P N Fernando - Clean Energy Impact of South Asia Cross Border Power Trade

7/31/2019 P N Fernando - Clean Energy Impact of South Asia Cross Border Power Trade

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SAENAsian Development Bank

June 2012

CLEAN ENERGY IMPACT

ofSOUTH ASIA

CROSS BORDER POWER TRADE


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Presentation Structure

SAARC Regional Energy Trade Strategy Focus

Regional power market expansion

Cross border interconnection benefits

Fuel cost savingsConcluding Remarks


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SAARC Regional Energy Trade Study

(SRETS) Focus

Key energy sector challenges

Projected energy demand and supply constraints Current and proposed energy trade

Accelerated intra/inter regional energy transfer

Additional Energy transfer options

Development of enabling framework


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Key Energy Sector Challenges in SA

Increasing energy deficits

Single fuel dominance in energy mix

Limited exploitation of renewable energyresources

High dependence on traditional fuels

Rising import dependence Lack of requisite energy infrastructure


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Countries Coal Oil Natural Gas Hydro

million tons million barrels trillion cubic feet MW

Afghanistan 440 (294.8) NA 15 (360)

25000

(18.9)

Bhutan 2 (1.5) 0 0

30000

(22.7)

Bangladesh 884 (592.3) 12 (1.6) 8 (192) 330(0.3)

India 90085 (60356.9) 5700 (775.2) 39 (936)

150000

(113.7)

Maldives 0 0 0 0

Nepal NA 0 0

42000

(31.8)

Pakistan 17550 (11758.5) 324 (44.1) 33 (792)

45000

(34.1)

Sri Lanka NA 150 (20.4) 0

2000

(1.5)

TOTAL 108961(73003.8) 5906 (803.3) 95 (2280)

294330

(223.0)

SAARC Member Energy Reserves - 2010(Figures in parenthesis are mtoe equivalents)


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SAARC Energy Demand Estimates

and Supply Constraints

Projected Energy Demand for 2015 (mtoe) Crude/Petroleum 233 (India 203)

Coal 528 (India 504)

Natural Gas 130 (India 60)

Projected Energy Demand for 2020 (mtoe)

Crude/Petroleum 306 (India 267)

Coal 629 (India 600)

Natural Gas 178 (India 82)

Domestic supply constraints are evident from the

resource development pace and the rate of import

growth apart from environmental concerns with coal


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Current Energy Trade

Electricity Trade

Bhutan-India (about 5600 GWh)

India- Nepal (about 600 GWh)Petroleum products

Between India and Bangladesh,

Bhutan, Nepal and Sri Lanka Inter-regional trade limited to

Oil, coal and electricity (limited)


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Proposed Intra/Inter Regional Transfer

India - Sri Lanka power transmission India Pakistan power transmission

CASA 1000 Project for Central Asia

AfghanistanPakistan power transmissionAdditional power transmission links Bhutan-

India, India-Nepal, Bangladesh-India

Turkmen-Afghanistan-Pakistan-India pipeline

Iran-Pakistan-India gas pipeline

Myanmar-Bangladesh-India gas pipeline


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ADDITIONAL ENERGY TRANSFER OPTIONS

(clean energy/energy efficiency emphasis)

Regional Power Market Expansion

Regional Refinery and Product

Transport Expansion

Regional LNG Terminal and Gas

Transmission Expansion

Regional Power Plant (s)


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Regional Power Market Expansion

Optimal exploitation of energy resources

Reduction in generation reserve requirements

Reduction in overall cost of supply

Improved system reliability, energy security

Incentives to resource rich countries to

accelerate power development

Cross-border connectivity, a prerequisite


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IND-BHU Power Interconnections


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Proposed IND-SRI HVDC Power Link


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SETTING OF CASA 1000 PROJECT

Peshawar

Kabul

Facilities UnderConstruction

500 kV OHL South-NorthFinancing: China Exim bank

Sangtuda 1 HPPFinancing: Russia

Sangtuda 2 HPPFinancing: Iran

220 kV OHL SS Sarban

Tajik/Afghan borderFinancing: ADB/IsDB

Existing Facilities

Toktogul HPPExisting Surplus

Nurek HPPExisting Surplus

Perspective Facilities

220/500 kV Uzbek by passSS Datka (Kyrgyz) SS

Hojent (Tajik)

Cascade of Zarafshan HPPs

(Yavan and Oburdon HPP)Annual generation 1680 GWh

Rogun HPPAnnual generation 13000 GWh

Coal TPPAnnual generation 3900-6400

GWh

500 kV OHL CASA 1000

Nurek HPP Kabul -Peshawar

Pakistan

Afghanistan

Kyrgyzstan

Tajikistan

Uzbekistan

Kazakhstan

India

China


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ADB SA Regional Power Exchange Study

Interconnections Considered

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No. Interconnection Description Capacity (MW) Cost (USD million)1 India-Bhutan Grid reinforcement to evacuate

power from Punatsangchhu I &II

Total gridreinforcement of 2,100MW

140-160 (2010 estimate)

2 India-Nepal Dhalkebar-Muazaffarpur 400 kVline

1,000 MW 186 (2010 estimate) includinginternal transmission upgrade

3 India- Sri Lanka HVDC line with sub-sea cable 500 MW in the short-term

339 (2006 estimate)

600 (Current)

4 India-Bangladesh HVDC back-to-backasynchronous link

500 MW 192-250 million (2011 estimate)

5 India-Pakistan 220 kV in the short term, 400kV in the long term

250-500 MW 50-150 million (2012 estimate)

6 CASA 1000 and India-Pakistan

interconnection

HVDC and 500 kV HVAC forCASA

1300 MW Approx 1 billion (2011 estimate)


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Economic Analysis Methodology: Overview

16

Transmission

ResourcesGenerators

Optimal Mix of Generation using Investment Optimisation with

DC power flow constraints

Performance of Selected Resourcesusing Monte Carlo Simulation with DC-PF. Perform two runs with and without a

transmission line to assess the benefit of the line

Capex/Opex, MW, Location ofResources

Selected Generators given atransmission configuration

Probability distribution ofuncertain parameters


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Results: Benefit Estimates

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Case study Keyassumption

Total and annualisedcost of transmission

USD million

Annual benefit in 2016/17

(USD million)

India-Sri LankaHVDC link

Puttalam Stage 2and 400 MW innew hydro is

added by 2016.But Trinco (1,000MW) coal stationis notconsidered.

Total cost USD 339million (2006 estimate)

Annualized cost USD 50

million pa (2010 estimate)

USD 186 million pa comprising 96million in unserved energy reduction,and 90 million in fuel/capacity

benefits.

India-Bangladesh

HVDC link

Three scenarios

around demandgrowth inBangladesh thatrange between9.000 MW to12,000 MW in2016/17.

Total cost range between

USD 192 million to USD250 million.

Annualised cost of USD25 million pa assumed forcost/benefit analysis.

Annual benefits range between USD

145 million to USD 389 million,depending upon demand-supplyassumptions.


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Results: Benefit Estimates

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Case study Keyassumption

Total and annualisedcost of transmission

USD million

Annual benefit in 2016/17(USD million)

India-Bhutan gridreinforcement

Puntsanchhu I &II (2100 MW)

Total cost USD 140-160million.

Annualized cost USD 18-20 million pa.

Up to USD 1,954 million pa including

USD 350 million in opex benefit

andUSD 1,604 million in unservedenergy reduction benefit

Nepal-Bihar 400kV link

Two scenarios:

Surplus state:(2000MWadded)

Deficit state:650 MW delayed

Total cost USD 63 million.

Annualized cost USD 8million pa

(a) Surplus state benefit of USD105 million pa(71 million inunserved energy reduction and

34 million in opex benefits)

(b) Deficit state benefit of USD 215million (173 million in unservedenergy reduction and 42 millionin opex benefits)


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Detailed Results: IND-SRI

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Distribution of benefits

0

200

400

600

800

1000

1200

123

45

67

89

111

133

155

177

199

221

243

265

287

309

331

353

375

397

419

441

463

485

Annu

alBenefitinUSD

million

Monte Carlo Samples 1-500

The link is likely to be beneficial with USD

186 million in annual benefit on average.

This is likely to yield a benefit to cost ratioof over 3


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-200

0

200

400

600

800

1000

1200

1400

0%

5%

9%

14%

19%

23%

28%

32%

37%

42%

46%

51%

55%

60%

65%

69%

74%

78%

83%

88%

92%

97%F

uel

andnon-fuelope

ratingcost

benefits(USDm

illion)

Probability

Fuel Cost Savings Non-fuel Cost Savings

Detailed Results: India-Bhutan

20

Distribution of fuel & opex benefits


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India-Pakistan Link (500 MW)

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Potentially very high benefits due to a combination of USE and fuel costsavings


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Estimates of Fuel Cost Savings through

Cross- Border Interconnection

Annual fuel cost savings in 2016/17 in 2011 dollars:

India Bhutan: USD 336 million

India Nepal: USD 38 million

India Sri Lanka: USD 56 million

India Bangladesh: USD 225 million

India Pakistan: USD 122 million (250 MW transfer)22


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India would be the biggest beneficiary with a significant

reduction in peaking gas/liquid based power generation

as well as reduction of generation from less efficient

and expensive coal-fired power stations

Collective fuel cost savings in India from coal-based

generation alone (with all interconnection cases) is closeto USD 300 million through displacement of 10,000 GWh

of coal-based generation in 2016/17

Thermal Power Generation Displacement


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The average emission intensity of less efficient coal plants in Indiais estimated at 1.35 tonne of CO2 per MWh

The overall emissions reduction in India from a reduction in coal-

based generation would be over 13 million tonne ofCO2 in 2016/17

If the value of carbon credits is considered at USD 15 per

tonne, the carbon reduction benefits would also be close to USD

200 million

The longer term savings through import of 40,000 GWh of hydro

from Bhutan alone would be 3-4 times as high

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Displacement of Thermal Generation


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Apart from India, thermal generation reduction can also save

significant costs in Pakistan, Bangladesh, and Sri Lanka

The fuel cost reduction potential in Pakistan is particularlynoteworthy because of a low efficiency plant stock andhigh fuel

cost (e.g., USD 11 per GJ for gas) fuel cost savings exceeding USD

100 million dollar is estimated in Pakistan

The following slide provides details on fuel cost savings POTENTIAL

from 8 major thermal power stations in Pakistan

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Displacement of Thermal Generation .


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Displacement of thermal generation (Pakistan)

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Accelerated expansion of electricity trade in

South Asia - a key recommendation of ADBs

SAARC Regional Energy Trade Study

Related economic analysis carried out so far

establishes economic feasibility of all proposed

interconnections

Fuel savings from thermal energy displacement

resulting mainly from expanded hydropower

utilization has strong clean energy impact

CONCLUDING REMARKS


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THANK YOU

VERY MUCH !

Documents

P N Fernando - Clean Energy Impact of South Asia Cross Border Power Trade