Independent Power Producers Forum

1
Independent Power Producers Forum

• Climate Changes
• Cost or Opportunity
• By
• Colin S. Tam
• Founder and Chairman
• Independent Power Producers Forum (IPPF)
• October 31th, 2008
• Macau

2
Clarification Statement

• The views therein in are solely my personal views
  and do not represent the views or opinions of AEI
  or any of its affiliates.

3
Introduction

• Formed in 2002 by Meiya Power Company, AES China
  Generation, Intergen, and Mirant
• Non-profit organization made up of senior
  executives and decision-makers from power
  generation and related firms with active business
  commitments in Asia
• IPPF organizes and sponsors activities in
  cooperation with selected NGOs, chambers, and
  organizers of seminars and conferences.

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IPPF Mission Statement

• IPPF works toward a level playing field,
  transparency, Rule of Law and a better overall
  investment environment for private sector IPP
  investors in Asia.
• IPPF is a non-profit organization made up of
  senior executives and decision-makers from power
  generation and related firms with active business
  commitments in Asia.
• IPPF interacts with like-minded international
  bodies and institutions, support and work with
  appropriate educational institutions and leading
  academics to promote sustainable, environmental
  friendly and efficient IPP infrastructure.
• IPPF provides opportunities for members to
  network among themselves and with relevant
  government decision makers. It also promotes it
  members as speaker and adviser in related
  activities.

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Our Members - 1

• Aggreko
• Aon
• Ashmore Energy Intl Asia (AEI Asia)
• Asia Energy Products
• Asian Power Solutions
• Atlantic Projects Company (APC)
• Baker Botts

• Black Veatch
• BP Global
• Caterpillar Asia
• Ceejay International
• Chevron International
• CLP Power
• CRA International
• Deacons

6
Our Members - 2

• Deloitte Touche Tohmatsu
• Dewey LeBoeuf
• Diaz, Reus, Rolff Targ
• DLA Piper
• EESCO P2E2 HK
• Emerson Process
• ExxonMobil Energy

• 1
• Gibson, Dunn Crutcher
• Golden Concord
• Granite Services Intl
• HSBC
• Laykin Communications
• Marsh
• Mayer Brown JSM

7
Our Members - 3

• OMelveny Myers
• PB Power
• Peak Pacific (China)
• Pinsent Masons
• Rhine-Main-Pacific
• R.W. Beck International

• Simmons Simmons
• Strait Aero Trading
• URS - Washington Division
• Worley Parsons

8
Cost or Opportunity

• Heres my short answer
• Short Term
• COST FOR ALL
• Long Term
• OPPORTUNITY FOR SOME

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Short Term Perspectives

• Collapse of traditional financial system
• Sharp decrease in both housing and equities value
• Slowing income growth
• Difficult job market
• Uncertainty about economic outlook
• October consumer confidence lowest in 41 years
• Recession is coming in 2009 and fundamental
  changes in the energy market will follow

10
View on Carbon Economy - 1

• Perspective of a power producer
• Fossil sources account for 80 of all energy
  demand coal is 25 of it
• 50 of electricity generation in US is coal, over
  60 for China
• China is constructing approx. 1,000 MW coal fired
  power plant every week
• One 500 MW coal fired power plant produces 3
  million tons of CO2 per year

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View on Carbon Economy - 2

• Momentum to reduce carbon emission will continue
• Ability and willingness to pay for it will not be
  there in the short term
• Cost will be borne by power producers without
  full recovery
• It will in term slow down technology development
  and implementation
• Everyone will pay in the short term

12
View on Carbon Economy - 3

• Renewable power producers will benefit
• CDM credit in many cases are pushing wind and
  solar power generation towards wide commercial
  acceptance
• Near term recession will however slow down
  development for new alternative clean energy
  technology
• It will in term slow down technology development
  and implementation
• Everyone will pay in the short term

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Thank You !
Independent Power Producers Forum

• Contact Information
• Colin Tam
• CEO, AEI Asia Ltd.
• 852-3710-6000
• Colin.tam_at_aeienergy.com