The World Bank Energy Program in East Asia and the

Pacific Region

Charles FeinsteinEAP Sector Manager, Energy and Water

PSLO SeminarNovember 6, 2013

Agenda

1 Strategy and Priorities

2 Global trends and EAP flagship activities

3 Overview of EAP energy program

4 Myanmar case study

Focal areas

• Institutional capacity building and policy advice• Introducing new financing mechanisms and market-based

approaches including trade in energy saving certificates• Energy efficient cities and green infrastructure

• Policy and regulatory framework (feed-in-tariff)• Resource assessment and pre-investment activities• Financing RE (hydropower, wind, geothermal, solar PV)• Supporting T&D projects, regional integration and trade

• Regulatory framework for advanced energy solutions• IGCC/CCS, energy storage, electric vehicles, smart grids• Low-carbon energy solutions, conventional and

unconventional gas

• Capacity building and institutional development• Grid and off-grid rural electrification programs• Access to clean and efficient cooking fuels and facilities• Knowledge sharing, regional initiatives and partnerships

Strategy and priorities

Turning strategy into action

Improving energy

efficiency

Scaling-up renewable

energy

Introducing new technologies

Increasing energy access

Advancing sector reforms

• Stable and transparent regulatory regime for PPP• Cost-reflective tariff system and well targeted subsidies for

poor and vulnerable consumers• Gradual introduction of environmental externalities in the

energy pricing

Global Trends and EAP Flagships

Sustainable Energy for All (SE4ALL)

Universal energy access (electricity

and modern cooking fuels) by 2030

Double the renewable energy

share in global energy mix

Double the rate of improvement in energy efficiency

F1: Winds of Change : Scaling-up RE and EE

F2: One Goal Two Paths : Achieving Universal Access to Modern Energy

F3: Sustainable Urban Energy and Emissions Planning

EA

P F

lag

ship

Act

ivit

ies

Energy efficiency, renewable energy and low-carbon technologies can stabilize CO2 emissions in EAP by 2030 and improve local environment and energy security without compromising economic growth.

However, the average annual incremental cost of SD scenario is $ 80 billion or about 0.8% of regional GDP …

F1: Scaling-up Renewable Energy and EE

0.0%

0.5%

1.0%

1.5%

2.0%

Investments Costs in China and EAP 5 as Share of GDP (3 year moving average; Capex Investment )

China SD

China BAU

EAP5 BAU

EAP5 SD

Energy efficiency, renewable energy and low-carbon technologies can stabilize CO2 emissions in EAP by 2030 and improve local environment and energy security without compromising economic growth.

However, the average annual incremental cost of SD scenario is $ 80 billion or about 0.8% of regional GDP …

F1: Scaling-up Renewable Energy and EE

… major policy and institutional reforms are needed

Ab

atem

ent

co

st

Energy Efficiency Renewable Energy

• Regulations and financial incentives

• Institutional reform and green financing

• Feed-in Tariff or RE Standard

• Tax on fossil fuel

• R&D and technology transfer

• Financing incremental costs

New Technologies

Energy pricing reforms

Energy efficiency, renewable energy and low-carbon technologies can stabilize CO2 emissions in EAP by 2030 and improve local environment and energy security without compromising economic growth.

However, the average annual incremental cost of SD scenario is $ 80 billion or about 0.8% of regional GDP …

F1: Scaling-up Renewable Energy and EE

0

2

4

6

8

10

12

14

16CO

2 em

issi

ons

(Gto

n)BAUEE

RE/NT

SD

F2: Universal Access to Modern Energy

Baseline in EAP: Despite impressive economic growth, 170 million people lack access to electricity…

F2: Universal Access to Modern Energy

….and every second household in the region still depends on solid fuels for cooking.

Indonesia: 1000 Islands Electrification Program

Renewable Energy based Electricity Access Scale-up & Integration

Electricity for a Better Life

Indonesia Electrification Rate – Target 90 % by 2019

Source: PLN

Meeting the Indonesia Electrification Challenge

In response:• The Government has announced a 1,000 islands electrification

program as a means to improve electricity access in its outer islands through renewable energy sources

• As part of the strategy to address the high cost of generation:– PLN is converting, where technically and economically feasible

and sustainable, its isolated grids from pure diesel-based generation to renewable diesel hybrid systems

– investing in new solar-diesel hybrid systems, and – investing in mini-hydros

• In parallel, PLN is embarking upon a grid rollout program that would improve electricity access, especially in the outlying communities in remote islands

Integrated Renewable Energy Planning and Investment Program

GEOSPATIAL MAPPING - LEAST COST ELECTRIFICATION PLANNING

[GIS BASED RAPID SPATIAL PLANNING PLATFORM]

ISLAND-BASED ISOLATED GRIDS, GRID EXTENSION, & OFF GRID COMPLEMENT PLANNING

RENEWABLE ENERGY RESOURCE MAPPING

MESO SCALE MAPPING

GROUND BASED MEASUREMENTS

PROPOSED LOAN

RENEWABLE ENERGY FOR ELECTRIFICATION (1,000 islands) PROJECTFUNDING SOURCES: World Bank, KfWFUNDING AMOUNT: US$ 600 million

• Cities account for nearly two-thirds of the world’s annual energy consumption and about 70% of the world’s greenhouse gas emissions.

• EAP cities have relatively low consumption of energy per capita but the energy consumption and emissions are likely to increase.

• Municipal governments in the EAP region would need to formulate and implement long term urban energy and emissions sustainability plans.

F3: Sustainable Urban Energy and Emissions Planning

14

F3: Sustainable Urban Energy and Emissions Planning

15

SUEEP: Maps primary and secondary energy supply and use in a city, as well as efficiency of energy conversion and GHG emissions across municipal sectors;TRACE: Identifies priority areas for further investigation and intervention

GHG emissions by Fuel Source

F3: Sustainable Urban Energy and Emissions Planning

16

SUEEP: Maps primary and secondary energy supply and use in a city, as well as efficiency of energy conversion and GHG emissions across municipal sectors;TRACE: Identifies priority areas for further investigation and intervention

GHG emissions by Fuel Source Energy Flow in Surabaya

F3: Sustainable Urban Energy and Emissions Planning

17

SUEEP: Maps primary and secondary energy supply and use in a city, as well as efficiency of energy conversion and GHG emissions across municipal sectors;TRACE: Identifies priority areas for further investigation and intervention

GHG emissions by Fuel Source

GHG emissions by End Use

Energy Flow in Surabaya

EAP Energy Program

18

China and Mongolia

Indonesia Vietnam Philippines Thailand, Lao and Cambodia

Pacific Island States (PICs)

Energy EfficiencyESCO/EMCs;District Heating;Financial intermediaries for scaling-up EE investments;Trading in EE certificates and MRV system

Renewable EnergyIntertidal and off-shore wind power;Concentrated Solar Power (CSP)Hydropower Pumped Storage

New TechnologiesIntegrated urban energy solutions for low-carbon cities: zero-emission buildings, solar PV, Electric Vehicles (EVs), energy storage and Smart Grids;Capacity building for Carbon Capture and Storage (CCS)Coal Bad Methane (CBM) and unconventional gas

Energy AccessClean Stove Initiative in China and Mongolia

Energy EfficiencyIndustrial EE and ESCOs

Renewable EnergyGeothermal powerHydropower Pumped Storage

Power TransmissionTransmission system expansion (substations and transmission lines)Management Information System

Energy AccessElectrification of islands in East Indonesia (solar PV and small RE)Clean Stove Initiative

New TechnologiesSustainable urban energy program (energy efficiency)CBM and unconventional gasCapacity building for CCS

Energy EfficiencyIndustrial EE and ESCOs

Renewable EnergyHydropower

Power TransmissionTransmission system expansion (substations and transmission lines)Distribution system expansion and modernization (smart metering)

Energy AccessRural power distribution

New TechnologiesSustainable urban energy program (energy efficiency);Smart Grids;Capacity building for LNG

Renewable EnergyDistributed renewable energy

Energy AccessRural power distribution

New TechnologiesSustainable urban energy program (energy efficiency);Capacity building for LNG

Renewable EnergyHydropower (Lao) and regional power trade in GMS

Power TransmissionGMS power transmission (substations and transmission lines)

Energy AccessRural power distribution and off-grid electrification (Lao and Cambodia)Clean Stove Initiative

Renewable EnergyDistributed renewable energy (small hydro, solar PV, biogas)Grid connected solar PV

Myanmar: Key Issues

1. Strategic Vision for Power Sector Development• Optimal fuel mix for secure and cost effective electricity supply in the domestic

market• Private sector participation model attractive for investors and affordable for

consumers

2. Reform of Legal and Regulatory Environment• Transparent and stable regulatory regime (adoption of new Electricity Law)• Financially sustainable power industry (cost recovery tariff for efficient power

services)

3. Implementation of Investment Program• Least-Cost Investment Program• Mobilization of long term capital

4. Institutional Development and Capacity Building • Coordination with National Energy Management Committee• Technical assistance to MOEP and MOE for energy policy • Policy dialog with development partners

5. Sponsor & Legacy Issues• Particularly relevant to private sector projects (e.g. IPPs with early MOAs)

Myanmar: Primary Energy Supply and Access to Electricity

Biomass accounts for about two-thirds of primary energy consumption

Electricity consumption per capita is one of the lowest in the world (and GMS)

Electrification ratio increased from 16% in 2006 to 27% in 2012 Large shortages in the gas (50%) and power (20-30%) market

Myanmar: Joint WBG Action Plan

1. Electric Power Project in MEPE (WB/IDA)• The $140 million CCGT Project presented at the Board on 09/24/2013, includes a sizable

TA component ($10 million)

2. Develop Analytical Basis for Strategic Decisions (WB, IFC and MIGA)• Complete Public Expenditure Review by end-2013 (WB)• Develop National Electrification Program by June 2014 (WB/SEFA)• Assess possible funding sources (IFC and MIGA)• Financial Viability Action Plan and fiscal impact assessment by June 2014 (WB)

3. Support Government Decision Making and Power Sector Reform and Development Program (WB, IFC and MIGA) – continuous activities• Policy dialog on power market reform options for Myanmar (follow-up on the 2013 Policy

Note to NEMC)• Policy briefs and presentations, workshops and outreach activities with other DPs• Electrification workshops (March and June 2014)

4. Preparation of Potential IFC Engagements• Joint advisory and investment proposal to support YESB• Investment support for emerging private sector projects in power distribution and gas-

fired power generation• Exploratory discussions around IFC role in LNG using InfraVentures• Initial scoping of potential opportunities in sustainable hydropower