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Progress and Priorities of GMS EnergySector Development: An Assessment

Fourth Economic Corridors Forum (ECF-4)

28 June 2012

Mandalay, Myanmar

Anthony J. JudeDirector, Energy Division

Southeast Asia Department

Asian Development Bank.

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GMS Energy Challenges: Impacts Socialand 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 todeveloping 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

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Thailand

Hydro: 12,700

Coal: 2,400

Gas: 943

Oil: 124

CambodiaHydro: 15,000

Gas: 42.5- 99

Oil: 7- 14

Myanmar

Hydro: 100,000

Coal: 200-230

Gas: 160

Oil: 32

Yunnan, PRC

Hydro: 150,000

Coal: 23,580

Gas: 32

Oil: 226

Viet Nam

Hydro: 30,000

Coal: 32,250

Gas: 144

Oil: 82

Lao PDR

Hydro: 26,000

Coal: 910GMS Energy Resources

Hydro: 333,700 MW

Coal: 59,340 Mln tons

Gas: 1,378 Bln cu. m.

Oil: 478 Mln tons

Energy Resources

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Expanded Cooperation in Energy Sector

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

Integrated regional planning and coordination allow foridentification 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 bestpractices in energy efficiency, renewable energytechnologies, 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

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Options to Meet Growing Energy Demandwhile Ensuring Access and Sustainability

Energy security:

o Use less energy for same tasks (energy efficiency- EE)

o Obtain energy from less vulnerable sources and increaseuse 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 projectin one country and export to another

Increase cross border power trading. Take advantage ofdifferences in peak demand/ save on base load investment

Power trade-o Requires strengthening grids for power trading- enables

service expansion to unserved corridor areas (e.g. LAO: GMSNorthern Power Transmission)o Involves construction of cross-border lines- makes more

feasible power distribution to nearby villages (e.g., CAM: GMSPower Transmission)

Future grid strengthening of East-West Corridor (important forMyanmar)

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GMS Energy Road Map: Ensuring EnergySecurity, Affordability and Sustainability

Thrusts Priority Projects/ ActivitiesEnergy Efficiency (EE) 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

New and Renewable

Energy (NRE)

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

Regional Energy Planning,

Policy and Program

Energy Database Development (RPTCC & SEF); Training Needs

Analysis; Accreditation Schemes for Energy Managers; Project

Preparation TA Facility

Power Trade Development Various Generation and Interconnection Projects; Study forRegional Power Transmission Development; RuralElectrification; Off-grid Systems Incentives; Piloting SmartSubsidies

Coal, Oil and Gas Gas Logistics; Natural Gas in Transport; Pipeline Safety; Abated

Coal Generation; Coal Liquefaction; Pilot Combined Cycle and

Carbon Capture and Storage

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Developing the GMS Power Market:Benefits and Approaches

Power Trade (especially inadvanced stage of wholesalecompetitive market) bringsmany benefits: Optimizedinvestments, more reliable

supply, lower operating costs,reduced GHGs, cheaper costs

Benefits of Energy Cooperation= $200 billion in discountedenergy costs (19% of total) over

2005-2025SMART objectives crucial to

achieve low carbon gains

Two-Pronged Approach to DevelopPower Market

1. Providing the Policy and InstitutionalFrameworkto promote opportunities forextended cooperation in power trade

2. Developing the Grid InterconnectionInfrastructurethrough a building blockapproach allowing cross-border dispatch

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8

Existing Grid

+ CommittedProjects

+ CandidateProjects

Master Plan Update: 3 Poles of DevelopmentAligned with Priority GMS Corridors

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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 items1-3 will facilitate feeder/distribution lines in settlements in Cambodiaand Lao PDR, and eventually Myanmar (via the East-West pole)

Myanmar distribution lines could also benefit from PRC-Myanmar andMyanmar-Thailand lines along the North South pole

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STRENGTHS OF GMS POWERCOOPERATION/ 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 powertrade; 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 ofpreparation

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For ADB

www.adb.org

For the GMS

www.adb.org/GMS/