Embed Size (px)
Citation preview
1
SUMMIT IMPLEMENTATION REVIEW GROUP (SIRG) OEA/Ser.E Sixth Regular Meeting of 2008 GRIC/O.6/doc.11/08 December 10-12, 2008 11 December 2008 Hotel Royal Decameron Salinitas Original: English El Salvador
PRESENTATIONS BY THE PARTNER INSTITUTIONS OF THE JOINT SUMMIT WORKING GROUP - JSWG
WORLD BANK
(Energy Security)
2
Summit Implementation Review GroupDecember 10, 2008
El Salvador
Philippe BenoitSector Manager, Energy
Latin America and the Caribbean
The World Bank
Energy Security in Latin America and the Caribbean and the role
of the World Bank
3
OutlineOutline
A. Energy Security Defined
B. Energy Security Challenges Facing the Latin America and Caribbean Region
C. World Bank Strategy to Promote Energy Security in the LAC Region
4
Part A: Energy Security Defined
5
A. Energy SecurityA. Energy Security
“Energy” for the WB means:
Power (P) [Gx, Tx, Dx; Hydro, Thermal, Wind, Coal, etc.]
+ Oil & Gas+ Biofuels, Biomass, Nuclear
with concerns regarding Climate Change
E=P++C2
6
A. Energy SecurityA. Energy Security
Focus is on electricity
-- but other sources also important (oil, gas, biomass, etc)
Energy security for electricity means:
• Sufficient, secure, quality electricity at a reasonable price
• Different countries face different challenges, but many common issues
• Approach: respect differences while looking to leverage off commonalities and synergies
7
Part B. Energy Security Challenges Facing the
LAC Region
8
1. Meeting the Increasing Demand for Electricity
Projected growth in electricity demand of 4.8% p.a.
Concern over supply gap• Load shedding in some countries• Other countries face prospect of future supply deficit
Concern over increasing cost of power supply • Capital costs (hydro, wind, etc.)• Fuel costs (thermal, etc.)
• 100,000 MW needed in next ten years (current capacity: 250,000 MW)
• Annual investment of about US$20 billion required for related
generation, transmission and distribution
• Investment requirements still large under lower demand scenarios
B. Energy Security Challenges Facing the Region B. Energy Security Challenges Facing the Region
9
Impact on region mixed, with certain countries in the Caribbean and Central America especially vulnerable
Challenges both for producer and consumer countries
Despite recent fall in prices, still historically high
Great uncertainty regarding future prices
2. Coping with Impact of High and Volatile Oil Prices
B. Energy Security Challenges Facing the RegionB. Energy Security Challenges Facing the Region
Evolution of Oil Prices (US$)
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
Jan-
98
Jul-9
8
Jan-
99
Jul-9
9
Jan-
00
Jul-0
0
Jan-
01
Jul-0
1
Jan-
02
Jul-0
2
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
US
$ P
er B
arre
l
?
10
2. Coping with Impact of High and Volatile Oil Prices (cont’d)
Changes in oil prices affect electricity costs (in some cases over US cents 3/kWh per US$10/bbl increase)
GDP impact of higher electricity costs varies:
• High impact (per $10/bbl): Jamaica (2.3%), Grenada (1.5%), Nicaragua (1%)• Low impact: Paraguay, Trinidad and Tobago (0%)
Variation on Electricity Production Costs per $50/bbl Change
0
2
4
6
8
10
12
14
16
18
20
PARAGUAY
TRINID
AD AND T
OBAGO
COLO
MBIA
BRASIL
CHILE
ARGENTINA
COSTA R
ICA
VENEZUELA
HAITI
PERU
SURINAM
E
BOLI
VIA
MEXIC
O
GUATEM
ALA
EL_SALVADO
R
URUGUAY
ECUADOR
PANAMA
HONDURAS
NICARAGUA
DOM
INIC
AN_REP.
GUYANA
JAM
AICA
BARBADOS
GRENADA
US
cen
ts/k
Wh
B. Energy Security Challenges Facing the RegionB. Energy Security Challenges Facing the Region
11
Opportunity to increase role of clean energy sources; renewed interest in hydropower
Climate change will impact energy resources (e.g. impact on hydrology)
{Other environmental and social impacts – e.g., local pollution, impact on indigenous peoples}
3. Including Climate Change in the Energy Equation
B. Energy Security Challenges Facing the RegionB. Energy Security Challenges Facing the Region
12
About 50 million people, mostly in rural and poor urban areas, still lack electricity service
About US$14 million in total needed to increase coverage to above 95% by 2015
4. Increasing Access to Electricity
B. Energy Security Challenges Facing the RegionB. Energy Security Challenges Facing the Region
13
5. A World in Flux
Impacts on the real
economy
Oil prices
Financial crisis
B. Energy Security Challenges Facing the RegionB. Energy Security Challenges Facing the Region
1414
Part C. World Bank Strategy to Promote Energy Security
in the LAC Region
15
C. WB Group Strategy to Promote Energy SecurityC. WB Group Strategy to Promote Energy Security
World Bank
IFC
MIGA
Financing
SUPPORT THROUGH
Analytical work
IN A CONTEXT OF
Climate Change
Regional Relations
Macroeconomic Considerations
Public/ Private Mix
Volatile Oil Prices
Policy Reform
The Approach:The Approach:
Collaboration
16
C. WBG Strategy to Promote Energy SecurityC. WBG Strategy to Promote Energy Security
1. Increase Power Supply
Increase investments in electricity infrastructure: • Generation, tranmission and distribution
Diversify energy matrix:• Promote development of lower-cost and clean power
sources• Greater focus on renewables: hydro, wind, biomass,
biofuels, geothermal, solar
17
•Total energy lending in FY08: $7.6b• IBRD/IDA : $4.2b FY08 ($1b FY04, $2b FY07)
• IFC: $2.9 billion
• MIGA guarantees $ 110 million
WBG Energy lending has increased in recent years:
World Bank Group Energy Lending
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
FY03 FY04 FY05 FY06 FY07 FY08
Fiscal Year
US
$ M
illi
on
s
C. WBGC. WBG Strategy to Promote Energy Security Strategy to Promote Energy Security
1. Increase Power Supply (cont’d)
• New focus on clean energy:
EE, new renewable energy and large hydro represented 35% (US$2.7billion, an 87% increase from FY07) of WBG energy lending in FY08
• World Bank is back in hydropower
18
1. Increase Power Supply (cont’d) Support regional integration (synergies, etc.)
C. WBGC. WBG Strategy to Promote Energy Security Strategy to Promote Energy Security
1919
2. Promote Energy Efficiency
Demand-side management• end-users (e.g. lighting, domestic appliances)
• policy advice and investment
Supply-side interventions• loss reduction
• efficiency in generation
Energy conservation
C. WBGC. WBG Strategy to Promote Energy Security Strategy to Promote Energy Security
2020
3. Strengthen Power Sector Planning
Managing High and Volatile Oil Prices:• Stronger Analysis of Impacts and Options
• Improve energy efficiency
• Diversify energy matrix, reducing dependency on thermal
generation
Better Planning for System Expansion:• Low-cost options
• Consider all options: thermal, clean sources
• Focus on renewables, with special attention to hydro
Support a sound public-private mix:• Support reform of sector utilities
• Recognize differing country-specific views on appropriate public-
private mix
C. WBGC. WBG Strategy to Promote Energy Security Strategy to Promote Energy Security
21
Mitigation: Support renewables (large and small hydro, wind, biomass, biofuels, geothermal) and gas
WBG: Share of renewable and EE in total energy lending is increasing
Adaptation/Resiliency: Understand impacts and plan accordingly (e.g. analyze hydrological changes as part of hydro dev. planning)
4. Integrate Climate Change in Power Sector Management
{Maintain attention on local pollution and other environmental and social issues -- incl. Impacts on local populations}
C. WBGC. WBG Strategy to Promote Energy Security Strategy to Promote Energy Security
22
Support rural electrification
Support electrification in poorer urban areas
Improve Access to other modern energies (e.g., gas)
Protect Affordability
5. Improve Access to Modern Energy Services for the Poor
C. WBGC. WBG Strategy to Promote Energy Security Strategy to Promote Energy Security
23
Impacts on the real
economy
Oil prices
Financial crisis
6. Responding to a World in Flux
WBG and other Multilaterals need to help countries to adapt to a rapidly changing world with evolving development challenges
C. WBGC. WBG Strategy to Promote Energy Security Strategy to Promote Energy Security
24
THANK YOU
