APERC Workshop at EWG54

Wellington, New Zealand, 20 November, 2017

3-3. Outlook of Transportation Sector

Alexey Kabalinskiy

Researcher, APERC

2

Outline

I. Transport sector overview

II. Transport model methodology

III.Preliminary results

I. Transport sector overview

4

Transport accounted for 27% of energy demand in 2015 – mostly from road

Source: IEA 2017

APEC’s TFED and Demand for Transportation

Transport27%

Industry33%

Residential18%

Commercial

9%

Others

3% Non-energy10%

TFED5,296 Mtoe

Domestic aviation

7%

Road84%

Rail3%

Pipeline3%

Domestic navigation

3%

Transport 1,420 Mtoe

5

Domestic transportation: key fuels and key consumers

Source: IEA 2017

Gasoline and diesel were the key fuelsChina and United States were the key

consumers

-

200

400

600

800

1,000

1,200

1,400

1,600

1990 1995 2000 2005 2010 2015

Fuel

dem

and

, Mto

e

Electricity

Biofuels

Natural Gas

OtherpetroleumJet fuel

LPG

Diesel

Gasoline

Coal

• Since 1990 the share of gasoline declined from 57% to 51%,

• The share of diesel, however, grew from 23% to 31%

-

200

400

600

800

1,000

1,200

1,400

1,600

1990 1995 2000 2005 2010 2015

21_VN

20_USA

19_THA

18_CT

17_SIN

16_RUS

15_RP

14_PE

13_PNG

12_NZ

11_MEX

10_MAS

09_ROK

08_JPN

07_INA

06_HKC

05_PRC

04_CHL

03_CDA

02_BD

01_AUS

United States

China

• In 2015, China and United States accounted for 65% of total transport energy demand

• Since 1990 China’s share grew from 4% to 21%

II. Transport model methodology

7

APERC Uses a Suite of 8 Models in its Outlook Research

APERC’s energy demand and supply model structure

8

Transport Model Now Has More Technologies and Activity Information

EDSO6 EDSO7

Bunker Fuels• Historical,• GDP and Population

• Historical,• GDP and Population

Non-road transport

• Historical,• GDP and Population• (ktoe - Demand only)

• TKM, PKM is ƒ (GDP, POP),• Efficiency is ƒ (year, policy)

Road transport

• Stock turnover • Consumer choice

• Stock turnover• Consumer choice• Activity (TKM, PKM)

Road transport: vehicles

• Passenger:o 2-wlrs and LVs,

• Freight:o HVs

• Passenger:o 2W, LV, LT and BUS,

• Freight:o 2W, LT and HT

Road transport: mileage

• Historical trend,• GDP and Population,• Fuel price,• Urbanisation

• Historical trend,• GDP and Population,• Fuel price,• Activity (TKM, PKM and VKM),• Urbanisation

9

Transportation Energy Demand Model User Interface

Output(Microsoft Excel)

(1990-2050)

Results

Vehicle ownershipVehicle stock by technology & fuelVehicle sales by technology & fuelEnergy demand by vehicle typeEnergy demand by fuelAnnual vehicle travelAverage energy intensityetc.

Main Model

(GAMS –General Algebraic Modelling System)

Vehicle ownership model -> vehicle stock(GDP per capita, vehicle ownership, stock)

Vehicle stock & flow model -> vehicle sales and vehicle retirement(vehicle age distribution, survival rate)

Vehicle consumer choice model -> share of vehicle technologies(fuel cost, purchase prices, driving range, refuelling infrastructure, etc..)

Vehicle travel model -> travel distance(fuel cost, income, vehicle ownership, efficiency improvement, urban density)

Macroeconomic data GDP & Population Crude oil price Urbanisation

Historical demand data Non-road demand

preliminary analysis Vehicle data Vehicle population Vehicle age distribution Vehicle sales Vehicle fuel economy Vehicle travel distance

(1990-2015)

Input(Microsoft Excel)

10

Business-as-usual (BAU) scenario:

The BAU scenario reflects current policies and trends within the APEC energy sector. In turn, it largely projects past trends into the future.

APEC Target (TGT) scenario:

The TGT scenario is driven by APEC’s goals of reducing energy intensity while increasing the share of renewables.

o Progressively improving Passenger and Freight transportation activity,

o Accelerated fuel efficiency improvement, and

o Increased share of biofuels.

2 Degree Scenario (2DS) scenario:

2DS follows the carbon emissions reductions included in the ETP by IEA.

o Further decoupling the transportation activity and economic growth,

o Reduced vehicle ownership and vehicle mileage compared to TGT,

o Fuel efficiency and energy intensity consistent with TGT,

o Support for advanced fuels and vehicles, mode/technology shifting.

Outlook 7th Edition Includes 3 Scenarios

III. Preliminary results

12

APEC’s vehicle ownership (1990-2050) shows strong role of GDP

Source: IEA 2017, OICA 2017 and APERC analysis

Vehicle ownership vs GDP per capita

-

200

400

600

800

1,000

1,200

1,000 10,000 100,000

Tota

l Ve

hic

le o

wn

ers

hip

(v

eh

icle

s p

er

1,0

00

pe

op

le)

GDP per capita in USD 2015 PPP

01_AUS

02_BD

03_CDA

04_CHL

05_PRC

06_HKC

07_INA

08_JPN

09_ROK

10_MAS

11_MEX

12_NZ

13_PNG

14_PE

15_RP

16_RUS

17_SIN

18_CT

19_THA

20_USA

21_VN

13

Source: APERC analysis

Note: Other north-east Asia includes Hong Kong, China; Japan and Korea; Oceania includes Australia; New Zealand; Papua New Guinea; South-East Asiaincludes Brunei Darussalam; Indonesia; Malaysia; The Philippines; Thailand and Viet Nam; Other Americas include Canada; Chile; Mexico and Peru.

In 2050, APEC’s Vehicles are More Diverse

• China and SEA markets increase three times in all scenarios

-

10

20

30

40

50

2015 BAU

2050

TGT

2050

2DS

2050

Sales, M

China - 5

10 15 20 25 30

2015 BAU

2050

TGT

2050

2DS

2050

Sales, M

United States

-

2

4

6

8

2015 BAU

2050

TGT

2050

2DS

2050

Sales, M

Russia

-

5

10

15

2015 BAU

2050

TGT

2050

2DS

2050

Sales, M

Other Americas

-

1

2

3

4

2015 BAU

2050

TGT

2050

2DS

2050

Sales, M

Oceania

-

5

10

15

2015 BAU

2050

TGT

2050

2DS

2050

Sales, M

South-East Asia

- 2 4 6 8

10 12

2015 BAU

2050

TGT

2050

2DS

2050

Sales, M

Other north-east Asia

-

5

10

15

20

25

30

35

40

45

2015 BAU

2050

TGT

2050

2DS

2050

Sales, M China Fuel cellElectricPlug-in HybridNatural GasLPGDiesel hybridGasoline hybridDieselGasoline

APEC’s Regional Road Vehicle Markets

14

Vehicle Stock (except 2-Wheelers) by drivetrain technology

• Electric vehicle stock grows from 1M (2015) to 100-250M (2050)

• Gasoline vehicle stock increases in the BAU, but significantly decreases in both the TGT and 2DS scenarios

Bright Futuer for Electric Vehicles, Uncertain for Gasoline

Source: APERC analysis

739 M

+447 M 1,186 M

739 M -140 M

+527 M 1,126 M

739 M -290 M

+628 M 1,077 M

0

200

400

600

800

1,000

1,200

1,400

2015 "+" 2050 2015 "-" "+" 2050 2015 "-" "+" 2050

BAU TGT 2DS

Ve

hic

le s

tock

, M

-

5

10

15

20

25

30

35

40

45

2015 BAU

2050

TGT

2050

2DS

2050

Sales, M China Fuel cellElectricPlug-in HybridNatural GasLPGDiesel hybridGasoline hybridDieselGasoline

15

Drivetrain technology stock change (2015-2050), M

• Plug-in hybrid, gasoline hybrid and natural gas Light Vehicles provide transition from conventional to advanced fuels.

• Fuel cell vehicles reach 9.5M (0.9% of total stock, excl. 2-wheelers).

Hybrids and Natural Gas Vehicles Provide Transition

Source: APERC analysis

(300)

(200)

(100)

-

100

200

300

BA

U

TGT

2DS

BA

U

TGT

2DS

BA

U

TGT

2DS

BA

U

TGT

2DS

BA

U

TGT

2DS

BA

U

TGT

2DS

BA

U

TGT

2DS

BA

U

TGT

2DS

BA

U

TGT

2DS

Gasoline Diesel Gasolinehybrid

Dieselhybrid

LPG Natural Gas Plug-inhybrid

Eectric Fuel cell

Dri

ve t

rain

te

chn

olo

gy

cha

ng

e t

o b

ase

ye

ar,

M

16

Road Freight Shifts Toward Sea and Rail

11,716

35,642 29,210

21,513

1,081

3,363

3,883

2,659

5,985

8,965 9,260

9,745

5,078

13,115 13,611 12,662

4,606 6,205 5,879 5,400

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 BAU2050

TGT2050

2DS2050

Frei

ght m

od

e sh

are

Air

Pipeline

Sea

Rail

Road_2W

Road_LT

Road_HT2,702 6,074 5,589 4,689

1,002 4,022 4,394 3,149

11,591 32,774 28,873 20,889

511 2,049 2,205

2,223

1,874 3,495 3,381 3,166

2,403 6,463 5,959 4,903

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 BAU2050

TGT2050

2DS2050

Pas

sen

ger

mo

de

shar

es

Air

Sea

Rail

Road_2W

Road_LV

Road_LT

Road_BUS

Source: APERC analysis

• The share of Road passenger transport remains at about 80% in all scenarios

APEC’s Freight and Passenger activity indicators

Freight activity, % and Gtkm Passenger activity, % and Gpkm

17

Improved fuel efficiency and logistics halves Road’s freight intensity

Source: IEA 2017, APERC analysis

Note: historical numbers are estimated based on IEA energy statistics and economies’ passenger and freight activity indicators

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1990 2000 2010 2020 2030 2040 2050MJ/

pkm

Air

Rail

Road

Sea

← APERC estimations → Projection →

• Rail remains the most efficient mode for both passenger and freight

-

5

10

15

20

25

30

35

40

45

50

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1990 2000 2010 2020 2030 2040 2050 MJ/

tkm

MJ/

tkm

Rail

Road

Sea

Pipe

Air (right axis)

← APERC estimations → Projection →

Passenger transportenergy intensity in BAU, MJ/pkm

Freight transportenergy intensity in BAU, MJ/tkm

Transport: energy intensity

18

Source: APERC analysis

Transportation energy demand by fuel and by type of transport (2015-2050)

Fossil Fuels Still Major in 2050

• In BAU demand grows by 30% to 2050

• In 2DS demand reduces by 27% and electricity share reaches 13.6%

Domestic aviation

12%

Road74%

Rail

4%

Pipeline4%

Domestic navigation

6%

Transport in 2050 in 2DS: 1,039 Mtoe

2.9%

3.5%

5.6%

6.8%

1.9%

6.4%

9.0%

13.6%

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2015 BAU 2050 TGT 2050 2DS 2050Mto

e

Electricity

Biofuels

Natural Gas

Otherpetroleum

Diesel

Gasoline

Coal

19

Source: IEA 2017, APERC analysis

Increasing Efficiency Leads to Emissions Peak in 2030

APEC’s Transport CO2 emissions

4,146 MtCO2

3,078 MtCO2

3,391 MtCO2

2,135 MtCO2

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1990 2000 2010 2020 2030 2040 2050

MtC

O2

BAU

TGT

2DS

• In BAU CO2 emissions keep growing and then plateau after 2040

• In TGT the emissions peak before 2030 and by 2040 become lower than in 2015

• In 2DS, 2050 emission level is in line with projections included in IEA’s ETP

20

Preliminary conclusions and future work

• Transportation sector remains a heavy energy user in all three scenariosdeveloped by APERC

• In the 2DS, electric vehicle deployment is more than 2x other scenarios,indicating a significant impact on the vehicle manufacturing industry in orderto supply this demand

• Rapidly growing economies might avoid “lock-in” effect by adopting advancedvehicles in the first place

• Non-road transport plays an important role in decarbonization strategies, andbecomes especially important in 2DS

• Future work includes:

Improving the road vehicle market analysis,

Improving vehicle mileage and fuel efficiency assumptions, and

Top-down analysis for the overall transportation system.

http://aperc.ieej.or.jp/

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