Jong Inn Kim Principal Energy Specialist Energy, Transport, and Water Division ,

1. ROUNDTABLEAPEC Energy Trade and InvestmentCairns, Australia1 October 2008Perspectives on Enhancing Energy Trade & Investment Jong Inn Kim Principal Energy Specialist Energy, Transport, and Water Division, Asian Development Bank

2. Outline • Views on the study • Views • GMS Experience • Cleaner Energy Technologies/Projects • Barriers • Enabling Environment • Capacity Building

3. Importance of Energy Trade and Investment in Asia • Energy demand will grow as economic growth in Asia– hugh investment requirements • Energy resources and demand are uneven – regional energy trade & cooperation • Financial resources are uneven – private sector participation, PPP, foreign investments • Achieve adequate, reliable and affordable energy supplies in a socially, economically and environmentally sustainable manner • Key issue is how to facilitate energy trade and investment, especially private sector investment ???

4. Views on the Study • Well prepared and comprehensive report • Identified 4 Border barriers, 9 Behind-the-border barriers, and 3 international collaboration barriers • Attempted ranking and prioritization of barriers by multi-criteria analysis • Discussed role and effectiveness of international bodies and current arrangements • Information on GMS activities (Box 1 & p. 29) • Information on ADB (Table 9) • APEC coverage: 17 members (except Russia, Mexico, Chile, Peru) • Energy type: all

5. Views on the Study • More practical approach on ranking and prioritization of barriers is suggested • For energy type, such as primary energy and secondary energy differently • Gas, Oil, Coal, Uranium • Electricity (including hydro) • For country-wise ( or subregion-wise ?) • In-depth study for developing members of APEC

6. The Greater Mekong Subregion (GMS) People’s Republic of China Land area: 633 thou sq km Population: 97.3 M GDP per capita: US$1,135 (figures for Yunnan and Guangxi only) Myanmar Land area: 677 thou sq km Population: 54.8 M GDP per capita: US$255 (2005) Viet Nam Land area: 332 thou sq km Population: 84.1 M GDP per capita: US$724 Thailand Land area: 513 thou sq km Population: 65.8 M GDP per capita: US$3,133 Lao PDR Land area: 237 thou sq km Population: 5.7 M GDP per capita: US$601 The GMS in 2006 Land area: 2.6 M sq km Population: 323 M GDP per capita: US$1,453* * excludes Myanmar Cambodia Land area: 181 thou sq km Population: 14.1 M GDP per capita: US$510

7. Yunnan, PRC • Hydro: 150,000 • Coal: 23,580 • Gas: 32 • Oil: 226 • Myanmar • Hydro: 100,000 • Coal: 200-230 • Gas: 160 • Oil: 32 • Energy Resources • Viet Nam • Hydro: 30,000 • Coal: 32,250 • Gas: 144 • Oil: 82 • Thailand • Hydro: 12,700 • Coal: 2,400 • Gas: 943 • Oil: 124 • Lao PDR • Hydro: 26,000 • Coal: 910 • GMS Energy Resources • Hydro: 333,700 MW • Coal: 59,340 Mln tons • Gas: 1,378 Bln cu. m. • Oil: 478 Mln tons • Cambodia • Hydro: 15,000 • Gas: 42.5- 99 • Oil: 7- 14

8. GMS Milestones • GMS Program (1992) • GMS Study (1994) • Policy Statement on Regional Power Trade (2000) • Inter-Governmental Agreement on Regional Power Trade (2002) • Regional Power Trade Coordination Committee. PTOA (2003 ~ )

9. Developing the GMS Power Market:Benefits Through power trade, GMS countries will be able to: Optimize investments in power reserves to meet peak demand Achieve more reliable supply Reduce operating costs Reduce greenhouse gas emission and pollutants Increase consumer access to the cheapest power sources available

10. GMS Experience • Sharing information and Knowledge • Recognize differences - Uneven distribution of resources - Location of demand centers and its structure - policy and regulatory frameworks - Technical, Institutional, Cultural, Social etc, • Convince benefits of regional cooperation on power interconnections and trade • Commitments from members

11. Why Cleaner Energy Projects in Asia? • Energy Security • Increasing demand for energy • Volatility in energy prices • Climate Change • Significance of global warming and climate change • Need to promote low carbon emission options and technologies • Cleaner Energy: Renewable Energy and Energy Efficient Technologies

12. Barriers • High up-front costs or lack of appropriate financial instruments • High transaction costs • Price distortions • Lack of information/awareness • Perceived high risks of new technologies • Inadequate institutional capacities

13. Interventions to Develop Enabling Environment • Need for effective policy & regulatory framework, and innovative financial approaches for scaling up clean energy technologies and practices. • Given the range of energy uses and stakeholders involved, a mix of policies, regulations, market-based mechanisms, new technologies and good practices are necessary • Small projects may be fooled together • Increase of availability of concessional financing • Adjustments in energy pricing • Promote RD&D, especially dissemination and public awareness • Effective knowledge sharing for building institutional capacities

14. Capacity Building • Thematic areas to be covered by capacity building activities to promote CEP • Identification of policy, regulatory and institutional constraints against greater use of EE, RE and greenhouse gas abatement technologies • Preparation of pre-feasibility and feasibility studies that are promising and qualified for financing • Development of specific financing schemes using existing and emerging national and international financing mechanisms • Knowledge sharing and dissemination of good practices

15. Thank you Shared Energy Future–Acting Now jkim@adb.org