateshasbeenpledgedtosupportachievingthetargetof70%ofelectrificationby2030.Someofthismoneyisalreadybeingcommittedtoprojects.PostCourierProliferationofOff-gridSolarLighting60%ofPapuaNewGuineanhouseholdsarenowusingoff-gridsolartechnologywithoff-gridsolarlightingproductsandbattery-basedtorchesandlanterns,whicharenoweffectivelyreplacingkerosenelamps.PNGOff-GridReportUsefullinksUnitedNations-https://papuanewguinea.un.org/TheWorldBank-https://www.worldbank.org/en/country/pngInternationalMonetaryFund-https://www.imf.org/en/Countries/PNGPNGEnvironmentalDataPortal-https://png-data.sprep.org/AsianDevelopmentBank-https://www.adb.org/countries/papua-new-guinea/mainAPECENERGYOVERVIEW2023188PeruIntroductionDespiteseveremeasuresbeingadoptedthroughmostof2020and2021,PeruhasbeenseverelyimpactedbytheCOVID-19pandemic.Peru’seconomygrew2.9%duringthefirstthreetrimestersof2022(InstitutoNacionaldeEstadísticaseInformática[INEI],2023)aftertheeconomicreboundin2021.MiningcontributedtotheeconomygrowththroughQuellaveco,alargecoppermine,whichstartedoperationsin2022(BBVA,2023b).ThelargestwindfarminPeru,187MWPuntaLomitas,iscurrentlyunderconstructionandwillprovideelectricitytoQuellaveco.InJanuary2022,acrudeoilspilloccurredonthecoastduringtheunloadingofcrudeoilattheLaPampillarefinery.LaPampillarepresentsapproximatelyhalfofthecruderefiningcapacityofPeruandsuppliesfuelsto40%ofthedomesticmarketandisthemainsuppliertomaritimebunkersandaviation.Thegovernmentorderedoperationstoceasebut,facingtheriskofafuelshortage,therefineryresumedproduction.Also,Peruissuedalawestablishingclimateemergencyasemergencyoftheutmostinterest.Thedecreeestablishedagoalofintroducing20%ofnon-conventionalrenewableenergies6intotheelectricgenerationfuelmixby2030andprioritised,amongotheractions,the6InPeru,‘non-conventionalrenewableenergyresources’referstobiomass,wind,solar,geothermal,andtidal.Hydrocanbeconsideredanon-developmentofprogramstopromotegreenhydrogen.Peruisanetimporterofoilproducts;therefore,theglobalenergycrisisimpactedPeru’seconomy.Tomitigatetheincreaseofprices,Peruimplementedseveralmeasures.However,despitetheseefforts,fuelincreasedinpriceduring2022:by23%fordieseland12%forgasohol(INEI,2023a)Table1:Peru’smacroeconomicdataandenergyreservesKeydataa,bEnergyreservesc,dArea(millionkm2)1.3Oil(billionbarrels)0.7Population(million)33Gas(trillioncubicfeet)0.7GDP(2017USDbillionPPP)422Coal(milliontonnes)0GDPpercapita(2017USDPPP)12500Uranium(kilotonnesU<USD130/kgU)14Source:aINEI(2022,June10);bWorldBank(2022);cBP(2022);dNuclearEnergyAgency&InternationalAtomicEnergyAgency(2022)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.PerualsosufferedLPGscarcityseveraltimesduring2022duetoextremeseaconditions,becauseLima,thecapitalcityofPeru,issuppliedmainlybysea.Inthecaseofshortages,vehicularLPGsupply,fuelusedinlightpassengervehicles,isrestrictedtoprotectLPGsupplytobuildings(ElComercio,2023a).Theseextremeeventsarebecomingconventionalrenewableiftheinstalledcapacityislessthan20MW,ThisdefinitionisaccordingtotheLegislativeDecree1002APECENERGYOVERVIEW2023189morefrequent.Ontheotherhand,improvementstotheenergystructurehavebeenannounced.500MWofwindand136MWofsolarprojectshavebegunconstructionandareexpectedtostartoperationsin2023.Naturalgasconnectionsexpanded14%in2021,reaching1554300naturalgasusersmainlyresidentialandcommercialconsumers(PeruEnergia,2022).Ruralelectrificationadvancedduringthelastyear,reaching84%ofcoveragein2022.Itisexpectedtoreach93%by2023(MINEM,2022Jun30).EnergysupplyandconsumptionTotalprimaryenergysupplyEnergystatisticsin2020showtheimpactofthepandemiconthePeruvianenergysystem.Strictlockdownsandrestrictionsonseveraleconomicactivities,suchastransport,wereimposed,affectingfueldemandandsupply.Oilproductionwasreduced,especiallyinsomeoilblockslocatedintheAmazonbasinwhereproductionwassuspended.Oilproductionfellalmost25%during2020.Additionally,Petroperú,theeconomy-ownedoilcompany,temporarilysuspendedoperationsintheNorthPeruvianOilpipelinethattransportcrudeoilfromthejungletothecoastbecauseoftheimplementationofupgradedsafetymeasuresagainstthepandemic,andsocialconflictsthatappearedattheendoftheyear.Ontheotherhand,associatednaturalgasliquidsandnaturalgasproductionfell10%duringthesameperiod.Consequently,Peru’stotalprimaryenergyproduction(TPES)fell7.9%in2020from2019levels,reaching961PJ(ExpertGrouponEnergyDataAnalysis[EGEDA],2022).However,duetothedrasticreductionindomesticfueldemand,importsofoilandoilproductswerereducedandPerubecameanetenergyexporterforthefirsttimesince2016(EGEDA,2022).Figure1:Peru’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)Theenergysupplyfromrenewableenergywasaffectedtheleastasitwasreducedonlyby1.2%,fallingfrom292PJin2019to288PJin2020(EGEDA,2022).Renewableenergyisusedmainlyinelectricitygenerationwhererenewableenergyplantshaveprioritytodispatchelectricitytothegrid.Otherimportantuseofrenewableenergyisincookingintheresidentialsector.Additionally,thegassupplydecreased16%,from319PJin2019to266PJin2020,andtheoilsupplydecreased23%,from497PJin2019to385PJin2020.ProductionNetimportsTotalPrimaryEnergySupply-20002004006008001000120020002005201020152020Production,netimportsandTPES(PJ)APECENERGYOVERVIEW2023190Ontheotherhand,thecoalsupplywasreducedby8PJin2020from29PJin2019,representingadecreaseof30%,althoughcoalrepresentsjust2%ofthetotalprimaryenergysupply.Figure2:Peru’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)ThedifferencesbetweenPeru’sandAPEC’senergysupplymixprovidessomeinsightsintotheenergydemandcharacteristicsoftheeconomy.Naturalgasandrenewableenergiessuppliedaround54%oftheenergyin2020.MostofthesefuelsareusedinpowergenerationinPeru.TheshareofthesefuelsinAPECislowerat32%.Incontrast,coalisanimportantfuelinAPECat35%whileitplaysaminorroleat2%.Otherimportantdifferenceisobservedintheshareofoil,thisshareinPeruwas40%whileinAPECitwas28%in2020.Becauseoilandoilproductsaremainlyusedintransport,figure3indicatestheimportanceoftransport’senergydemandinshapingPeru’senergymix,whileproductionofelectricityhasagreaterinfluenceindefiningAPEC’senergymix.Figure3:Energysupplymix–PeruandAPEC,2020Source:EGEDA(2022)TotalfinalconsumptionInMarch2022,afterthefirstcasesofCOVID-19werereportedinPeru,thegovernmentimposedcompulsorysocialisolation,whichrequiredmostpeopletostayathomemostofthetimeandrestrictedvariousactivitiessuchasservicesandcommerce.Eventhoughsomeoftherestrictionswereloosenedupaftersometime,severalremainedthroughouttheyear.Energydemandintheresidentialsectorgrew7.7%from163PJin2019to176PJin2020.Thisgrowthwashigherthantheaverage-200020040060080010001200200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersCoalOilGasRenewablesOther0%20%40%60%80%100%PeruAPECAPECENERGYOVERVIEW2023191annualrateof0.6%inthepreviousdecadeandwastheresultofthecompulsorysocialisolationandtheimplementationofteleworkinganddistanceeducation.Energydemandintheothersectorswasreduceddrastically.Transport,themainenergyconsumer,decreased22%from377PJin2019to295PJin2020.ThiswasaconsequenceofthemeasuresofimmobilisationimplementedbyPeruthatrestrictedtravellers’long-distancetrips,closedinternationalborders,reducedlocaltransportcapacityto50%andpromotedteleworking.Figure4:Peru’sfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)Industryenergydemandwasreducedby17%from251PJin2019to207PJin2020.Severalindustrialactivitiesweresuspendedorrestrictedbecausenewsafetyprotocolsneededtobeimplementedbeforeactivitiescouldberesumed.Commercial,whichincludespublicandservices,alsoreduceditsenergyconsumptionin9.2%from57PJin2019to51PJin2020.Commercialsectorgraduallyresumedactivitiesinaccordancewithacalendarpublishedbythegovernment.Figure5:Finalconsumptionbysector,PeruandAPEC,2020Source:EGEDA(2022)Despitetheseriousrestrictionsimposedontransport,thissectorwasthemainenergyconsumerin2020,using40%oftotalenergy.Industryconsumed28%andwasthesecondlargestconsumer,whiletheresidentialsectorconsumed24%andwasthethirdmainenergyconsumerinPeru.ThemaindifferencebetweenPeruandAPECconcernstheshareoftransport.InAPEC,transportrepresented25%,butindustrywas34%,indicatingtheimportanceoftheindustrialisedeconomiesindefiningAPEC’sfinalenergyconsumption.01002003004005006007008009001000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%PeruAPECAPECENERGYOVERVIEW2023192Anotherimportantdifferenceisobservedintheshareofnon-energy,whichincludestheuseoffuelsasrawmaterialfornon-energyproductssuchaslubricants.InAPEC,non-energyuserepresents13%offinalenergyconsumptionwhileinPeruitis0.7%.FinalenergydemandDemandforallfuelsexceptforrenewableenergywasreducedin2020.Coaldemandwasreducedby33%;oilandoilproductsdemandby17%;naturalgasby26%.Incontrast,renewableenergydemandincreased4.2%.Thistrendisexplainedbyadecreaseofactivitiesintheindustryandcommercial/servicessectors,andrestrictionsintransport.Increaseddemandforrenewablesisindicatedbytheestimatedincreaseintraditionalbiomassconsumptionintheresidentialsector.Figure6:Peru’sfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsAlmosthalfofthefinalenergydemandinPeruissatisfiedbyoilandoilproducts.Peru’sfinalenergydemandfuelsharedidnotchangedrasticallyifcomparedwith2019’sfuelshare.Themaindifferenceswerethedecreaseofthenaturalgassharethatwasusedinindustrialactivitiesandtheincreaseofrenewablesbecauseoftheuseofbiomassintheresidentialsector.Renewablesthatareusedinelectricitygenerationaredemanded.DemandforelectrificationismoreadvancedinAPECwhereitrepresents33%ofthefinalenergydemand,indicatingthepotentialforimprovingthedemandforelectrificationinPeru.Figure7:Finalenergydemandfuelshare,PeruandAPEC,2020Source:EGEDA(2022)NaturalgasappearedinPeru’sfinalenergydemandmixin2004whenCamisea,themainnaturalgasproject,startedoperation.Sincethen,01002003004005006007008009001000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersCoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%PeruAPECAPECENERGYOVERVIEW2023193naturalgashasincreaseditsshareinthefinalenergydemandtoapproximately10%.ThisshareishalfofAPEC’sshare,indicatingthechallengestoexpandnaturalgascoverageintheeconomy,althoughadvancementshavebeenreportedconstantly.TransformationPowersectorIn2020,Peru'selectricitygenerationtotalled52803gigawatt-hours(GWh),afallof7.9%from2019.Renewablesourcesprovided64%ofelectricity:hydropowerproduced58%andnon-conventionalrenewableenergyproduced5.9%ofelectricity.Therestoftheelectricitywasproducedinthermalplants,mainlynatural-gas-based.(EGEDA,2022).Figure8:Peru’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)Thedecreaseinelectricitydemandobservedin2020causedareductionofelectricitygenerationofgas-firedpowerplants.Consequently,themonthlyshareofnon-conventionalrenewableenergyinelectricitygenerationreached7.2%inApril2022(MINEM,2020).ThePeruvianelectricitygenerationmixismainlycomposedofhydropower,non-conventionalrenewableenergy,andnaturalgasthatisusedmainlyincombinedcycleturbines(MINEM,2021).Peru’spowergenerationmixdiffersdrasticallyfromAPEC’smixascoalhasaminorroleinelectricitygenerationandtherearenonuclearpowerplantsinPeru.Becausesomestudiesestimate57GWofhydro,20GWofwindpower,and25GWofsolarpowerpotential,amongotherrenewableenergysources(MINEM,2021),itisverylikelythatPeruwillcontinuetohaveacomparativelycleangrid.Figure9:Electricitygenerationfuelshare,PeruandAPEC,2020Source:EGEDA(2022)010203040506070200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersCoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%PeruAPECAPECENERGYOVERVIEW2023194RefiningInadditiontotheeventinLaPampillarefineryinJanuary2022,refiningwasimpactedbythepandemicastheworktomodernisetheTalararefinerystoppeduntilJune2020.Talararefineryisexpectedtoreturntofulloperationin2023.Thisprojectwillincreasecapacityfrom65000barrels/dayto95000barrels/day.EnergytransitionIn2020,PerusubmitteditsrevisedNationalDeterminedContributions(NDCs),increasingitsmitigationgoalfrom30%to40%in2030andrestrictingemissionsto179MtCO2-eqby2030iftherearefavourableconditions(UNCC,2022).InJanuary2022,PeruissuedthesupremedecreeNº003-2022-MINAMthatdeclaredtheclimateemergencyasanemergencyoftheutmostinterest.ThislawcreatedtheframeworktodesignandexecutemeasurestoimplementtheseNDCs.EmissionsDuetotheobserveddecreaseinenergydemand,thePeruvianenergysectorreducedemissionsby19%in2020.However,aneconomyreboundisexpectedtoincreaseemissionsinfutureyears.Figure10:PeruCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecurityBiofuelsalsoplayaroleinPeru’stransitionplan.Since2007,Peruhasestablishedamandatorymixofbiofuelswithdieselandgasolinesthataretradedthroughouttheeconomy,exceptinsomeareas.SocialconflictsputthedomesticsupplyoffuelsatriskandPeruissuedaministerialdecreethatstoppedthismandatorymixfor15days.Asmentionedbefore,PerusufferedLPGsupplyrestrictionsduring2022duetoextremesealevels.TheMinistryofEnergyandMinesrespondedbyauthorisingthereleaseofLPGstockstomaintaintheLPGsupplytothedomesticmarket;however,therecurrenceoftheseshortageeventshighlightstheimportanceofswitchingawayfromthisfueltoalternativeenergysourcessuchasnaturalgas.CO2combustionemissions010203040506020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW2023195APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective:toimproveenergyintensityandtodoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargettoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.Figure11:Peru’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.DespitetheimpactoftheCOVID-19pandemic,energyintensityshowedanimprovementof3%in2020withrespectto2019.Thisrepresentsanimprovementof10%fromthe2005level.Thereductionofenergyintensityfromthe2005levelwas10%.However,thisdecreasingtrendmightbeaffectedinfuturereportsaseconomygrowthwillbeaffectedbyseveralinternalandexternalfactors.DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.TotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012014020002005201020152020202520302035Energyintensityindex(2005=100)APECENERGYOVERVIEW2023196Figure12:Peru’smodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.Peruhasalmostdoubleitsshareofmodernrenewables,goingfrom11%in2010to19%in2020.ThisshareisoneofthehighestregisteredinAPEC,thefourthafterNewZealand,Canada,andChile.ConsideringtheimportantundevelopedpotentialofrenewableenergyinPeru,itispossibletoassumethatPerumightdoubleitsmodernrenewableenergysharebefore2030.Figure13:Peru’srenewablegenerationshare,2000to2020Source:EGEDA(2022)Therenewableshareinelectricitymixincreasedin2020,mailyduetothedecreaseofthermalgenerationthatwastheconsequenceofreducedelectricitydemand.Thenewestwindenergyplants,HuamboandDunaswithacombinedcapacityof36MW,startedoperationsinmid2021.However,duetoanexpectedgrowthofelectricitydemandduetoeconomyreactivation,therenewablesharemightnotimprovein2021or2022.Ontheotherhand,severalrenewableenergypowerplantshavebeenannounced.During2022,136MWsolarand500MWwindenergyprojectsstartedconstructionsoanincreaseoftherenewableshareintheelectricitymixislikelyafter2023.Changefrom2010to20200.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%18.0%20.0%2010Change2020Renewablesshareinelectricitymix0%10%20%30%40%50%60%70%80%90%20002005201020152020ProportionAPECENERGYOVERVIEW2023197EnergypolicyEnergypolicyDetailsReferenceNaturalGasMassificationMassificationofnaturalgasviatheuseoftheSocialEnergyInclusionFund.Thegovernmentplanstobuildanaturalgasdistributionnetworkforsevenregions.ProInversionModernisationofTalaraRefineryTheprojectinvolvestheconstructionandextensionoffacilitiesaimedatincreasingrefiningcapacityfrom65000to95000barrelsperday(bpd)by2022,producingcleanerfuels,reducingimportsofsuchproducts,andtherebyimprovingPeru'stradebalance.Itisexpectedtostartfulloperationsin2023Petroperú2021to2030TransmissionPlanThetransmissionplan,elaboratedbytheComitédeOperaciónEconómicadelSistema(COES)andapprovedbytheMINEM,definesalistofprojectsthatreinforcetheelectrictransmissiongrid.TheestimatedinvestmentisUSD981million.MinistryofEnergyandMinesNationalPlanforRuralElectrificationTheobjectiveoftheRuralElectrificationPlanistoachieveareductioningreenhousegasemissionsusingrenewableenergyinruralareasfortheprovisionofelectricity.In2018,ruralelectrificationreached87%ofcoverage;economy-wideelectrificationwas92%.Thepolicytargetistoreach100%by2022.MinistryofEnergyandMinesTheSouthernPeruvianGasPipelineThispipelinewillincreasethenaturalgastransportationcapacityto800millioncubicfeetperdayby2025throughthefollowingpipelines:-Camisea–Lima(500km);PeruLNG(300km)-Ica–Marcona(300km);Marcona–Mollendoloop(500km)-CentralHighlands–Trujillo(1100km);Trujillo–Piura(500km);Piura–Tumbes(400km)MinistryofEconomyandFinanceElectricVehicleChargingInfrastructurePeruhasapprovedstatutoryprovisionsforthecharginginfrastructureandelectricitysupplyforelectricvehicles.Aproposalforspecificregulationsfortheinstallationandoperationofelectricvehiclechargingstationshasbeenpresented.MinistryofEnvironmentEnergyEfficiencyAuditsIn2021,Peruapprovedlegalrequirementsforenergyefficiencyauditstopromoteenergyefficiencyinpublicandprivatebuildings.MinistryofEnvironmentEnergyEfficiencyLabellingRegulationIn2017,thetechnicalregulationforenergyefficiencylabellingfor12typesofequipmentwasapproved.However,therequirementofpresentingacertificateofconformitybeforeusingthelabelswaspostponed.MinistryofEnergyandMinesEnergyEfficiencyStandardsAnewsetoftechnicalspecificationsforwashingmachinesandlightsforstreetlightinghasbeenapproved.Thegovernmentisobligatedtoacquirenewproductsaccordingtothesenewspecifications.MinistryofEnergyandMinesAPECENERGYOVERVIEW2023198NationalDeterminedContributions(NDCs)PeruhasupdatedtheunconditionalandconditionalNDCs.Theunconditionaltargetchangedfrom20%to30%andtheconditionaltargetchangedfrom30%to40%emissionreductionsby2030.MinistryofEnvironmentDeclarationofclimateemergencyasutmostinterestPerudeclaredtheclimateemergencyasanemergencyoftheutmostinterestandprioritisedactionstoimplementNDCs,includingsettingagoalofachieving20%non-conventionalrenewableenergyintheelectricitymix.MinistryofEnvironmentNotableenergydevelopmentsEnergydevelopmentDetailsReferenceCrudeOilSpillatLaPampillaAcrudeoilspilloccurredonthecoastduringtheunloadingofcrudeoilattheLaPampillarefineryinJanuary2022.MinistryofEnvironmentDeclarationofClimateEmergencyasUtmostInterestPerudecreedclimateemergencyasanemergencyoftheutmostinterestMinistryofEnvironmentQuellavecoStartedOperationQuellavecostartedoperationsin2022.ThislargecopperminewillconsumegreenenergyfromPuntaLomitas,awindenergyproject,thatiscurrentlyunderdevelopmentMinistryofEnergyandMinesRenewableEnergyProjectsThewindprojectsPuntaLomitas,WayraExtension,SanJuan,andCaraveliandthesolarprojectsClemesiandMilagrosstartedin2021.Theseprojectswillincreasecapacityby500MWforwindprojectsand136MWforsolarprojects.OSINERGMINAPECENERGYOVERVIEW2023199UsefullinksGovernmentCentralReserveBank,BancoCentraldeReserva–https://www.bcrp.gob.pe/CommitteefortheEfficientOperationoftheSystem,ComitédeOperaciónEconómicadelSistemaInterconectadoNacional–https://www.coes.org.pe/portal/NationalInstituteofStatisticsandInformation,InstitutoNacionaldeEstadísticaseInformática–https://www.gob.pe/inei/MinistryofEnergyandMines,MinisteriodeEnergíayMinas–http://www.minem.gob.pe/index2.phphttp://www.minem.gob.pe/index2.phpMinistryoftheEnvironment,MinisteriodelAmbiente–https://www.gob.pe/minamSupervisoryBodyofInvestmentinEnergyandMining,OrganismoSupervisordelaInversióndeEnergíayMinería–https://www.osinergmin.gob.pe/Paginas/en/index.htmlOfficialNationalNewspaperElPeruano,DiariooficialelPeruano–https://elperuano.pe/EnergyassociationsNationalSocietyofMining,OilandEnergy—https://www.snmpe.org.pe/NationalSocietyofIndustries—https://sni.org.pe/ReferencesArgusMedia(2021)PetroTaltotestPeru-Brazilriverrouteforcrudehttps://www.argusmedia.com/en/news/2176296-petrotal-to-test-perubrazil-river-route-for-crudeBBVAResearch(2023,January16)PeruEconomicactivitycontinuestoshowsignsofweakness.https://www.bbvaresearch.com/en/publicaciones/peru-economic-activity-continues-to-show-signs-of-weakness/BP(2022)StatisticalReviewofWorldEnergy.Retrievedfromhttps://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2022-full-report.pdfAPECENERGYOVERVIEW2023200Bnamericas(2022,November11)PeruLNGtoexpanddispatchcapacity.https://www.bnamericas.com/en/news/peru-lng-to-expand-dispatch-capacityExpertGrouponEnergyDataAnalysis,APECEnergyWorkingGroup(2021),APECEnergyDatabase.https://www.egeda.ewg.apec.org/egeda/database_info/index.htmlElComercio(2023a)DesabastecimientodeGLP.https://elcomercio.pe/noticias/desabastecimiento-de-glp/ElComercio(2023b)OleaductoNorperuano.https://elcomercio.pe/noticias/oleoducto-norperuano/ElPeruano(2020)DecretoSupremoqueapruebalareanudacióndeactividadeseconómicasenformagradualyprogresivadentrodelmarcodeladeclaratoriadeEmergenciaSanitariaNacionalporlasgravescircunstanciasqueafectanlavidadelaNaciónaconsecuenciadelCOVID-19https://busquedas.elperuano.pe/normaslegales/decreto-supremo-que-aprueba-la-reanudacion-de-actividades-ec-decreto-supremo-n-080-2020-pcm-1865987-1/ElPeruano(2022)DecretoSupremoquedeclaradeinterésnacionallaemergenciaclimática.https://busquedas.elperuano.pe/normaslegales/decreto-supremo-que-declara-de-interes-nacional-la-emergenci-decreto-supremo-n-003-2022-minam-2033317-1/ElPeruano(2022,September28)EliniciodeQuellavecohttps://elperuano.pe/noticia/192720-el-inicio-de-quellavecoEnergíaEstratégica(2021,November11)Perúsoloaprovechael1%desupotencialenergéticosolar.https://www.energiaestrategica.com/peru-solo-aprovecha-el-1-de-su-potencial-energetico-solar/Gestión(2022,September19)ReportanescasezdelcombustibleengrifosdeLima.https://gestion.pe/economia/reportan-escasez-del-combustible-en-grifos-de-lima-desabastecimiento-de-glp-rmmn-noticia/InstitutoNacionaldeEstadísticaeInformática(2022)ProducciónyEmpleoInformalenelPerú,CuentaSatélitedelaEconomíaInformal2007-2021.https://www.gob.pe/institucion/inei/informes-publicaciones/3799186-produccion-y-empleo-informal-en-el-peru-cuenta-satelite-de-la-economia-informal-2007-2021InstitutoNacionaldeEstadísticaeInformática(2022,June10)Poblaciónperuanaalcanzólos33millones396milpersonasenelaño2022.https://m.inei.gob.pe/media/MenuRecursivo/noticias/nota-de-prensa-no-115-2022-inei.pdfInstitutoNacionaldeEstadísticaeInformática(2023a)Informedeprecios.https://m.inei.gob.pe/biblioteca-virtual/boletines/informe-de-precios/1/#listaInstitutoNacionaldeEstadísticaeInformática(2023b)PBItrimestral.https://m.inei.gob.pe/biblioteca-virtual/boletines/pbi-trimestral/1/#listaAPECENERGYOVERVIEW2023201MinisteriodelAmbiente(2022,February15)MinampresentaunbalancedeltrabajorealizadoenlazonadelderramedepetróleoporoperacionesdeRepsolhttps://www.gob.pe/institucion/minam/noticias/583876-minam-presenta-un-balance-del-trabajo-realizado-en-la-zona-del-derrame-de-petroleo-por-operaciones-de-repsolMinisteriodeEnergíayMinas(2020)BoletínMensualdeEnergíasRenovables2020.https://eficienciaenergetica.minem.gob.pe//es-pe/pagina/boletin-mensual-de-energias-renovables-2020MinisteriodeEnergíayMinas(2021,April27)BalanceNacionaldeEnergía2019.https://www.gob.pe/institucion/minem/informes-publicaciones/1902937-balance-nacional-de-energia-2019MinisteriodeEnergíayMinas(2022,Jun30)MINEM:coberturadeelectrificaciónruralllegaráa93%enel2023https://www.gob.pe/institucion/minem/noticias/628245-minem-cobertura-de-electrificacion-rural-llegara-a-93-en-el-2023MinisteriodeEnergíayMinas(2022,July9)MINEMadoptamedidasparacontribuircondisponibilidaddeGLPanivelnacionalhttps://www.gob.pe/institucion/minem/noticias/630463-minem-adopta-medidas-para-contribuir-con-disponibilidad-de-glp-a-nivel-nacionalMinisteriodeEnergíayMinas(2022,November17)Familiasperuanastendránrebajaentarifaseléctricasapartirdeestemeshttps://www.gob.pe/institucion/minem/noticias/670715-familias-peruanas-tendran-rebaja-en-tarifas-electricas-a-partir-de-este-mesMinisteriodeEnergíayMinas(2023)Publicacioneshttps://www.minem.gob.pe/_publicaSector.php?idSector=5NuclearEnergyAgency&InternationalAtomicEnergyAgency(2022)Uranium2020Resources,ProductionandDemand.https://www.oecd-nea.org/jcms/pl_52718/uranium-2020-resources-production-and-demandPerúEnergía(2022,October13)CoberturadegasnaturalenelPerúcreció14%enelúltimoaño.https://peruenergia.com.pe/cobertura-de-gas-natural-en-el-peru-crecio-14-en-el-ultimo-ano/RevistaEnergíayNegocios(2022,October13)CoberturadelgasnaturalenelPerúavanzóun14%másenel2022https://revistaenergiaynegocios.com/2022/10/13/el-gas-natural-en-el-peru-avanzo-un-14-mas-en-el-2022/UnitedNationsClimateChange(2023)NationallyDeterminedContributionsRegistry.https://unfccc.int/NDCREGWorldBank.(2021).Peru.Retrievedfromhttps://data.worldbank.org/country/peruAPECENERGYOVERVIEW2023202ThePhilippinesIntroductionThePhilippinesincreaseditseffortstoprovideenergyaccessforallduringtheDuterteAdministrationin2016.Asanarchipelagowith7641islandsandseparatedintothreemajorislands(Luzon,VisayasandMindanao)attaininga100%householdelectrificationlevelwasachallenge.Nevertheless,inDecember2021,theeconomyrecordeda95%householdelectrificationlevel.Luzonhasthehighesthouseholdelectrificationlevelat99%,Visayasfollowedcloselyat97%,andthenMindanaoatalmost86%.TheNationalCapitalRegion,wheretheeconomy’scapitalsits(Manila),andCARAGA7haveattainedtotalelectrificationstatus(DOE,2022).Theeconomyislikewisecommittedtodevelopingamoreresilientenergyinfrastructure.ThePhilippinesisamongthemembereconomiesinAPECthatarefrequentedbynaturalcalamitiessuchastyphoons,earthquakesandvolcaniceruptions.Inthe2022WorldRiskIndex,thePhilippinesrankedfirstamong193economieswiththemostdisasterandithadsufferedabillionpesosworthofdamageandlossesduetotropicalcyclonesalone(NEDA,2023).In2018,acircularmandatedallenergyindustryplayerstoformulateandsubmittheirResiliencyCompliancePlan(RCP),andasofDecember2021,thegovernmenthadreceived161RCPs.ATaskForceonEnergyResiliencywasalsoactivatedbythecircular,andlikewise,inAPEC-EWG(EnergyWorking7OfficiallycalledtheCaragaAdministrativeRegionandconsistsofprovincesGroup),thePhilippinesco-chairstheEnergyResiliencyTaskForcewiththeUnitedStates.InadditiontothepoliciesdevelopedinresponsetoCOVID-19mentionedinthepreviousedition,thegovernmentissuedseveralenergy-relatedpoliciestohelpcurbtheeffectofthepandemicontheenergysector.Thesewerethe“RationalizingtheUtilizationofER1-94FundbyHostLocalGovernmentUnitsinResponsetoCOVID-19PublicHealthEmergency,”whichallowedhostLocalGovernmentUnits(LGUs)touseER1-94fundsforCOVID-19responses.Table1:ThePhilippines’macroeconomicdataandenergyreservesKeydataa,bEnergyreservesc,dArea(thousandkm2)343Oil(millionbarrels)97Population(million)110Gas(billioncubicfeet)637GDP(2017USDbillionPPP)827Coal(milliontonnes)d2370GDPpercapita(2017USDPPP)7960Uranium(kilotonnesU<USD130/kgU)Sources:agov.ph,b(WorldBank,2021b),c,d(DOE,2021)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.OtherissuancesrelatedtoCOVID-19include:a)AdministrativeOrderNo.AO2020-05-0001entitled,“ProvidingforaCOVID-19ResponseProtocolintheEnergySector”;b)compliancetoEO113,entitled“TemporarilyModifyingtheRatesofImportDutyonCrudePetroleumOilandRefinedPetroleumProductsunderSection1611ofRA10683”,inthenortheasternsectionofMindanao.APECENERGYOVERVIEW2023203otherwiseknownasthe“CustomsModernizationandTariffAct”;andc)DC2020-05-0012orthe“GuidelinesImplementingtheTemporaryModificationofImportandDutyRatesonCrudePetroleumOilandRefinedPetroleumProductsasProvidedunderEO113”.ThePhilippinesisoneofthefast-growingeconomiesinsoutheastAsia;however,theeconomyhasstruggledtorecoverfromtheeffectsoftheCOVID-19pandemic.In2020,itsGDPdippedalmost10%toUSD872billion(2017USDPPP),thebiggestdroprecordedsincethe1998financialcrisis.Relatedly,theGDPpercapitadroppedmorethan10%.SincetheenactmentoftheRenewableActin2008(REActof2008),theeconomyhasmadeconsiderableprogressinadvancingtheeconomy’sdomesticallyproducedenergysources,consequentlyincreasingtherenewableshareintheeconomy’senergymix.SpecificpoliciesrelatingtoREACTof2008weresummarisedintheEnergyPolicytable.Oneimportantpolicywasallowing100%foreignownershipoflarge-scalegeothermalexploration,development,andutilisationprojects.ThePhilippinescontinuedtoplaceasthethird-largestgeothermalproducerintheworld(1930MW)intermsofinstalledcapacity,behindtheUnitedStatesandIndonesia(DOE,2022).Theeconomyhasamodestamountofdomesticresources.AsofDecember2021,theindigenouspetroleumproductionreached7millionbarrels(MMB)ofcrudeoil,23MMBofcondensateand848billioncubicfeet(BCF)ofnaturalgas,whilecoalproductionstoodat81millionmetrictons(MMMT)(DOE,2022).EnergysupplyandconsumptionTotalprimaryenergysupplyThePhilippineswashistoricallyanetimporter,mostlyofoilandcoal.Netimportspeakedin2018andin2020declinedby8.2%.Whileasimilartrendwasseeninthepreviousyear,somethingofnotewasthehugedropofoilimportsby21%,resultinginareductionofitsshareoftotalimportsto57%in2020,historically,itwasmorethan60%(Figure1).Figure1:ThePhilippines’energysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)Theyear2020markedtheperiodwhentheCOVID-19pandemicwasdeclared,andthisbroughtnewtrendsintheenergysupply.ThePhilippines’totalprimaryenergysupply(TPES)plungedalmost5%toProductionNetimportsTotalPrimaryEnergySupply05001000150020002500300020002005201020152020Production,netimportsandTPES(PJ)APECENERGYOVERVIEW2023204reach2430PJin2020.Otherfuelsourceswhichincludednon-renewableenergywastes,decreasedmorethan20%in2020.Asaresultofthedeclineinoilimports,theoilsupplydecreasedbymorethan11%.Theloomingdepletionoftheeconomy’ssinglegassourcecoupledwithreduceddemandduetothepandemichascontributedtoadipinthegassupplyofmorethan9%.Renewables(35%)andcoal(30%)whichaccountedformorethan60%oftheeconomy’senergysupply,bothdropped1%in2020.Amongtherenewablessupply,biomass(49%)andgeothermal(45%)accountedforthelion’sshare,biomassdropped1%,butincontrastgeothermalincreasedalmost1%.Duetothesignificantdeclinesintheoilsupply,coalovertookoil(29%),asthelargestfuelsourceoftheeconomyforthefirsttimein2020(Figure2).Figure2:ThePhilippines’energysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)ThePhilippinesenergysupplyisrelativelysmallascomparedwithothereconomiesinAPEC,butthePhilippinestakesprideinharnessingitsowndomesticenergysources.Inparticular,renewableenergythatwasmostlyproducedlocallywasrelativelyprominentintheeconomycomparedwithAPECasawholein2020.Oil’sshare,whiledecreasing,wasrelativelyonaparwiththeAPECoilsupply.Similarly,asthePhilippinesrelymostlyoncoalforpowergeneration,thecoalsharewasrelativelysignificantcomparedwithAPEC.Ontheotherhand,gasandotherfuelsourceswererelativelysmallcomparedwithAPEC(Figure3).Figure3:Energysupplymix–ThePhilippinesandAPEC,2020Source:EGEDA(2022)TotalfinalconsumptionThesignificantdropintheeconomy’senergysupplybroughtbytheCOVID-19shockresultedinanunprecedenteddropintotalfinal050010001500200025003000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersCoalOilGasRenewablesOther0%20%40%60%80%100%PhilippinesAPECAPECENERGYOVERVIEW2023205consumption(TFC-includingnon-energy)in2020.Theeconomy’sTFCplungeddramaticallybyalmost11%toreach1360PJin2020–equivalentlya2.6%increaseonaverageforthelasttwodecades.Whilecommoditiesfornon-energyusehadincreasedbymorethan10%(14%to54PJ),andenergyconsumptioninthehouseholdsectorslightlyincreasedby3.3%,thesewerenotenoughtooffsetthehugeenergyconsumptiondeclinesinthesectorsin2020,inparticular,themorethan20%reductioninenergyconsumptioninthetransportsector(413PJ)in2020andinparttheenergyconsumptiondecreasesintheindustry(-15%),agriculture(-7.4%)andservicessectors(-6.3%).Figure4:ThePhilippines’finalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)ThePhilippineswasnotsparedfromtheclosingofbordersduetothepandemic,whichlimitedmobilityandcausedstagnationofallotheractivities.Thishasledtoarecordhighdecreaseinenergyconsumptioninallmodesoftransport.Likewise,theworkforces’placeofactivityhasshiftedfromofficestoresidentiallocationsduetothework-from-home/teleworkingschemeimposedduringthelockdown.Thismayhavecontributedtothelargedeclineintheservicesector’senergyconsumptionandgainsintheresidentialsectorfrom2019to2020(Figure4).Figure5:Finalconsumptionbysector,ThePhilippinesandAPEC,2020Source:EGEDA(2022)Thetransport,residentialandservicessectorsweremoreprominentinthePhilippinesthaninAPECgenerally.Thesesectorsweredirectlyassociatedwiththepurchasingcapacityoftheconsumers.Despitethereductioninenergyconsumptionduetothepandemic,increasedincomeindicatesanincreasingabilitytopurchasegoodsandservices02004006008001000120014001600200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%PhilippinesAPECAPECENERGYOVERVIEW2023206associatedwiththesesectors(Figure5).FinalenergydemandTotalfinalenergyconsumption(TFEC-excludingnon-energy)felltoalittleover1300PJin2020oranunprecedentedannualdropofmorethan11%.GasconsumptiontookthebruntoftheCOVID-19pandemic,dippingalmost40%.Thelowdemandduringthepandemichasresultedintheclosingofthesolegasrefinery.Electricitywasthemajorfuelsource,occupyingathirdofthePhilippines’TFEC,butthisfell4%in2020aswell.Renewablesalsofellby4%in2020.Figure6:ThePhilippines’finalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Coalconsumptionassociatedmostlywithindustryusefellalmost33%,whileoilconsumption,almost100%ofwhichwasfortransportuse,reducedbyalmost15%.Electricitywasthemajorfuelsourceintheservicesandhouseholdsectors.Themajorlockdownscauseda19%reductionofelectricityconsumptionintheservicessector,andincontrasta12%increaseinthehouseholdsector(Figure6).Figure7:Finalenergydemandfuelshare,thePhilippinesandAPEC,2020Source:EGEDA(2022)ThePhilippinescontinueditsrelianceonoilfortransportuse,whichwasclearlyevidentintherelativesharecomparedwithAPECasawhole.Asmosthouseholdsstillconsumealargeamountofbiomassforhouseholduse,andthePhilippinesisincreasinglyharnessingitsrenewablessources,thesharewaslargerthanthatofAPEC.ElectricityuseseemedsmallerinthePhilippinesthaninAPEC,buttheshareofelectricityinthePhilippines’fuelmixwassignificant.Directuseofcoalislimitedtoasub-sectorofindustryinthePhilippinesandhencethe02004006008001000120014001600200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersCoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%PhilippinesAPECAPECENERGYOVERVIEW2023207sharewassmallerthaninAPEC(Figure7).TransformationPowersectorThePhilippines’electricitygenerationrecordedanunprecedenteddeclineof4%to102TWhin2020(Figure8).Electricityoutputfromoilwhichhasfluctuatedforthelast10years,plummetedby34%,thebiggestdropamongthefuelsourcesforpowergenerationin2020.Coal,whichaccountedformorethan50%oftheeconomy’spowergenerationmix,slightlyincreasedbyalmost1%(58TWh)in2020.Figure8:ThePhilippines’electricitygenerationbyfuel,2000to2020Source:EGEDA(2022)Electricitygenerationfromrenewableswassurprisinglythewinneramongthefuelsusedforpowergeneration.Inparticular,biomass,solarandotherrenewablessawa10%risein2020,althoughthiswasnotenoughtooffsetthedeclinesinfossilfuels.Thesignificanthikesofcapacitygenerationfrombiomass,wind,etc.helpedprovidetheneededpowerrequirementsduringthepandemic.Althoughminimal,geothermalprovidedanalmost1%increasetoboosttheelectricitygenerationin2020.Asidefromthepandemic,electricitygenerationfromhydro,whichhasbeenaffectedby“ElNiño”since2019,fellfurtherby10%in2020.Figure9:Electricitygenerationfuelshare,thePhilippinesandAPEC,2020Source:EGEDA(2022)Whiletheincreaseinpowergenerationfromgeothermalwasminimalin2020,itsrelativesharewasquitesignificantcomparedwithAPEC.Astheeconomyreliesmostlyoncoalforpowergeneration,itsrelative020406080100120200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersCoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%PhilippinesAPECAPECENERGYOVERVIEW2023208sharecomparedwithAPECwasmoreprominentin2020.PowergenerationfromoilisslightlylargerthanAPECwhilegaswasasalmostonaparwithAPEC.Therelativesharesoftheremaininggenerationmodalitieswereeitherzero(inthecaseofnuclear)orsmallerthantheAPEC-widepowergenerationmix(Figure9).EnergytransitionThePhilippinessubmitteditsNationallyDeterminedContribution(NDC)totheUnitedNationsFrameworkConventiononClimateChangein2021.TheNDCstatedthatthePhilippinescommita75%reductioninGHGemissionsagainstthebusiness-as-usualscenario(2020-2030).Thismitigationtargetcomprises2.7%unconditional,and72%areconditionalonresourcestobeprovidedbydevelopedeconomiestoimplementmitigationactionsintheagriculture,waste,industrialprocessesandproductuse,transport,andenergysectors(NEDA,2023).InitsPhilippineDevelopmentPlan2023-2028underthenewMarcosAdministration,theLowcarboneconomytransitionenabledisoneofthegovernment’sstrategiesinitsclimateactionandstrengtheningdisasterresilienceStrategyFramework(NEDA,2023).EmissionsAshighlyexpected,theslumpinenergyconsumptionacrosssectorsresultedinanalmost8%declinein123mt-CO2emissionsin2020.Adeclineofthismagnitudewasfirstseenin2006whenthepopulationwasabout80million.Emissionsduetoactivitiesinthetransportandindustrysectorscontributedgreatlytothesignificantdrop,mostlyrelatedtotherestrictionsonmobilityandothereconomicactivities.Figure10:ThePhilippines’CO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecurityEnergysecurityhasbeenattheforefrontoftheeconomy’sPhilippineEnergyPlan(PEP)2020-2040.ThePEP2020-2040advocatesforthedevelopmentanduseofexistingandemergingtechnologiesinthemostefficientandsustainablemanner(DOE,2023).RecenteventssuchastheCOVID-19pandemic,fast-pacedchangesinthetechnologyenvironmentandgeopoliticalsituation,andotherfactorsposedachallengetotheeconomy’ssupplysecurity,forexampletheliquifiedpetroleumgas(LPG).InFebruary2022,theglobalpriceofLPGsoareddramaticallyduetotheRussia-Ukraineconflict.SanctionsimposedonMoscowrequiredbuyerstolookforsupplyelsewhere,andalongwithsurgingspotpremiumsandfreightrates,thisputadditionalupwardpressureonLPGprices.CO2combustionemissions02040608010012014016020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW2023209Theseeventscalledfortheeconomytoincreasetheuseofalternativefuelsandexploremoreoftheeconomy’slocalenergysourcessuchasrenewables(DOE,2023).ThedepletionofthePhilippinessolenaturalgasresourcesisalsothreateningashortageofmorethan20%inthepowersupply.Sixproposedliquefiednaturalgas(LNG)terminalprojectswithacombinedcapacityof22milliontonsperannum(MTPA),areexpectedtostartoperatingbetween2022and2023(DOE,2022).AsoftheendofDecember2021,theeconomymaintaineda38-dayinventorylevelofcrudeoilandpetroleumproductsequivalentto2610millionlitres,comprising26daysofin-economystocks(onshore)and13daysofcrudeoilandpetroleumproductsstillintransit(DOE,2022).ThePhilippinesisoneofthesignatoriestotheASEANPetroleumSecurityAgreement(APSA).APSAwaslaunchedin1986withtheaimofensuringregionalcooperationinenergysecurityintimesofoversupplyorundersupplyofoiland/orpetroleumproducts.AlthoughAPSAhasnotyetcomeintoforce,thePhilippinesasoneoftheactivemembersoftheASEANislookingforwardtoitsimplementation.Withtheexpectedreboundofactivitiesafterthepandemic,thegovernmentassuredtheconsumerswithasufficientandsteadysupplyofpower.InDecember2021,therehabilitationandrefurbishmentoffacilities,bothgridandoff-grid,wereongoing,andtheexpansionofinstalledcapacitieswasrecorded.APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective-toimproveenergyintensityandtodoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargettoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.Figure11:ThePhilippines’totalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)TotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012014020002005201020152020202520302035Energyintensityindex(2005=100)APECENERGYOVERVIEW2023210ThePhilippinesfinalenergyintensityhasbeenimprovingby2%onaverageannuallysince1990.In2020,finalenergyintensityimproved31%comparedwith2005.Thebiggestimprovementinmagnitudeyear-on-yearsince2005,maybeduetostrongimplementationofenergyefficiencyandconservationprogramsorjustaneffectoftherestrictionsimposedduringlockdown.ItwouldbeinterestingtoseeifthePhilippineswillcontinuethistrendinthefollowingtwoyearspostpandemic.DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.Figure12:ThePhilippines’modernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.TheRenewablesActin2008laidthegroundworkforadvancingthePhilippines’renewableandlocallyproducedenergy.Effortshadbeenmadetopromoteutilisationofrenewableresourcesbothforend-usersandpowergeneration.However,in2020,theshareofrenewablesinfinalenergyconsumptionfellveryminimally⎯from10%in2010to9.9%in2020.Iftheeconomyaimedtodoubletheshareofrenewablesinfinalenergydemand,theeconomywouldneedanadditional10%by2030(Figure12).Changefrom2010to20200.0%2.0%4.0%6.0%8.0%10.0%12.0%2010Change2020APECENERGYOVERVIEW2023211Intermsofpowergeneration,theshareofrenewablesinthegenerationmixincreasedby2.2%in2020from2019.Lookingclosely,however,theshareofrenewablesinpowergenerationsince2010hasbeenonadecliningtrend,falling2%annuallyonaverage.Thishasbroughttheshareofrenewablesfrom26%in2010to21%in2020.Iftheeconomywantstodoubletheshareofrenewablesinthepowergenerationmix,thetrendshouldbeincreasingby2%annuallyonaveragetoreach53%by2030(Figure13).Figure13:ThePhilippines’renewablegenerationshare,2000to2020Source:EGEDA(2022)Renewablesshareinelectricitymix0%5%10%15%20%25%30%35%40%45%50%20002005201020152020ProportionAPECENERGYOVERVIEW2023212EnergypolicyTheenergysectoriscontinuouslyguidedbyitslong-termvisionknownasAmBisyonNatin2040(NEDA,2023).Torealisethisvision,thesectoralroadmapwasformulated,andthisisupdatedforeachenergysub-sector.Itcontainslong-termobjectives,deliverablesandtargetsconsistentwiththeStrategicDirectionsandNine-PointEnergyAgendacitedinPEP2018-2040andwillprovidedirectiononhowtoachievethecleanenergypath.(DOE,2022).EnergypolicyDetailsReferenceNDCTargetsThispolicytargetsaneconomy-wide75%reductionofGHGemissionsby2030,relativetothebusiness-as-usualscenariofrom2000to2030.Ofthe75%reductiontarget,identifiedpoliciesandmeasures(PAMS)accountfor11%or365MTCO2ereductionfromthebusiness-as-usual(BAU)/ReferenceScenario.Ofthistotal,theenergysectorisexpectedtocontribute46MTCOe(13%shareoftotal),whichtranslatestoa1.4%reductioninthesector’sGHGemissionovertheBAU.PAMSyettobeidentifiedwillaccountfor64%avoidance,therebycompletingthetargetof75%GHG.UNFCCPhilippineDevelopmentPlanPDP2023-2028Aplanframedbythenewadministration’s8-PointSocioeconomicAgendawhichseekstoaddressbothshort-termissuesandmedium-termconstraintstogrowthandinclusion.NEDAPhilippineEnergyPlan(PEP)2020-2040TowardsaSustainableandCleanEnergyFutureTheDOE'sblueprinttosecuretheeconomy'senergyfuturewascreatedfollowingregionalconsultationsandinformation,educationandcommunicationcampaigns(IECs).Thisisacomprehensiveenergyblueprintsupportingthegovernment’slong-termvisionknownasAmBisyonNatin2040.PEP2020-2040isatransformationalplantobringinmoreofthecleanenergyfuelsandtechnologiesthatwilldominatetheeconomy'sportfolioofplansandprogramsforthenexttwodecades.DepartmentofEnergyPowerDevelopmentPlan2020-2040Thisisamasterplanthatintegratesallthedevelopmentplansforthegeneration,transmission,distributionandsupplysectorsingridandoff-gridareas.Italsooutlinestherecentdevelopmentsintheelectricitymarketandinoff-gridandmissionaryareas,householdelectrification,andtheinstitutionalsupportmechanisms.DepartmentofEnergyRepublicAct(RA)9367(BiofuelsAct2006)Approvedon12January2007,thisactdirectstheuseofbiofuelsbyestablishingthebiofuelprogramandappropriatingfundsforsaidprogramandforotherpurposes.DepartmentofEnergyAPECENERGYOVERVIEW2023213RA9513(RenewableEnergyLaw)TheNationalRenewableEnergyProgram(NREP)outlinesthepolicyframeworkstipulatedinRepublicAct9513.ThestrategiessetoutintheBiofuelsActof2006formpartoftheimplementationoftheRenewableEnergyLaw.DepartmentofEnergyNationalRenewableEnergyProgram(NREP)TheNREPoutlinesthepolicyframeworkstipulatedinRepublicAct9513.ThestrategiessetoutintheBiofuelsActof2006formpartoftheimplementationoftheRenewableEnergyLaw,whichisincludedintheNREP.20-yearREtargetcapacityinadditiontotriplingthe2010installedcapacityfrom5440MWto15300MWby2030.DepartmentofEnergyNationalEnergyEfficiencyandConservationProgram(NEECP)Thisisacontinuingprogramthataimstomakeenergyefficiencyandconservation(EEandC)awayoflife.Italsoaimstoincreaseawarenessandattainmeasurabletargetsfortheperiodfrom2011to2030throughthefollowingmeasures:-Reductionintheeconomy'sfinalenergydemandby10%-Energysavingsof69100ktoe-Defermentof6.8Mweofadditionalcapacity-Reductionof178980kTofCO2emissionsDepartmentofEnergyEnergyEfficiencyandConservationActof2019ThisActinstitutionalisesEEandC,enhancingtheefficientuseofenergyandgrantingincentivestoenergyefficiencyandconservationprojects.ItfacilitatestheimplementationofprojectsandprogramsunderNEECP.DepartmentofEnergyRERoadmapThisfocusesonattainingthetargetofatleasta35%renewableenergyshareinthepowergenerationmixby2030and50%by2040.DepartmentofEnergyFiTInstallationTarget(MW)PolicymechanismunderRELaw-Run-offriverhydro(250MW)-Biomass(250MW)-Wind(400MW)-SolarPV(500MW)-Ocean(10MW)DepartmentofEnergyBiofuelsRoadmapTheaimistocontinuetheimplementationofblendingtargetssetintheBiofuelsActof2006,withthefollowingmeasuresfrom2020to2040:-Implementa5%biodieselblend(B5)andmaintain10%ethanol(E10).-Revisitthebiofuelblendrequirementsandavailablefeedstock.-ImplementResearchandDevelopment(RandD)activitiesanddemonstrationprojectsusingJatropha,wastecookingoil,microalgae,rubberandseedoilforbiodiesel;andsweetsorghum,cassava,microalgae,Nipasapandcellulosicmaterialforbioethanol.DepartmentofEnergyAPECENERGYOVERVIEW2023214PowerGenerationRoadmapShort-termgoals(2021–2022):-Implementthecoalmoratorium.-Establishguidelinesforpowerplantdecommissioning.-Firm-uptheprivatisationplanforthegovernment’sremainingpowergenerationassets.Long-termgoals(2023–2040):-Utilisecleanertechnologiesforpowergeneration.-Increaseflexibilityinpowergeneration.DepartmentofEnergyOff-GridDevelopmentRoadmapEnergyaccessforallby2040-GraduationandrationalisationoftheUniversalCharge-MissionaryElectrification(UC-ME)subsidiesinoff-gridareas,whilethe“electricityaccessforallby2040”istheobjectiveoftheTotalElectrificationProgram(TEP)DepartmentofEnergyAlternativeFuelsandEnergyTechnologies(AFET)RoadmapThisroadmaplaysdowntheframeworkfortheadoptionandcommercialisationofemergingandefficientenergytechnologiesintheeconomy.Medium-termgoal(2020-2022):-IdentificationofAFETsforapplicationLong-termgoal(2023–2040):-PreparationoftheregulatoryandinfrastructurerequirementsoftheidentifiedAFETsDepartmentofEnergyUpstreamOilandGasRoadmapThisroadmapfocusesonattainingthefollowingobjectivesby2040:-Increaseindigenouspetroleumreservesto116MMBoiland5.9TCFgas.-Produce66MMBcrudeoiland3.5TCFnaturalgas.DepartmentofEnergyUpstreamCoalRoadmapTargetstheincreaseofdelineatedmineablecoalreservesupto766MMMTbytheendof2040withadditionalreservesof65MMMTinthemedium-termand223MMMTinthelong-term.DepartmentofEnergyDownstreamOilRoadmapImprovedpolicygoverningthedownstreamoilindustrytoensureacontinuoussupplyofhighquality,andtherightquantityofpetroleumproductsinthemarketby2040.DepartmentofEnergyDownstreamNaturalGasRoadmapToestablishaworldclass,investmentdrivenandefficientnaturalgasindustrythatmakesnaturalgasthepreferredfuelbyallend-usesectorsby2040.DepartmentofEnergyEnergyEfficiencyandConservationRoadmapMeasurablereductioninenergyintensityandconsumptionperyearversusBAUby2040-Medium-termandlong-termframeworkfocusingontwopriorityareas,namely,theStrengtheningandSustainingofEEandCpoliciesandinitiativesDepartmentofEnergyExecutiveOrder(EO)116EstablishestheNEP-IAC,aninter-agencyTaskForceledbytheDOEwhichistaskedtoconductastudyfortheadoptionoftheeconomypositiononNuclearPowerPlant(NPP)inaccordancewithpertinentInternationalAtomicEnergyAgency(IAEA)guidelines,relevantlaws,rulesandregulationsDepartmentofEnergyAPECENERGYOVERVIEW2023215DC2020-11-0024AdoptingtheGuidelinesGoverningthe3rdOpenandCompetitiveSelectionProcess(OCSP3)intheawardoftheRenewableEnergyServiceContract,andforotherpurposesDepartmentofEnergyDC2022-02-0002PrescribingthePoliciesandProgramstoPromoteandEnhancetheDevelopmentofBiomassWaste-to-Energy(WTE)FacilitiesDepartmentofEnergyNotableenergydevelopmentsThePhilippinesEWGrepresentativereportedthefollowingatEWG64hostedbyMalaysiaonlineon1-3November2022.EnergydevelopmentDetailsReferenceDepartmentCircularNo.DC2022-10-0031DeclaringAllRenewableEnergyResourcesasPreferentialDispatchGeneratingUnitsintheWholesaleElectricitySpotMarketAcircularsignedbytheDOESecretaryregardingthepreferentialdispatchofallgeneratingunitsutilisingREresourcesinthewholesaleelectricityspotmarketon5October2022.ItwillboostREdevelopmentandutilisation.DepartmentofEnergyDC2022-06-0019DeclaringtheInterimCommercialOperationsoftheRenewableEnergyMarketAcircularreleasedbytheDOEdeclaringtheinterimcommercialoperationoftherenewableenergymarket,thevenuefortradingrenewableenergycertificates.DepartmentofEnergyDepartmentCircularNo.DC2022-11-0035ExpandingtheCoverageofthePhilippineEnergyLabellingProgram(PELP)fortheComplianceofImporters,Manufacturers,Distributors,DealersandRetailersofEnergy-ConsumingProducts(ECPs)TheDOEconductedthesecondpublicconsultationonthedraftdepartmentcirculartoexpandthecoverageofthePhilippineEnergyLabellingprogramforthecomplianceofimporters,manufacturers,distributorsanddealersinenergy-consumingproductson30September2022.DepartmentofEnergyGasPolicyDevelopmentProject2(GPDP2TheDOEandtheUniversityofthePhilippinesStatisticalandResearchFoundationhavecompletedanaturalgasdevelopmentplantoattractinvestmentintheeconomy'sdownstreamnaturalgasindustry.DepartmentofEnergyAPECENERGYOVERVIEW2023216UsefullinksAsianDevelopmentBank—www.adb.orgClimateChangeCommission(CCC)—www.climate.gov.phDepartmentofEnergy,RepublicofthePhilippines(DOE)—www.doe.gov.phDepartmentofScienceandTechnology(DOST)—www.dost.gov.ph/DepartmentofTradeandIndustry(DTI)—www.dti.gov.ph/DepartmentofTransportationandCommunication(DOTC)/LandTransportationFranchisingandRegulatoryBoard(LTFRB)—www.dotc.gov.phNationalPowerCorporation(NPC)—www.napocor.gov.ph/NationalTransmissionCorporation(TransCO)—www.transco.ph/PhilippineNationalOilCompany(PNOC)—www.pnoc.com.ph/WholesaleElectricitySpotMarket(WESM)—www.wesm.ph/WorldBank—https://www.worldbank.org/en/country/philippinesReferencesDOE(DepartmentofEnergy)(2021).DOE.RetrievedfromPhilippineEnergyPlan:https://www.doe.gov.ph/pep.⎯(2020).PhilippineEnergySituationerandKeyEnergyStatistics,https://www.doe.gov.ph/energy-statistics?q=energy-statistics/2020-key-energy-statistics-kes.⎯(2022).EnergySectorAccomplishmentReport2016-2022.https://www.doe.gov.ph/esar⎯(2023).PhilippineEnergyPlan2020-2040:TowardsSustainableandCleanEnergyFuture.https://www.doe.gov.ph/pepEGEDA(ExpertGrouponEnergyDataAnalysis,APECEnergyWorkingGroup)(2022),APECEnergyDatabase.https://www.egeda.ewg.apec.org/egeda/database_info/index.htmlAPECENERGYOVERVIEW2023217NEDA(NationalEconomicandDevelopmentAuthority)(2023).PhilippineDevelopmentPlan2023-2028.https://neda.gov.ph/philippine-development-plan-2023-2028/WB(WorldBank)(2022).https://databank.worldbank.org/source/world-development-indicators.APECENERGYOVERVIEW2023218RussiaIntroductionRussiahasthelargestlandareaglobally,spanningover17millionsquarekilometresinbothEasternEuropeandNorthernAsia.ThecombinationofgeographyandpopulationsettlementinRussiamakesitnecessarytouseasignificantamountofenergytoprovidecomfortablelivingconditionsformostofthepopulationformostoftheyear,whichisoneofthecriticalfactorscontributingtotheeconomyhavingthehighestenergyintensityofGDPamongAPECeconomies.ThesefactorshavedeterminedthedevelopmentinRussiaofnotonlycentralisedpowersupplysystemsbutalsoofcentralisedheatsupplysystems,which,inturn,hasledtothewidespreaddevelopmentofthermalpowerplantswithcombinedheatandpowergeneration.NowRussiahastheworld’slargestdistrictheatsupplysystemsinmostmajorcities.Itspopulationof146millionpeoplelivesmostlyinurbanareas(74%),and68%ofthepopulationlivesintheEuropeanpartofRussia,whichaccountsfor21%oftheterritory.In2020,Russia’sGDPdeclined4%to3893billion2017USDPPPbecauseofthelockdownsduetotheCOVID-19pandemic.GDPremainedthe4thlargestinAPEC.Russia’sGDPpercapitadeclined4%asthepopulationremainedconstant.Russiawasthethird-largestenergyproducerinAPEC.Abouthalfofthisenergywasconsumedwithintheeconomy,whiletherestwasexported.Russiawastheworld’slargestenergyexporteroverall,exportingabout29EJin2020.Inthesameyear,exportsdeclinedalmost9%whileoilexportsdeclined12%.Russiawasthethird-largestpowerproducerinAPEC,accountingfor6.2%ofAPEC’stotalelectricitygenerationin2020,andthelargestheatproducer.Russiahassignificantreservesoffossilfuelsanduranium.Table1:RussiamacroeconomicdataandenergyreservesKeydataa,bEnergyreservesc,dArea(millionkm2)17Oil(billionbarrels)108Population(million)146Gas(trillioncubicfeet)1321GDP(2017USDbillionPPP)3893Coal(milliontonnes)162166GDPpercapita(2017USDPPP)27019Uranium(kilotonnesU<USD130/kgU)211Source:aROSSTAT(2022);bWorldBank(2022);cBP(2022);dUN(2022)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.EnergysupplyandconsumptionTotalprimaryenergysupplyRussiaisthethird-largestenergyproducerinbothAPECandtheworld,afterChinaandtheUS.Russia’stotalprimaryenergysupply(TPES)in2020was31729PJ,adeclineof2%comparedto2019levelsAPECENERGYOVERVIEW2023219(EGEDA,2022).ThisdeclinewascomparabletothedropinTPESin2015afterthefirstwaveofsanctionswasimposed.Energyproductionhasgrownconsistentlysince2000withaCAGRof2.4%.Theonlyyearofdeclinefortheperiodwasin2009duetolowerdomesticconsumption.In2020,productiondeclinedmorethan6%to59868PJ.Netexportsgrewatamuchhigherratethanproduction,withaCAGRof3.9%from2000to2019butdeclinedbynearly9%in2020.Figure1:Russia’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)Russia’sTPESfuelmixremainedstablefor2000–2020;naturalgasaccountedformorethanhalfwithaslightdecreaseintheshareofcoal.In2020,theTPESfuelmixcomprisedthefollowing:naturalgas(54%),crudeoilandpetroleumproducts(20%),coal(15%)andothers,includingnuclearandhydro(11%)(EGEDA,2022).Forthe2000–2019period,TPESvolumesofcoalremainedstable;oilincreasedby19%,others,includingnuclearandhydro,increasedby67%,andrenewablesincreasedby10%,whilethevolumeofgasincreasedby31%orover4000PJ.In2020,TPESdecreasedby2%duetoreducedconsumptionofcoalandnaturalgasinthepowersector.Figure2:Russia’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)Russia’sTPESfuelmixissubstantiallydifferentfromtheentireAPECregion.TheshareofnaturalgasinRussiaismorethantwiceashigh,whichisexplainedbyitslargenaturalgasreservesandthepredominanceofgas-firedpowerplants,whichaccountformorethan70%oftheelectricityproducedbythermalpowerplants.Gasconsumptionisdistributedunevenlyacrosstheregions,asthedevelopednetworkofdistributionpipelinesisconcentratedinthewesternpartoftheeconomy.Incontrast,thesharesofcoalandrenewablesinRussiaarelessthanhalfofAPEC’s.ThemodestshareProductionNetimportsTotalPrimaryEnergySupply-40000-2000002000040000600008000020002005201020152020Production,netimportsandTPES(PJ)05000100001500020000250003000035000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersAPECENERGYOVERVIEW2023220ofrenewablesinelectricitygenerationisduetotheunevendistributionofrenewableenergysources,alargeshareofwhichisconcentratedinremoteareasandlimitedgovernmentsupportfornewprojects.Figure3:Energysupplymix–RussiaandAPEC,2020Source:EGEDA(2022)TotalfinalconsumptionRussia’sfinalconsumptionin2020was21187PJ,almost3%lowerthanin2019(EGEDA,2021).Russiaremainedthethird-largestenergyconsumerinAPECafterChinaandtheUS(EGEDA,2022).Theindustrial(6002PJ,28%)andtheresidentialsector(5760PJ,27%)accountedforthetwomostsignificantsharesoffinalenergyconsumption.Energyconsumptioninindustrydroppedbyalmost2%duetorestrictionscausedbythepandemic.Inresidentialbuildings,consumptiondecreasedbymorethan4%,largelyduetoseasonalfactors.Oneofthemainreasonsresidentialbuildingsarethelargestconsumingsectoristhesignificantenergyconsumptionforheatingformorethanhalfoftheyear.AccordingtoEGEDA,consumptioninbuildingsbegantoincreasesignificantlyfrom2017.Thisnotableincreasewasduetotheriseingasconsumptioninresidentialbuildings,whichdoesnotcorrespondtothemembereconomystatistics.Thethird-largestsectorwastransport(3786PJ,18%).Energyconsumptioninthetransportsectorfellbyalmost9%duetolockdownsandtravelrestrictions.Non-energyusehasmorethandoubledsince2000andaccountedfor17%ofRussia’senergyproductusein2020.Agricultureandthecommercialsectoraccountedfortheremaining10%.Figure4:Russia’sfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)Russia,likeAPEC,hasthesamemajorconsumersectors:industry,CoalOilGasRenewablesOther0%20%40%60%80%100%RussiaAPEC0500010000150002000025000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyAPECENERGYOVERVIEW2023221transportandresidential.Theiroverallshareisalmostthesame,accountingforaboutthree-quartersoftotalconsumption.However,thefractionofeachsectorisdifferent.TheshareoftheresidentialsectorinRussiaismuchhigherthaninAPECduetoitssignificantheatconsumption,whiletheshareofindustryandtransportislower.Thenon-energyuseshareishigherthaninAPECduetoconsiderableconsumptionofpetroleumproductsandnaturalgasasafeedstockinthechemicalindustry.Figure5:Finalconsumptionbysector,RussiaandAPEC,2020Source:EGEDA(2022)FinalenergydemandRussia’sfinalenergyconsumptionin2020was17524PJ,almost5%lowerthanin2019(EGEDA,2022).About40%ofthefinalenergyconsumptionin2020wassuppliedbyelectricityandheat,theshareofwhichdecreasedby10%comparedto2000duetoasignificantdecreaseinheatconsumption.Correspondingly,theshareoffossilfuelsincreasedfrom50%in2000to59%in2020.Naturalgasaccountsformorethanhalfoftheconsumptionoffossilfuels,andoilandpetroleumproductsforslightlymorethanathird.Theshareofcoal,despiteaslightincreaseinconsumption,isgraduallydecreasing.Theshareofrenewablesourcesdoesnotexceed1%.AccordingtoEGEDA,gasconsumptionhasstartedtoincreasesignificantlysince2017.However,thenoticeableincreaseingasconsumptionwasinresidentialbuildings,whichdoesnotcorrespondtotheeconomystatistics.Figure6:Russia’sfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%RussiaAPEC02000400060008000100001200014000160001800020000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersAPECENERGYOVERVIEW2023222InRussia,fossilfuelsaccountedforalmost60%offinalenergyconsumptionin2020,4%lessthantheAPECtotal.Electricityandheataccountedforabout40%.IntheAPECregion,theshareofelectricity(andtoamuchlesserextentheat)wasalmostathird.Theshareofrenewableswaslessthan1%,severaltimeslowerthanfortheentireAPECregion.Figure7:Finalenergydemandfuelshare,RussiaandAPEC,2020Source:EGEDA(2022)TransformationPowersectorElectricitygenerationhasgrownconsistentlysince2000(exceptin2009)withaCAGRof1.3%.In2020,Russiagenerated1088TWhofelectricity,almost3%lessthanthepreviousyear.Fossilfuelsaccountedforthelargestshareofthisgeneration(60%),ofwhichnaturalgascontributedmorethan70%.Theremaining40%ofelectricitygenerationcamefromhydropowerandnuclearpowerinroughlyequalshares.Electricitygenerationatgas-firedpowerplantsdecreasedbyalmost9%duetoasignificantincreaseingenerationathydropowerplants(morethan9%)andnuclearpowerplants(morethan3%).Figure8:Russia’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)ThefuelmixforpowergenerationinRussiaandtheAPECregionisquitesimilarintermsofthesharesoffossilandnon-fossilfuels.InRussia,fossilfuelscomprise64%ofthegenerationmix,andinAPEC,theyaccountfor66%.However,thefossilfuelswiththelargestshareinRussiaandAPECdiffer.NaturalgasaccountsforamuchlargershareCoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%RussiaAPEC020040060080010001200200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersAPECENERGYOVERVIEW2023223(46%)inRussia,whilecoalaccountsforamuchlargershare(44%)inAPEC.Theshareofhydroisalsodifferent,amountingto17%inRussiaand14%inAPEC.NuclearenergyinRussiaaccountsfor19%,almosttwiceasmuchasinAPEC.RussialagsfarbehindinsolarandwindpowergenerationinrelationtotheAPEC-wideregion.InAPEC,theshareofotherrenewables(primarilysolarandwind)in2018exceeded8%,whilethatshareislowerthan1%inRussia.Figure9:Electricitygenerationfuelshare,RussiaandAPEC,2020Source:EGEDA(2022)RefiningOilrefinerycapacityinRussiain2021wasabout6.9millionbarrelsperday(BP,2022),whichisthethirdhighestintheworldaftertheUSandChina.In2020,53%ofallproducedoilwasrefineddomestically(EGEDA,2022).Dieselfuel(30%),fueloil(18%),motorgasoline(15%)andnaphtha(10%)dominatedinthepetroleumproductoutputmix.Morethanhalfofthetopthreerefinedproductsbyvolumeareexported.Theshareoffueloilexportsin2020was88%,naphta–67%,diesel–51%.EnergytransitionThepresidentialdecree“OnReducingGreenhouseGasEmissions”,adoptedinNovember2020ledtosignificantactivity.ItinstructedthegovernmentoftheRussianFederationtodevelopaStrategyforSocio-EconomicDevelopmentoftheRussianFederationwithLowGreenhouseGasEmissionsuntil2050.TheStrategyofSocio-EconomicDevelopmentoftheRussianFederationwithLowGreenhouseGasEmissionsupto2050wasapprovedattheendofOctober2021,justbeforetheCOP26summit.ThestrategyrecognisesthedevelopmentofnuclearpowergenerationandtheexpansionoftheAFOLUabsorptioncapacityasthemostsignificantcontributorstothereductionofgreenhousegasnetemissions.Fromthepointofviewoftheglobalcommunity,bothareasseeminsufficienttoreduceRussia’scontributiontogreenhousegasemissions.Nevertheless,eventhesestatementsdemonstratesignificantprogressinunderstandingtheproblemandfindingfeasiblewaystoreducegreenhousegasemissions.Currently,thisstrategyistheonlydocumentconcerningstrategicdevelopmentuntil2050intheRussianFederation.In2021,essentialdocumentswereadoptedthatsetthecontoursofthedevelopmentofenergysub-sectorsthatpromotedecarbonisation:theCoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%RussiaAPECAPECENERGYOVERVIEW2023224FederalLaw“OnLimitingGreenhouseGasEmissions”(July2021),“TheconceptofthedevelopmentofhydrogenenergyintheRussianFederationuntil2035”(August2021),“TheconceptforthedevelopmentofproductionanduseofelectricvehiclesintheRussianFederationuntil2030”(August2021).TheFederalLaw“OnLimitingGreenhouseGasEmissions”providestheintroductionofastagedmodelforregulatingsuchemissions.Thisincludestheintroductionofmandatorycarbonreporting,collectedandsummarisedbytheauthorisedgovernmentbody.Thedocumentalsointroducesthenotionofa“greenhousegasemissionreductiontarget”.ItwillbesetbythegovernmentonthescaleoftheRussianeconomy,takingintoaccounttheAFOLUandtheneedtoensureasustainableandbalancedsocioeconomicdevelopmentoftheeconomy.Thelawproposesthecreationofarosterofgreenhousegasemissions.Thisrosterwillbetheinformationsystem,whichtheauthorisedfederalexecutivebodywillmaintain.EmissionsCO2emissionshaveincreasedsteadilysince2000duetoeconomicgrowthanddevelopmentaftertherecessionofthe1990s.Thedecreaseinemissions,particularlyin2009and2020,reflectsthedeclineineconomicactivityduringeconomiccrises.Afterasignificantdecreasein2013,thelevelofemissionshasremainedataboutthesamelevelforfouryears.Thisnotableincreasein2017-2018wasmainlyduetotheriseingasconsumptioninresidentialbuildings,whichdoesnotcorrespondtotheeconomystatistics.Figure10:RussiaCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecurityIn2019,theDoctrineofEnergySecurityoftheRussianFederationwasadoptedbydecreeofthePresidentoftheRussianFederation.AccordingtotheDoctrine,Russia,asamajorexporterofenergyresources,seeksontheonehand,toprovideareliablesupplyofenergytoconsumerswithintheeconomy,andontheotherhand,toensureenergysuppliestotheworldmarket.TheDoctrinereferstothefollowingasexternalchallengestoenergysecurity:shiftingthecentreofglobaleconomicgrowthtotheAsia-Pacificregion;aslowdowninglobaldemandforenergyresourcesandachangeinitsmix,includingthereplacementofpetroleumproductsbyothertypesofenergyresourcesandthedevelopmentofenergysavingandenergyefficiency;anincreaseintheworldresourcebaseofCO2combustionemissions120012501300135014001450150020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW2023225hydrocarbons;increasedcompetitionamongenergyexporters;changesintheinternationalregulatoryframeworkintheenergysectorandconditionsoftheworldenergymarkets,strengtheningthepositionofconsumers;thegrowthofLNGproductionanditsshareontheworldenergymarkets;theformationofaglobalnaturalgasmarket;anincreaseintheshareofrenewableenergysourcesintheglobalenergybalance,andingeneralincreasedinternationaleffortstoimplementclimatepolicyandacceleratethetransitiontoagreen.APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective-toimproveenergyintensityandtodoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargetforreducingenergyintensityby45%by2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.Russiaisthemostenergy-intensiveeconomyintheAPECregion.However,improvementsaretakingplace.In2020,Russia’stotalfinalenergyconsumption(excludingnon-energy)intensityimprovedby16%comparedtothatin2005.Figure11:Russia’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.Russia’sshareofmodernrenewablestofinalenergyconsumptionin2010was2.9%.In2020,thisshareincreasedto3.2%,asshowninFigure12.ThisslightincreasehighlightsthecomplexitiesofexpandingrenewablesinRussia.TotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012014016020002005201020152020202520302035Energyintensityindex(2005=100)APECENERGYOVERVIEW2023226Figure12:Russia’smodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.Theshareofelectricitygeneratedbyrenewableenergysourcesin2000–2020averaged17–18%.Almostallelectricityisgeneratedbylargehydropowerplants(HPPs).Inthisregard,changesintheshareofHPPsinsomeyearsareassociatedwithlow-waterperiods.Theshareofgenerationbysolarandwindpowerplantsdoesnotexceed1%.Figure13:Russia’srenewablegenerationshare,2000to2020Source:EGEDA(2022)Changefrom2010to20200.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%2010Change2020Renewablesshareinelectricitymix0%5%10%15%20%25%20002005201020152020ProportionAPECENERGYOVERVIEW2023227EnergypolicyEnergypolicyDetailsReferenceExportofenergyresourcesRussia’sEnergyStrategy2035,adoptedin2020,assumesanincreaseinenergyexportsby9–15%by2024comparedto2018MinistryofEnergyLNGproductionPlannedincreaseonliquefactioncapacityto46–65mtpaby2024and80–140mtpaby2035(2.4–3.4timesgrowthto2018level);developmentofx(orxmtpa)small-scaleLNGplantsMinistryofEnergyLNGexportsTheRussiangovernmentintendstoeaserestrictionsonexportsofLNGandallownewcompaniestoexportontheirown,unlikeexportsofpipelinegas,whereGazpromisamonopolyMinistryofEnergyGasprocessingRussia’sEnergyStrategy2035assumestheshareofprocessednaturalgasliquids(NGLs)willincreaseto30%by2024andto35%by2030MinistryofEnergyHydrogenexportsStarthydrogenexportsupto0.2mtpaby2024,2–12mtpaby2035,15–50mtpaby2050TheRussianGovernmentOilproductionRussia’sEnergyStrategy2035assumesthatoilproductionby2024willremainatthecurrentlevelof11.6–11.7millionbarrelsperday,withapossiblereductionto10.2by2035MinistryofEnergyGasconsumptioninthetransportsectorRussia’sEnergyStrategy2035assumesanincreaseofgasconsumptioninthetransportsectorto2.7bcmby2024andto10–13bcmby2035MinistryofEnergyUseofassociatedgasRussia’sEnergyStrategy2035assumestheuseofassociatedgaswillincreaseto90%by2024and95%by2035MinistryofEnergyOwnuseingaspipelinesRussia’sEnergyStrategy2035assumesareductionofunitconsumptionofenergyasownuseingaspipelinesof12%by2024and17%by2035,withrespecttothe2018levelMinistryofEnergyThermalefficiencyinthepowersectorRussia’sEnergyStrategy2035assumesanincreaseofthethermalefficiencyinthepowersectorto43%by2024and48%by2035MinistryofEnergyShareofregionswithaccesstotheeconomygastransportationsystemRussia’sEnergyStrategy2035assumesanincreaseintheshareofregionswithaccesstotheeconomygastransportationsystemto75%by2024and83%by2035MinistryofEnergyRussia’sEnergySecurityDoctrineAforeignpolicychallengetoeconomyenergysecuritytostepupinternationaleffortstoimplementclimatepolicyandacceleratethetransitiontoagreeneconomyMinistryofEnergyGreenhousegasesemissionlevelRussia’sNDCproposesreducingGHGemissionsto70%by2030fromthe1990baseline.TheNDClevelofemissionswasapprovedbypresidentialdecreeinNovember2020PresidentialDecreeCarbonNeutralityCommitmentAftertheapprovalofthelow-carbondevelopmentstrategy,thePresidentofRussiaannouncedthatRussiawillachievecarbonneutralityby2060TheRussianGovernmentAPECENERGYOVERVIEW2023228LimitingGreenhouseGasEmissionsTheFederalLaw“OnLimitingGreenhouseGasEmissions”providestheintroductionofastagedmodelforregulatingsuchemissions.Thismodelincludestheintroductionofmandatorycarbonreporting,collectedandsummarisedbytheauthorisedgovernmentbody.Subjecttoregulationwillbethelargestemittersofgreenhousegaseswithamassequivalentof150000tonsofcarbondioxideperyearormorefortheperioduntilJanuary1,2024.Suchcompanieswillhavetoreporton1January2023.Thosewhoproduce50000tonsofcarbondioxideperyearormorewillbesubjecttoregulationfrom1January2024.Theywillhavetosubmitreportsongreenhousegasemissionson1January2025.Thedocumentalsointroducesthenotionofa“greenhousegasemissionreductiontarget”.ItwillbesetbythegovernmentonthescaleoftheRussianeconomy,takingintoaccounttheAFOLUandtheneedtoensuresustainableandbalancedsocioeconomicdevelopmentoftheeconomy.Thelawproposesthecreationofarosterofgreenhousegasemissions.Thisrosterwillbetheinformationsystem,whichtheauthorisedfederalexecutivebodywillmaintain.FederalLawDevelopmentofelectrictransportThe“ConceptfortheDevelopmentofProductionandUseofElectricVehiclesintheRussianFederationuntil2030”providesthreescenariosforthedevelopmentofelectrictransportuntil2030.Thetargetscenarioproposesanincreaseinproductionofelectricvehiclesto217000units(100times)by2030,anincreaseintheshareofelectricvehiclesintheoverallvehiclefleetto15%,andanincreaseinthenumberofchargingstationstoover14000units(eighttimes).TheRussianGovernmentAPECENERGYOVERVIEW2023229NotableenergydevelopmentsEnergydevelopmentDetailsReferenceArcticLNG-2TheprojectincludestheconstructionofthreeLNGtrains,withacapacityof6.6mtpaofLNGeach.ThetotalLNGcapacityofthethreetrainswillbe19.8mtpa.ArcticLNGiscurrentlyunderconstruction.BytheendofMarch2021,theoverallprogressforArcticLNG2isestimatedtohavereached39%,thefirsttrainisroughly53%completed.Itisexpectedtoreachfullcapacityby2025.NovatekGazpromLNGPortovayaInSeptember2022anLNGplantwithacapacityof1.5milliontonsperyearwasputintooperationnearthePortovayacompressorstation.Theplantconsistsoftwotrains.GazpromIncreaseinthecapacityofoippipelinesystemEastSiberiaPacificOceanThecapacityofthepipelinepartoftheESPOoilpipelinesystemwasincreasedby4%in2022.ThecapacityoftheKozminooilportwasincreasedfrom36to43milliontonsperyear.TransneftPowerofSiberiaGassuppliesbeganonDecember2,2019.Designcapacityof38billioncubicmetresofnaturalgasexportstoChinawillbereachedby2025.Attheendof2022,theKovyktagas-condensatefieldwasconnectedtothegaspipelinesystem.GazpromPowerofSiberia2GazpromcontinuessurveysfortherouteofthenewPowerofSiberia-2pipeline,whichwillmakeitpossibletosupplygasfromtheYamalPeninsulafieldstoChinaviaMongoliawithaplannedexportcapacityofabout50billioncubicmetresperyear.ThefeasibilitystudyfortheconstructionofthepipelinesectionthatwillpassthroughMongolia,whichisnamed“SoyuzVostok”,wascompletedinJanuary2022.GazpromVostokOilAttheendof2020,RosneftannouncedthestartoftheVostokOilmegaproject.Accordingtotheplans,itissupposedtoproduce30milliontonsofoilby2024anddeliveritbyseaviatheNorthernSeaRoute.Thisprojectisachallengebecauseitinvolvessignificantinfrastructuredevelopmentintheregionofnewdevelopmentinaveryshorttimeframe.RosneftAPECENERGYOVERVIEW2023230UsefullinksMinistryofEnergyoftheRussianFederation–http://minenergo.gov.ru/enMinistryofNaturalResourcesandEnvironmentoftheRussianFederation–https://www.mnr.gov.ru/en/MinistryofEconomicDevelopmentoftheRussianFederation–https://en.economy.gov.ruFederalStatisticsServiceoftheRussianFederation–https://eng.gks.ruMinistryofIndustryandTradeoftheRussianFederation–https://minpromtorg.gov.ru/en/FederalCustomsService–https://eng.customs.gov.ruFederalTariffService–http://www.fstrf.ru/engAtomEnergoProm–http://atomenergoprom.ru/en/Rosseti,PublicJointStockCompany(PJSCROSSETI)–http://www.rosseti.ru/eng/AssociationNPMarketCouncil–http://www.en.np-sr.ru/index.htmGazprom–http://www.gazprom.com/Rosneft–https://www.rosneft.com/RusHydro–http://www.eng.rushydro.ru/Transneft–http://www.en.transneft.ru/CentralDispatchingDepartmentofEnergySector–http://www.cdu.ru/en/APECENERGYOVERVIEW2023231SingaporeIntroductionSingaporecontinuedtomakeprogressontheclimatefrontin2022,submittingasecondupdatetoitsnationallydeterminedcontribution(NDC)totheUnitedNationsFrameworkConventiononClimateChange(UNFCCC),strengtheningitsLong-TermLowEmissionsDevelopmentStrategy(LEDS),andannouncingamorestringentcarbonpricingschedule(NCCS,2022a,2022b;EMA,2022a).However,theseambitiouscommitmentshavebeenovershadowedbytherecentturmoilinenergymarkets.Inlate2021,aconfluenceofincreasedgasconsumptionfromrecoveringeconomicactivity,severeweathereventsandaseriesofgasproductionoutagesdisruptedsuppliessawglobalmarketpriceshitnewhighs.TherewerealsoupstreamproductionissuesinIndonesia’sWestNatunagasfieldresultinginreducedoutput.Giventhesedevelopments,Singaporeannouncedtemporaryenergysecuritymeasurestoincreasefuelsupplyavailability,mitigateprojectedshortfallsinelectricitysupplyandensuretheaccessibilityoftheelectricitysupplyatstablerates(EMA,2021a).AmidsthigherenergymarketuncertaintyfollowingtheRussia-Ukrainianconflict,thesemeasureshavenowbecomepermanent.SingaporeisalsofurtherbolsteringsecuritybyempoweringtheEMAasalast-resortelectriccapacitybuilderandstrengtheningconsumerprotectionswithretailregulationsandwholesaleelectricitymarketrestrictions(EMA,2022b).Moredetailonthesepoliciesandannouncementscanbefoundinthetablesattheendofthischapter.Withthelasthistoricalyearofdatainthechartsandtablesofthisreportbeing2020,muchofthediscussionwillcentrearoundtheimpactoftheCOVID-19pandemicontheSingaporeaneconomyanditsenergysystem.Table1:SingaporemacroeconomicdataandenergyreservesKeydataa,bEnergyreservesc,dArea(millionkm2)728Oil(billionbarrels)0Population(million)5.7Gas(trillioncubicfeet)0GDP(2017USDbillionPPP)537Coal(milliontonnes)0GDPpercapita(2017USDPPP)94506Uranium(kilotonnesU<USD130/kgU)0Source:aDOS(2023);bWorldBank(2022);cBP(2022);dUN(2022)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.LowereconomicactivitystemmingfromthepandemicreducedSingapore’seconomicoutputby4.1%toUSD537billion(2017USDpurchasingpowerparity[PPP])in2020,andincomesby3.8%toUSD98412(EGEDA,2022).EnergysupplyandconsumptionTotalprimaryenergysupplyWithoutindigenousnaturalresources,Singaporereliesonfossilfuelimportstomeetitsdomesticdemandandfeedoilrefineries.Theeconomy’stotalenergyimportswere6897petajoules(PJ)in2020,APECENERGYOVERVIEW2023232theirlowestlevelsince2014.ExportsofrefinedproductsmostlylandintheAsia-PacificEconomicCooperation(APEC).Lowerdemandforthemovementofgoodsandpeoplereducedglobaldemandforoilproducts,draggingSingapore’stotalenergyexportsdownto3202PJ,thelowestlevelsince2007(EGEDA,2022).Figure1:Singaporeenergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)Singaporeplaysanimportantroleininternationalshippingandaviation.WithglobaltravelrestrictionssignificantlycurbingdemandforaviationduringtheonsetofCOVID-19,Singaporeputonly87PJofaviationfuelinaviationbunkers,acollapseofthree-quartersfrom2019anditslowestlevelsince1992.Withthemovementofgoodsprovingmoreresilienttothepandemicthanthemovementofpeople,shippingbunkersgrew3.5%to1815PJ.Singapore’stotalprimaryenergysupply(TPES)in2020droppedby8.6%to1186PJ,mostlyduetoloweroilimports.Figure2depictsSingaporeenergysupplymix.Effortstodecreaserelianceonoilimportshaveincreasedtheroleofnaturalgas,whichisthedominantfuelsourceforSingapore’spowergeneration,overthelasttwodecades.Singaporeisalsopursuingsolartargetsandelectricitytradetoreduceitsrelianceongasimportsandiscurrentlylookingtoreduceitsrelianceonfossilfuelsasitforgesapathwayforanenergytransition.Thistransitionwillrelyontheswitchesofnaturalgas,solar,regionalpowergrids,andemerginglow-carbonfuels,andwillleverageenergyefficiencytoreduceenergysupplyrequirements(EMA,2022b).Figure2:Singaporeenergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)ProductionNetimportsTotalPrimaryEnergySupply0500100015002000250030003500400020002005201020152020Production,netimportsandTPES(PJ)0200400600800100012001400200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersAPECENERGYOVERVIEW2023233Singaporebeganimportingliquefiednaturalgas(LNG)inMay2013todiversifyitsgassourcesbeyondpipedimportsfromMalaysiaandIndonesia.Theeconomy’sregasificationandstoragecapabilities,alongwithitsauxiliaryservices,haveincreasedtheshareofgasintheenergymixandhaveenabledSingaporetodiversifyitsgassupplies.SingaporehasimportedLNGfromover20economiesinthelastfiveyears,andLNGmakesupnearlyathirdofgasimports(UNComtrade,2023;EMA,2022d).WithIndonesiangaspipelineimportssettodeclinein2023,theroleofLNGinSingapore’sfuelmixwillprobablyincreaseoverthenextdecade(ESDM,2019).Figure3:Energysupplymix–SingaporeandAPEC,2020Source:EGEDA(2022)In2020,oilaccountedforthelargestshareofTPESatapproximately61%(725PJ),followedbynaturalgasat35%(415PJ),coalat1.5%(19PJ)andrenewablesat1.4%(16PJ)(EGEDA,2022).Figure3presentsacomparisonofSingapore’sTPESfuelshareswiththoseoftheentireAPECregion.WhilefossilfuelsplayamoredominantroleinSingaporethaninAPEC,comprising98%ofthefuelmix,Singaporesportsasignificantlylowershareofcoalinitsmix.Anothernotabledifferenceisthelowproportionofrenewables;landconstraints,geologicalfactorsandgeographicallocationarelimitingfactorsforrenewableadoptioninSingapore.Hydro,wind,andtidalenergiesarenotfeasible,leavingsolarPVsystemsandwaste-to-energy(WtE)plantsasSingapore’smainrenewableenergysources.Oncethoughttobeinfeasible,technologicaldevelopmentsinadvancedgeothermalsystemshaveopenedupthepossibilityofgeothermalapplicationin.ThefeasibilityofutilisingthesenewtechnologiesinSingaporeisbeingstudied(EMA,2021b).TotalfinalconsumptionFinalenergyconsumptionremainedresilientduringthepandemic’sonset,risingby1.0%in2020to682PJ,asindustry,non-energyandresidentialsectorsmadeupfordeclinesincommercialandtransportstemmingfromrestrictionstocontainthespreadofCOVID-19.CoalOilGasRenewablesOther0%20%40%60%80%100%SingaporeAPECAPECENERGYOVERVIEW2023234Figure4:Singaporefinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)Theindustry(39%)andnon-energy(35%)sectorsaccountforthelargestshareoftotalfinalconsumption.Singapore’slarge-scalepetrochemicalindustrydrivesmuchofthis,usingenergyfeedstockstomakeandexportchemicals.Singaporeistheeighth-largestchemicalexporterintheworld(WTO,2021).ComparedtoAPEC,Singapore’ssectoralsharesarehighlytiltedtowardsnon-energyuse,reflectingthelargeroleofthechemicalsector.Buildingsaccountfor16%oftotalfinalconsumption,thetransportsector11%,andothersectors0.1%(EGEDA,2022).Beingasmallcity-economy,Singapore’stransportactivityislowerthanothereconomies,whichresultsinitstransportdemandsharebeingmuchlowerthantheAPEC-wideshareof25%.Figure5:Finalconsumptionbysector,SingaporeandAPEC,2020Source:EGEDA(2022)FinalenergydemandSingapore’sfinalenergydemandwas445PJin2020,markinga0.4%annualincrease.Liketotalfinalconsumption,finalenergydemandplateauedinrecentyearsduetoreducedexport-orientedmanufacturingoutputandmoderateincreasesinenergyefficiency.0100200300400500600700800200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%SingaporeAPECAPECENERGYOVERVIEW2023235Figure6:Singaporefinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsIn2020,fossilfuelsconstituted59%ofSingapore’senergydemand,andelectricityuseaccountedfortheremainder.AsshowninFigure7,comparedtoAPEC,Singaporederivesitsdemandfromalowershareoffossilfuelsandrenewablesandahighershareofelectricity.OilmadeupalargershareofSingapore’sdemandstructurethanofAPEC’s,drivenbynon-energyfeedstockuse;this,too,reflectsthesignificantrolethatthechemicalsectorplaysinSingapore’seconomyanddemandstructure.Figure7:Finalenergydemandfuelshare,SingaporeandAPEC,2020Source:EGEDA(2022)TransformationPowersectorSingapore’selectricitygenerationfellby2.0%in2020to53080gigawatthours(GWh)duetolowerusebybothindustryandcommercialbuildings(EGEDA,2022).Thepeakdemandforelectricitysawa0.4%annualincreaseandstoodat7376megawatts(MW)(EMA,2022d).Totallicensedgenerationcapacityfellto12025MWin2020,followingtheretirementofseveralsteamturbines.Inrecentyears,steamturbineplantshavebeendisplacedbythemoreefficientcombined-cyclegas050100150200250300350400450500200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersCoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%SingaporeAPECAPECENERGYOVERVIEW2023236turbine(CCGT)powerplants.Therefore,theshareofCCGTsintheoverallgenerationcapacityincreasedfrom46%(4534MW)in2005to85%(10491MW)in2020,whiletheshareofsteamturbineplantsdroppedfrom48%(4640MW)in2005to6.4%(764MW)in2020.Open-cyclegasturbineplantscomprised1.5%(180MW)ofthecapacityin2020,WtEplantsfor2.1%(257MW),andsolarmadeup2.8%(332MW)(EMA,2022d).Figure8:Singaporeelectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)Figures8and9illustratehowtechnology,marketsandpolicyhavealteredSingapore’selectricitymixoverthepasttwodecades.Oil-basedgenerationfellfromover80%ofthefuelmixin2000to0.3%in2020,whilegasgrewfromunder20%to96%.Coalandotherfuels,includingWtEandsolar,constitutedtheremaining3.4%ofgeneration(EGEDA,2022).DuetoSingapore’slimitednaturalresources,solarandWtEaretheonlyviableformsofrenewableenergygenerationinSingapore.Figure9:Electricitygenerationfuelshare,SingaporeandAPEC,2020Source:EGEDA(2022)Totalgrid-connectedsolarPVinstalledcapacityinSingaporeincreasedby22%to432megawatt-peak(MWp)in2020aftersurpassingtheeconomy’stargetof350MWpin2019.Singaporehassettwomoretargets,aimingtoinstall1.5gigawatt-peak(GWp)ofsolarcapacityby2025and2.0GWpby2030(SingaporeGreenPlan,2021).SingaporeisencouragingdeploymentwithitsrooftopPVSolarNovaprogrammeandthedeploymentoffloatingPV.AsofFebruary2022,theHousingDevelopmentBoard(HDB)hascommittedtoinstalling380MWpon8400housingblocksandhasalreadyinstalledmoduleson2700blocks.HDB’ssolartargetisfor540MWpofinstalledcapacityby2030(HDB,2022).A60MWpfloatingsolarPVsystemintheTengehReservoirwasdeployedin2021(PUB,2022).0102030405060200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersCoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%SingaporeAPECAPECENERGYOVERVIEW2023237RefiningSingaporeisoneoftheleadingoilrefininghubsintheworld.In2020,refineryactivityfellbyasixthaspandemicrestrictionsacrosstheworldreducedthemovementofpeopleandinturndemandforoilproducts.In2020,ShellannouncedplanstoreducecrudeprocessingcapacityatitsPulauBukomrefinerybyhalfasitaimstoreducetheemissionsofitsenergyproductstream(ArgusMedia,2022).However,followingtightglobalmarkets,Shellcancelledplanstoclosetherefinery’slubricantunitinJuly2022,whichcouldsignalachangeinplanstoreduceSingaporerefinerycapacity.EnergytransitionSingaporesubmitteditssecondupdatetoitsNDCtotheUNFCCCinNovember2022,whereinitcommitstoreducingemissionstoaround60MtCO2ein2030afterpeakingemissionsearlierandstrengtheneditsLEDSbycommittingtoachievingnet-zeroby2050(NCCS,2022a).SingaporewillincreaseitscarbontaxfromSGD5pertonnenowtoSGD25in2024,SGD45in2026andbetweenSGD50and80by2033(NCCS,2022b).Singaporeishopingtoleveragehighersolarpenetration(1.5GWpin2025and2GWpin2030)andinterconnectivitywithneighbouringeconomiestohelpachieveitsclimateambitions.Inaddition,italsolaunchedahydrogenstrategy(EMA,2022a).TheNationalHydrogenStrategysetsoutSingapore’splanstodevelophydrogenasamajordecarbonisationpathwayforitspowerandindustrysectors.EmissionsTheexpertgrouponenergydataandanalysis(EGEDA)fallsundertheumbrellaofAPEC’sEnergyWorkingGroup(EWG).InadditiontoenergydatacompiledbyEGEDA,CO2emissionsfromcombustionactivitiesintheenergysectorarerecorded.Theseemissionsareasubsetoftotalgreenhousegas(GHG)emissionsthatareconsideredinthecontextofclimatechange,suchasundertheUNFCCC.ForSingapore,CO2combustionemissionshavemaintainedahighplateauforthepastseveralyears,thoughtheyfellslightlyin2020.ThisfallwaspartlyduetoafallineconomicactivitythatwasbroughtonbytheinitialstagesoftheCOVID-19pandemic.Figure10:SingaporeCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecurityEnergysecurity,particularlythesecurityofnaturalgassupplyanditsresultingimpactonelectricityreliability,hasbecomeanincreasinglyprominentissueoverthepasttwoyears.Disruptionstopipelinegasimportsinlate2021createdthepossibilitythatSingapore’sgencosCO2combustionemissions05101520253035404520002005201020152020MilliontonnesCO2APECENERGYOVERVIEW2023238wouldlackthegastofulfiltheircontracts:wholesaleelectricitypricesbecameelevatedandvolatile;retailerbankruptcyincreased;andsomeconsumerswereexposedtowholesaleprices.Thegovernmentimplementedtemporaryenergysecuritymeasurestoincreasethefuelsupplyavailability.ThisincludedtheestablishmentofastandbyLNGfacility(SLF)bytheEMAforgencostodrawuponiftheywereshortoffuel,requiringgencostocontractsufficientfueltoatleastmeetthedemandsofcustomersoftheirretailarms,andgrantingtherightoffirstrefusaltootherSingaporeangencosortheEMAbeforeexcessgascouldbedivertedorsoldontheglobalmarket(EMA,2021a).EMAalsoworkedwithretailerstoprovidelong-termelectricitycontractsandprovideamonthlyratetiedtothemonthlyspotLNGimportcostforconsumersthatwantedtoavoidexposuretowholesaleelectricityprices(EMA,2021a).EMA’sactionsillustratehowgovernmentscanplayanimportantroleintheshort-termbolsteringofenergysecurityduringperiodsofsignificantsupplydisruptionandmarketupheaval.However,in2022,theRussia-UkrainewarledtoafurthertighteningofenergysuppliesandhigheruncertaintyinthesecurityofenergysuppliersacrosstheAPECregion.Inresponse,Singaporeidentifiedthreemainrisksinherenttoitsenergymarketstructure:therisksofenergysupplydisruptionsandpriceshocks;theriskofinsufficientgenerationcapacity;andtheriskofmarketfailuresstemmingfrommarketparticipantsbeingunequippedtodealwithvolatilemarketconditions.Toaddresstheseshortcomings,Singaporewill:institutionalisetheSLF,empowertheEMAasalast-resortgenerationcapacitybuilder,andstrengthenconsumerprotectionswithretailregulationsandwholesalemarketrestrictions(EMA,2022b).APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective-toimproveenergyintensityanddoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargettoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.In2009,Singaporetargeteda35%reductioninenergyintensityby2035and,in2015,issueditsfirstNDC,pledginga36%intensityreductionbelow2005levelsby2030(NCCS,2018a).Energyintensityfellaslowas28%below2005levelsbutroseto21%belowin2020duetothepandemicimpactingSingapore’sGDPatahigherlevelthanenergydemand(Figure11).APECENERGYOVERVIEW2023239Figure11:Singaporetotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)Singaporeiscommittedtoimprovingitsenergyefficiency.Recentmeasurestomeetthiscommitmentincludeelectrifyingcookingandheating,reducingspacecoolingneedsandspacecoolingefficiency,phasingoutinternalcombustionengine(ICE)vehicles,improvingmanufacturingefficiencythroughdigitalisation,researchingimprovementsinindustrialandmanufacturingefficiencythroughresearchgrants,andimprovinglogisticstooptimisethemovementofgoodsandpeopleandthusminimiseenergyusage.Theestablishmentofamorestringentcarbonpriceschedulewillalsoencouragemoreinvestmentinenergyefficiency.Together,thesepoliciescanaccelerateenergyintensityreductionsandfurtherhelpAPECachieveitsaspirationaltargets.DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.Figure12:Singaporemodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.Duetotheprevalenceoffossilfuelsinitssupplymix,SingaporestartedTotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012020002005201020152020202520302035Energyintensityindex(2005=100)Changefrom2010to20200.0%0.1%0.2%0.3%0.4%0.5%0.6%0.7%0.8%2010Change2020APECENERGYOVERVIEW2023240withaverylowmodernrenewableenergyshareof0.47%in2010(Figure12).By2020,thisshareincreasedto0.73%.Singapore’slowrenewableenergyshareisduelargelytothesmallsizeofthecity-economyanditsdenseurbanlandscape,whichchallengetheadoptionofconventionalvariablewindandsolarrenewablesatanisland-widescale.Renewablesonlyaccountedfor1.8%oftheelectricitymixin2020(Figure12).However,solartargets,includingbotheconomy-widecapacitytargetsandahousingunit-targetbytheHDB,haveresultedinasteadyincreaseinrenewableenergyuseoverthepastdecade.AchievingitssolarcapacitytargetsthroughoutthecurrentdecadeshouldenableSingaporetofurtherincreaseitsrenewablegenerationshareaswellasitsmodernrenewableenergyshare.Figure13:Singaporerenewablegenerationshare,2000to2020Source:EGEDA(2022)Renewablesshareinelectricitymix0.0%0.4%0.8%1.2%1.6%2.0%20002005201020152020ProportionAPECENERGYOVERVIEW2023241EnergypolicyEnergypolicyDetailsReferenceUNFCCCsecondNDCupdateSingaporeaimstoreduceemissionstoaround60MtCO2ein2030afterpeakingemissionsearlier.NowincludingNF3asaGHG.NationalClimateChangeSecretariateLEDSupdateSingaporestrengtheneditsLowEmissionsDevelopmentStrategy(LEDS)toacommitmenttoachievenet-zeroemissionsby2050.NationalClimateChangeSecretariatSingaporeCarbonTaxCarbontaxofSGD5pertCO2ein2019willcoverrefining,LNG,power,andindustrialfacilitiesthatemit25,000tCO2e/yr.ThepricewillincreasetoSGD25pertCO2ein2024andSGD45pertCO2ein2026,withtheaimofreachingSGD50to80pertCO2eby2030.NationalClimateChangeSecretariatSingaporeEconomy-wideSolarandstoragetargetsSolartargets:1.5GWpby2025,2GWpby2030;storagetarget:200MWofenergystoragesystemsdeployedbeyond2025.SingaporeGreenPlanSolarNovaProgrammeTargeting540MWpofsolaronHDBhousingblocksby2030.HousingDevelopmentBoardEnhancedearlyturnoverscheme(ETS)Providesanincentivefortoderegisterolder,morepollutingvehiclesandreplacethemwithnewer,lessemittingmodels.Theincentivecomesintheformofadiscountedcertificateofentitlementontheregistrationofthenewvehicle.LandTransportAuthorityEnhancedVehicleEmissionsSchemeIncentiveschemethatprovidesarebate(uptoSGD25000)orcharge(uptoSGD25000)totheMRSPofnewvehiclesbasedontheirpollutantperformance.Singaporeisextendingprogrammeto2025withtighterpollutantthresholdsemergingin2024.NationalEnvironmentAgencyCommercialVehicleEmissionsSchemeIncentiveschemethatprovidesarebate(uptoSGD30000until2023,SGD15000thereafter)orcharge(uptoSGD10000until2023,fallingtoSGD5000forpetrolvehiclesandincreasingtoSGD15000fordieselvehiclesthereafter)totheMRSPofcommercialvehicles.NationalEnvironmentAgencyEarlyEVAdoptionIncentive45%rebateonAdditionalRegistrationFeeofEVsales(cappedatSGD20,000)from2021-2023)LandTransportAuthorityVehicleQuotaSystemBymaintainingagrowthrateofzeroforvehicleregistrationssince2018,theVQSeffectivelycapsvehicleownershipinSingapore.LandTransportAuthorityAPECENERGYOVERVIEW2023242Cleaner-energyvehiclesEnroutetophasingoutICEvehiclesby2040,ceasingregistrationsfordieselcarsandtaxisby2025andmandatingallnewregistrationsforcarsandtaxisbeclean-energymodelsfrom2030.Furthermore,establishing8EV-readytownswithchargersatallHDBcarparksby2025andtargeting60000chargingpointsby2030.SingaporeGreenPlanGreenBuildingMasterplansSeveralinitiativesaimedatincreasingenergyefficiencyandreduceenergydemandinbuildings.BuildingConstructionAuthorityMandatoryEnergyLabellingSchemeHouseholdappliancesthataresoldinSingaporemustdisplayanenergylabel,whichhelpsconsumerscomparetheenergyefficiencyofdifferentappliancesandmakeinformedpurchasingdecisions.NationalEnvironmentAgencyMinimumEnergyPerformanceStandardsRaisestheaverageenergyefficiencyofhouseholdappliances,encouragingmanufacturerstoprovidemoreenergy-efficientappliancesastechnologyimproves.NationalEnvironmentAgencyPre-emptiveMeasurestoEnhanceSingapore’sEnergySecurityandResilienceEstablishesstand-byfuelpowergeneratingfacilitiestorunifthetightglobalnaturalgasmarketfacilitatesanaturalgassupplydisruptionthatconstraintselectricitysupply;grantsthefirstrightofrefusalofexcessnaturalgaspowersupplytoeithertheEMAorotherpowergenerators.EnergyMarketAuthorityGuardrailstoEnhancetheCompetitiveMarketStructureofthePowerSector-GenerationCapacityEMAwillconductacompetitivetender,yearsaheadofprojectedgenerationrequirements,awardingthemostcompetitiveproposalwithalicensetobuild,ownandoperatethenewcapacity,shouldtherebeaneedfornewcapacity.Allnewcapacitywillbecoordinatedwithinthisprocesstoavoidrisksofover-andunder-capacity.Ifprivatesectorinterestisinsufficient,theEMAwillbuildtherequiredcapacity.EnergyMarketAuthorityGuardrailstoEnhancetheCompetitiveMarketStructureofthePowerSector-RetailmarketStricterfinancialqualifyingcriteriaandtheimpositionofhighercapital/hedgingrequirementsonretailerstoincreaseresiliencytomarketvolatility.Additionalprotectionsforconsumersifretailersprematurelyterminatecontracts.Tighteningtheeligibilitycriteriaforwholesalepriceexposure,sothatonlyconsumerswhoareequippedtodealwiththerisksareeligible.EnergyMarketAuthorityGreenbuilding,townsanddistrictstargetsBy2030,targetinga15%reductioninenergyconsumptioninexistingHDBtowns;aimingfor80%ofSingapore'sbuildingstobegreenand80%ofnew-buildstobesuperlowenergyusers;andtargetingan80%improvementinenergyefficiency(relativeto2005)ofbest-in-classgreenbuildingsby2030.SingaporeGreenPlanGuardrailtoEnhancetheCompetitiveMarketStructure–TemporaryPriceCap(TPC)EMAintroducedaTPCmechanismtomitigateextremepricevolatilityintheSingaporeWholesaleElectricityMarketon1July2023.EnergyMarketAuthorityAPECENERGYOVERVIEW2023243NotableenergydevelopmentsEnergydevelopmentDetailsReferenceNestebiorefineryexpansionIncreasecapacity1.4Mtpato4.5Mtpaby2023NestePipelinegassupplydisruptionsandhigherLNGpricesencouragefuelswitchinginthepowersectorInthefaceofpipelinegasdisruptionsfromIndonesiaandhigherLNGspotprices,oilproductusebyelectricitygeneratorsincreased.EnergyMarketAuthorityRenewableelectricityimportsfromMalaysiabeginandEMAIssuesSecondRequestforProposalforElectricityImportsAspartofEMA’splanstoimportupto4gigawatts(GW)ofelectricityby2035todecarbonisetheenergysector,Singaporebeginimporting100MWfromLaoPDRthroughThailandandMalaysiain2022andissuedtwoRFPstoimportlow-carbonelectricity.EnergyMarketAuthoritySingaporelaunchesNationalHydrogenStrategyTheNationalHydrogenStrategyprovidesaroadmapofhowhydrogencansupportthedecarbonisationeffortsandthenextstepsforahydrogenfuture.EnergyMarketAuthoritySingapore'sfirstEnergyStorageSystem(ESS)deployedatPSAPasirPanjangTerminalThisESSispartoftheSmartGridManagementSystem(SGMS)whichhasthepotentialtoimprovetheenergyefficiencyofportoperationsby2.5%andreducetheport’scarbonfootprint.EnergyMarketAuthorityEMAseekingmoreLNGtermimportersAtightglobalnaturalgasmarketsendingnaturalgaspricestorecordhighsispromptingsomeretailerstoceaseoperationsandvariableconsumerstopayahigherpriceforelectricity.ThetightmarkethaspromptedtheEMAtoestablishstand-bypowergeneratingunitsasaback-stoptothewholesaleelectricitymarketintheeventofsupplydisruptions.EnergyMarketAuthoritySingaporeLooksToDevelopandDeployLow-CarbonTechnologicalSolutionsTworecentlyreleasedfeasibilitystudiesonlow-carbonhydrogenandCCUScanhelpSingaporetransitiontoalow-carbonfuture.Thefindingswillinformthedeploymentoffunds(includingtheSGD49millionfortheLowCarbonEnergyResearchFundingInitiative)totest-bedtechnologies,anddevelopmentofpartnershipwithothereconomiesasfuelandtechnologysuppliers,suchasthecurrentlow-emissionMOUwithAustraliaandthelow-carbonhydrogenMOUwithChile.EnergyMarketAuthorityExploringSingapore'sGeothermalPotentialEMAisexploringthefeasibilityofnewtechnologies(e.g.Enhanced/AdvancedGeothermalSystems)forSingapore.In2022,itissuedaRequestforInformation(RFI)tofacilitateageophysicalinvestigationprojecttoassessthegeothermalenergypotentialacrossSingapore.EnergyMarketAuthorityAPECENERGYOVERVIEW2023244UsefullinksBuildingandConstructionAuthority–https://www1.bca.gov.sg/DepartmentofStatisticsSingapore–https://www.singstat.gov.sgEconomicDevelopmentBoard–https://www.edb.gov.sg/EnergyEfficiencyProgrammeOffice–http://www.e2singapore.gov.sg/EnergyMarketAuthority–https://www.ema.gov.sgHousing&DevelopmentBoard–https://www.hdb.gov.sg/cs/infoweb/homepageLandTransportAuthority–https://www.lta.gov.sgMinistryofNationalDevelopment–https://www.mnd.gov.sg/MinistryoftheEnvironmentandWaterResources–https://www.mewr.gov.sgMinistryofTradeandIndustry–https://www.mti.gov.sgNationalEnvironmentAgency–https://www.nea.gov.sgNationalClimateChangeSecretariat–https://www.nccs.gov.sg/PublicUtilitiesBoard–https://www.pub.gov.sg/SingaporeDepartmentofStatistics–https://www.singstat.gov.sg/SingaporeLNGCorporation(SLNG)–https://www.slng.com.sg/website/index.aspxSolarEnergyResearchInstituteofSingapore(SERIS)–http://www.seris.nus.edu.sg/TemasekHoldings–https://www.temasekholdings.com.sgReferencesBCA(BuildingandConstructionAuthority)(2021),GreenBuildingMasterplans,https://www1.bca.gov.sg/buildsg/sustainability/green-building-masterplans.BP(2022),StatisticalReviewofWorldEnergy,https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2022-full-report.pdfAPECENERGYOVERVIEW2023245DOS(DepartmentofStatistics,Singapore)(2023),LandArea,https://tablebuilder.singstat.gov.sg/table/TS/M890621EGEDA(ExpertGrouponEnergyDataAnalysis,APECEnergyWorkingGroup)(2021),APECEnergyDatabase.https://www.egeda.ewg.apec.org/egeda/database_info/index.htmlEMA(EnergyMarketAuthority)(2019a),TheFutureofSingapore'sEnergyStory,https://www.ema.gov.sg/media_release.aspx?news_sid=20191029Yk3uENU5Z4bL––(2021a)Pre-emptiveMeasurestoEnhanceSingapore’sEnergySecurityandResilience,https://www.ema.gov.sg/media_release.aspx?news_sid=20211019jGdGgQ0nLhyb––(2021b),EMAtoExplorethePotentialofGeothermalEnergyforPowerGeneration,https://www.ema.gov.sg/media_release.aspx?news_sid=20211023kEitG26TOhWn––(2022a),SingaporeLaunchesNationalHydrogenStrategytoAccelerateTransitiontoNetZeroEmissionsandStrengthenEnergySecurity,https://www.ema.gov.sg/media_release.aspx?news_sid=202210246JoalvsFYBOc––(2022b),EnhancementsforaMoreSecureandResilientPowerSector,https://www.ema.gov.sg/media_release.aspx?news_sid=20221024JgsvM6RzUJvA––(2022c),Energy2050CommitteeReport:ChartingtheEnergyTransitionto2050,https://www.ema.gov.sg/energy-2050-committee-report.aspx––(2022d),SingaporeEnergyStatistics,https://www.ema.gov.sg/Singapore_Energy_Statistics.aspx.––(2022e),Singapore’sFirstEnergyStorageSystematPSA’sPasirPanjangTerminal,https://www.ema.gov.sg/media_release.aspx?news_sid=20220713RokuoGsvMaqz––(2022f),EMAIssuesSecondRequestforProposalforElectricityImports,https://www.ema.gov.sg/media_release.aspx?news_sid=20220701iM1feIkN4FFe––(2022g),SingaporeLooksToDevelopandDeployLow-CarbonTechnologicalSolutions,https://www.ema.gov.sg/media_release.aspx?news_sid=20210624H62TSVHMkIxT––(2022h),RequestforInformationonExplorationofGeothermalEnergyPotentialAcrossSingapore,https://www.ema.gov.sg/media_release.aspx?news_sid=202204203EB1lGvfi8wt––(2023),IntroductionoftheTemporaryPriceCap,https://www.ema.gov.sg/media_release.aspx?news_sid=20230627ld9s1rNxDXsoESDM(MinistryofEnergyandMineralResources,Indonesia)(2019),GasSupplytoSingaporetobeSwitchedtoDomesticin2023,https://www.esdm.go.id/en/media-center/news-archives/gas-supply-to-singapore-to-be-switched-to-domestic-in-2023HDB(HousingDevelopmentBoard)(2022),HDBtoBringSolarEnergytoOver8000BlocksthroughSolarNovaProgramme,APECENERGYOVERVIEW2023246https://www.hdb.gov.sg/about-us/news-and-publications/press-releases/HDB-to-bring-solar-energyLTA(LandTransportAuthority)(2022a),TransitioningtoEVs,https://www.lta.gov.sg/content/ltagov/en/industry_innovations/technologies/electric_vehicles/transitioning_to_evs.html––(2022b),EarlyTurnoverScheme,https://onemotoring.lta.gov.sg/content/onemotoring/home/buying/vehicle-types-and-registrations/commercial-vehicle/early-turnover.html#Discounted_PQP––(2023),AnnexA:MonthlyCOEQuotafromFEB2023toAPR2023,https://www.lta.gov.sg/content/dam/ltagov/news/press/2023/230120-1q2023-coe-quota.pdfNCCS(NationalClimateChangeSecretariat)(2018a).NationalStatementofSingaporebyMrMasagosZulkifli,MinisterfortheEnvironmentandWaterResources,AttheUnfcccCop-24HighLevelSegment,12December2018,https://www.nccs.gov.sg/media/speeches/national-statement-of-singapore-by-mr-masagos-zulkifli-minister-for-the-environment-and-water-resources-at-the-unfccc-cop-24-high-level-segment-12-december-2018––(2022a),JointpressreleasebyNCCSandMSE:Singaporecommitstoachievenetzeroemissionsby2050andtoarevised2030nationallydeterminedcontribution;publicsectorandJuronglakedistricttoleadthewaywithnetzerotargets,https://www.nccs.gov.sg/media/press-releases/singapore-commits-to-achieve-net-zero/––(2022b),Carbontax,https://www.nccs.gov.sg/singapores-climate-action/carbon-tax/NEA(NationalEnvironmentAgency)(2022a),EnhancedVehicularEmissionsSchemeToBeExtendedWithTightenedPollutantThresholds,https://www.nea.gov.sg/media/news/news/index/enhanced-vehicular-emissions-scheme-to-be-extended-with-tightened-pollutant-thresholds––(2022b),ExtensionAndAdjustmentsToCommercialVehicleEmissionsSchemeAndEarlyTurnoverScheme,https://www.nea.gov.sg/media/news/news/index/extension-and-adjustments-to-cves-and-ets––(2022c),AboutMandatoryEnergyLabellingSchemeandMinimumEnergyPerformanceStandards,https://www.nea.gov.sg/our-services/climate-change-energy-efficiency/energy-efficiency/household-sector/about-mandatory-energy-labelling-and-minimum-energy-performance-standardsNeste(2022),NesteSingaporeExpansionProject,https://www.neste.sg/neste-in-singapore-and-asia-pacific/journeytozerostories/singapore-expansion-projectPUB(2022),FloatingSolarSystems,https://www.pub.gov.sg/sustainability/solar/floatingsystemsS&PGlobal(2022),SingaporetakesupLNGfloatingstoragetoboostenergysecurity,https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/lng/061722-singapore-takes-up-lng-floating-storage-to-boost-energy-securitySingaporeGreenPlan(2021),OurKeyTargetsfortheGreenPlan,https://www.greenplan.gov.sg/targetsAPECENERGYOVERVIEW2023247UNFCCC(UnitedNationsFrameworkConventionalonClimateChange)(2022),Singapore’ssecondupdateofitsfirstnationallydeterminedcontribution(NDC)andaccompanyinginformation,https://unfccc.int/sites/default/files/NDC/2022-11/Singapore%20Second%20Update%20of%20First%20NDC.pdfUNComtrade(UnitedNationsComtrade)(2023),UNComtradeDatabase,https://comtrade.un.org/data/WTO(WorldTradeOrganisation)(2021),Worldtradestatisticalreview2020,https://www.wto.org/english/res_e/statis_e/wts2020_e/wts2020_e.pdfsAPECENERGYOVERVIEW2023248ChineseTaipeiIntroductionChineseTaipeiisanarchipelagowithGDPreaching1250billion(2017USDpurchasingpowerparity(PPP))in2020,a4%increasefromthe2019level.Thepopulationin2020stayedatthe24millionlevelbutadecreasingtrendinpopulationisexpectedtobeobservedinthecomingdecades.Inaddition,ChineseTaipei’sGDPpercapitawasstilloneofthehighestintheAPECregion,atUSD53130PPP,in2020.ChineseTaipeihastinyenergyreserves.AccordingtodatafromTheWorldFactbookofCIA,ChineseTaipeiholdsonly1milliontonnesofprovencoalreserves,2.4millionbarrelsofprovenoilreserves,and6.2billioncubicmetresofprovengasreserves(CIA,2022).Althoughtherearesomeminorproportionsofcrudeoilandnaturalgasproduction,theeconomyreliesheavilyonenergyimports.InMarch2022,ChineseTaipeiproposeditsguidelineofthe“2050Net-zeroemission”target.ThepreviousGHGnetemissionstargetwas50%ofthe2005levelby2050;thenewandambitiousGHGnetemissionstargetwaszeroby2050.Twelvekeystrategieswereproposedtoachievethistarget,includingwind,solarPV,hydrogen,innovativeenergy,storage,CCUS,carbon-freeandelectricvehicles,etc.(NDC,2022).InDecember2022,underthe“2050Net-zeroemission”target,ChineseTaipeifurtherannouncedthe2030milestonesforthe12keystrategies.Forexample,thesolarPVandoffshorewindinstalledcapacityareexpectedtoreach31GWand13GWin2030,andtheinstalledcapacityofhydrogenandammoniaco-firingpowerplantsisexpectedtoreach891GWin2030.Ifallthemilestonesareachieved,thenetemissionreductionin2030maybe24%lowerthanthe2005level.(NDC,2022)Ahigherpenetrationrateofintermittentrenewableenergy,extremeclimateevents,andseveraloutageincidentsthatinthelasttwoyears,ledTaipowertoannouncea10-yearplantoreinforcetheresilienceofthepowergridsystem(Taipower,2022).ThisplanindicatesthatChineseTaipei’spowergridwilltransitfromanefficient,centralisedgridstructuretoamoreresilient,decentralisedgriddesign.Table1:ChineseTaipei’smacroeconomicdataandenergyreservesKeydataaEnergyreservesbArea(millionkm2)36200Oil(millionbarrels)2.4Population(million)24Gas(billioncubicmetres)6.2GDP(2017USDbillionPPP)1250Coal(milliontonnes)1GDPpercapita(2017USDPPP)53130Uranium(kilotonnesU<USD130/kgU)--Source:aIMF(2022);bCIA(2022)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.APECENERGYOVERVIEW2023249EnergysupplyandconsumptionTotalprimaryenergysupplyThetotalprimaryenergysupply(TPES)inChineseTaipeidropped2.2%to4244PJin2020(Figure1).Thedeclinecanbeattributedtothesignificantdecreasesinoil(-3%)andcoal(-6%),whichcomprised36%and34%ofTPESin2020,respectively.Ontheotherhand,thegasinTPESincreasedby9%butcouldnotoffsetthedecliningtrendforits(19%)shareofTPESin2020.Thedeclineresultedinaslowercompoundannualgrowthfrom2000to2020(1.3%).Figure1:ChineseTaipei’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)ChineseTaipeiisheavilydependentonforeignenergysupplies.In2020,netimportsaccountedformorethan90%ofTPES,despitethe2.3%dropfromthe2019level(Figure1).Oil,includingcrudeoilandpetroleumproducts,accountedforthelargestshareofnetimports(42%).However,oilimportandexportvaluessharplyfellby12%and35%in2020,respectively(duetotheeconomicshocksbroughtbythepandemic).Coalisexclusivelyimported,accountingfor37%ofChineseTaipei’snetimportsin2020.In2020,coalandgasimportvolumeswere6%lowerand7%higher,respectively.ChineseTaipeihasbeenoneofthetopLNGimportersintheworldformanyyears(GIIGNL,2022).Figure2:ChineseTaipei’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)OilandcoalaccountformostofChineseTaipei’senergysupply,withatotalof2985PJ(70%ofTPES)in2020.Coalwasmainlyusedforpowergeneration,andtheoilsupplywasmainlyusedasafeedstockfortheeconomy’sfuelrefinery.GassupplyhasconsistentlygrownforProductionNetimportsTotalPrimaryEnergySupply050010001500200025003000350040004500500020002005201020152020Production,netimportsandTPES(PJ)0500100015002000250030003500400045005000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersAPECENERGYOVERVIEW2023250thelasttwodecades,anditincreasedby9%to808PJin2020(Figure2).Toachievetheenergytransitiontarget,ChineseTaipeihasbeenactivelypromotingrenewableenergyinrecentyears.Althoughthereisanincreasingtrendinrenewables,renewablesinTPESdroppedby0.7%to74PJin2020,mainlycausedbyasignificantdecreaseinhydro-power.Figure3:Energysupplymix–ChineseTaipeiandAPEC,2020Source:EGEDA(2022)TotalfinalconsumptionTotalfinalconsumption(non-energyincluded)inChineseTaipeiin2020was2825PJ,whichwas1.1%higherthanthe2019level(Figure4).Theincreasecanbeattributedtotheincreaseindemandbytheresidentialandnon-energysectorsin2020.Theformerreacheditshighestrecordedpointinthepast20years,whilethelatterwasstilllowerthanthe2018level.Figure4:ChineseTaipei’sfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)Althoughtheindustrialsectorincreasedbyonly0.1%in2020,itremainedthelargestenergy-consumingsectorinChineseTaipei,witha35%shareinTFCin2020.Itisworthnotingthatthemachinerysector(mainlycomprisingelectricalandelectronicmachinery),thesecond-largestindustrysubsector,increasedsignificantlyby6.5%in2020andoffsetthedecreasesfromothersubsectorsduetothepandemic.In2020,ChineseTaipei’stransportsectorslightlyincreasedby0.1%to460PJandaccountedfora16%shareofTFC.In2020,theshareofthenon-energysectorinTFCinChineseTaipeiremainedgreaterthanthewholeAPECeconomy.ThisreflectstheCoalOilGasRenewablesOther0%20%40%60%80%100%ChineseTaipeiAPEC0500100015002000250030003500200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyAPECENERGYOVERVIEW2023251extensiveuseofpetroleumproductsasfeedstockfortheeconomy’srefiningandpetrochemicalindustry.Incontrast,exceptfortheindustrysector,thesharesoftheothersectors(transportation,buildings,andagricultureandothers)werealllessthantheAPECregion(Figure5).Figure5:Finalconsumptionbysector,ChineseTaipeiandAPEC,2020Source:EGEDA(2022)FinalenergydemandTotalfinalenergyconsumption(TFEC)(non-energyexcluded)inChineseTaipeiin2020was1956PJ,slightlyhigherthanthe2019level.Increaseswereingas,renewables,andelectricityandothers,whereascoalandoilbothdeclined(Figure6).From2010to2020,thecompoundannualgrowthrate(CAGR)ofTFECwas0.3%.AlthoughtheCAGRofcoal(-1.9%),oil(-1.5%)andrenewables(-3.5%)wereallnegative,thesefallswereoffsetbythepositiveCAGRofgas(6.6%)andelectricity(1.5%).Thestronggrowthtrendingaswasmainlyduetocontributionsfromtheindustrialsector,whilethemoderategrowthtrendinelectricityandothersresultedfromtheindustrialandresidentialsectors.Figure6:ChineseTaipei’sfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsIn2020,electricityandothersaccountedforalmosthalfofTFEC(50%)inChineseTaipei,greaterthanmostAPECeconomiesexceptforHongKong,China.TherelativelyhighshareofelectricityandothersinTFECwasmainlyduetotheusageoftheindustryandbuildingsectors.TheshareofoilinTFECwas31%,whichwasslightlylessthanthewholeAPECeconomy.TheshareofoilinTFECwasmainlydrivenbytheIndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%ChineseTaipeiAPEC05001000150020002500200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersAPECENERGYOVERVIEW2023252transportsector(75%),anditisexpectedtodecreasewiththeriseofEVs(Figure7).Figure7:Finalenergydemandfuelshare,ChineseTaipeiandAPEC,2020Source:EGEDA(2022)TransformationPowersectorChineseTaipei’selectricitygenerationwas280TWhin2020,2.2%higherthanin2019(Figure8).Theincreasemainlycamefromtheresidentialandindustrialsectorsin2020.TheelectricitygenerationmixinChineseTaipeiwasdominatedbyfossilfuelpowerplants(coal,gas,andoil),withashareofmorethan82%in2020.Amongfossilfuelpowerplants,coalaccountedforthelargestshare,accountingfor45%ofelectricitygeneration,followedbygas(36%)andthenoil(2%)in2020.From2010to2020,theCAGRoftheelectricitygeneratedbyoil(-8.8%)andnuclear(-2.8%)wasnegative,whileelectricitygeneratedbycoal(0.3%),gas(5.2%),andrenewablesandothers(11%),waspositive.Itisworthnotingthatthewatershortageresultedinasignificantdropinhydro-powerby29%in2020.AccordingtotheCAGRofelectricitygeneration,ChineseTaipeihastransitionedtomoregasandrenewablesandreducedtheelectricitygeneratedbyoilandnuclearduringthepastdecade.Figure8:ChineseTaipei’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)In2020,coalaccountedforalmosthalfofChineseTaipei’selectricitygeneration,whichwas3%higherthanthewholeAPECeconomy(Figure9).Itisalsoworthnotingthattheshareofgas-firedelectricitygenerationinChineseTaipeiwas14%higherthantheAPECeconomyCoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%ChineseTaipeiAPEC050100150200250300200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersAPECENERGYOVERVIEW2023253asawhole.Thepercentageofgas-firedelectricitygenerationisexpectedtoincreasebecausegas-firedgeneratorscanproducebridgeenergyunderChineseTaipei’sambitiousenergytransitionpolicy.Figure9:Electricitygenerationfuelshare,ChineseTaipeiandAPEC,2020Source:EGEDA(2022)EnergytransitionTostabilisethepowersupply,improveairquality,andcreateanuclear-freehomeland,ChineseTaipeiaimstoachieve50%gas-firedpowerplants,27%coal-firedpowerplants,20%renewables,and3%othersinthepowermixby2025.Allthenuclearpowerplantsarealsoexpectedtobedecommissionedby2025.Inaddition,thelong-termGHGemissionreductiongoalwasinitiallysettobe50%lowerthanthe2005levelby2050;in2022,itwasrevisedtobeamoreambitiousgoal,“net-zeroemission”by2050.EmissionsTheCO2combustionemissionsinChineseTaipeihavedecreasedsince2017.In2020,theemissionlevelwas257milliontonnesofCO2,around0.6%lowerthanthe2019level(Figure10).However,theemissionlevelhasexceeded250milliontonnesofCO2since2010,0.7%higherthanthe2005level.Itseemschallengingtoachievethenet-zeroGHGemissiongoalby2050atthecurrentreductionspeed.Figure10:ChineseTaipei’sCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%ChineseTaipeiAPECCO2combustionemissions05010015020025030020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW2023254EnergysecurityOneofthereasonsforpromotingtheenergytransitionis“energysecurity.”ChineseTaipeiisexpectedtomaximiserenewableenergyinthenextfewdecadeswithadequategridinfrastructureandstorageinvestmenttolowertheimportedenergydependencyandensureenergystability.Inaddition,regardingtheincreasingusageofnaturalgasinChineseTaipei’senergytransitionpathway,existingLNGterminalsarebeingexpandedandnewLNGprojectsareunderway.Furthermore,regardingenergysecurity,thediversifiedLNGimportsourcesandlong-termLNGcontractsmayhelpChineseTaipeitocopewiththecurrentenergycrisis.APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective—toimproveenergyintensityandtodoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargettoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwastoimproveby25%by2030,relativetothe2005baseline.APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.In2020,theenergyintensityofChineseTaipei’sTFECimprovedby37%,comparedwiththe2005level(Figure11).AsimilarenergyintensitytrendisalsopresentforenergyintensityintermsofTPESandTFC.Figure11:ChineseTaipei’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetomeetingthedoublinggoal.TotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012020002005201020152020202520302035Energyintensityindex(2005=100)APECENERGYOVERVIEW2023255Figure12:ChineseTaipei’smodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.ChineseTaipei’sshareofmodernrenewablesinTFECwas2.8%in2010.Itincreasedto3.5%in2020,representinga27%improvementfrom2010to2020(Figure11).TheAPEC-widedoublinggoalwillrequiretheshareofAPEC’smodernrenewablestoreach12%by2030.Theelectricitygenerationofrenewableenergyincreasedslightlyby2%,butitssharedroppedfrom6%to5.8%inChineseTaipeiin2020.Thestronggrowthofgas-firedgenerationandthemassivedecreaseinhydro-powergenerationin2020werethemainreasonsforrenewablegeneration’ssharedrop.Theshareofrenewablesinelectricitygenerationwasrelativelystableinthe2000sbuthasbeenslowlygrowingoverthepastdecade.ItisexpectedthattheshareofrenewablegenerationcanfurthergrowasChineseTaipeiaimstoexpanditsshareto60-70%by2050.(NDC,2022).Figure13:ChineseTaipei’srenewablegenerationshare,2000to2020Source:EGEDA(2022)Changefrom2010to20200.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%2010Change2020Renewablesshareinelectricitymix0%1%2%3%4%5%6%7%20002005201020152020ProportionAPECENERGYOVERVIEW2023256EnergypolicyEnergypolicyDetailsReferenceEnergyTransitionPolicyby2025Thissetsupprinciplesbasedonpromotinggreenenergy,increasingnaturalgas,reducingcoal-firedpowerplants,andachievingnuclear-freetargetstoensureareliablepowersupplyandreduceemissions.MinistryofEconomicAffairs[MOEA](2019)ClimateChangeResponseActTheact,anamendmenttotheGreenhouseGasReductionandManagementAct,setsanewgoaltoreachnet-zeroemissionsby2050,enhancesthelevelofclimate-relatedgovernance,andbuildsasystemtolevycarbonfeesfromemissionsources.ClimateChangeResponseAct(2023)RenewableEnergyDevelopmentAct(draftrevision)Thisprovidesafriendlierenvironmenttodeveloprenewableenergy(solarPV,smallhydro-power,geothermalpower,etc.).MOEA(2022)2030MilestoneofNet-ZeroTransitionGoalTheemissionreductiongoalin2030ischangedfrom20%to24%.NDC(2022)Pathwayto2050Net-ZeroTransitionGoalTheemissionreductiongoalin2050ischangedfrom50%to100%(net-zeroemissionby2050).Thepathwayprovidesenergy,industrial,lifestyle,andsocialguidelinestoachievethenet-zerogoal.NDC(2022)Long-termPowerDevelopmentPlanThisplanstoincludeadditionalgas-firedandbiomasspowerplantstoreplaceoil,coal,andnuclearplantsby2028.Taipower(2022)2030/2050MilestoneofRenewablesThissets2030/2050targetsforoffshorewind,solarPV,hydrogen,geothermal,biomass,andmarineenergy.NDC(2022)2030MilestoneofEVsThissets2040100%new-sale-ratetargetsforelectricpassengercarsandscooters.Itisalsoexpectedtoseea100%penetrationrateofelectricbusesby2030.NDC(2022)2025/2030MilestoneofstorageThisaimstoincreasetheinstalledcapacityofstorageto1500MWand5500MWby2025and2030,respectively.NDC(2022)APECENERGYOVERVIEW2023257NotableenergydevelopmentsEnergydevelopmentDetailsReferenceSolarPVDevelopmentin2022In2022,theadditionalcapacityofsolarPVreachedarecordhighof2.5GW,andthecumulativecapacityofsolarPVwas10GW,whichwasfarbehindthe2025target,20GW.MOEA(2022)OffshoreWindDevelopmentin2022In2022,theadditionalcapacityofoffshorewindpowerreached1GW,andthecumulativecapacitywas1.4GW,whichwasfarbehindthe2025targetof5.6GW.MOEA(2023)HeavylossesduetosoaringenergypricesIn2022,theeconomy-ownedenergycompanies,TaipowerandCPCbothfacedaroundUSD6.5billioncumulativelossesbecauseofthepricestabilitypolicy.EventhoughTaipoweradjustedpartsofitsrateschedulesinAugust2022,theadjustmentcouldnoteffectivelyreflectthesoaringpriceofimportednaturalgas.MOEA(2023)DemoSitesofHydrogen/AmmoniaCo-firingtechnologyTaipowersignedMOUswithSimensEnergyandMitsubishi(MHI,MC,andMCH)topromotedemositesofco-firingtechnology.Itisexpectedtorealisea5%hydrogenco-firingtechnologyonagas-firingunitin2025anda5%ammoniaco-firingtechnologyonacoal-firingunitin2030.Taipower(2022)GridResilienceStrengtheningConstructionPlanTaipowerplanstoinvestUSD19billionin10yearstoupgradethepowergridsystem.Thepowergridisexpectedtoberesilientanddecentralisedinthefuture.Taipower(2022)UsefullinksNDC–https://www.ndc.gov.tw/en/Default.aspx.MOEA–https://www.moea.gov.tw/Mns/english/home/English.aspx.BOE–https://www.moeaboe.gov.tw/ECW/populace/home/Home.aspx.EnergyStatisticsInformationSystem–https://www.esist.org.tw/DatabaseTaipower–https://www.taipower.com.tw/en/index.aspxAPECENERGYOVERVIEW2023258ReferencesIMF(InternationalMonetaryFund)(2022).WorldEconomicOutlookDatabase,https://www.imf.org/en/Publications/WEO/weo-database/2022/April/download-entire-databaseCIA(CentralIntelligentAgency)(2022).TheWorldFactbook,https://www.cia.gov/the-world-factbook/countries/taiwan/#energy.NDC(2022).PathwaytoNet-ZeroEmissionsin2050,https://www.ndc.gov.tw/en/Content_List.aspx?n=B927D0EDB57A7A3A&upn=A2B386E427ED5689.Taipower(2022).GridResilienceStrengtheningConstructionPlan,https://www.taipower.com.tw/en/news_info.aspx?id=127&chk=3567c3cc-306d-4aaa-8f92-64d9d8e77352&mid=4412&param=pn%3d1%26mid%3d4412%26key%3d.GIIGNL(InternationalGroupofLiquefiedNaturalGasImporters)(2022).GIIGNL2022AnnualReport,https://giignl.org/document/giignl-2022-annual-report/.EGEDA(ExpertGrouponEnergyDataAnalysis,APECEnergyWorkingGroup)(2021),APECEnergyDatabase.https://www.egeda.ewg.apec.org/egeda/database_info/index.htmlMOEA(2019).EnergyTransitionPromotionScheme,https://www.moea.gov.tw/MNS/english/Policy/Policy.aspx?menu_id=32904&policy_id=19.EPA(2022).TheRevisedClimateChangeResponseActPassesItsThirdLegislativeReading,https://www.epa.gov.tw/eng/F7AB26007B8FE8DF/2533e423-cb11-4bc8-bff9-ee80958bf354MOEA(2022).RenewableEnergyDevelopmentAct(draftrevision)Approved,https://www.moea.gov.tw/Mns/populace/news/News.aspx?kind=1&menu_id=40&news_id=103893.NDC(2022).The“12KeyStrategies”ActionPlanisAnnouncedtoFullyPromote2050Net-ZeroTransitionGoals,https://www.ndc.gov.tw/en/nc_8455_36526.Taipower(2022).Long-termPowerDevelopmentPlan,https://www.taipower.com.tw/tc/page.aspx?mid=212&cid=122&cchk=260a432c-fc0e-47e0-a90e-2bc0cc52cb61&fbclid=IwAR15IFO7yNU9gSwatkC2BVH9_TvTbzCEGRnS1-59_ycPYFYn8IQaaLslycA.NDC(2022).12KeyStrategiesActionPlan,https://www.ndc.gov.tw/Content_List.aspx?n=6BA5CC3D71A1BF6F.MOEA(2022).SolarPVDevelopment,https://www.moea.gov.tw/MNS/Populace/news/News.aspx?kind=1&menu_id=40&news_id=104147.MOEA(2023).OffshoreWindDevelopment,https://www.moea.gov.tw/Mns/populace/news/News.aspx?kind=1&menu_id=40&news_id=104246.APECENERGYOVERVIEW2023259MOEA(2023).TaipowerandCPCBoretheSoaringFuelCosttoCurbInflation,https://www.moea.gov.tw/Mns/populace/news/News.aspx?kind=1&menu_id=40&news_id=104189.Taipower(2022).MOUonHydrogen/AmmoniaCo-firingTechnology,https://www.taipower.com.tw/tc/news_info.aspx?id=6320&chk=0664b316-e085-4475-8b2f-9a7157e27bb0&mid=17.APECENERGYOVERVIEW2023260ThailandIntroductionThailandisinthecentreoftheMalaypeninsula,whichconnectsnortheastAsiawithsoutheastAsia.TheeconomyissurroundedbyMyanmar,theLaoPeople’sDemocraticRepublic(LaoPDR)andCambodiatothenorthandeast,andMalaysiatothesouth.Thailandhasanareaof513120squarekilometres(km2)andhadapopulationof70millionin2020.In2020,itsgrossdomesticproduct(GDP)droppedtoUSD1200billion(2017USDpurchasingpowerparity[PPP]),a6.2%decreasefromitsGDPin2019(WorldBank,2022)becauseofaslowdownineconomicactivitiesinresponsetotheCOVID-19pandemic.Despitetheimpactfromthepandemic,ThailandwasquotedbytheWorldBankasoneofthegreatdevelopmentsuccessstories.Duetosmarteconomicpolicies,ithasbecomeanuppermiddle-incomeeconomyandismakingprogresstowardsmeetingtheSustainableDevelopmentGoals1.Thailandhaslimiteddomesticenergyresources.Attheendof2020,Thailandhadprovenreservesof0.3billionbarrelsofoil,5.1trillioncubicfeetofnaturalgasand1.1billiontonnesofcoal.Basedonthecurrentratesofproduction,itsdomesticsupplywillsoonbecomedepleted–oilandnaturalgasresourcesinabouttwoandthreeyears,respectively(EnergyPolicyandPlanningOffice(EPPO),2020).Mostcoal-firedpowerplantsinThailandusedomesticallyproducedligniteandimportedbituminouscoal.Thailandishighlydependentonenergyimports,particularlyoil,withapproximately80%ofitsoiland30%ofitsgassupplycomingfromimportsin2020.MostofThailand’sprovencoalreservesarelignitecoal,whichhasalowcalorificvalue.Forthisreason,Thailandreliesoncoalimportstomeettheenergydemandsofboththepowerandindustrialsectors.In2020,thecoalsupplywas650PJ—a7%increasefromthepreviousyear’slevel.Theincreaseinthecoalsupplywasmainlyfortheindustrialsector,witha10%increase,whilecoalforpowergenerationdecreasedby6%.Thenaturalgassupplyin2020was1760PJ,a6.5%furtherdecreasefrom2019duetolowerconsumptioninboththepowergenerationandindustrialsectors,witha10%declineindomesticproductionanda5%decreaseofgasimportsfromMyanmar,whileliquefiednaturalgas(LNG)importsincreasedby13%.Table1:Thailand’smacroeconomicdataandenergyreservesKeydataaEnergyreservesb,cArea(km2)513120Oil(billionbarrels)0.3Population(million)70Gas(trillioncubicfeet)5.1GDP(2017USDbillionPPP)1200Coal(billiontonnes)1.1GDPpercapita(2017USDPPP)17250Uranium(kilotonnesU<USD130/kgU)-Source:aWorldBank(2022);bBP(2022);cUN(2022)Note:Reservesaretotalprovedreservesandreasonablyassuredrecoverableresourcesforuranium.ThailandhasincreaseditsrelianceonimportedLNGbyinvestinginnewLNGreceivingfacilities.ThenewLNGreceivingterminal(T-2terminal)hasbeencompletedandbeganoperationsin2022witha7.5milliontonnesperannum(MTPA)capacity,makingThailand’stotalreceivingcapacity19MTPA,expandableto26.5MTPA.ThethirdAPECENERGYOVERVIEW2023261terminal(T-3)whichisunderconstructionandexpectedtobecompletedin2027willbringthetotalLNGreceivingcapacityofThailandto37MTPA,expandableto42MTPA.EnergysupplyandconsumptionTotalprimaryenergysupplyThailand’stotalprimaryenergysupply(TPES)was5400PJin2020,down5%fromthepreviousyear.Domesticproductionfellforthefourthconsecutiveyeartoapproximately2780PJ,representinga-4%CAGRbetween2016and2020.Figure1:Thailand’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)Inthemid-2010s,netimportsbegantorisetocompensatefordiminishingdomesticproduction.However,netimportshavedecreasedsince2019,owingtotheeconomicslowdowninducedbytheCOVID-19pandemic.Consecutively,domesticproductionandnetimportshavecontributedanequalsharetoTPES(Figure1).Thailand’sTPESwasonanincreasingtrendbeforedeclininginthelasttwoyears(Figure2).Oilandgasaccountedfornearly70%oftheTPESshare,followedbyrenewables(20%).Nonetheless,theTPESofallmentionedfuelsfellbyanaverageof-8%fromthepreviousyear.Incontrast,thecoalsupplygrewby7%,reachingroughly650PJin2020duetofuelswitchingtousemorecoalbytheindustrysector.Thegassupplystoodat1800PJin2020,comingfromdomesticproduction(70%),pipelinegasimportsfromMyanmar(15%),andLNGimports(15%).Figure2:Thailand’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)SincetheconcessionperiodsfortheErawangasfield,operatedbyChevronCorporation,andtheBongkotgasfield,operatedbyPTTProductionNetimportsTotalPrimaryEnergySupply0100020003000400050006000700020002005201020152020Production,netimportsandTPES(PJ)01000200030004000500060007000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersAPECENERGYOVERVIEW2023262ExplorationandProduction(PPTEP),expirein2022and2023,respectively,theMinistryofEnergyhasopenedauctionsfortheG1/61project(Erawan)andtheG2/61project(Bongkot)forexplorationandproductionconcessioncontracts,aimingtoraisedomesticnaturalgasproductionand,ultimately,topromoteenergysecurity.PTTEPwasawardedthecontracttoserveasanofficialoperatorforbothprojects,withthelatterunderaproductionsharingagreementwithMPG2(Thailand)Limited.Figure3:Energysupplymix–ThailandandAPEC,2020Source:EGEDA(2022)Thailand’sfuelmixdiffersfromtheAPECregion(Figure3).Theshareofcoalissmaller,whereasthesharesofoil,gas,andrenewablesareproportionallylarger.Theshareofrenewablesat19%in2020wasalsosignificantlylargerthanAPEC.Despitedecliningdomesticgasproduction,gassupplygrowthremainsthegreatestamongfossilfuels,withimportsaccountingformuchoftheincrease.Thehighgasshareisprojectedtopersistinthecomingyearsasthepowersectortransitionsfromcoaltogas.TotalfinalconsumptionCOVID-19countermeasures,includingdomesticandinternationaltravelrestrictionsandshortenedbusinesshours,coupledwithfloodingduringthemonsoonseasoncausedadeclineintotalfinalconsumption(TFC),especiallyinthefirsthalfof2020.However,economicactivitiesresumedmoderatelyinthesecondhalfoftheyearafterthegovernmentannouncedasignificantrelaxationofCOVID-19protocols.Asaresult,TFCdeclinedto3700PJbytheendof2020,an8%decreasefrom2019.Figure4:Thailand’sfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)Thetransportsectorovertooktheindustrysectorasthelargestenergy-CoalOilGasRenewablesOther0%20%40%60%80%100%ThailandAPEC050010001500200025003000350040004500200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyAPECENERGYOVERVIEW2023263consumingsector,accountingfor1280PJand1220PJ,or35%and33%ofTFC,respectively.Buildings(commercialandresidential)andnon-energysectorscomprisedtheremainingshare,atroughly20%and10%,respectively.Thenon-energysectorpredominantlyconsistsofenergyproductsthatareusedasfeedstock(particularlyinpetrochemicals)ratherthanforenergypurposes.Thailandrepresented2%ofAPEC’sTFC.TheeconomysharessimilarTFCsectorialcharacteristicswithAPEC,withtheprimarydistinctionsbeinginthetransportandresidentialsectors.Thailand’stransportsectorwas10percentagepointshigherthanAPEC’s;conversely,Thailand’sbuildingssectorwaslowerthanAPEC’sbysixpercentagepoints.Figure5:Finalconsumptionbysector,ThailandandAPEC,2020Source:EGEDA(2022)FinalenergydemandFinalenergydemand(FED)decreasedby6%in2020comparedtothepreviousyear,approaching3300PJ.Themajorityoffueldemanddecreasedwithrenewablessawthelargestpercentagedeclineat20%,incontrast,demandforcoalincreasedby15%.Thesignificantincreaseincoaldemandwasprimarilydrivenbyhigherconsumptioninthepowersectorandtheindustrysector,especiallyinthecementandpaperindustrieswheresteamgeneratingheatpumpsarenecessary.Figure6:Thailand’sfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsThailandsawareboundinFEDfromthesecondhalfof2020.ThiswasbecausetheeconomystartedtorecoverastheThaigovernmenteasedCOVID-19restrictions,announcedaneconomicstimuluspackage,andencourageddomestictourism.Moreover,globaleconomicrecoveryIndustryTransportCommercialResidentialAgriculture&…Non-energy0%20%40%60%80%100%ThailandAPEC05001000150020002500300035004000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersAPECENERGYOVERVIEW2023264resultedinhigherexportsfromThailand,causinghigherelectricityconsumptionintheindustrysector,notablyinsteel,automotive,andelectronicsmanufacturing.Figure7:Finalenergydemandfuelshare,ThailandandAPEC,2020Source:EGEDA(2022)WhileThailandhasasimilarproportionofcoalFEDcomparedtoAPEC,otherfuelsharesarediverse.ForAPEC,oil,electricityandothersequallycontributedtotheAPECFEDshare(30%each),withrenewablesbeingtheleastusedfuelinFED.Thailand’sFED,ontheotherhand,isheavilyreliantonoil.Oilaloneaccountedforthelargestshareof45%,followedbyelectricityandothersandrenewables.Moreover,gaspresentedthelowestshareofThailand’sFED,atslightlyunder6%.TransformationPowersectorThailand’selectricitysystemismadeupofmultipleplayerswithacombinedcontractedcapacityof50GW.EGAT,aneconomy-ownedenterprise,andindependentpowerproducersindividuallytake30%oftotalpowergeneration.Sharesofsmallpowerproducersandverysmallpowerproducerscombinedrepresented30%,withtheremaindercomingthroughelectricitytradingwithLaoPDRandMyanmar.Figure8:Thailand’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)Two-thirdsofelectricityinThailandcamefromgas-firedgeneration;nonetheless,electricityderivedfromotherrenewableshasmoderatelysubstitutedthatfromthegas-firedgeneration.TheThaigovernmentCoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%ThailandAPEC050100150200250200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersAPECENERGYOVERVIEW2023265haspromotedthedeploymentofrenewableenergysince2007whenafeed-inpremiumwasimplementedalongsidethefirstRenewableEnergyDevelopmentPlan(2008-2022).Consequently,agrowingrenewablestrend(excludinghydro)emergedinearly2010.Consequently,electricitygeneratedfromotherrenewablesincreased60-foldtoalmost30TWhduring2012-2020.Meanwhile,electricityproducedfromgas-firedgenerationfellby20%fromitspeakof140TWhin2015.Figure9:Electricitygenerationfuelshare,ThailandandAPEC,2020Source:EGEDA(2022)In2020,electricitygenerationdeclinedby6%relativeto2019,fallingto190TWh.Previously,powergenerationwasonarisingtrendbeforestagnatinginthemid-2020s.Forthelast20years,generationhasgrownat3%annually.However,thegrowthrateinthelastfiveyearswasobviouslysluggish,standingat0.2%annually.Thailandhighlyreliedonthermalpowergeneration,accountingforroughly80%oftotalelectricitygeneration,comparedtothe60%shareinAPECin2020.Naturalgasgenerationisdominant,accountingforthree-quartersofThailand’sthermalgenerationin2020(Figure9).Renewablepotentialandpoliciesthatsupporttheseresourceshavecontributedtorenewablegenerationshareincreasingtoalmostthesamesizeascoal-firedgenerationin2020.RefiningIn2020,crudeoilandcondensateproductionandimportsdecreasedbecauseoflowerdemandforrefinedpetroleumproductscausedbythespreadofCOVID-19.Approximately80%ofcrudeoilandcondensatesupplyisimported,primarilyfromtheMiddleEastregion.Thailandhasatotalrefinerycapacityof1245thousandbarrelsperday(KBD)(EPPO,2022).Crudeoilintakebyrefineryisslightlyover1000KBD,accountingfor80%ofrefinerycapacity.Despitethelowerimportvolume,thegreaterdeclineindomesticpetroleumproductconsumptionledtoahigherexportvolumetoregionalmarketssuchasMyanmar,Cambodia,andVietNam.Thailandproducedmorethan160millionlitresofpetroleumproductsperday,withdieseloilaccountingfor45%oftotalpetroleumproducts.EnergytransitionThailandaspirestoreduceitsdependenceonfossilfuelsandtoleveragethefullpotentialofdomesticrenewableenergyresourcestoenhanceitsenergysecurity,energyaffordability,andenvironmentalsustainability.TheThaigovernmenthasimplementedseveraldevelopmentplansandpoliciestorealisetheseobjectives,withtheThailandIntegratedEnergyBlueprint(TIEB)servingasthecorestrategicplan.Followingtheglobaldynamic,PrimeministerPrayutCoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%ThailandAPECAPECENERGYOVERVIEW2023266Chan-o-chaannouncedatthe26thUNFCCCCOP(COP26)inNovember2021thatThailandisstrivingforcarbonneutralityby2050andfornet-zerogreenhousegas(GHG)emissionsby2065.EmissionsUnderThailand’s2ndUpdatedNationalDeterminedContribution(NDC)publishedinNovember2022,ThailandaimstoreducerelativeGHGemissionsof30-40%by2030,withthemoreambitiousreductiondependentoninternationalsupport.Thailandexpectstoemit555milliontonnesofcarbondioxideequivalent(MtCO2e)inthe2030.Figure10:Thailand’sCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)Thailand’scarbondioxidecombustionemissionsgrewby2.1%yearlyduring2000-2020,reaching250milliontonnes,mainlyduetotheeconomy’sdependenceonfossilfuelsforpowergeneration,industry,andtransportation.AccordingtotheEnergyPolicyandPlanningOffice(EPPO)(2022),thepowersectorgeneratedthelargestshareofcarbonemissionsat35%,followedbytheindustryandtransportsectorsjointly,bothatbelow30%.DespiteThailand’sambitiousclimatetargetsandgoaltoincreasetheshareofrenewableenergyinfinalenergyconsumptionto30%by2037,carbonemissionsfromthepowersectorwillcontinuetoincreasefrom84milliontonnesto100milliontonnesbasedonthePowerDevelopmentPlan(PDP)2018-2037(Revision1).EnergysecurityThailand’sself-sufficiency,aratioofdomesticproductiontoprimaryenergysupply,hasbeendeclining,accountingforaround50%in2020.Theeconomyproduces20%,40%,and70%ofcrudeoilandnaturalgasliquids,coal,andgassupply,respectively.ThesefiguresshowthattheeconomyheavilyreliedonenergyimportstomeetincreasingdomesticdemandsandhighlighttheneedforThailandtoinvestinfossilfuelresourceexplorationandproduction.TheeconomyimportedcrudeoilmainlyfromtheMiddleEastandcoalfromIndonesiaandAustralia.2020wasthefirstyearwhenLNGimports,mainlyfromQatar,surpassedpipelinegasimportsfromMyanmarafterThailandfirstreceivedLNGin2011.Thailandhaslimiteddomesticenergyreserves.AccordingtoEPPO(2020),Thailand’sreservetoproductionratiosfornaturalgas,crudeoil,andligniteare3.3,2.2,and138years.However,thegovernmenthasimplementedvariousmeasurestoenhanceitsenergysecurity,suchasincreasingthestrategicpetroleumreservecapacity.Thailandimportedenergytoavalueofnearly800billionBaht,accountingfor12%ofthetotalimportvalue.Conversely,thevalueofenergyexportswasfivetimeslessthanthatofenergyimports.Thevalueofexportedenergywasslightlyabove2%oftotalexports(EPPO,2020)CO2combustionemissions05010015020025030020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW2023267APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective–toimproveenergyintensityanddoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargettoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.Figure11:Thailand’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.RecognisingAPEC’senergyintensitygoal,ThailandimplementedtheEnergyEfficiencyPlan(EEP)2015-2036whichtargetsanenergyintensityreductionof30%by2036incomparisonto2010.Thetargetentailsa2350PJcurtailmentinfinalenergyconsumption,with85%comingfromthethermalsectorandtheremainderfromtheelectricitysector.Thailand’stotalfinalenergyconsumption(TFEC)energyintensityhasdeclinedby1%annuallyovertheprevious20years.Althoughfinalenergyconsumptionin2020was4%lowerthanthepreviousyear,GDPin2020wasmuchlowerat6%.Asaresult,Thailand’sTFECenergyintensitycurvedupin2020.ToachieveAPEC’senergyintensityoverallgoalandtheEEP2015-2036targets,Thailandneedstoincreaseitsenergyintensityreductionto30%by2035and20%by2036.DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.Thailand’smodernrenewableenergyshareincreasedby3.3%between2010and2020,reachingnearly16%.Electricityandheataswellasmodernbiomassequallycontributedtotheincrease.Thesharedroppedbytwopercentagepointsrelativeto2019,withlowermodernbiomassconsumptionaccountingformostofthedecline.Thailandneedstoincreasethemodernrenewableenergysharebyalmost9%withinthisdecadetomeettheeconomy’sgoalofdoublingitsproportionTotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012020002005201020152020202520302035Energyintensityindex(2005=100)APECENERGYOVERVIEW2023268ofmodernrenewableenergy,whichis24%.Figure12:Thailand’smodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.Priorto2015,theaverageshareofrenewableenergysourcesintheelectricitymixfluctuatedataround10%;however,thatpercentagehadsubstantiallyincreasedtonearly20%by2020.Higheramountsofelectricitygeneratedbyotherrenewables(solar,wind,biomass,etc.)causedthenotableincrease.Inthepreviousfiveyears,geothermalenergycontributedanegligibleamounttotheelectricitymix,withthehydrocontributionremainingconsistentat3%.Figure13:Thailand’srenewablegenerationshare,2000to2020Source:EGEDA(2022)Changefrom2010to20200.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%2010Change2020Renewablesshareinelectricitymix0%2%4%6%8%10%12%14%16%18%20%20002005201020152020ProportionAPECENERGYOVERVIEW2023269EnergypolicyEnergypolicyDetailsReference2ndUpdatedNDC30-40%GHGemissionsreductionrelativetoaprojectedbusiness-as-usuallevelby2030(555MtCO2e).Additionally,Thailandaimstoachievecarbonneutralityby2050andnet-zeroGHGemissionsby2065.UNFCCCLong-TermLowGreenhouseGasEmissionDevelopmentStrategy(LT-LEDS)(Revisedversion)Long-ternGHGmitigationactionsintheenergy;transport;industrialprocessesandproductusewaste;agriculture;andlanduse,landusechangeandforestrysectors.ONEPNationalEnergyPlan2022(Expectedendorsementin2023)Integratingfiveexistingplans,previouslyknownastheTIEBtosupportThailandinachievingcleanenergyandcarbonneutrality.Themainpolicydirectionsinclude50%ofrenewableenergyinpowergeneration,30%ofdomesticelectricvehiclesproductionby2030,30%energyefficiencyimprovement,andenergyinfrastructuredevelopments.EPPOPromotionofelectricvehicles(EVs)Upto40%cutinimporttax,dependingontheenginesize,between2022and2023topromotetheuseofEvs.Additionally,taxincentivesandsubsidiesfrom2022-2025areprovidedtoadvancedomesticmanufacturing,725000EVunits/yearby2030,andthedevelopmentofEVcharginginfrastructure.ITANotableenergydevelopmentsEnergydevelopmentDetailsReferenceBCG(Bio-Circular-Green)EconomymodelPost-pandemicgrowthstrategythatcoverstheeconomy,society,andtheenvironment;emphasisingefficientuseofresourcesandwastetopromotesustainableandbalancedeconomicgrowth.APECChonburiNaturalGasPowerProject2.5GWgas-firedpowerplantsinChonburitosupportagrowingindustrydemandundertheEasternEconomicCorridorprogram.TheanticipatedcompletionwasinOctober2022.ADBFifthGasTransmissionPipelineProjectThelongestonshoretransmissionpipeline,415kminlength,connectsRayongandNonthaburi.ThedevelopmentisbeingcarriedoutbyPTTtostrengthenthestabilityofthenaturalgaspipelinenetworkandtoexpandpowergenerationcapacity.PTTAPECENERGYOVERVIEW2023270GreenYellowRooftopSolarProjectNationwiderooftopsolarinstallationsoncommercialandindustrialbuildings,withatotalcapacityof60MW.ADBLiberalisationofthenaturalgasmarketTheThaigovernmentisconsideringpromotingacompetitivemarkettowelcomeadditionalLNGcarriersinresponsetothehighLNGprice.RegulatedplayersareallowedtotradewithPTTwhilepartiallyregulatedplayerscanselldirectlytoconsumers.BangkokInsightLomligorWindPowerProjectFirstprivatesector10-MWwindpowerproject,integratingabatteryenergystoragesystem.PartiallyfundedbytheAsianDevelopmentBank(ADB)loanforUSD7.2million.ADBNongFabLNGReceivingTerminalThailand’ssecondLNGreceivingterminalafterMapTaPhutLNGterminal.A7.5MTPAregasificationunitwillbedeployedtoimproveLNGsupplysecurity.HydrocarbonsOmkoiLawsuitInSeptember2022,theAdministrativeCourtrevokedtheconcessioncertificateNo.1/2543oftheOmkoicoalminingprojectinChiangMai,Thailand,sincetheprojectviolatedhumanrightstoacleanenvironment,andenvironmentalimpactassessmentparticipation.GranthamResearchInstituteWithdrawalofcoal-firedpowerplantdevelopmentplansInvestmentpullbacksof870MWand2200coal-firedplantsinKrabiandSongkhla,respectively,duetopublicopposition.Thegovernmentapprovedthe1400MWgas-firedplantsinSuratThaniasasubstituteinJuly2021.EJAtlasFirstCarbonCreditExchangeThailandimplementeditsfirstvoluntarycarboncreditexchangeunderFTIXtoencouragebusinessestoreducetheircarbonfootprintandpromotealow-carboneconomyinSeptember2022.TherevenuewillbeusedtosupportREandEEprojectsandfinanceclimatechangeadaptationandmitigationmeasures.BloombergApprovalson24thBidRoundforOffshoreGulfofThailandExplorationandProductionsLicensesGovernmentawardedcontractsforthreeoffshoresexplorationandproductionareasintheGulfofThailand,projectG1/65G2/65andG3/65,toincreasedomesticproductionandpetroleumreserveDMFRenewableEnergyProcurementThailand'sNationalEnergyPolicyCouncilapprovednewrenewablecapacityof3,668.5MW,resultingintotalcapacityincreasefrom9,996MWto12,700MWtomeetrisingelectricitydemand.EPPOReferencesEPPO(EnergyPolicyandPlanningOffice)(2022),EnergystatisticsofThailand2021.https://drive.google.com/file/d/1SCKwm9psfL6VZN4NDCodqJLfa3s8hKo0/viewAPECENERGYOVERVIEW2023271EPPO(EnergyPolicyandPlanningOffice)(2022),EnergystatisticsofThailand2022.https://drive.google.com/file/d/1bQMPAYuPlTDmMNyzk_iCHTNRlkx3Iknb/viewAPECENERGYOVERVIEW2023272UnitedStatesIntroductionTheUSproducestheworld’ssecond-largestgrossdomesticproduct(GDP)whenmeasuredinpurchasingpowerparity(PPP).TheUShasoneofthehighestlevelsofpercapitafinalenergydemandinAPEC.Intermsofenergyintensity,theUShadthesixthhighestlevelinAPECatslightlylessthan3.0PJperbillionUSDofGDP(PPP).Theserelativelyhighlevelsofeconomy-wideenergyintensityandpercapitaenergyuseappearacrossallsectorsintheUS;however,therearewidevariationswithintheUnitedStates.TheUSisthesecond-largestproducerandconsumerofenergyinAPECandisthelargestoilandlargestnaturalgasproducerintheworld.Thehighlevelsofoilandnaturalgasproductionareprimarilytheresultoftechnicalinnovations,includingthosethatenabledthecommercialproductionofoilandgasfromshaleformations.TheenergysystemsofthethreeeconomiesinNorthAmericaarewellintegrated,withrobustenergytradebetweentheUS,Canada,andMexico.In2020,theUShad69billionbarrelsofprovedoilreserves,446trillioncubicfeetofprovednaturalgasreserves,and249billiontonnesofcoalreserves(BP,2022).Intermsofglobalrankings,theUSistheninth-largestholderofoil,thefifth-largestforgas,andthelargestforcoal.TheUShaslessthan1%oftheworld’sidentifiedrecoverableuraniumresources.NouraniumhasbeenextractedfromundergroundorsurfaceminesintheUSsince2015.Table1:RecentUnitedStatesmacroeconomicandenergydataKeydataa,bEnergyreservesc,dArea(millionkm2)9.9Oil(billionbarrels)69Population(million)333DryGas(trillioncubicfeet)4462022GDP(2017USDbillionPPP)19800Coal(milliontonnes)2489002022GDPpercapita(2017USDPPP)59760Uranium(kilotonnes;cost<USD130/kgU)48Sources:aUSCensusBureau(2022);bWorldBank(2022);cBP(2022);dUN(2022)Note:Oil,gas,andcoalreservesaretotalprovedreservesatendofyear2020asreportedbyBP.UraniumisreasonablyassuredrecoverableresourcesasreportedbytheUN.RenewableresourcescanbefoundthroughouttheUS.Broadlyspeaking,thebestsolarresourcesareinthesouthwesterncontinentalUSaswellasinHawaii.Forwind,thehighestpotentialextendsfromNorthDakotathroughTexasaswellasoffshoreonbothcoastsandthewesternportionoftheGulfofMexico.GeothermalpotentialisconcentratedinthewesternhalfofthecontinentalUS,andbiomassiswidelyavailableacrossthecontinent.APECENERGYOVERVIEW2023273EnergysupplyandconsumptionTotalprimaryenergysupplyIntheUS,totalprimaryenergysupply(TPES)–thesumofproduction,netimports,andstockchanges–hasdeclinedslightlysince2000.Figure1:TheUnitedStates’energysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)Between2005and2020,USoilandnaturalgasproductionhasgrownwhilenetimportshavedeclined.In2019,theUSbecameanetenergyexporter.TheprimarydriversofthistransitionfromenergyimportertoexporterwerethesubstantialgrowthinbothUSoilandnaturalgasproduction.In2020,energysupplydecreasedby8%from2019levels,reflectingtheimpactofCOVID-19ontheUSenergysystem.Relativeto2019,oilandnaturalgasproductiondeclined5%and2%,respectively.Figure2:TheUnitedStates’energysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)Thesharesbyfueltypechangedslightlyin2020:34%ofTPEScamefromcrudeoilandpetroleumproducts,35%fromnaturalgas,andonly11%fromcoal.Renewablesaccountedfor8%ofTPES,andothersources,includingnuclearandnon-energyuseoffuels,accountedfor10%.Coalsupplypeakedin2005anddeclinedby55%through2020.Oilsupplyin2020was24%lowerthanthepeakin2005.Meanwhile,naturalgassupplyincreased43%through2020froma21st-centuryProductionNetimportsTotalPrimaryEnergySupply-2000002000040000600008000010000012000020002005201020152020Production,netimportsandTPES(PJ)020000400006000080000100000120000200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersAPECENERGYOVERVIEW2023274lowin2006,dueprimarilytotheproliferationofhorizontaldrillingandhydraulicfracturing.Thesedynamicsarereflectedinthe2020compositionofTPESoftheUScomparedtotheaggregateAPECTPES.Intermsofpercentageshares,theUSprimaryenergysupplycontainsaneightpercentagepointhighershareofoilanda10percentagepointhighershareofgas,buta22percentagepointlowershareofcoalthanAPECasawhole.Figure3:Energysupplymix–theUnitedStatesandAPEC,2020Source:EGEDA(2022)TotalfinalconsumptionOnthedemandside,totalfinalconsumption(TFC),includingnon-energy,was61180PJin2020,adeclineof8%from2019.From2000through2020,USTFChasmaintainedareasonablyconsistentplateau(Figure4),withvariationassociatedwithmacroshocksliketheGreatRecessionandCOVID-19.Figure4:TheUnitedStates’finalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)ThetransportsectoraccountsforthelargestshareofTFCintheUS,despitethedeclineintransportationfuelin2020duemobilityrestrictionsassociatedwiththepandemic.In2020,transportation’sshareofTFCwas40%,followedbyresidentialandindustry(17%each),commercial(14%),non-energy(10%)andagriculture(2%).Asof2020,therehadbeennomarkedshiftinthesectoralTFCpatternsintheUSsince2000.CoalOilGasRenewablesOther0%20%40%60%80%100%UnitedStatesAPEC01000020000300004000050000600007000080000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyAPECENERGYOVERVIEW2023275Thetransportsector’s40%shareofTFCintheUSis15percentagepointshigherthanthetotalAPECshare.However,theindustrialsector’sshareofTFCintheUSisonlyhalftheaggregateshareinAPEC.Figure5:Finalconsumptionbysector,theUnitedStatesandAPEC,2020Source:EGEDA(2022)TotalfinalenergyconsumptionIn2020,UStotalfinalenergyconsumption(TFEC),whichexcludesthenon-energyuseoffuels,was55200PJ,whichwasan8%declinerelativeto2019.ChangesinTFECwerecausedbyseveralfactors,includingchangesineconomicactivity,weather,andthedegreeofelectrification.USTFECtrendshavelargelymirroredTFCtrends,withvariationmostlyassociatedwithsignificantmacroeconomicshocks.ThefallassociatedwithCOVID-19in2020(7.8%)wasthelargestdeclineforthetwodecadesshown.Figure6:TheUnitedStates’finalenergyconsumptionbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsPetroleumproductsremainedthedominantenergysourceintheUS,accountingfor41%ofTFECin2020(downfrom44%in2019).Naturalgasandelectricitywerethetwoothermainenergycarriers,accountingfor26%and25%,respectively.Bothnaturalgasandelectricityslowlygainedmarketsharewhilepetroleumproductsandcoallostshare.Since2000,theshareofelectricityandnaturalgasgained2.9and1.7percentagepoints,respectively,whilepetroleumproductsandcoallost4.7and1.2IndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%UnitedStatesAPEC010000200003000040000500006000070000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersAPECENERGYOVERVIEW2023276percentagepoints.Duringthesameperiod,directuseofrenewablesrosefroma3.6%to6.3%marketshareandtherenewablesshareofelectricitygenerationrosefromessentiallyzeroto4.4%.Figure7:Finalenergydemandfuelshare,theUnitedStatesandAPEC,2020Source:EGEDA(2022)IncomparisontotheaggregateTFECofAPEC,theUSreliesmuchmoreonoilandgasandlessoncoalandelectricitythantheAPECaverage.TheUSshareofoilandgasis17percentagepointshigherthantheAPECaverage,andtheUS’sshareofcoalandelectricityis11andsevenpercentagepointslower,respectively.TransformationPowersectorTheUSgenerated4240TWhofelectricityin2020.Thiswasslightlylessthanthepowergeneratedin2019.USgenerationwasmostlygrowinginthe2000s,thoughitplateauedfollowingtheGreatRecession.ThefallinthemostrecenttwoyearsofdatahasmeantUSgenerationhasonlyincreasedbyanaverageof0.3%peryearsince2000.Figure8:TheUnitedStateselectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)Althoughtheamountofgenerationhasbeenrelativelystable,thefuelsusedtogeneratepowerintheUShavechangedconsiderablyovertheCoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%UnitedStatesAPEC0500100015002000250030003500400045005000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersAPECENERGYOVERVIEW2023277last20years.From2000to2006,over50%ofUSelectricitywasgeneratedincoal-firedplants,butthissharesteadilydeclinedto20%in2020.Overthesameperiod,theshareofgas-firedgenerationincreasedfrom16%in2000to39%in2020.Thesharesofotherfuelsandtechnologiesremainedrelativelyconstantexceptfornon-hydrorenewables,theshareofwhichgrewfrom2%in2000to12%in2020.Figure9:Electricitygenerationfuelshare,TheUnitedStatesandAPEC,2020Source:EGEDA(2022)Theincreaseingasuseandthedeclineincoalusehavebeendrivenbybotheconomicsandgovernmentpolicies.WhencomparedtothesharesofgenerationforAPEC,naturalgas,nuclear,andnon-hydrorenewableshadlargersharesintheUSthantheAPECaverage.In2020,naturalgasgenerated39%ofelectricityintheUS,butonly21%inaggregateAPEC;nuclearaccountedfor19%intheUS,butonly15%inAPEC;non-hydrorenewablegenerationaccountedfor12%intheUS,butonly9.5%inAPEC.Thereverseistrueforcoalandhydroelectric.Coalgenerated20%ofUSelectricity,but42%inAPEC;hydrogenerated7%intheUS,but10%inAPEC.EnergytransitionTheBidenadministrationbelievestheclimatecrisisrequiresimmediateandsustainedinvestmenttoreduceglobalgreenhousegasemissions.TheadministrationviewsthiscrisisasatransformationalopportunityfortheUSthatcanbecapturedthroughinvestmentincleanenergytechnologies,infrastructure,workforce,andsystemsofthefuturetoimprovequalityoflifeandcreateavibrant,sustainable,resilient,andequitableeconomy.EmissionsTheexpertgrouponenergydataandanalysis(EGEDA)fallsundertheumbrellaofAPEC’sEnergyWorkingGroup(EWG).InadditiontoenergydatacompiledbyEGEDA,CO2emissionsfromcombustionactivitiesintheenergysectorarerecorded.Theseemissionsareasubsetoftotalgreenhousegas(GHG)emissionsthatareconsideredinthecontextofclimatechange,suchasundertheUnitedNationsFrameworkConventiononClimateChange(UNFCCC).USCO2emissionshavedeclinedsteadilysince2007.Increasednaturalgasproductionfromhorizontaldrillingandhydraulicfracturingenabledasubstantialsupplyofcost-competitivedomesticnaturalgas.Naturalgaswasincreasinglyconsumedforelectricitygenerationattheexpenseofcoal.CoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%UnitedStatesAPECAPECENERGYOVERVIEW2023278Figure10:TheUnitedStates’CO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecurityEventhoughtheUSproducesmuchmoreenergythanitconsumes,energysecurityhasbecomeanincreasinglyprominentissueinrecentyears.Therecentincreasesininternationaloil,gas,andcoalpricescausedbyreducedupstreaminvestmentduringthepandemicwereexacerbatedbytheRussian-UkraineconflictandcausedenergypricestorisesubstantiallyintheUS.InMarch2022inresponsetothehigherprices,PresidentBidenauthorisedthelargest-everreleasefromtheUSStrategicPetroleumReserve(SPR)andsecuredcommitmentsfromalliesandpartnerstoreleasecrudeoilfromtheirreserves.Intotal,180millionbarrelsofcrudeoilwassoldfromtheUSSPRin2022.APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective–toreduceenergyintensityanddoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirambitiontoreduceenergyintensityby45%in2035,relativetoa2005baseline.Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.In2020,theenergyintensityofthetotalfinalenergyconsumption(excludingnon-energy)oftheUSimprovedby24%relativeto2005(Figure11).CO2combustionemissions0100020003000400050006000700020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW2023279Figure11:TheUnitedStates’totalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.IntheUS,theshareofmodernrenewablestofinalenergyconsumptionin2010was6.3%,andthisincreasedto10%in2020(Figure12).Figure12:TheUnitedStates’modernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.TheshareofrenewableelectricitygenerationhasbeensteadilyrisingintheUSsincethemid-2000s.Renewablesaccountedforapproximatelyone-fifthofUSelectricitygenerationin2020(Figure13).TotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012020002005201020152020202520302035Energyintensityindex(2005=100)Changefrom2010to20200.0%2.0%4.0%6.0%8.0%10.0%12.0%2010Change2020APECENERGYOVERVIEW2023280Figure13:TheUnitedStatesrenewablegenerationshare,2000to2020Source:EGEDA(2022)Renewablesshareinelectricitymix0%5%10%15%20%25%20002005201020152020ProportionAPECENERGYOVERVIEW2023281EnergypolicyEnergypolicyDetailsReferenceParisAgreementTheUnitedStatesrejoinedtheParisAgreementinJanuary2021.TheupdatedNDCemphasisesawhole-of-governmentapproachtoclimatechangepolicywithatargetofreducingnetGHGsby50-52%by2030(relativeto2005).USupdatedNDCGlobalMethanePledgeAtCOP26inNovember2021inGlasgow,PresidentBidenandPresidentVonderLeyeninvitedeconomiestocommittoaGlobalMethanePledge(GMP).ParticipantsjoiningthePledgeagreetotakevoluntaryactionstocontributetoacollectiveefforttoreduceglobalmethaneemissionsbyatleast30%from2020levelsby2030.AsofNovember2022,economyendorsementsoftheGMPhavegrownto150.Morethan50economieshavedevelopedmethaneactionplansorareintheprocessofdoingso,andsubstantialnewfinancialresourcesarebeingdirectedtowardmethanereduction.GlobalMethanePledgeLong-TermStrategyoftheUnitedStatesPublishedinNovember2021,theLong-TermStrategyenvisionssustained,coordinatedactionalongfourdimensions:Federalgovernmentleadership,innovation,localgovernmentleadership,andall-of-societyaction.Theenergytransitiontonet-zeroemissionswillbebasedonfivekeytransformations.-Decarboniseelectricity-Electrifyendusesandswitchtoothercleanfuels-Cutenergywaste-Reducemethaneandothernon-CO2emissions-RampupCO2removalLong-TermStrategyAPECENERGYOVERVIEW2023282NotableenergydevelopmentsNotabledevelopmentsDetailsReferenceBipartisanInfrastructureLawTheBipartisanInfrastructureLaw(orInfrastructureInvestmentandJobsAct)includesseveralimportantenergyprovisionsforcleanenergytransmissionandelectricgridupgrades;hydrogenresearchandinfrastructure;expandingrailandtransit;deployingelectricvehicle(EV)chargingstations;andfundingcarbondioxideremoval(CDR),CO2pipelines,andlarge-scalecarboncapture,utilization,andsequestration(CCUS)projects.BipartisanInfrastructureDealInflationReductionActTheInflationReductionAct(IRA)of2022buildsontheInfrastructureInvestmentandJobsActbyearmarkingUSD370billioninenergyinvestments.TheIRAcontainsmanyprovisions,includingincentivesfortheproductionofcleanenergyprojects;developmentofcriticalmineralsupplychains;andthemanufacturingofcleanenergycomponentsintheUnitedStates.InflationReductionActEnergyEarthshotsInitiativeEnergyEarthshotsaredesignedtodriveintegratedprogramdevelopmentacrosstheUSDepartmentofEnergy'sscienceandappliedenergyofficesandARPA-E,andtakean‘allRandDcommunity’approachtoleadingscienceandtechnologyinnovationstoaddresstoughtechnologicalchallengesandcosthurdles.TherearecurrentlysevenEnergyEarthshots:-Hydrogenshot-LongDurationStorageShot-CarbonNegativeShot-EnhancedGeothermalShot-FloatingOffshoreWindShot-IndustrialHeatShot-CleanFuelsandProductsShotEnergyEarthshotsInitiativeNewProposedVehiclePollutionStandardsInApril2023,theUSEnvironmentalProtectionAgency(EPA)proposednewpollutionstandardstoreduceCO2emissionsfromallvehicles,includinggasoline-poweredcarsandheavy-dutytrucks.TheEPAprojectsthattheproposedstandardswouldavoidnearly10billiontonnesofCO2emissionsthrough2055.Iftheproposedrulesareadopted,theEPAestimatesthatby2032theregulationcouldresultinEVsaccountingfor67%ofnewlight-dutyvehiclesalesand46%ofnewmedium-dutyvehiclesalesin2032.ProposedVehiclePollutionStandardsAPECENERGYOVERVIEW2023283NewProposedCarbonPollutionStandardsforCoalandGasPowerPlantsInMay2023,theUSEPAproposednewcarbonpollutionstandardsforcoalandnewnaturalgas-firedpowerplants.TheEPAestimatesthat,ifadopted,theproposalforcoalandnewnaturalgaspowerplantswouldavoidupto617millionmetrictonsofCO2emissionsthrough2042.Theproposedruleswould:-StrengthenNewSourcePerformanceStandards(NSPS)fornewlybuiltfossilfuel-firedstationarycombustionturbines(generallynaturalgas-fired).-Establishemissionguidelinesfortheeconomytofollowtolimitcarbonpollutionfromexistingfossilfuel-fired,steamgeneratingelectricitygeneratingplants(includingcoal,oilandnaturalgas-firedunits).-Establishemissionguidelinesforexisting,large,frequentlyused,fossilfuel-firedstationarycombustionturbines(generallynaturalgas-fired).NewProposedCarbonPollutionStandardsforCoalandGasPowerPlantsUsefullinksUSCensusBureau-https://www.census.govUSDepartmentofEnergy—https://www.energy.gov/USEnergyInformationAdministration—https://www.eia.gov/USEnvironmentalProtectionAgency—https://www.epa.gov/TheWhiteHousePresidentialActions—https://www.whitehouse.gov/briefing-room/presidential-actions/APECENERGYOVERVIEW2023284VietNamIntroductionVietNamannounceditscommitmenttoachievinganet-zerocarbonemissionstargetby2050inOctober2021atthe26thUnitedNationsClimateChangeConferenceoftheParties(COP26)inGlasgow.Simultaneously,VietNampledgedtoreducemethaneemissionsby30%from2020levelsby2030andjoinedtheGlobalCoaltoCleanPowerTransitionStatement.InOctober2022,VietNamupdateditsnationallydeterminedcontribution(NDC),committingtoreducegreenhousegas(GHG)emissionsby15.8%below2005levelsby2030withdomesticresources.Itisasignificantincreaseinambitiontothepriorcommitment(2020version).Withfinancialsupportfrominternationalorganisations,theGHGemissionsreductiontargetwillincreaseto43.5%(NDC,2022).Inrecentdecades,VietNamhasbeenoneofthefastest-growingeconomiesinAsia,withagrossdomesticproduct(GDP)growthrateof6.4%perannuminthe2000–2020period.Thepopulationwas99millionin2021,withanurbanisationshareof37%(GSO,2022).In2020,VietNam'sGDPreachedjustoverUSD1000billion(2017USDpurchasingpowerparity[PPP]),markinga2.9%increasefrom2019(WorldBank,2022).AccordingtotheGeneralStatisticsOffice,GDPin2022wasestimatedtoincreaseby8%comparedtothepreviousyear,achievingthehighestgrowthsince2011asaresultoftheeconomicrecovery.Industry,construction,andservicearesignificantsectors,accountingforapproximately95%ofVietNam'sGDPin2022.Naturalresourcesarediverse,includingcoal,oil,naturalgasandrenewables,whichisanadvantageforVietNam(Table1).Theprovenfossilenergyreserveswere4.4billionbarrelsofoil,23trillioncubicfeetofgasand3360milliontonnes(Mt)ofcoalin2019(BP,2022).VietNamhashighpotentialinrenewableenergy,includinghydro,solar,windandbiomass.Therenewableenergyshareinthetotalprimaryenergysupply(TPES)was15%in2020(EGEDA,2022),anditisexpectedtoriseto30%by2045(Politburo,2020).Table1:VietNam’smacroeconomicdataandenergyreservesKeydataa,bEnergyreservescArea(millionkm2)0.33Oil(billionbarrels)4.4Population(million)97Gas(trillioncubicfeet)23GDP(2017USDbillionPPP)1000Coal(milliontonnes)3360GDPpercapita(2017USDPPP)10340Uranium(kilotonnesU<USD130/kgU)-Source:aGSO(2022);bWorldBank(2022);cBP(2022)Overthelastfewyears,VietNam'senergysectorhasshiftedfromfossilfuel-basedenergytocleanerenergytopursueclimategoals,particularlyinpowergeneration.Forinstance,installedcapacityfromrenewableenergies(solarandwindenergy)increasedfrom7%(3.4GW)ofthetotalgenerationmixin2018to27%(21GW)in2022.Simultaneously,thegovernmentofVietNamhasprioritisedenergyAPECENERGYOVERVIEW2023285security,resilience,andaffordabilityforeconomicgrowthamidtherecentglobalenergycrisisandvolatileenergyprices.In2022,severalenergy-relatedpolicieswereendorsedtoaccommodatethenet-zerotarget,suchastheNationalClimateChangeStrategyto2050,theActionPlanoftheMinistryofIndustryandTradetoimplementVietNam'scommitmentsatCOP26,andtheSchemeonTasksandSolutionstoImplementtheResultsofCOP26.EnergysupplyandconsumptionTotalprimaryenergysupplyWithahigheconomicgrowthtargetincomingyears,ensuringenergysourcesisoneofthetopprioritiesofVietNam'sgovernment.Figure1illustratesthattheTPESrosebyafactorof6.6from2000to2020,primarilydrivenbythehigheconomicgrowthrate.In2020,TPESroseonlyby2.8%relativetothepreviousyearduetotheimpactsoftheCOVID-19pandemic,reaching4000petajoules(PJ)(EGEDA,2022).Indigenousenergyproductiondeclinedbyapproximately9%in2020.Thedeclinein2020wasduetopreventivemeasuresagainstthespreadoftheCOVID-19virus,suchassocialdistancing,quarantine,andisolation.Energyproductionhasfallenandplateauedrecentlyafterreachingapeakin2014.VietNamhasabundantcoalresourcesinthenorthernprovinces,anthraciteandsemi-anthracitecoalinQuangNinhprovince,andsub-bituminouscoalintheRedRiverDeltaprovinces(ThaiBinh,HaiDuong,HungYen,NamDinh,HaiPhongandHaNam).Nevertheless,thedomesticcoalminingindustryisconstrainedduetotechnicalbarrierssuchascomplexgeologicalconditionsanddeepcoalseamformations.Therearealsoeconomicbarriersinthatcoalenergyisuncompetitivecomparedtootherresources.Therefore,coalhasmainlybeenminedintheQuangNinhcoalbasin.Thisregionproducesaround40Mtofcoalannually,accountingforapproximately90%ofdomesticcoalproduction.Meanwhile,sub-bituminouscoalintheRedRiverDeltaareahasnotbeenminedyetduetotechnicalandeconomicissues.Figure1:VietNam’senergysupply,production,andnetimports(PJ),2000to2020Source:EGEDA(2022)CrudeoilandnaturalgasaremainlyextractedoffshoreinthesouthofVietNam.However,thecrudeoilproductionisexpectedtobedepletedsometimebefore2030.ThesignificantrecentdevelopmentofnaturalgasistheCaVoiXanhproject,locatedinthecentralprovinces(QuangNamandQuangNgai).ThisisajointventureProductionNetimportsTotalPrimaryEnergySupply-2000-100001000200030004000500020002005201020152020Production,netimportsandTPES(PJ)APECENERGYOVERVIEW2023286projectbetweentheExxonMobilgroupandtheVietNamNationalOilandGasGroupandisexpectedtostartcommercialproductionin2025(OffshoreTechnology,2021).Itwillsupplygas-firedpowerandpetrochemicalplantsinVietNam'scentralregion,suchasMienTrung1and2;DungQuat1and3.HydropoweristhemostimportantrenewableenergysourceinVietNamandaccountedfor29.3%ofitselectricitygenerationin2020.VietNamaimstoleveragehydroandotherrenewablesourcestooffsetfossilenergythroughelectrificationtoreachitsnet-zerotargetby2050.WhileVietNamwasanetenergyexporterforseveraldecades,ithastransitionedtoanetenergyimportersince2015duetothehighenergydemandforeconomicgrowth.Energyimportshavegrowndramaticallyinrecentyearsandareexpectedtocontinuetoriseinthecomingdecades.Netimportsincreasedby26%fromthepreviousyearto1940PJin2020,accountingfor48%ofVietNam'sTPESin2020.VietNam'sTPESprovidedbyfuelhascontinuouslyincreasedsince2000,surginginrecentyears(Figure2).Coalsupplyroseapproximately11%from1870PJin2019to2080PJin2020,accountingforapproximately52%ofVietNam'sTPESin2020.However,oilandgassupplydeclinedby2%and13%,respectivelyin2020comparedtothepreviousyear.Renewablessupplydeclinedby4.2%,from631PJin2019to605PJin2020(EGEDA,2022).Asurgeinrenewableenergyprojectsin2018resultedfrompoliciespromotingrenewableenergythroughasolarpowerfeed-in-tariff(FiT)mechanism(WatsonFarley,2019).However,VietNamhasfacedseveralchallengesthathindertheswitchingtorenewableenergy,suchasinsufficientsmartgridtechnologies,storagesystemsandtransmissionlinescapacity.Consequently,mostsolarinstallationshavebeenrequiredtoreducetheirelectricityoutputduetothelimitedcapacityofthegridsysteminrecentyears.Coal-firedpowerplantsandenergy-intensiveindustries(steelmaking,aluminiumsmelting,cementmanufacturingandfertiliserproduction)havecontributedtosignificantcoalsupplygrowthinrecentyears.Figure2:VietNam’senergysupplybyfuel(PJ),2000to2020Source:EGEDA(2022)Figure3showstheenergysupplymixforVietNamandtheAPECregionin2020.CoalhasindeeddominatedVietNamenergysupplymix,accountingforoverhalfoftheenergysupplymix(52%).Thisshareismuchmoreprominentthancoal'sshareintheAPECregion(35%).Oil'sshareinVietNam’senergysupplymixwasapproximately25%,2.6%lowerthantheAPECregion'soilshare.Furthermore,VietNam'sgasshareaccountedforonly8.2%ofthe050010001500200025003000350040004500200020012002200320042005200620072008200920102011201220132014201520162017201820192020TPESbyfuel(PJ)CoalOilGasRenewablesOthersAPECENERGYOVERVIEW2023287energysupplymix,muchlowerthantheAPECgasshare(24%).Therenewablesshareaccountedfor15%ofVietNam'senergysupplymix,almostdoubletheAPECregion'srenewablesshare(8.2%).Figure3:Energysupplymix–VietNamandAPEC,2020Source:EGEDA(2022)TotalfinalconsumptionVietNam'stotalfinalconsumptionrose5.4-foldoverthe2000–2020period(Figure4).ThislargeincreaseresultedfromsignificantGDPandpopulationgrowth.Thetotalfinalconsumptionin2020was2700PJ,ariseof5.1%comparedtothepreviousyear.Theindustrialsectorwasthedominantend-usesector,accountingfor53%ofallend-useenergyconsumption(includingnon-energy)in2020.Thetransportsectorwasthenextlargest,withaproportionof19%.Thecommercialandresidentialsectorsaccountedfor4.1%and15%ofthetotalfinalconsumption,respectively,whileagriculture,forestry,fisheryandothersaccountedfor4.5%.Figure4:VietNam’sfinalconsumptionbysector(PJ),2000to2020Source:EGEDA(2022)ThefinalconsumptionbysectorofVietNamandAPECin2020isdepictedinFigure5.EnergyconsumptionforVietNam'sindustryaccountedforoverhalfofthetotalfinalenergyconsumption(53%),whichwasmuchhigherthanAPEC'sindustryend-useenergyconsumption(34%).VietNam'sextensiveenergyuseintheindustrialsectorisdrivenbygovernmentpolicytoacceleratetheindustrialisationandmodernisationprocess(Politburo,2018).Incontrast,thetransportsectorshareofVietNamislowerthanthatoftheAPECregion.CoalOilGasRenewablesOther0%20%40%60%80%100%VietNamAPEC050010001500200025003000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbysector(PJ)IndustryTransportCommercialResidentialAgriculture&othersNon-energyAPECENERGYOVERVIEW2023288Figure5:Finalconsumptionbysector,VietNamandAPEC,2020Source:EGEDA(2022)FinalenergydemandIntermsoffinalenergydemand,theshareoffossilfuelsaccountedforapproximately63%ofVietNam'sfinalenergydemandin2020(Figure6).Coalwasconsumedthemost,accountingforalmostone-thirdofthefinalenergydemand(32%),followedbyoil(30%).Electricityandothersaccountedfor29%,whilegasaccountedforonly1.3%ofthefinalenergydemand.Renewables'sharewasapproximately8%ofVietNam'sfinalenergydemand.Figure6:VietNam’sfinalenergydemandbyfuel(PJ),2000to2020Source:EGEDA(2022)Note:doesnotincludenon-energysectorconsumptionofenergyproductsWhilethecoalshareinVietNam'sfinalenergydemandwasmorethandoublethatofAPEC'scoalshare,itsfinaldemandshareofoilwasslightlylowerthantheAPECregion'sin2020(Figure7).Gasdemandamountedtoonly1.3%ofVietNam'sfinalenergydemand,whichismuchlowerthanitsshareof18%fortheentireAPECregion.VietNam'srenewablessharewasalmostdoublethatoftheAPECregionin2020,whiletheshareofelectricityandothersshowedonlyasmalldifferencebetweenVietNamandAPECoverall.IndustryTransportCommercialResidentialAgriculture&othersNon-energy0%20%40%60%80%100%VietNamAPEC050010001500200025003000200020012002200320042005200620072008200920102011201220132014201520162017201820192020Finalenergydemandbyfuel(PJ)CoalOilGasRenewablesElectricityandothersAPECENERGYOVERVIEW2023289Figure7:Finalenergydemandfuelshare,VietNamandAPEC,2020Source:EGEDA(2022)TransformationPowersectorVietNamElectricity(EVN)isaneconomy-ownedgroupwithsignificantcontroloverpowertransmissionanddistributionsystems.VietNam'spowersectorhasoneofthehighestgrowthratesinelectricitygridsworldwide,withapowergenerationgrowthrateofapproximately10%perannuminthe2010–2020period(EGEDA,2022).AlthoughtheelectricitygridisinterconnectedacrosstheentiretyofVietNam'sgeography,thedifferentgenerationmodalitiestendtobecongregatedtogether.Forinstance,coal-firedpowerplantsaremainlylocatedinthenorth,whilegas-firedpowerplants,solarandwindpowerplantsaremostlylocatedinthesouth.In2020,VietNamgeneratedapproximately243terawatthours(TWh)ofelectricity,anincreaseof2.5%fromthepreviousyear.Fossilfuel-basedpowergeneration(coal,oilandgas)accountedfornearlytwo-thirdsofthetotalgenerationmix,followedbyhydro(30%).Renewablegenerationandothersconstitutedlessthan5%ofthetotalgenerationmix(EGEDA,2022).VietNam'spowersectorisincreasinglyreliantoncoal.Overhalfoftheelectricityproduction(51%)wasgeneratedfromcoalin2020,whichrepresentedanincreaseofnearly18%perannumoverthe2010-2020period(EGEDA,2022).Hydropowerplantsareclosetofullutilisation,contributing30.3%ofthetotalelectricityproductionin2020.Otherrenewables,includingsmallhydropower,biomass,solar,andwindpower,accountedfor4.5%ofthetotalgenerationmix.Before2018,onlyasmallamountofsolarandwindcapacitywasinstalledinVietNam.ThankstotheFiTmechanism,solarinstalledcapacityincreasedsubstantiallyfrom8MWin2017toalmost16600MWin2020(EVN,2021).Uptotheendof2021,thetotalsolarandwindcapacitiestogetherreached20600MW,accountingfor27%ofthetotalinstalledgenerationcapacity.VietNamisdraftingthePowerDevelopmentPlanforthe2021-2030periodwiththevisionto2045(PDP8),consideringthe2050net-zerocarbonemissiontarget,whichwascommittedatCOP26.Accordingtotherecentrevisiondraft,VietNamplanstoreducetheshareofcoalpowergenerationandrampuprenewablegeneration,biomass,hydropowerandenergystorage.CoalOilGasRenewablesElectricityandothers0%20%40%60%80%100%VietNamAPECAPECENERGYOVERVIEW2023290Figure8:VietNam’selectricitygenerationbyfuel,2000to2020Source:EGEDA(2022)VietNam'selectricitysharefromcoalin2020was8.3%higherthanthesharefortheentireAPECregion(Figure9).However,theshareofgasinelectricitygenerationforVietNamwasmuchsmallerthanforAPEC.Hydropoweraccountedforthesecond-largestshareofVietNam'selectricitygenerationmixin2020.Itssharewasapproximately30%,morethandoublethatofAPEC'shydropowershare.GenerationfromotherrenewablesinVietNamaccountedforonlyhalfofthegenerationshareofAPEC'sotherrenewables.Figure9:Electricitygenerationfuelshare,VietNamandAPEC,2020Source:EGEDA(2022)RefiningCurrently,VietNamhastworefineryplants,namelyDungQuatandNghiSon,witharefinerycapacityof16.5Mtpa,meeting70%ofitsoilproductdemand.DungQuatisthefirstrefineryplant,commissionedin2009withacapacityof6.5Mtpa,andisoperatedbyPetroVietnam,asubsidiaryoftheeconomy-ownedVietNamOilandGasGroup.ThesecondoneistheNghiSonrefineryplantwithacapacityof10Mtpa,commissionedin2018andoperatedbyIdemitsuKosan(Japan).VietNamisplanningascheduleofexpansionsandnewrefineriestohelpmeetrisingrefinedproductdemandoverthecomingdecades.AccordingtothedraftoftheNationalEnergyMasterPlanforthe050100150200250300200020012002200320042005200620072008200920102011201220132014201520162017201820192020Electricitygeneration(TWh)CoalOilGasHydroNuclearGeothermalOtherrenewablesOthersCoalOilGasHydroNuclearGeothermalOtherrenewablesOthers0%20%40%60%80%100%VietNamAPECAPECENERGYOVERVIEW20232912021-2030periodwiththevisionto2050,VietNamplanstoexpanditsrefiningcapacityto15.3Mtpain2026-30.EnergytransitionAfterannouncinganet-zerocarbonemissionstargetfor2050atCOP26in2021,theVietNamGovernmenthasupdatedcurrentenergy-relatedpoliciesandissuedseveralnewpoliciesrelatedtoGHGemissionsandenergytransitions.Thesepoliciesare:theNationalClimateChangeStrategyto2050(2022);theMinistryofForeignAffairs'ClimateDiplomacyActionPlanaimingtoimplementVietNam'scommitmentsatCOP26intheperiod2022-2025(2022);theActionPlanoftheConstructionSectorinClimateChangeResponsefortheperiod2022-2030,withavisionto2050inordertoimplementVietNam'scommitmentsatCOP26(2022);theActionPlanoftheMinistryofIndustryandTradetoimplementVietNam'scommitmentsatCOP26(2022);theSchemeonTasksandSolutionstoImplementtheResultsofCOP26(2021);theActionProgramonGreenEnergyTransitionandReductionofCarbonandMethaneEmissionsoftheTransportationSector(2022);andtheMethaneEmissionReductionActionPlanto2030(2022).Theabovenewpoliciesfocusonthepotentialsolutionsandmeasuresforenergytransitioningtocleanerenergywhilemaintainingenergysecurity,reliability,andaffordability,particularlyinthehighGHGemissionssectors.EmissionsAsadevelopingeconomythathasjuststartedaprocessofindustrialisationandmodernisationthatwilllastafewdecades,CO2emissionsfromenergy-relatedsectorshaveincreasedsix-foldoverthelast20years,reaching273Mtin2020from45Mtin2000,mainlyfromthepower,industryandtransportsectors.ThepowersectoristhemostsignificantcontributortoCO2emissions,accountingforoverhalfoftotalenergy-relatedCO2emissions.Theindustrialsectoristhesecond-largestCO2emitter,followedbythetransportsector.AlthoughvariouspoliciesrelatedtoCO2emissionsreductionhavebeenimplementedinrecentyears,CO2emissionshavecontinuedtoriserapidlyduetoeconomicandpopulationgrowth.Furthermore,beinghighlyreliantonfossilfuelsinthepowerandindustrialsectorshinderstheprogresstowardnet-zeroemissions.Inrecentyears,VietNamhasimplementedmeasurestoreduceGHGinvarioussectors,especiallytheenergyandindustrysectors.Intheenergysector,enhancingrenewableenergy,energyefficiencyandsaving,andreducingtransmissionlossaremajormeasuresforGHGemissionreduction,contributingtoareductionof68MtCO2eqin2020comparedtothebaselineyearof2014.Intheindustrialsector,replacingclinkerincementcompositionandapplyingadvancedtechnologyinthechemicalandsteelindustriesarethekeydriverstoreducingcarbonemissionsinthesesub-sectors.In2020,areductionof4.06MtCO2eqwasachievedinthemining,construction,andchemicalindustries(NDC,2022).VietNamfirstsubmitteditsIntendedNationallyDeterminedContribution(INDC)in2015andsignedandapprovedtheParisAgreementin2016.AftertheParisAgreementcameintoforceonNovember2016,theINDCbecameNDC.VietNamupdateditsNDCin2020and2022.Inthe2022version,VietNamcommittedtoreducinggreenhousegasemissionsby15.8%below2005levelsby2030withdomesticresources.Thisisasignificantincreaseinambitioncomparedtothepreviouscommitmentin2020.Withfinancialsupportfrominternationalorganisations,theGHGemissionAPECENERGYOVERVIEW2023292targetwillincreaseto43.5%.InDecember,VietNamanditsinternationalpartnersannouncedaNZD16billionpackagethroughtheJustEnergyTransitionPartnership(JETP)program,designedtoacceleratethereductionofcarbonemissionsandincreasetheuptakeofrenewableenergy.UsingthebudgetpackagefromJETPanddomesticresources,VietNamaimstoreduceCO2emissionsfromthepowersector,reducethenumberofexistingcoal-firedpowerplants,anddevelopmorerenewablegenerationcapacityassociatedwiththetransmissiongrid,andamoreeffectiveenergyinfrastructure.Figure10:VietNam’sCO2combustionemissions(milliontonnes),2000to2020Source:EGEDA(2022)EnergysecurityVietNamhasbecomeanetenergyimportersince2015andimportdependencyisexpectedtoriseinthenextdecade,accountingfor53-60%oftotalprimaryfuelsin2030.Currently,VietNamisimportingcoal,crudeoilandoilproductsandwillimportLiquefiedNaturalGas(LNG)from2023forward.Therefore,energysecurityisoneofthetopprioritiesoftheVietNamgovernment.AnewPowerDevelopmentPlan(PDP8)iscurrentlybeingdrafted,withsubstantialchangesintheshareoffuelsforpowergeneration.Duetothehighenergypricesandimportedenergydependence,theVietNamgovernmentplanstodramaticallyreducenewLNG-firedandcoal-firedpowercapacitiesinthelatestrevision(December2022)comparedtothepreviousrevision(March2021).ThisactionshowsthattheVietNamgovernmentisworkingtoensureenergysecuritytoavoidglobalsupplychaindisruptionduetogeopoliticalandextremeweatherissues.Energyimportdependencyisaffectedbyglobalenergyprices.Byreducingtheamountofimportedenergy,VietNam’senergysystemwillfacelessriskduetopricevolatility.Therefore,diversificationofdomesticenergysourceswouldalsoavoidtheriskofglobalsupplydisruption.VietNamplanstoexpandoffshorewindpowergeneration,biomassgeneration,ammonia,andhydrogenproductionfromrenewableenergy.APECenergygoalsTherearetwoenergy-relatedobjectivesthatAPECmembereconomieshaveagreedtomeetasacollective–toimproveenergyintensityanddoubletheshareofmodernrenewables.EnergyintensitygoalIn2011,APECmembereconomiesagreedtoincreasetheirtargettoreduceenergyintensityby45%in2035,relativetoa2005baseline.CO2combustionemissions05010015020025030020002005201020152020MilliontonnesCO2APECENERGYOVERVIEW2023293Theoriginalgoalwasa25%improvementby2030,relativetoa2005baseline.APECisontracktoachievethisenergyintensityimprovement.Thegoaldoesnotimposeindividualeconomytargets,butitispossibletotracktheprogressofindividualAPECeconomiesrelativetotheoverarchingproportionalimprovement.Figure11:VietNam’stotalfinalenergyconsumptionintensityindex,2000to2020(2005=100)Source:EGEDA(2022)VietNamdeployedtheNationalEnergyEfficiencyProgramandtheLawonEnergyEfficiencyandConservationin2006and2010,respectively(NAVN,2010;PMVN,2006).However,itsfinalenergyconsumptionintensityisstillhighcomparedtoothereconomies.VietNam’stotalfinalenergyconsumptionintensityimprovedby7.2%between2010and2020duetothehigherincreaseinGDPcomparedtoenergyconsumption(Figure11).Inthisperiod,VietNam’sGDPannualgrowthratewas6.2%,whiletherewasa5.4%growthrateintotalenergyconsumption.However,theenergyintensityoftheeconomyisstillconsiderablyhigherthanintheneighbouringeconomies.VietNamhasapprovedtheProgramonEconomicandEfficientUseofEnergyfor2019–2030,withatargetofsaving8–10%ofeconomy-wideenergyconsumptionandensuringelectricitylossisbelow6%(PMVN,2019).ThisprogramwillpartlycontributetoAPEC’saspirationaltargetofreducingenergyintensity.DoublingofrenewablesThesecondenergygoalinvolvesdoublingtheshareofmodernrenewablesintheAPECenergymixfortheperiod2010to2030.Thereisnoeconomy-levelgoalforindividualmembereconomies,butimprovementsbyindividualeconomieswillcontributetothedoublinggoal.VietNamisstartingfromahigherrenewablebasethanthewiderAPECregion,asitsrenewablesharein2010was9.2%(Figure12),whileAPEC’swas6%.In2020,theproportionalsharereached15%,whichis1.6timesgreaterthan2010.AccordingtotheDevelopmentStrategyofRenewableEnergyofVietNamby2030withaVisionto2050,theshareofmodernrenewableswillreach32%by2030and44%by2050(PMVN,2015).ThisgrowthwillcontributetoAPECmeetingitsgoalofdoublingitsrenewablesshareby2030.Withanet-zeroemissiontargetin2050,VietNamaimstoboosttheuptakeofrenewableenergyintheupcomingPowerDevelopmentPlan(PDP8).Havingahighpotentialforrenewables,VietNamcanachievemorethan90%penetrationofdomesticsolarandwindTotalfinalenergyconsumptionenergyintensityAPEC-widegoal203502040608010012020002005201020152020202520302035Energyintensityindex(2005=100)APECENERGYOVERVIEW2023294powerandpumpedstoragehydropowerinitselectricitymixatacompetitivecost.Themomentumforrampinguprenewableenergyuptakecouldbebuiltontheeconomy'searlysuccessinsolarandonshorewindpowerdevelopment,makingitaleaderinSoutheastAsia.Figure12:VietNammodernrenewableenergyshare,2010and2020Source:EGEDA(2022)Note:Biomassusedintheresidentialandcommercialsectorsisassumedtobetraditionalbiomassandisnotincludedinthedefinitionofmodernrenewables.Allotherrenewables(biomassusedbyindustry,hydro,geothermal,etc.)areconsideredmodernrenewables.Modernrenewablesalsoincludetheshareofelectricitythatisgeneratedfromrenewablesources.VietNamhas475GWofoffshorewindpowertechnicalpotentialwithin200kmofthecoastalline,equaltoabouteighttimesVietNam'stotalinstalledpowercapacityasof2020.AccordingtotheWorldBank,bysubstitutingcoalpowerwith25GWofoffshorewindpowerby2035,VietNamcouldreduceCO2emissionsbyabout200Mt,approximatelyone-thirdofthetotalemissionsinenergysectorsunderthebusiness-as-usualscenario(EastAsiaForum,2021).Figure13:VietNam’srenewablegenerationshare,2000to2020Source:EGEDA(2022)InVietNam,theproportionofelectricityoutputfromrenewableshasdeclinedsubstantiallyfrom55%in2000to35%in2020(Figure13).Thenotablereductionwasduetothelimitedcapacityofexistinglarge-scalehydropowergeneration,whilegeographicalconditionsandenvironmentalfactorsconstrainedtheconstructionofnewlarge-scaledams.Althoughsolarandwindgenerationinrecentyearshasbeenaccelerating,ithasnotbeenenoughtooffsetthereductionfromlarge-scalehydrogeneration.Changefrom2010to20200.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%2010Change2020Renewablesshareinelectricitymix0%10%20%30%40%50%60%70%20002005201020152020ProportionAPECENERGYOVERVIEW2023295EnergypolicyEnergypolicyDetailsReferencePolitburo'sResolutionNo.55onVietNam'sNationalEnergyDevelopmentStrategyto2030,withavisionto2045Theresolutionprovidesfortheprioritisationoffastandsustainableenergydevelopmentwhilefosteringfavourableconditionsforalleconomicsectors,particularlytheprivatesector,toparticipateinenergydevelopment.CommunistPartyofVietNamNationallyDeterminedContribution(2022version)VietNamwillreducegreenhousegasemissionsby16%comparedtoBusinessasusual(BAU)by2030withdomesticresources.However,this16%contributioncouldbeincreasedto44%ifinternationalsupportisreceivedthroughbilateralandmultilateralcooperation.UnitedNationsFrameworkConventiononClimateChangeLawonEconomicalandEfficientUseofEnergyThislawensureseconomicalandefficientuseofenergy;providespoliciesandmeasurestopromoteeconomicalandefficientuseofenergy;andsetsouttherights,obligationsandresponsibilitiesoforganisations,households,andindividualsinregardtoeconomicalandefficientuseofenergy.VietNamGovernmentPortalPetroleumLawThislawprescribesactivitiesofpetroleumprospection,exploration,andexploitationwithintheterritory,exclusiveeconomiczoneandcontinentalshelfoftheSocialistRepublicofVietNam.VietNamGovernmentPortalElectricityLawThislawcoverselectricitydevelopmentplanningandinvestment,electricity-saving,electricitymarkets,rightsandobligationsoforganisationsandindividualsconductingelectricityactivitiesandusingelectricity,protectionofelectricequipmentandfacilities,electricityworksandelectricsafety.VietNamGovernmentPortalLawonEnvironmentalProtectionThislawprovidesstatutoryprovisionsonenvironmentalprotectionactivities,measuresandresourcesusedforthepurposeofenvironmentalprotection,rights,powers,duties,andobligationsofregulatorybodies,agencies,organisations,households,andindividualswhoaretaskedwithenvironmentalprotectiontasks.MinistryofNaturalResourcesEnvironmentVietNam'sNationalEnergyDevelopmentStrategyto2020,withaVisionto2045ThisstrategyaddressestheVietnamesegovernment'senergydevelopmentviews,objectives,policies,andmeasurestoachievethe2050vision.CentreDatabaseonLegalNormativeDocumentsDevelopmentStrategyofRenewableEnergy(2015)Theshareofproducedelectricityfromrenewableenergy(includingbothsmallandlargehydro)inthetotaleconomy-wideelectricityproductionshouldreachabout32%by2030andabout43%by2050.VietNamGovernmentPortalNationalProgramonEconomicalandEfficientUseofEnergyforthePeriod2019–2030Topromotetheeconomicalandefficientuseofenergybymeansofmanagementdutiesandsolutions,technicalassistance,scientificandtechnologicalresearch,productdevelopment,markettransformation,humanresourcetraininganddevelopment.VietNamGovernmentPortalAPECENERGYOVERVIEW2023296NationalStrategyforEnvironmentalProtectionto2020,visionto2030Thisinvolvescontrollingandlimitingenvironmentalpollutionlevels,reductionofnaturalresourcesandbiologicaldiversity,continuingtoimprovetheenvironmentandenhancingthecapacitytocopewithclimatechangetowardssustainabledevelopment.VietNamGovernmentPortalDevelopmentPlanoftheGasIndustryofVietNamby2025withaVisionto2035Thisincludesdevelopmentofthegasindustrysectorinallstages,organisedinacompleteanduniformmanner,includingextraction,gathering,transport,processing,storage,distributionofgasandimportand/orexportofgasproductsacrosstheeconomy.Italsoensuresthatgasproductionfromtheblocks/gasfieldsoftheVietNamOilandGasGroupandoilandgascontractorsoperatinginVietNamisfullycollected.VietNamGovernmentPortalMasterPlanforVietNam'sCoalIndustryDevelopmentto2020andVisiontowards2030TheplanwilldevelopVietNam'scoalindustrytomakeitmorecompetitivebyapplyingtechnologicaladvancestocoalexploration,miningandpreparation,processingandtrading.Theplanwillalsoensurethesufficiencyofcoalresourcestomeetthedomesticconsumptiondemand,especiallyforthethermalpowerindustry.VietNamGovernmentPortalSupportMechanismforDevelopmentofBiomassPowerProjectsinVietNamThepolicyprovidesthesupportmechanismforthedevelopmentofprojectsgeneratingpowerusingbiomassenergyinVietNam.VietNamGovernmentPortalVietNam'sIndustrialDevelopmentStrategythrough2025,aVisiontowards2035Thisprovidestheoverallobjectivesandspecifictargetstodeveloptheindustrialsector,includingeconomy-owned,private,andforeign-investedsectors.Focusesonagriculturalandruralindustrialisationandmodernisation.VietNamGovernmentPortalNationalClimateChangeStrategyto2050(2022)Thestrategysetstheoveralltargetstominimisetheeffectsordamagecausedbyclimatechange,reachingnet-zeroemissionsby2050.Thegreenhousegasemissionspeakisexpectedtobereachedby2035.VietNamPlusNationalGreenGrowthStrategyfortheperiod2021-2030,withavisionby2050(2021)Thestrategyfocusesontheeffortstorestructuretheeconomyinconjunctionwithrenewingthegrowthmodel,reducinggreenhousegasemissionintensity,strivingtowardsagreenandcarbonneutraleconomy.FAOVietNam'sActionPlanonMethaneEmissionsReductionby2030(2022)Theactionplantargetsmethaneemissionsincultivation,animalhusbandry,solidwastemanagement,wastewatertreatment,oilandgasexploitation,coalminingandfossilfuelconsumption.Totalmethaneemissionvolumeshouldnotexceed96milliontonnesofCO2equivalentin2025,down13%from2020.VietNamPlusSolutionstoimplementtheSchemeontasksandsolutionstoimplementtheresultsofCOP26(2022)Decision888/QD-TTgapprovedin2022,definingthetasksandsolutionstoimplementtheresultsofthe26thConferenceofthePartiestotheConventionoftheUnitedNationsframeworkonclimatechangeinVietNam.LawNetAPECENERGYOVERVIEW2023297NotableenergydevelopmentsEnergydevelopmentDetailsReferenceVietNammadeapoliticaldeclarationontheFairEnergyTransitionPartnership(JETP)withG7economiesandpartnersOn14December2022,representativesofVietNamandtheG7economies,anddevelopmentpartnersoftheEuropeanUnion,NorwayandDenmarkapprovedapoliticaldeclarationestablishingtheJETPtosupportVietNam'stransitionfromfossilfuelstorenewableenergyinordertoachievenet-zeroemissionsby2050.TheprogramwillinitiallymobiliseaclimatefinancepackageofaboutUSD16billionfromthepublicandprivatesectorsduringthenextthreetofiveyearstosupportsomeofVietNam'snewambitiousgoals,includingtargetstoreducecoal-firedpower,andacceleraterenewableenergyprojects,andmayachievethegreenhousegasemissionreductiontargetfiveyearsearlierthanplanned.VietNamEnergyVietNam'srenewablegenerationoutputexceedsthethermalpoweroutputThedomesticoutputandimportelectricityin2022was268billionkWh,ofwhichhydropoweroutputincreasedby21%comparedto2021duetogoodwaterinthelakesandthemobilisationofpowergenerationinaccordancewithinter-lakeregulation.Thestableoperationofthewindandsolargenerationplantsledtoreducethecoalpower.In2022asaresult,electricityoutputfromrenewableenergyplants(includinghydropowerplants)exceededoutputfromthermalpower.VietNamEnergyAmendmentofthePetroleumLawTheamendedPetroleumLawmoreclearlystipulatestheroleofmanagementandinvestors(contractors),therebyupgradingPVN'sproactiveroleininvestmentapprovalandappraisalactivities,includingtechnicalandcommercialapprovalssuchas:exploration,drillingprogramsandfielddevelopmentplans(ODP/FDP),economicestimateandinvestmentreport.ThisisthepremiseforPVNtodevelopaseriesofkeyprojectsandgatheralloffshorefieldsassoonasthePetroleumLaw(amended)takeseffectfromJuly2023,asagrowthleverfortheentireindustry.VietNamEnergyStrategyfordevelopinghydrogenandoffshorewindpowerprojectsinVietNamTheVietNamOilandGasGroup(PVN)andtheAsianDevelopmentBanksignedaMemorandumofUnderstandingonbuildingastrategicpartnershipin2021–2024topromotecleanandsustainableenergydevelopmentinVietNam,aswellastohelpPVNtoachievethegreenenergytransitiongoal.Specifically,thetwosideswillcooperateinstrategy;inproducingaroadmapforgreenenergytransition;incarboncapture,useandstorage;andindevelopingthehydrogenindustryandoffshorewindpowerprojects.VietNamEnergyVietNamfostersshifttorenewableenergyWithanemphasisonsustainablepower,theVietnamesegovernmenthasenactedseveralproceduresandregulationstofosteranequitableenergytransition.VietNamInvestmentReviewAPECENERGYOVERVIEW2023298UsefullinksGovernmentofVietNam—http://chinhphu.vn/portal/page/portal/chinhphu/trangchuMinistryofIndustryandTrade—http://www.moit.gov.vn/NationalEnergyEfficiencyProgram(VNEEP)—http://vneec.gov.vn/ElectricityRegulatoryAuthorityofVietNam(ERAV)—http://www.erav.vn/NationalLoadDispatchCentre(NLDC)—https://www.nldc.evn.vn/VietNamElectricity(EVN)—http://www.evn.com.vnEnergySavings—https://tietkiemnangluong.evn.com.vn/VietNamEnergy—http://nangluongvietnam.vnVietNamOilandGasGroup(PVN)—http://www.pvn.com.vnVietNamNationalPetroleumGroup(Petrolimex)—https://petrolimex.com.vn/VietNamNationalCoalandMineralIndustriesHoldingCorporationLtd(Vinacomin)—http://www.vinacomin.vn/VietNamEconomicTimes—https://vneconomy.vn/VietNamNewsAgency—https://vietnamnews.vn/GeneralStatisticsOffice—https://www.gso.gov.vn/ReferencesBP(2022),BPStatisticalReviewofWorldEnergy2022.https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2021-full-report.pdfEastAsiaForum(2021),AddingSubstancetoVietnam'sClimateCommitments.https://www.eastasiaforum.org/2021/12/03/adding-substance-to-vietnams-climate-commitments/APECENERGYOVERVIEW2023299EGEDA(ExpertGrouponEnergyDataAnalysis,APECEnergyWorkingGroup)(2022),APECEnergyDatabase.https://www.egeda.ewg.apec.org/egeda/database_info/index.htmlEVN(2021),EVNAnnualReport2021.http://www.evn.com.vnGSO(GeneralStatisticsOffice)(2022),StatisticalYearBookofVietNam2021.https://www.gso.gov.vn/wp-content/uploads/2022/08/Sach-Nien-giam-TK-2021.pdfNAVN(2010),LawonEnergyEfficiencyandConservation,LawNo.50/2010/QH12,promulgatedbytheNationalAssemblyon17June2010.NDC(2022),NationallyDeterminedContributions,https://unfccc.int/documents/622541PMVN(PrimeMinisterofVietNam)(2006),ApprovingtheVietNamNationalEnergyEfficiencyProgramme(VNEEP)forthePeriod2006–2015,DecisionNo.79/2006/QD-TTg,14April2006.––(2015),ApprovingtheDevelopmentStrategyofRenewableEnergyofVietNamby2030withaVisionto2050,DecisionNo.2068/QD-TTg,25November2015.––(2019),ApprovingtheVietNamNationalProgramonEnergyEfficiencyandConservationforthePeriod2019–2030,DecisionNo.280/QD-TTg,13March2019.http://www.moit.gov.vn/documents/20182/0/_VB_1552977553286_VB_vpcp_2019_735.pdf/2f699912-110e-4d06-b0eb-63ecbbe5a0b9Politburo(2018),OrientationforCreationofNationalIndustryDevelopmentPolicyto2030,Visionto2045,ResolutionNo.23-NQ/TW,2018.Politburo(2020),OrientingNationalEnergyDevelopmentStrategyto2030,withanOutlookto2045,ResolutionNo.55-NQ/TW,11February2020.OffshoreTechnology,2021,CaVoiXanhconventionalgasfield,VietNam,https://www.offshore-technology.com/marketdata/ca-voi-xanh-conventional-gas-field-vietnam/WatsonFarley(2019).https://www.wfw.com/wp-content/uploads/2019/03/WFW-Briefing-New-Feed-in-tariff-mechanism-for-Vietnamese-solar.pdfWorldBank(2022),WorldBankOpenData.https://data.worldbank.org/

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