Jong Inn KimJong Inn KimPrincipal Energy SpecialistPrincipal Energy SpecialistEnergy, Transport, and Water Division, Energy, Transport, and Water Division, Asian Development BankAsian Development Bank

ROUNDTABLEROUNDTABLEAPEC Energy Trade and InvestmentAPEC Energy Trade and InvestmentCairns, AustraliaCairns, Australia1 October 20081 October 2008

Perspectives on Perspectives on Enhancing Energy Trade Enhancing Energy Trade & Investment& Investment

OutlineOutline

Views on the studyViews on the study – ViewsViews– GMS ExperienceGMS Experience

Cleaner Energy Cleaner Energy Technologies/ProjectsTechnologies/Projects– BarriersBarriers– Enabling EnvironmentEnabling Environment– Capacity BuildingCapacity Building

Importance of Energy Importance of Energy Trade and Investment in Trade and Investment in AsiaAsia

Energy demand will grow as economic growth Energy demand will grow as economic growth in Asia – hugh investment requirements in Asia – hugh investment requirements

Energy resources and demand are uneven – Energy resources and demand are uneven – regional energy trade & cooperationregional energy trade & cooperation

Financial resources are uneven – private Financial resources are uneven – private sector participation, PPP, foreign investmentssector participation, PPP, foreign investments

Achieve adequate, reliable and affordable Achieve adequate, reliable and affordable energy supplies in a socially, economically energy supplies in a socially, economically and environmentally sustainable mannerand environmentally sustainable manner

Key issue is how to facilitate energy trade Key issue is how to facilitate energy trade and investment, especially private sector and investment, especially private sector investment ???investment ???

Views on the StudyViews on the Study

Well prepared and comprehensive reportWell prepared and comprehensive report– Identified 4 Border barriers, 9 Behind-the-border Identified 4 Border barriers, 9 Behind-the-border

barriers, and 3 international collaboration barriersbarriers, and 3 international collaboration barriers – Attempted ranking and prioritization of barriers by Attempted ranking and prioritization of barriers by

multi-criteria analysismulti-criteria analysis– Discussed role and effectiveness of international Discussed role and effectiveness of international

bodies and current arrangementsbodies and current arrangements Information on GMS activities (Box 1 & p. Information on GMS activities (Box 1 & p.

29)29)

Information on ADB (Table 9)Information on ADB (Table 9)– APEC coverage: 17 members (except Russia, APEC coverage: 17 members (except Russia,

Mexico, Chile, Peru)Mexico, Chile, Peru)– Energy type: allEnergy type: all

Views on the StudyViews on the Study

More practical approach on ranking and More practical approach on ranking and prioritization of barriers is suggestedprioritization of barriers is suggested

For energy type, such as primary For energy type, such as primary energy and secondary energy energy and secondary energy differentlydifferently

Gas, Oil, Coal, UraniumGas, Oil, Coal, Uranium Electricity (including hydro)Electricity (including hydro)

For country-wise ( or subregion-wise ?)For country-wise ( or subregion-wise ?) In-depth study for developing members of In-depth study for developing members of

APEC APEC

Thailand

Land area: 513 thou sq km

Population: 65.8 M

GDP per capita: US$3,133

Cambodia

Land area: 181 thou sq km

Population: 14.1 M

GDP per capita: US$510

Myanmar

Land area: 677 thou sq km

Population: 54.8 M

GDP per capita: US$255 (2005)

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)

Viet Nam

Land area: 332 thou sq km

Population: 84.1 M

GDP per capita: US$724

Lao PDR

Land area: 237 thou sq km

Population: 5.7 M

GDP per capita: US$601The GMS in 2006

Land area: 2.6 M sq km

Population: 323 M

GDP per capita: US$1,453*

* excludes Myanmar

The Greater Mekong Subregion The Greater Mekong Subregion (GMS)(GMS)

•Thailand

•Hydro: 12,700

•Coal: 2,400

•Gas: 943

•Oil: 124

•Cambodia

•Hydro: 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: 910•GMS Energy Resources

•Hydro: 333,700 MW

•Coal: 59,340 Mln tons

•Gas: 1,378 Bln cu. m.

•Oil: 478 Mln tons

•Energy ResourcesEnergy Resources

GMS MilestonesGMS Milestones

GMS Program (1992)GMS Program (1992) GMS Study (1994) GMS Study (1994) Policy Statement on Regional Policy Statement on Regional

Power Trade (2000)Power Trade (2000) Inter-Governmental Agreement on Inter-Governmental Agreement on

Regional Power Trade (2002)Regional Power Trade (2002) Regional Power Trade Regional Power Trade

Coordination Committee. PTOA Coordination Committee. PTOA (2003 ~ )(2003 ~ )

Developing the GMS Power Market:Developing the GMS Power Market:BenefitsBenefits

Through power trade, GMS Through power trade, GMS countries will be able to:countries will be able to:

Optimize investments in power Optimize investments in power reserves to meet peak demandreserves to meet peak demand

Achieve more reliable supply Achieve more reliable supply Reduce operating costsReduce operating costs Reduce greenhouse gas emission Reduce greenhouse gas emission

and pollutantsand pollutants Increase consumer access to the Increase consumer access to the

cheapest power sources availablecheapest power sources available

GMS ExperienceGMS Experience

Sharing information and KnowledgeSharing information and Knowledge Recognize differences Recognize differences

- Uneven distribution of resources- Uneven distribution of resources

- Location of demand centers and its - Location of demand centers and its structurestructure

- policy and regulatory frameworks- policy and regulatory frameworks

- Technical, Institutional, Cultural, Social etc, - Technical, Institutional, Cultural, Social etc, Convince benefits of regional cooperation on Convince benefits of regional cooperation on

power interconnections and tradepower interconnections and trade Commitments from membersCommitments from members

Why Cleaner Energy Why Cleaner Energy Projects in Asia?Projects in Asia?

Energy SecurityEnergy Security– Increasing demand for energyIncreasing demand for energy– Volatility in energy pricesVolatility in energy prices

Climate ChangeClimate Change– Significance of global warming and Significance of global warming and

climate changeclimate change– Need to pNeed to promote low carbon emission romote low carbon emission

options and technologiesoptions and technologies Cleaner Energy: Renewable Cleaner Energy: Renewable

Energy and Energy Efficient Energy and Energy Efficient TechnologiesTechnologies

BarriersBarriers

High up-front costs or lack of High up-front costs or lack of appropriate financial appropriate financial instrumentsinstruments

High transaction costsHigh transaction costs Price distortionsPrice distortions Lack of information/awarenessLack of information/awareness Perceived high risks of new Perceived high risks of new

technologiestechnologies Inadequate institutional Inadequate institutional

capacitiescapacities

Interventions to Develop Interventions to Develop Enabling EnvironmentEnabling Environment

Need for effective policy & regulatory Need for effective policy & regulatory framework, and innovative financial framework, and innovative financial approaches for scaling up clean energy approaches for scaling up clean energy technologies and practices. technologies and practices.

Given the range of energy uses and Given the range of energy uses and stakeholders involved, a mix of policies, stakeholders involved, a mix of policies, regulations, market-based mechanisms, new regulations, market-based mechanisms, new technologies and good practices are necessarytechnologies and good practices are necessary– Small projects may be fooled togetherSmall projects may be fooled together– Increase of availability of concessional financing Increase of availability of concessional financing – Adjustments in energy pricing Adjustments in energy pricing – Promote RD&D, especially dissemination and public Promote RD&D, especially dissemination and public

awarenessawareness– Effective knowledge sharing for building institutional Effective knowledge sharing for building institutional

capacities capacities

Capacity BuildingCapacity Building

Thematic areas to be covered by Thematic areas to be covered by capacity building activities to promote capacity building activities to promote CEPCEP– Identification of policy, regulatory and Identification of policy, regulatory and

institutional constraints against greater use of EE, institutional constraints against greater use of EE, RE and greenhouse gas abatement technologies RE and greenhouse gas abatement technologies

– Preparation of pre-feasibility and feasibility Preparation of pre-feasibility and feasibility studies that are promising and qualified for studies that are promising and qualified for financingfinancing

– Development of specific financing schemes using Development of specific financing schemes using existing and emerging national and international existing and emerging national and international financing mechanismsfinancing mechanisms

Knowledge sharing and dissemination Knowledge sharing and dissemination of good practices of good practices

Thank youThank you

Shared Energy Future–Acting Shared Energy Future–Acting NowNow

jkimjkim@adb.org@adb.org