1

Key issues framing the SEA scopeKey issues framing the SEA scope

Related to electricity demand and power trade development

in the LMB and GMS

Briefing to TNMC Based on the Presentations Made to NMCS/Line Agencies

And separate CSO/NGO Consultation Meetings

In Viet Nam, Lao PDR and Cambodia

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Purpose of this PresentationPurpose of this Presentation

1. Trends in electricity demand-supply in the LMB/GMS 2. Linkages to the GMS sustainable energy futures – and

regional context of cross-border power 3. Proposed mainstream dams in relation to the above

trends (multiple seller- multiple buyer)

Illustrate /explore:

Focused on the opportunities side of the Development “Opportunities-Risk” Equation

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LMB Selected indicators 2004LMB Selected indicators 2004Cambodia Lao PDR Thailand Viet Nam

Population (million) (2004)

13.8 5.8 64.2 82.1

GDP (current USD billion)

4.9 2.2 150.1 41.2

GDP per capita (current USD)

361 420 2,519 551

FDI (USD million) 131 17 1,064 1,610

FDI/capita (USD) 9.5 2.9 16.6 19.6

Electricity use per capita (kWh)

45 160 1,752 (2003) 433 (2003)

Energy use per capita (kgoe)

180.0 355.0 1,405.7 (2003) 544.3 (2003)

Fuelwood share in total primary energy

88% 67% 16% 49%

Source: Economics of energy integration , ADB, 2008

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Regional GMS energy issues Regional GMS energy issues

Source: Building a sustainable energy future the GMS, ADB 2009

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Electricity consumption in LMB / Electricity consumption in LMB / GMS GMS

relative to other countries + Human Development IndexPer Capital Electricity Use

Kwh/yr/pc Normalized

Thailand 1,950 34.8Yunnan 1,252 22.4

Viet Nam 573 10.2Lao PDR 187 3.3Myanmar 78 1.4Cambodia 56 1.0

Source: Building Sustainable energy futures in the GMS, ADB, 2009

UN Human Development index + Per Capital Electricity Use (2005)

4,000 kwh / yr /pcAs turning pointIn HDI

Per capita electricity use

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Source: Building a sustainable energy future the GMS, ADB, 2009

Significant differences in urbanization Significant differences in urbanization and household electricity consumption and household electricity consumption

in LMB in LMB Country Urbanization

RatioPer capita household consumption (KWh)

Share of residential sector in total electricity consumption (%)

Cambodia 17% 29 52.0

Lao PDR 21% 95 53.0

Thailand 33% 409 21.0

Vietnam 27% 242 42.0

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Overall trend in GDP growth + Overall trend in GDP growth + electricity consumption in GMS electricity consumption in GMS

correlatedcorrelated

Thailand growth of net

electricity consumption

and GDP 1982-2006

Example:

Growth + Electricity

No trend decoupling of overall energy

consumption seen yet - as in OECD

economies

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High economic growth in the LMB High economic growth in the LMB 1985-20051985-2005

Source: Building a sustainable energy future the GMS, ADB 2008

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What about the current economic crisis?What about the current economic crisis?

Source: World Bank 2009e – expectedf - forecast

Current downturn in rate of economic growth in the GMS

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Trend with last Asia economic Trend with last Asia economic downturn downturn

Source: EIA 2009, UNSD 2009

electricity consumption, total energy and GDP - 1982-2006

Thailand growth rates:

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Changing economic environment?Changing economic environment?

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Projected growth in grid power Projected growth in grid power demand demand

in LMB Countries 2005-2025in LMB Countries 2005-2025

Source: Economics of energy integration , ADB, 2008 (base case projection)

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What this means What this means from a Regional Power Planner from a Regional Power Planner

PerspectivePerspective Grid Based Generation Expansion

time

Energy Demand

Need for new generation delayed through demand-side management & supply-side efficiency measures

Future Capacity AdditionsFuture Capacity Additions• Natural Gas?• Coal?• Oil?• Hydro from tributaries or LMB mainstream?• Nuclear?• Co-generation, etc• Grid-scale biomass• Grid-scale Wind, Solar• Other Grid-scale renewable?

Existing Capacity

• Natural gas• Coal• Oil• hydropower• biomass• Etc.

Projected energy demand Projected energy demand with demand management Supply

*RoW = Rest of World

TodayToday

Other:Other:• Power Import• Replacement Plant• Fuel-Switching

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GMS energy resources – for grid-scale GMS energy resources – for grid-scale electricity generation (ADB)electricity generation (ADB)

Source: Economics of energy integration , ADB, 2008

Hydro (MWyr/yr) - ADB

Other renewable sources- Different grades

Cambodia Lao PDR Thailand Viet NamRegional

total (GMS)

Low –cost 1,670 4,640 2,784 3,248 54,102

Medium-cost 1,114 3,944 1,856 3,712 43,802

High-cost 742 2,320 928 1,392 23,571

Small 650 1,015 406 812 5,928

Total 4,176 11,919 5,974 9,164 127,403

Cambodia Lao PDR Thailand Viet NamRegional

total (GMS)

Low –cost 1,670 4,640 2,784 3,248 54,102

Medium-cost 1,114 3,944 1,856 3,712 43,802

High-cost 742 2,320 928 1,392 23,571

Small 650 1,015 406 812 5,928

Total 4,176 11,919 5,974 9,164 127,403

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• From ADBFour GMS Scenarios – new generation capacity to 2025

Electricity Generation Scenarios – Fuel Electricity Generation Scenarios – Fuel TypeType

Hydropower Between 62,000 – 93,000 MW

Between 217,000 – 238,000 MW

One Interpretation – GMS Energy Futures ADB

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Trends in GMS cross-border Trends in GMS cross-border power trade?power trade?

• Inter-government Agreement on Regional Power Trade (2002)• GMS Power Trade Road Map - as reference• Existing Bilateral Power Trade MOUs, subject to PPAs

– E.g. Thailand’s MOU’s with• Lao PDR (5,000 MW)• Cambodia• Others, including China

Cross-border trade is the key motivating factor for 11+ proposed LMB hydropower schemes (buyer + seller perspectives)

Policy + Legal FrameworkPolicy + Legal Framework

Why?

Under Integrated GMS Scenario

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Trend in cross-border Power TradeTrend in cross-border Power Trade

Source: Economics of energy integration , ADB, 2008

TTrade flow (GWh)rade flow (GWh)

in 2005in 2005

2025202520252025

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2005 2025

Projected electricity trade within 2005-2025Projected electricity trade within 2005-2025One Trend Scenario – GMS (ADB) One Trend Scenario – GMS (ADB)

Source: Building a sustainable energy future the GMS, ADB, 2009

?

Under Integrated GMS Scenario

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11+ Proposed LMB Mainstream dams in the 11+ Proposed LMB Mainstream dams in the Context of Cross-Border TradeContext of Cross-Border Trade

• 12-14,000 MW and up to 65,000 GWh av. annual

• 11.5% of installed capacity in LMB by 2020

• 9.3% of power produced in the LMB by 2020

• 5% of new generation capacity in GMS by 2025 (ADB Base case)

• Abut 10 Nam Theun 2’s

All LMB schemes together represent near:

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Potential Markets for Mainstream Potential Markets for Mainstream DamsDams

ThailandThailand

PRCPRC

Lao & CambodiaLao & Cambodia

Viet NamViet Nam

2,600 MW

Luang Prabang 1,410 MWSambor 2,600 MWStung Treng 800 MW

8 in operation, under construction and planned, total 13,800 MW

980 MW- A proportion of

generation for domestic power expansion

- Units from schemes, subject to agreements

1,410 MW

1,230 MW

1,260 MW

1,320 MW

1,200 MW

1,872 MW

800 MW

Pak Beng 1,230 MWXayabori 1,260 MWPak Lay 1,300 MWSanakham 1,200 MWBan Khoum 1,827 MWLat Sua 800 MWDon Sahong 360 MW

MyanmarMyanmar

- No mainstream projects proposed

360 MW

Installed Capacities (MW) subject to change

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5 general themes in discussions to date (in Cambodia, Lao & Viet Nam)

1. National policy framework - what policies are relevant to place decisions on LMB mainstream dams in a basin-wide sustainable context?

2. Demand - Is the power needed? Is the picture changed with the economic downturn?

3. Supply - Other options to meet electricity needs? theoretical and practical ? What lead time is needed?

4. Priorities – to meet urban or rural needs? 5. Transboundary dimensions - What are the opportunities

and constrains? Sharing benefits? Mechanisms?

Summing Up Summing Up Framing Issues Regional Energy Demand / Power TradeFraming Issues Regional Energy Demand / Power Trade

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Tariff measures?

Preferential Energy Rates?

Subsidy on power saving?

Carbon Tax?

Distribution Loss Reduction?

Structural Change in Demand?

End-Use Efficiency?

Power Factor correction?

Bulk metering?

Conventional Thermal? gas, coal, oil

Hydro Tributaries?

Hydro Mainstream?

Grid-scale Renewable? E.g. wind, biomas, solar

Nuclear?

Decentralized Systems?

Other non Conventional?

Electricity Imports?

Supply-side efficiency?

Improved facility operations?

Improved cost recovery?

Policies to attract investors?

Public and private sector roles?

Power Sector

Structural / Structural / Infrastructure optionsInfrastructure options

Demand-Side Demand-Side ManagementManagement

OptionsOptions

Supply-Side Supply-Side OptionsOptions

Non-StructuralNon-StructuralOptionsOptions

e.g. NGO / CSOs and others advocate expanding consideration of options

Change for SEA: Measure and Manage Expectation

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How will the SEA address divergent How will the SEA address divergent views?views?

On the power and energy themeOn the power and energy theme

• SEA now at Preparation Stage – consultation oriented. • Focus on the 11+ mainstream dams• Systematically bring existing information in a timely way to feed

immediate needs (e.g. MRC Procedures) + longer term planning

Inception Report and Baseline Assessment - to follow

• Trend analysisTrend analysis - how mainstream dams impact on development trends

• Scenario analysisScenario analysis - ‘With and without’ mainstream dams scenario’s feeding new information to MRC Hydropower Database > BDP Scenario.

• Opportunities and RisksOpportunities and Risks – analysis of development opportunities and risks, mitigation and enhancement using the SEA Framework

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Thank you