June 16 - 1

Power Sector Vision in the Greater Mekong

WWF

June 2016 JP Denruyter

June 16 - 2

Average real GDP growth 2000 - 2014

June 16 - 3

Electricity demand and growth rates

• CAGR for electricity consumption is for the last ten years for Cambodia, Lao PDR, and Viet Nam, last five years for Myanmar and twelve years for Thailand.

• CAGR for peak demand is for last five years for Cambodia, Myanmar, and Thailand, ten years for Lao PDR and Viet Nam.

June 16 - 4

Electrification rates (2014)

June 16 - 5

Installed capacity by technology/fuel (2014)

June 16 - 6

The future for the power sector in the Greater Mekong

• Huge electricity consumption growth

• Hydro – not much potential left in Thailand and Viet Nam but large potential in Cambodia, Lao PDR and Myanmar – high environmental and social impacts

• Coal – available but poor quality and difficult locations. Imports planned.

• Gas – over 1000 Bcm in region.

• Great wind, solar and biomass potential

June 16 - 7

Greater Mekong future generation mix (BAU)

June 16 - 8

Is that a good future?

• Health Impacts - $0.014 - $0.17/kWh (Buonocore et al., 2015)

• Over 780 million tonnes of CO2eq emissions per year in 2050

• 50% of electricity produced with imported fuel (outside of Mekong region) by 2050

June 16 - 9

Alternative for the region?

June 16 - 10

June 16 - 11

• Analyse technically and economically whether the power sector can shift to a power mix largely based on renewables and efficiency.

• Multi-stakeholder project with consultations.

• Contribute to debate on power development plan and future of power sector.

Project Stages & Current Status

12

Cambodia

Laos PDR

Myanmar

Thailand

Vietnam

• Economic outlook • Current situation • Potential RE & EE • Existing plans • Feasibility of other

plans & constraints

Assumptions & Methodology

Business as Usual (BAU)

Sustainable Energy Scenario

(SES)

Consultation

Detailed Technical Modelling of GMS Power Sectors (BAU

& SES)`

• Detailed results • Alternative SES

plan for GMS • Cost & benefits • Implications • Barriers

GMS Power Sector Vision

refine key assumptions

Modelling

• On an hourly basis to balance supply and demand

• Optimisation based on least cost

• Transparent assumptions on fixed and variable costs of various technologies

June 16 - 13

June 16 - 14

Assumptions for Scenarios

• Use of official GDP and population growth forecasts

• Conservative assumptions on technology and fuel costs for fossil fuels and renewable energy

• Energy efficiency assumptions based on other Asian countries – huge potential!

• Sustainable Energy Scenario gives preference to solar, wind and biomass technologies

June 16 - 15

Our Partners for the Power Sector Vision project

• IES for technical modelling

• Vietnamese Sustainable Energy Alliance

• Renewable Energy Association Myanmar

• Spectrum Myanmar

• Healthy Public Policy Foundation Thailand

• Mekong Strategic Partners in Cambodia

• Laos – consultants

June 16 - 16

Greater Mekong future generation mix (BAU)

June 16 - 17

June 16 - 18

Resource Flows

Coal, Diesel, Fuel Oil, Nuclear Below 10,000 GWh

Gas 10,001 - 20,000 GWh

Large Hydro Above 20,000 GWh

Wind

Solar, Battery, CSP

Biomass and Biogas

Other Renewables

Greater Mekong future generation mix (BAU)

Sustainable Energy Scenarios Electricity Demand

June 16 - 19

-30%

BAU

Greater Mekong future capacity mix (Sustainable Energy Scenario)

June 16 - 20

Greater Mekong future generation mix (Sustainable Energy Scenario)

June 16 - 21

Greater Mekong future generation mix (Sustainable Energy Scenario)

June 16 - 22

Supply security : % of electricity

generated at home

June 16 - 23

Net Present Cost of power sector OPEX & CAPEX until 2050

June 16 - 24

Are the cost assumptions realistic?

June 16 - 25 June 16 - 25

Solar PV + battery Hawaii contract at 145 $/MWh

Solar PV PPAs in India, Saudi Arabia, Dubai, US at 50-70 $/MWh Wind PPAs in Brazil at around 40-50 $/MWh

Levelised cost of electricity

June 16 - 26

Avoided CO2eq emissions

June 16 - 27

Job creation

June 16 - 28

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

2048

2049

2050

Num

ber

of J

obs

BAU SES ASES

Scenario Conclusions

• RE range is between 86% and 100% by 2050

• Carbon emissions reduced by minimum 83%

• SES Hydro increase limited to plants under construction or last phases of planning

• Additional cost to society? Higher capital costs (50% higher) but lower fuel costs turn the energy transition into a win-win scenario

• This does not take into account social and environmental benefits – a just and sustainable energy transition has many more benefits

June 16 - 29

JPDenruyter@wwfgreatermekong.org

panda.org/greatermekong/energyvision

Back up slides

June 16 - 31

Greater Mekong future capacity mix (BAU)

June 16 - 32

Advanced Sustainable Energy

Scenario (ASES)

June 16 - 33

Electricity demand by sector

2014

June 16 - 34

June 16 - 35

June 16 - 36

Cumulative investments

June 16 - 37

Carbon Emissions

June 16 - 38

Job creation

June 16 - 39

Hydro

“The fact that current hydro power projects

are included in the SES does not mean that

WWF or its partners condone any specific

existing dam. But since they have been built,

they are part of the suggested power mix in

the SES. It may well be that some of those

dams will be decommissioned early to make

way for more sustainable solutions.”

June 16 - 40

Technical potential: 60% of variable

electricity

June 16 - 41

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2010 2020 2030 2040 2050

Max

ium

um

shar

e fr

om s

upply

-drive

n s

ourc

es

(WWF and Ecofys, 2011)

Why batteries?

June 16 - 42

2015: $350/kWh

2030: $120/kWh

Why batteries?

• UBS study recently showed that solar and batteries are

already cost effective in Australia (Reneweconomy,

2014).

• Project in Hawai: “The combined solar and energy

storage system is designed to give KIUC, the Kaua‘i

Island Utility Cooperative, dispatch-able electricity in the

evening, and after the sun goes down. KIUC has a 20-

year contract with SolarCity to buy the solar-generated

electricity at a competitive price of 14.5 cents per kilowatt

hour.”

• Estimate of amount of EV conservative (25% in Thailand

by 2050 – compared to expert projections of 50-60%)

June 16 - 43

Efficiency – why this method?

• No bottom-up approach possible without data

• Simply assuming a percentage of EE is not

satisfactory

• Assuming future energy intensity levels by

comparing with other countries – ok, not perfect.

• Quite conservative: we compare energy intensity

in 2050 with today’s energy intensity in

reference countries

June 16 - 44

Electricity tariffs

June 16 - 45 (ASEAN Centre for Energy)

Main assumptions

Demand

• BAU: government plans, with extrapolation

based on GDP growth per economic sector,

population growth and electrification rates.

• SES: GDP growth, population growth,

electrification rates (access to electricity + car

electrification), energy intensity from other

countries (Japan, South Korea, Hong Kong,

Singapore)

• Energy efficiency costs from McKinsey, Berkeley

June 16 - 46

Main Assumptions

Supply

• CAPEX and OPEX assumptions on RE

and FF (incl. nuclear) for BAU and SES

• Cost assumptions on storage (batteries

mainly)

• Reasonable speed of technology

development

June 16 - 47

Capital costs

June 16 - 48

2,49

2

5,75

6

942

778

1,45

0

2,90

0

2,10

0

2,30

0

2,24

3

2,63

0

500

8,51

3

5,22

6

1,80

02,47

4

5,18

0

935

772 1,

305

2,61

0

2,20

0

2,35

0

1,50

0

1,75

9

225

5,50

0

4,17

0

1,76

52,45

0

4,60

5

926

764 1,

175

2,34

9

2,35

0

2,45

0

1,00

0

1,17

3

200

4,00

0

3,70

3

1,72

5

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Gen

eric

Coa

l

Coal

with

CCS

CCG

T

GT

Win

d O

nsho

re

Win

d O

ffsh

ore

Hyd

ro L

arge

Hyd

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mal

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PV N

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acki

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PV w

ithTr

acki

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Batt

ery

- Util

itySc

ale

Sola

r The

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with

Sto

rage

Sola

r The

rmal

No

Stor

age

Biom

ass

Capi

tal C

ost (

Real

201

4 U

SD/k

W)

2015 2030 2050

Grids - Myanmar

June 16 - 49

Cost of scenarios BAU

June 16 - 50

Cost of scenarios SES

June 16 - 51

Cost of scenarios Difference between BAU and SES

June 16 - 52

-60,000

-50,000

-40,000

-30,000

-20,000

-10,000

0

10,000

20,000

20

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50

Incr

em

en

tal

Inve

stm

en

t ($

m's

)

OPEX CAPEX Grid Electrification

Energy Efficiency Offgrid Net Investment

June 16 - 53

June 16 - 54

June 16 - 55

Type FOM ($/MW/yr) VOM ($/MWh)

Hydro 15,124 0.00

Wind 11,784 10.00

Coal 24,036 3.69

Gas 12,023 6.31

Diesel 29,870 15.20

Uranium 34,400 13.77

Fuel Oil 13,283 8.73

Bio 30,435 4.48

Solar 11,331 5.00

CSP 51,359 5.00

Battery 10,000 0.00

Hydro ROR 12,861 0.00

Geothermal 51,359 0.00

Pump Storage 6,216 0.00

CCS 48,724 8.29

Ocean 140,000 0.00