Presentation on theme: "Sector Planning & Policy Issues: The Energy Sector"— Presentation transcript:
1 Sector Planning & Policy Issues: The Energy Sector Session on Planning & PolicyRita NangiaAsian Development BankThe views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
2 Session Description The session will cover - Major energy trends in AsiaSector planning and policy issuesChallenges and opportunities to integrated energy markets
3 Overview of the Session Part IThe GMS energy sceneSector planning issuesPart IIInteractive session
4 Access to Electricity Varies... Source: World Development Indicators 2004 & World Energy Outlook 2002
5 Access to Electricity Varies... Source: Key Energy Statistics, 2005, International Energy Agency & World Development Indicators Online
6 Overall Quality of Electricity Supply Varies... Source: The Global Competitiveness Report
7 The Greater Mekong Subregion Land area 2.5 million km2 Population Million
8 The GMS Economic Conditions MyanmarLand area: 677,000 km2Population: 55.4 MGDP per capita: US$ 176Yunnan & Guangxi, PRCLand area: 624,000 km2Population: 93.8 MGDP per capita: US$ 842ThailandLand area: 513,000 km2Population: MGDP per capita: US$ 2,727Viet NamLand area: 332,000 km2Population: 83.1 MGDP per capita: US$ 622CambodiaLand area: 181,000 km2Population: 13.8 MGDP per capita: US$ 393Lao PDRLand area: 237,000 km2Population: 5.6 MGDP per capita: US$ 491Source: Beyond Borders – Regional Cooperation Strategy & Program Update, ; Asian Development Outlook, 2006; ADB Key Indicators, 2006; FAO/People’s Govt. of Yunnan Province;
9 The GMS Energy SceneHydro: 333,700 mega watts Coal: 59,340 million tons Gas: 1,378 billion cubic meters Oil: 478 million tonsSource: GMS Energy Strategy July 2006 Proceedings, work in progress
10 Source: GMS Energy Strategy July 2006 Proceedings, work in progress Energy ResourcesMyanmarHydro: 100,000 MWCoal: MTGas: 160 BCMOil: 32 MTYunnan, PRCHydro: 150,000 MWCoal: 23,580 MTGas: 32 BCMOil: 226 MTCambodiaHydro: 15,000 MWGas: BCMOil: MTViet NamHydro: 30,000 MWCoal: 32,250 MTGas: 144 BCMOil: 82 MTThailandHydro: 12,700 MWCoal: 2,400 MTGas: 943 BCMOil: 124 MTLao PDRHydro: 26,000 MWCoal: 910 MTSource: GMS Energy Strategy July 2006 Proceedings, work in progress
11 Challenges and Opportunities Big disparity in the size of the countries’ markets.Four countries (PRC, Thailand, Vietnam and Myanmar) have transmission systems that interconnect most of their internal demand centres. Two countries currently have no nationwide transmission systems (Lao PDR and Cambodia).
12 Challenges and Opportunities (continued) Three countries (Myanmar, Lao PDR and Cambodia) have internal demand levels that do not allow for the development of large-scale generation projects that are only based on internal load. Therefore the possibilities of obtaining energy at low (competitive) prices are linked to cross-border trading.Constraints to develop new hydro power in Thailand and there is a growing concern that natural gas reserves are not sufficient to satisfy future load growth. Coal resources are also limited to lignite, which has historically been associated with significant environmental problems.
13 Historical Growth Rates for Electricity… **********Sources:*ADB Key Indicators, 2005**RPTCC Presentation***Viet Nam Master Plan VI Essentials****ADB, MKOC Study on Electricity Production
14 National Electricity Forecasts in GMS - Item200420102015Ave. Growth (%)Peak Demand, MWCambodia1384065005Lao PDR2514926657Myanmar1,4252,0127,35753Thailand19,32629,80840,978Viet Nam8,25319,00032,00014People's Republic of China62,740103,850141,310Total GMS92,133155,568222,8109Source: Country Presentations RPTCC Meeting, Myanmar 2006
15 National Electricity Forecasts in GMS - Item200420102015Ave. Growth (%)Generation Capacity, MWCambodia1426391,19417Lao PDR6602,3056,97140Myanmar1,7253,4169,94638Thailand26,44334,66847,8988Viet Nam11,19724,44736,52010People's Republic of China80,154136,815184,3487Total GMS146,764202,290286,877Source: Country Presentations RPTCC Meeting, Myanmar 2006
16 National Electricity Forecasts In GMS - Item200420102015Ave. Growth (%)Load/Demand, GWhCambodia6251,7933,80022Lao PDR1,2202,7213,6107Myanmar5,40221,28864,36440Thailand127,473193,530265,788Viet Nam46,24097,111164,96114People's Republic of China386,600619,000815,8006Total GMS567,560935,4431,318,3238Source: Country Presentations RPTCC Meeting, Myanmar 2006
17 GMS Energy Strategy Policy & Planning Issues Energy demand, access, and quality of suppliesEnergy securityExpanding private sector participationEnergy and environment
18 Energy Demand, Access, and Quality of Supplies Most country level forecasts see energy demand growth between 8% to 16%. Demand has to be met to ensure that adequate energy at reasonable price is not a constraint to economic growth.Uneven access across countries in the region and even within country - rural energy access at affordable prices is important.Quality, reliability, and security, important challenge
19 Energy SecurityRapid motorization and a vehicle boom increases the region’s oil dependence dramatically in the next two decades.Poor production prospects, weak demand management, insignificant penetration rates for alternative energy sources, and high global oil prices make the region insecure and vulnerable.In addition, there are no institutional mechanisms to deal with energy disruptions arising out of emergency or supply shocks.
20 Expanding Private Sector Participation Presently, most energy entities are owned through public sector. Isolated regional private projects such as Nam Theun 2.Large investment needs for energy: Country level resources are inadequate.More attractive to harness private sector investments through regional approach.Need to attract private initiatives also in the area of energy efficiency.Need cost recovery, sector reforms, and greater competition to improve efficiency for energy.
21 Energy and Environment Integrating environmental concerns at planning stage is usually a better alternative than clean up at later.Cross-border environment impacts need to be integrated at planning stage.Often environmental issues require cross-sectoral policy action - e.g., urban transport and air pollution as a result of energy use pattern.Awareness and public educationHigher share of renewables and alternative energy
22 Sector Planning Basics Part II:Interactive Session - Identify step-by-step approach to sector planning
23 Developing the GMS Energy Strategy Use the energy strategy model MESSAGE to develop a regional energy sector strategy.MESSAGE utilizes existing domestic and internationally available information to formulate alternative energy supply strategies, each of them optimized under different sets of assumptions (“scenarios”) reflecting future uncertainties.These strategies will be assessed for robustness of policy options, and policy recommendations will be based on these analyses.The advantages of expanded cooperation among the GMS countries will be assessed by comparing country strategies with integrated strategies for the GMS.
24 Formulating Energy Strategies Using MESSAGE MESSAGE identifies a flow of energy from primary-energy resources to useful-energy demands thatIs feasible in a mathematical and an engineering sense, and at the same timeRepresents the investment choices that lead to the least cost of all feasible energy supply mixes to meet the given (expected) energy demand.Feasibility is defined by constraints imposed, for example, by the environment, energy resources, and technology build-up.
25 MESSAGE Model for Energy Supply System Alternatives and their General Environmental Impacts InputEnergy system structure (including vintage of plant and equipment)Base year energy flows and pricesEnergy demand projections (MAED)Technology and resource options & their techno-economic performance profilesTechnical and policy constraintsOutputPrimary and final energy mixEmissions and waste streamsHealth and environmental impacts (externalities)Resource useLand useImport dependenceInvestment requirementsMESSAGE
26 Formulating Least-Cost Strategies Formulating strategies from model solutions requires the assessment of political feasibility including possible implementation barriers such as the unavailability of investment financing. A crucial aspect of strategies will therefore be the possible involvement of the private sector.The most important strategy will describe a maximum of GMS-wide integration of the individual energy systems.
27 Key MessagesNeed an integrated approach both across sectors and across regions.Need to mainstream cross-border public goods such as network expansion of markets and resulting efficiency, reliability, and security gains, as well as public bads - cross-border pollution, downstream impacts, haze, etc.Need attention on harmonization of policies as also institutions.Need comprehensive capacity building plans.