Power Integration in the Lower Mekong

1
Power Integration in the Lower Mekong
Thierry Lefevre, Jean-Marc Alexandre, Jessie L.
Todoc Centre for Energy Environment Resources
Development (CEERD) Foundation for International
Human Resource Development (FIHRD)

• Development of a strategic environmental
  assessment platform for the regional power sector
  integration in the Lower Mekong countries
• National consultations, 04 05 April 2005,
  Bangkok, Thailand

2
Outline of presentation

• Background on the Mekong Region and the regional
  power sector cooperation
• Future energy needs
• Proposed power generation projects and
  interconnections
• Benefits of interconnection
• Potential issues and barriers remaining

3
Background The Mekong Region

• GMS is home to 255 million people and covers a
  total land area of 2.3 million sq km
• Population growth rate of 1.5 annually

4
Background The Mekong Region

• Cambodia recorded the largest increase in
  proportion of urban population, from less than
  13 in 1990 to more than 18 in 2003, equivalent
  to a 6.1 annual growth during the 13-year period
• Thailand continues to experience rapid urban
  population explosion, at 5.3 per annum, from
  18.7 of total population in 1990 to 31.9 in 2003

5
Background The Mekong Region

• High GDP growth is driven mainly by large gains
  in the industrial sector
• ADB expects robust growth to continue

6
Background on power sector cooperation in the
Lower Mekong

• 2 main contexts for power integration among Lower
  Mekong Countries, and 2 recent studies
• ADBs efforts in the context of the GMS energy
  cooperation Regional Indicative Master Plan on
  Power Interconnection in the GMS countries
• ASEANs efforts in the context of the ASEAN Power
  Grid ASEAN Interconnection Master Plan Study
  (AIMS)

7
Focus on the GMS context

• 1992 Launch of ADBs GMS program
• 1995 Creation of the GMS Sub-regional Electric
  Power Forum (EPF)
• 1998 Creation of the Experts Group on Power
  Interconnection and Trade (EGP), responsible
  for discussing detailed work programs and make
  recommendations to the EPF
• 2000 Policy Statement on Regional Power Trade in
  the GMS
• Start of the preparation of the Regional
  Indicative Master Plan on Power Interconnection
  in the GMS with ADB assistance

8
Focus on the GMS context (cont.)

• 2001 GMS countries requested TA from ADB to
  prepare a Regional Power Trade Operating
  Agreement (PTOA) as a basis for the
  Intergovernmental Agreement for Power Trade in
  the GMS (IGA)
• 2002 Signing of the Intergovernmental Agreement
  for Power Trade in the GMS (IGA), at the first
  GMS meeting summit
• Completion of the Regional Indicative Master
  Plan on Power Interconnection in the GMS
  countries
• 2004 Inception and first meetings of the GMS
  Regional Power Trade Coordinating Committee
  (RPTCC)
• 2005 PTOA to be adopted (?)

9
Increasing energy needs
Peak demand (MW)
Thailand
Source H.S. Woldstad, T. Holtedahl, G.L.
Doorman. Large Scale Power Exchange in the
Greater Mekong Subregion. 2004.
Electricity demand in Thailand is expected to
grow at 6.43 and 5.79 per annum respectively
between 2005-2010, and 2010-2020.
10
Increasing energy needs (continued)
Source H.S. Woldstad, T. Holtedahl, G.L.
Doorman. Large Scale Power Exchange in the
Greater Mekong Subregion. 2004.
11
Increasing energy needs (continued)
Source H.S. Woldstad, T. Holtedahl, G.L.
Doorman. Large Scale Power Exchange in the
Greater Mekong Subregion. 2004.
12
...and per capita electricity consumption

• But except in Vietnam, the per capita electricity
  consumption in the GMS transition economies would
  remain below 500 kWh per annum, compared to
  Thailand in which the per capita electricity
  consumption would reach more than 4000 kWh per
  annum by 2020.

Thailand
13
Major generation options
Source T. Lefevre. Reveiew of Energy Sector
Cooreration in the GMS. GMS-EPF 11. 2004.
14
Interconnection scenarios (ADB-GMS Study)

• Scenario 1 Limited power cooperation
• Scenario 2 Extended power cooperation
• Scenario 2A All generation projects indicated by
  the GMS countries (19 projects)
• Scenario 2B Economically viable projects only
  (12)
• Scenario 2C Same as 2B, but without the Tasang
  Hydropower project in Myanmar (11)

15
Proposed interconnections
Source H.S. Woldstad, T. Holtedahl, G.L.
Doorman. Large Scale Power Exchange in the
Greater Mekong Subregion. 2004.
Main Sources of Energy to feed the GMS
Interconnection Network Hydropower in Lao PDR
for export to Thailand Hydropower in Lao PDR for
export to Vietnam Hydropower in Cambodia for
export to Vietnam Coal power in Lao PDR for
export to Thailand Hydropower in Myanmar for
export to Thailand Hydropower in Yunnan for
export to Thailand (through Lao PDR)
16
GMS Proposed Interconnection
Low cooperation scenario
Extended cooperation scenario
Source H.S. Woldstad, T. Holtedahl, G.L.
Doorman. Large Scale Power Exchange in the
Greater Mekong Subregion. 2004.
17
Benefits Potential peak load reduction (overall
GMS)
Source H.S. Woldstad, T. Holtedahl, G.L.
Doorman. Large Scale Power Exchange in the
Greater Mekong Subregion. 2004.
18
Benefits Balanced generation mix (overall GMS)

• More contribution from hydro in the extended
  cooperation scenario
• Significant role for natural gas

Source H.S. Woldstad, T. Holtedahl, G.L.
Doorman. Large Scale Power Exchange in the
Greater Mekong Subregion. 2004.
19
Benefits Investment cost saving and GHG
reduction (overall GMS)
Source H.S. Woldstad, T. Holtedahl, G.L.
Doorman. Large Scale Power Exchange in the
Greater Mekong Subregion. 2004.
20
Summary of benefits

• Power cooperation causes a shift from thermal to
  hydropower generation
• Power cooperation provides cost savings through
  capacity reduction
• Power cooperation reduces GHG emissions

21
Potential barriers and issues remaining

• Future power cooperation might face
• Conflicts between national and regional agendas
• Weak regional cooperation framework
• Opposition to large hydropower
• Huge financing requirements still required for
  expanding cooperation and the institutional and
  policy frameworks
• High risk perception from project developers and
  financiers