Progress and Priorities of GMS Energy Sector Development: An Assessment

Fourth Economic Corridors Forum (ECF-4)

28 June 2012 Mandalay, Myanmar

Anthony J. Jude Director, Energy Division Southeast Asia Department Asian Development Bank.

GMS Energy Challenges: Impacts Social and Environmental Sustainability

Despite impressive economic growth, poverty is still high GDP grew about 7% yearly (1992-2010); poverty levels generally lower; inequality edged up in most of the subregion Many are still energy poor; access to power is key to

developing corridor areas!

Power use grew 9% yearly (2001-2005) Per capita GMS power use- 863 kWh vs 2,876 kWh world average Poor access, limited connectivity still problems in GMS

Energy vulnerability rising- high dependence on oil imports Oil supply/ price disruptions (sanctions on Iran, etc.) Reducing dependence- shift to alternative supply Lower emissions by integrating energy sector High economic growth puts stress on resources
Energy productivity/ quality of energy supply is low

Myanmar
Hydro: 100,000

Energy Resources

Yunnan, PRC
Hydro: 150,000 Coal: 23,580

Coal: 200-230
Gas: 160 Oil: 32

Gas: 32
Oil: 226

Thailand
Hydro: 12,700 Coal: 2,400 Gas: 943 Oil: 124

Viet Nam
Hydro: 30,000
Coal: 32,250 Gas: 144 Oil: 82

Lao PDR

GMS Energy Resources

Hydro: 333,700 MW Coal: Gas: Oil: 59,340 Mln tons 1,378 Bln cu. m. 478 Mln tons

Hydro: 26,000 Coal: 910

Cambodia
Hydro: 15,000 Gas: 42.5- 99 Oil: 7- 14

Expanded Cooperation in Energy Sector

2009 Study to prepare Regional Energy Plan- High
Growth, GMS Integrated, Low Carbon Scenarios

Integrated regional planning and coordination allow for identification of cost-effective energy projects
Power trade promotion = address transmission issues

Mitigation measures to addressing climate change (CC) need public policy actions at national & regional levels
Reduced emissions = price for carbon

Regional cooperation will enable propagation of best practices in energy efficiency, renewable energy technologies, and clean energy
SMART objectives for RE/EE plans

Regional cooperation on common resources Knowledge products and capacity building

Balancing objectives: growth, food/ energy security, CC, poverty reduction

Options to Meet Growing Energy Demand while Ensuring Access and Sustainability
Energy security: o Use less energy for same tasks (energy efficiency- EE) o Obtain energy from less vulnerable sources and increase use of renewables (solar, wind and biomass) o Use of domestic energy such as natural gas, hydropower, coal (clean coal), alternative fuels (biofuels) Share energy resources: develop sustainable hydropower project in one country and export to another Increase cross border power trading. Take advantage of differences in peak demand/ save on base load investment Power tradeo Requires strengthening grids for power trading- enables service expansion to unserved corridor areas (e.g. LAO: GMS Northern Power Transmission) o Involves construction of cross-border lines- makes more feasible power distribution to nearby villages (e.g., CAM: GMS Power Transmission) Future grid strengthening of East-West Corridor (important for Myanmar)

GMS Energy Road Map: Ensuring Energy Security, Affordability and Sustainability
Thrusts
Energy Efficiency (EE)

Priority Projects/ Activities

Energy Efficiency Network; Demand Side Management and Energy Conservation; Public-Private Partnerships for EE; Carbon-Neutral Transport Corridors; EE Transport Modal Mix; Regional Energy Efficiency Program Regional Framework for NRE; Small Scale Clean Generation Fund; RE Resource Assessment; Promoting RE and Clean Fuels; Biomass Generation; Rural Renewable Energy; Propagating NRE; RE Advocacy Program in the GMS Energy Database Development (RPTCC & SEF); Training Needs Analysis; Accreditation Schemes for Energy Managers; Project Preparation TA Facility Various Generation and Interconnection Projects; Study for Regional Power Transmission Development; Rural Electrification; Off-grid Systems Incentives; Piloting Smart Subsidies Gas Logistics; Natural Gas in Transport; Pipeline Safety; Abated Coal Generation; Coal Liquefaction; Pilot Combined Cycle and Carbon Capture and Storage

New and Renewable Energy (NRE)

Regional Energy Planning, Policy and Program Power Trade Development

Coal, Oil and Gas

Developing the GMS Power Market: Benefits and Approaches

Power Trade (especially in advanced stage of wholesale competitive market) brings many benefits: Optimized investments, more reliable supply, lower operating costs, reduced GHGs, cheaper costs Benefits of Energy Cooperation Two-Pronged Approach to Develop = $200 billion in discounted Power Market energy costs (19% of total) over 1. Providing the Policy and Institutional 2005-2025 Framework to promote opportunities for SMART objectives crucial to extended cooperation in power trade achieve low carbon gains
2. Developing the Grid Interconnection Infrastructure through a building block approach allowing cross-border dispatch

Master Plan Update: 3 Poles of Development Aligned with Priority GMS Corridors
Existing Grid + Committed Projects + Candidate Projects

Priority Regional Interconnections

1. Lao PDR Thailand: - Nabong - Udon Thani: Pakse - Ubon 3 2. Lao PDR Viet Nam: - Ban Hatxan - Plei Ku 3. Lao PDR Cambodia Viet Nam: - Ban Hat - Stung Treng - Tay Ninh 4. PRC Viet Nam: - Southern China Northern Viet Nam 5. PRC Thailand: - Yunnan Wang Noi, Bangkok NOTE: High-medium voltage cross-border lines and substations in items 1-3 will facilitate feeder/distribution lines in settlements in Cambodia and Lao PDR, and eventually Myanmar (via the East-West pole) Myanmar distribution lines could also benefit from PRC-Myanmar and Myanmar-Thailand lines along the North South pole

STRENGTHS OF GMS POWER COOPERATION/ FUTURE DIRECTIONS

Infrastructure: Existing limited cross border links; Dedicated PPA lines; Shared benefits; Growing bilateral trade; Growing demand for new capacity (15% of supply to cross borders by 2025) Institutions/ Policies: Political commitment to power trade; National power sector reforms; Liberal IPP rules; Updated PDPs and GMS Master Plan; RPTCC as coordinator; ADB support GMS REGIONAL POWER COORDINATION CENTER (RPCC): Design criteria, current status of preparation

For ADB www.adb.org For the GMS www.adb.org/GMS/