1 / 38

Energy sector development in the Mekong region: current plans, key concerns and alternatives

Energy sector development in the Mekong region: current plans, key concerns and alternatives. Chuenchom Sangarasri Greacen Palang Thai www.palangthai.org Workshop on Mekong Environment and Livelihood : The Changing situation and Trans - boundary Implications  3-4 February 2010.

tyrell
Download Presentation

Energy sector development in the Mekong region: current plans, key concerns and alternatives

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Energy sector development in the Mekong region: current plans, key concerns and alternatives Chuenchom Sangarasri Greacen Palang Thai www.palangthai.org Workshop on Mekong Environment and Livelihood: The Changing situation and Trans-boundary Implications  3-4 February 2010

  2. Export to Thailand Export to Vietnam Lao PDR’s electricity forecast (PDP2007) Future DemandMW 2010 648 2015 1216 2020 1486 Source: Department of Energy Promotion & Development Ministry of Energy & Mines, Power Development Plans & Transmission Interconnection Projects Lao PD, Nov 2008. Downloaded from: http://www.adb.org/Documents/Events/Mekong/Proceedings/FG7-RPTCC7-Annex3.3-LaoPDR-Presentation.pdf

  3. MOU: Lao PDR to export 5000 MW to VN Source: Ministry of Energy and Mines, “Energy Requirement & Sector Development in Lao PDR”presentation in Phnom Penh, Sep 2009

  4. MOU: Lao PDP to export 7000 MW to Thailand Source: Ministry of Energy and Mines, “Energy Requirement & Sector Development in Lao PDR”presentation in Phnom Penh, Sep 2009

  5. Vietnam’s planned power imports from Laos PDR Source: Progress of Vietnam Power Development Plan and Transmission Interconnection Project, Nov 2008. Downloaded from: http://www.adb.org/Documents/Events/Mekong/Proceedings/FG7-RPTCC7-Annex3.6-VietNam-Presentation.pdf

  6. Vietnam’s planned power imports from Cambodia Source: Progress of Vietnam Power Development Plan and Transmission Interconnection Project, Nov 2008. Downloaded from: http://www.adb.org/Documents/Events/Mekong/Proceedings/FG7-RPTCC7-Annex3.6-VietNam-Presentation.pdf

  7. Power Generation and National Grid during 2024 of Cambodia Import SPP from Thailand

  8. Myanmar Source: Myanmar Country Report on Progress of Power Development Plans and Transmission Interconnection Projects, Nov 2008. Downloaded from http://www.adb.org/Documents/Events/Mekong/Proceedings/FG7-RPTCC7-Annex3.4-Myanmar-Presentation.pdf

  9. China’s GMS cooperation projects Sino-Vietnam Cooperation • 1. Power Supply to Vietnam • 3 220kV + 4 110kV lines • Total by the end of Sep 2008: 5.9 TWh • 2. 500kV Interconnection Project • Feasibility Study is under progression • 3. Vinh Tan 1 BOT Coal-fired Power Plant (2×600MW) • Under negotiation Sino-Thailand Cooperation • 1. China-Laos-Thailand 500kV Transmission Project • Suspended Sino-Cambodia Cooperation • 1. Sambor Hydro-Electric Power Project (2600MW) • Finished the FS and submitted it to Cambodia. Source: China Southern Power Grid, “Update For CSG Power Grid Planning & GMS Cooperation ProjectsChina” 2008. http://www.adb.org/Documents/Events/Mekong/Proceedings/FG7-RPTCC7-Annex3.3-LaoPDR-Presentation.pdf

  10. China’s GMS cooperation projects Sino-Laos Cooperation • 1. Laos’Master Plan on Electric Power Industry • Finished by the end of 2007 and submitted to laos on Jan.16, 2008. • 2. Nam Tha 1 Hydro-Electric Power Project (3×56MW) • Under Negotiation • 3. Nam Ou Hydropower Station Project (about 1000MW) • Initiated by Sinohydro Corporation • 4. Northern Grid Construction Project • Under Construction Sino-Myanmar Cooperation • 1. Ta Sang Hydro Power Plant Project (10×711MW) • Signed Frame Agreement to develop in Thalwan River • 2. Development of Myanmar Northern Hydropower Projects (total about 1680MW) • Initiated by China Power Investment Corporation Source: China Southern Power Grid, “Update For CSG Power Grid Planning & GMS Cooperation ProjectsChina” 2008. http://www.adb.org/Documents/Events/Mekong/Proceedings/FG7-RPTCC7-Annex3.3-LaoPDR-Presentation.pdf

  11. Do we need all these projects? Who is going to pay for them? What is driving the process?

  12. Case study of Thailand

  13. Govt. ERC Structure of Thai power sector“Single-buyer” (monopoly) Generation (% share) EGAT (50%) IPPs (41%) Import (2%) VSPPs (<<1%) SPPs (7%) EGAT (100%) SO Transmission PEA (67%) MEA (31%) Direct Customers (2%) Distribution Users Users Remarks: - Figure of % Share in 2008 - ERC = Energy Regulatory Commission ที่มา: EPPO Aug 2009

  14. Overview of Electricity Generating CapacityPDP 2007 (Revision 2: Mar09) • Installed capacity as at Dec 2008 29,140 MW • Total increased capacity (2009-2021) 30,155 MW • 2009 - 2015 12,605 MW • 2016 - 2021 17,550 MW • Decommissioned plants -7,502 MW • Total generating capacity up to 2021 51,792 MW ที่มา: EPPO Aug 2009

  15. Incentive structure for utilities:the more expansion, the more profits • Financial criteria for utilities link profits to investments • Thailand uses outdated return-based regulation • WB’s promoted financial criteria such as self financing ratio (SFR) also have similar effects • ROIC (Return on Invested Capital means: the more you invest, the more profits 4.8% Result: Demand forecast have systemic bias toward over-projections Too many expensive power projects get built

  16. Power Demand: Projections vs. Actual1992 – 2008If no systemic bias, the chance of over-projecting demand 12 times in a row should be 1/4096!! MW

  17. E x c e s s c a p a c i t y 2008 2007 2009 Fictional power demand did lead to real investments that become waste & burden(not to mention disturbed ecology, communities) Generation capacity in excess of demand (2007-2009) Under centralized monopoly structure Excess gas/ pipeline capacity/ generation capacity economic waste + excess burden for consumers Very little incentives to do energy efficiency/conservation Source of data: EGAT 2010. หมายเหตุ คำนวณจากกำลังผลิตติดตั้งและความต้องการไฟฟ้าสูงสุดรายเดือน

  18. Part of power demand is for subsidized high-energy-intensity, low-value, low-competitiveness industries BOI investment privileges should take into account energy and environmental considerations Primary metal industry High energy intensity Low value added Low competitiveness

  19. Vietnam 2003 39176 BTU/$GDP Thailand, Vietnam vs. International Energy Intensity

  20. Office of the National Economic and Social Development Board O F F I C E O F T H E P R I M E M I N I S T E R Macroeconomic Analysis Low Quality Education Low Quality labour Enabling factors: MACROECONOMIC MANAGEMENT (Low margin/return) Low Quality for Raw-material, machinery and equipment Insufficient inR&D Investment No immunity/ High volatility Financial System Lack of Saving Lack of regulation on industrial product’s quality control Low Basic infrastructure and Logistic development Slow Technology Development

  21. Electricity production and consumption (GWh) Siam Paragon 1700 families relocated 123 Loss of livelihood for >6200 families MBK 81 Loss of 116 fish species (44%) Central World Mae Hong Song Fishery yield down 80% 75 65 Impacts of Pak Mun Dam alone Source: MEA, EGAT, Searin, Graphic: Green World Foundation Pak Mun Dams Malls Province

  22. Country Average 5.4 Per capital CO2 emission (tons/yr) 11.4 7.3 7.1 5.9 5.7 World Avg 1 ton/yr San Francisco Tokyo London New York Bangkok Source: Green World Foundation, 2008.

  23. "Nature has enough for our need, but not enough for our greed." - Gandhi

  24. Irreversible losses and sufferings…for whose benefits?

  25. Cycle of over-investment Deterministic planning based on demand forecast leads to over-investment in capital-intensive power projects Power demand (over-)projections 1 2 Utilities’ Profits 3 Tariff structure that allows pass-through of unnecessary investments

  26. Nam Theun 2 (1000 MW) Mainly to serve Thailand 6,200 people in Laos resettled Dam will dry Nam Theun River and swell Xe Bung Fai River Endangered species, elephant habitat to be flooded When resistance is tough at home, GMS/ASEAN “Grid” allows cross-border exports of environmental, social and HR problems of securing energy

  27. Regional cooperation framework is used to explore and expand business opportunities for Thai energy corporations • Power projects by Electricity Generating Authority of Thailand (EGAT)’s subsidiaries • RATCH • EGCO • EGAT International • Activities in Laos, Burma, Cambodia, Indonesia • Gas/petroleum projects by • PTT (partially privatized gas/petroleum utility) • PTTEP and its various subsidiaries • Activities in Burma, Malaysia, Indonesia, the Philippines EGAT PTT

  28. Conflict of interest : policyv business Board of directors Permanent secretary of ministry of energy Chairman of PTT Chairman of EGAT Board member of PTT chemical Chairman of Rayong refinery Director general,Energy fuel Dep. permanent secretary Board member of Thai oil Board member of RATCH Dep. permanent secretary Board member of PTTEP Dep. permanent secretary Director general of energy business Board member of PTT Director general of Department of Alternative Energy Development and Efficiency energy Board member of RATCH Director of Energy Policy and Planning official Board member of PTTEP Senior official of ministry of energy Board member of Aromatics PLC Senior official of ministry of energy Board member of Bang chak Board member of RATCH Board member of Ratchaburi generation company Senior official of ministry of energy

  29. Energy policy and its impacts on share prices of energy companies in the stock market • The coup-installed government announced its policy on energy investment opportunities on 3 Oct 2006 • Energy policy, PDP approval and IPP bidding resulted in significant windfall benefits for selected companies • 1 year later, the share prices of companies benefiting from the PDP jumped 66% (other companies had a 8.7% rise)

  30. In conclusion • GMS framework = expanded ground • to which Thailand can export its envi, social & human rights problems from securing energy? • from which Thailand’s centralized energy corporations can grow and profit? • In which Thailand’s cycle of over-investment and excess consumer burden is aggravated? • Regional energy decisions dominated by utilities and senior officials with conflict of interests

  31. Do we have alternatives?

  32. Comparison of trend lines with historical peak consumption Exponential Linear Past demand trajectory was linear but how come the official demand projections have always assumed exponential trend and over-estimated?

  33. Alternative PDP for Thailand 1. Demand forecast • Adjust to be consistent with historical record (linear trend) 2. Renewable Energy • Adjust amount of RE to be consistent with the government’s own plan 3. Energy efficiency/Demand-side management • Adjust amount of EE/DSM to be more consistent with study by academics & EGAT DSM Office

  34. Unnecessary investments worth US$30 billion can be avoided/postponed till 2021

  35. Benefits of Alternative PDP compared to PDP2007(rev.2) • Avoided investments, impacts, conflicts • Reduced dependency on energy imports • Only 23.5% instead of 42.5% in 2021 • Reduced per capita CO2 emission in 2021 • Down 6.6% instead of up 51.4% wrt 2009 level • Reduced electricity bill by 5.8% • More employment, more equal distribution of income, more competitive economy

  36. Comparison of CO2 emissions from approved PDP vs. Alternative PDP หมายเหตุ ใช้ข้อมูลอัตราการปล่อย CO2 จาก CARMA ไม่นับรวม CO2 จากขั้นตอนการจัดหาเชื้อเพลิงและการก่อสร้างโรงไฟฟ้า

  37. Reforms needed for the status quo to embrace alternatives • Return-based regulation -> Performance-based regulation • Accountable demand forecast through contracted demand (forecast backed up by contracts) • Supply-side planning process -> Integrated resource planning (IRP) • Decentralize structure of control and decision making Not possible without broad-based demand for change

More Related