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Energy Scenarios: From the Present to the Next Decade Thailand Infrastructure Dialogue Bangkok, Aug 28, 2006. World Bank Global Review of Energy Policies. At its Annual Meeting in Singapore, in September 2006, the Bank will present the ‘Clean Energy and Development Investment Framework’ - PowerPoint PPT Presentation
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ASTAE
Energy Scenarios: From the Present to the Next Decade
Thailand Infrastructure DialogueBangkok, Aug 28, 2006
ASTAE World Bank Global Review of Energy Policies
At its Annual Meeting in Singapore, in September 2006, the Bank will present the
‘Clean Energy and Development Investment Framework’
• It is a serious response to today’s cascade of severe energy challenges.
• Current development scenarios have failed due to rapid price increases of fossil fuels. Net oil-importing countries have lost around 3.5 % of GDP.
• Businesses – and the economy – suffer from higher prices, and heavier costs for energy
• Households – and society – suffer from reduced benefits of energy• The evidence of climate change is requiring additional drastic steps in the
energy, transport, and industrial sectors to adjust to change and reduce further climate change by reducing greenhouse gases from energy use and production.
ASTAE RE+EE 48% growth
ASTAE Magnitude of Energy Needs
Total annual investment in renewable capacity:2004: US$ 30 billion2005: US$ 38 billion
2005: Annual investment levels (excluding large hydro):
China: US$ 7 billionGermany: US$ 7 billionUSA: US$ 3.5 billionSpain: US$ 2 billionJapan: US$ 2 billion
Demand in 2006 is 4,300 million tons of oil equivalent.Demand will rise 60% by 2030.
Required annual investment in NICs and developing countries between 2005 and 2030 = US$ 300 billion of which 73% for electricity.
Public sector cannot meet needs. Policy changes are required to facilitate private sector investment
ASTAE …Different investment characteristics
• Low(er) carbon• Incorporate security and climate change risks: diversify technologies
-> clean coal, oil and gas fueled, hydro and wind turbine, solarPV and solar heat, etc.
• Diversify operations due to less firm energy capacity (droughts -> empty reservoirs, no wind, high cost for gas and oil)
• Challenge and opportunity: diversified ownership: public, private, communities, etc.
• Diversified maintenance and operation standards, need for different regulations.
• Changing Financing Terms and Conditions:– Longer terms and different risk patterns:
• Lend against Power Purchase Agreements• Reinsurance against security and weather conditions
ASTAE
Diversified Technologies
Diversified Ownership
ASTAE What other countries are doing
• USA: 22 states have renewable portfolio standards (RPS) targets
• Germany: Feed-in laws greatly stimulated capacity in wind (total installed capacity 18GW)
• Spain: wind capacity of 10GW meets 6% electricity demand now and 12% in 2010
• China: Renewable Energy Law, including feed-in tariffs for biomass but not wind. Aims 15% of electricity from RE in 2015
• Japan: 830,000 grid-connected solar rooftop programs• Brazil: 2005: 15 billion liters of ethanol (equalled by USA)• Netherlands: 50%+ consumers buy Green Energy
Certificates
ASTAE
Bangladesh India Pakistan China
Percent with generators
72% 71%
42%
27%
3.3%
5.4%
2%
0
20
40
60
80
Mean losses due topower outages (percent)
With generators
Losses from outages
0
2
4
69%
Total Factor Productivity of Micro, Small, Medium and Large Enterprises can differ
between countries by more than 60% due to Energy and Infrastructure factors
Energy Impact on Competitiveness
ASTAE EAP energy trends 2005-2010
• Fastest growth in energy demand of any region in world
• Coal will account for nearly half of primary energy environmental impacts
• Oil imports to rise security concerns
• Gas low; renewables low – aggressive promotion needed
• Power generation dominated by coal (~50 -75%); oil (~10%); gas (~10%); rest renewables + nuclear
• Biomass to remain significant
EAP in 2010: Coal dominant, oil & gas risingPrimary energy consumption (IEA 2004)
0
500
1,000
1,500
2,000
2,500
EA
P 2
002
Chi
na 2
002
EA
P 2
010
(BA
U)
US
A+C
anad
a20
02
EU
200
2
Japa
n+K
orea
2002
Mill
ion
tons
oil
equi
vale
nt (M
toe) Biomass
Otherrenew ablesHydro
Nuclear
Gas
Oil
Coal
EAP to account for 30% of global energy demand growth 2002-20(IEA 2004)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2002 2010 2020
Prim
ary
ener
gy (M
illion
tons
oil e
quiv
)
USA+Canada EU Developing East AsiaSouth America South Asia Japan+KoreaRest of the World
ASTAEDevelopment challenges
Future: Plenty of room for growthIn transport, vehicle ownership is still low
-
50
100
150
200
Chi
na
Vie
tnam
Indo
nesi
a
Phi
lippi
nes
Mon
golia
Cam
bodi
a
Thai
land
Sou
thK
orea
Mal
aysi
a
Pas
seng
er c
ars/
1000
per
sons
, 20
02
EAP Average
= 10
Japan 492
Environmental cost: High fossil fuel use is leading to increasing Greenhouse Gas emissions
0
1
2
3
4
5
6
7
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002B
illio
ns o
f ton
s of
CO
2 fro
m fo
ssil
fuel
con
sum
ptio
n
China
Indonesia, Vietnam& PhilippinesS. Korea, Thailand,Malaysia
USA
Global and domestic environmental impacts•1/3 of land in China is affected by acid rain
People affected by climate change events over a 14 year period (1990-2004)• China 1.8 billion• Thailand 34 million
ASTAEDevelopment challenges
EAP has not exploited most of its hydropower potential
• Investment needs dwarf public resources
• Energy efficiency is low• Unexploited hydropower
potential
EAP medium-term needs in power (excl. China)
0
1,000
2,000
3,000
4,000
5,000
6,000
Tim
orLe
ste
Mon
golia
Cam
bodi
a
Lao
PDR
PNG
Philip
pine
s
Viet
nam
Indo
nesi
a
US$
mill
ion
per y
ear
Low Efficiency: Energy consumed per unit of GDP is still high in major EAP countries
(Energy consumed to produce 1,000 dollars of GDP in 2003)
0.0
0.5
1.0
Source: World Bank WDI Online, BP Statistical Review of World Energy 2004
ASTAE Renewables least cost energy solution?
• Netherlands last week stopped applications for subsidies
• Fiji aims to have Electricity supply 100% from renewables by 2012 in least cost scenario.
• Shipping and Transport Companies in Pacific switching to Coconut Oil.
• Renewables profitable investments …..
ASTAE Practical Examples
ASTAE
• Long-term finance even at the micro-level, in Papua New Guinea now lets teachers reduce their energy costs by switching to renewables
Practical Examples
ASTAE
TIME
COST
This project transforms the initial high investment cost (US$250 – US$1,000)
into less than….the current monthly cost of kerosene and torch batteries used for lighting, resulting in…….
S A V I NG S
ASTAE Clean Energy Financing Vehicle
The Clean Energy Financing Vehicle (CEFV) will
provide a mechanism to transfer high efficiency technology blend grants and carbon finance to buy down the costs of new
technologies and mitigate technology risks.
The Vehicle will provide include:
• Power rehabilitation financing, with repayment provided from increased efficiency and capacity, plus carbon emissions reductions.
• Project development fund, to increase “Bankable” projects with private sector participation
• Venture capital funds for technology adoption
ASTAE Carbon Finance Business
• Relatively new business; launched in 2000• Two Carbon Finance business lines: IBRD Carbon
Finance and IFC Carbon Finance.• About $1.4 billion in funds under management since
2000• Leverage public and private investments for projects
that generate greenhouse gas emission reductions
ASTAE
World Bank Carbon Finance Products
Total funds under management: ~ $1.7billion
Italian Carbon Fund. $100 million (open to Italian participation). Italian Multi-shareholder. Multipurpose.
Netherlands Clean Development Facility. $222 million.Netherlands Ministry of Environment. CDM energy projects.
BioCarbon Fund. $63.5 million (open). Multi-shareholder. JI and CDM LULUCF projects.
Community Development Carbon Fund. $128.6 million (closed). Multi-shareholder. Small-scale CDM energy projects.
Prototype Carbon Fund. $180 million (closed). Multi-shareholder. Multi-purpose.
Netherlands ECF
Netherlands European Carbon Facility. $40 million with IFC.Netherlands Ministry of Economic Affairs. JI projects.
Spanish CF
Spanish Carbon Fund. $280 million (open to Spanish participation). Spanish Multi-shareholder. Multipurpose.
Danish CFDanish Carbon Fund. $75 million (open to Danish participation). Danish Multi-shareholder. Multipurpose.
ASTAE
78% in East Asiasome Thai projects submitted for financing from
other funds
ASTAE Declining Supply fromExisting Hydro (Wailoa) in Fiji
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1997 1998 1999 2000 2001 2002 2003 2004 2005
Perc
ent S
hare
Wailoa VLIS Diesel
ASTAE 2006 Supply & Demand
FEA - Fiji installed Capacity Firm VariableHydro 72Hydro 6.6Wind 10Biomass 5Diesel to be run on coconut oil 88Total 160 21.6
When the wind blows, or when it rains, and the Variable hydro and wind can generate, FEA needs to close the valves from the reservoir to save water for peak demand.
While we have the technologies, we need to develop the experience to operate systems with multiple energy sources with variable availability.
ASTAE Overview of Bank presentations
• Peter Meier, economic analysis of RE benefits• Jan Hamrin, how to promote renewables• Dr. Masami Kojima, one possible technology: the
challenges and promises of biomass and biofuel
• Ashok Sarkar EE in Global Context• Vincent David, EE in Canada, Ireland and EU• Takeshi Sekiyama, EEE in Japan.
• Mr. Chandrasekhar, Entrepreneur• Mr. Guido Delgado, Banker and Energy expert
ASTAE
Thank You !Antonie de Wilde
CoordinatorAsia Alternative and Sustainable Energy (ASTAE)
East Asia and Pacific Region
Contact: [email protected]