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Temima

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London Asia Capital plc. About London Asia. Asian focused merchant banking group: ... London Asia Capital plc. Existing E&E Investments ... – PowerPoint PPT presentation

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Title: Temima


1
Global Energy Security November 2005 Simon
Littlewood CEO
2
About London Asia
  • Asian focused merchant banking group
  • Private equity investment of own third party
    funds
  • Over 35 investments made since 2002
  • Focus on education, financial services, TMT, and
    Energy Environment
  • Corporate finance advisory services
  • MA Fund raising Capital market transactions
  • Fund management
  • Manage the 50 million UK listed London Asia
    Chinese Private Equity Fund
  • Structured finance
  • Listed on UKs AIM Stock Market since 2002
  • Over 50 owned by UK institutional shareholders
  • International network of offices and joint
    ventures
  • China (32 offices) London New York Hong Kong
  • Germany Singapore Mongolia
  • Malaysia Canada Vietnam

3
Existing EE Investments
  • Management team track record of over 10 years in
    the EE sector
  • made first energy investment in China in 1996
  • Raised over 500 million for projects in Europe
    and North America
  • Current Asian investments
  • China New Energy (UK PLUS listed) ethanol
    equipment
  • Asia Wind wind technology projects in Asia
  • Asia Water (Spore listed) water supply
    treatment
  • China Solar - solar thermal
  • Devotion Ecothermal Technology (Spore listed)
  • Energy efficient heating equipment
  • Green Coke other clean coal/oil technology
  • Asia Power (Spore listed) renewable power
    generation in China
  • China Climate Exchange leading Chinese CDM
    consulting business
  • Coal mines coal bed methane

4
Energy Security - The Problems
  • Rising demand
  • Dwindling supplies of fossil fuels
  • Environment sacrificed for energy security
  • Limited alternative strategies
  • Existing infrastructure cant cope with demand
  • Short term solutions delay the inevitable

5
Rising Demand to continue
  • IEA estimates 53 increase in energy consumption
    by 2030
  • Demand growth 3.7 pa for non OECD countries
  • Driven mainly by India and China India 3.6 -
    3.9
  • Indias Energy consumption up 208 from 1980-2001
    5.4 pa
  • China up 130 - 4.3 pa
  • Indias Production consumption
  • 11th biggest energy producer (2.4 of world
    production)
  • 6th biggest consumer (3.3 of consumption)

6
Supply Shortages
  • Increasing reliance on a smaller number of source
    countries
  • IEA estimates non OPEC crude oil production will
    peak by 2015
  • Rush to secure the last remaining supplies
  • Economic, political military conflict
  • Compromising long term stability and principles
    for short term solutions
  • Rising costs
  • biggest hit are developing countries without
    adequate natural resources cut backs on
    education health to fund it

Source Shell
7
Indias Position
  • Coal
  • 90 billion tons reserves 10 of world total
  • 200 years worth at current consumption
  • 3rd largest coal producer in the world 8.5 of
    world production
  • 3rd largest coal consumer 9 of global
    consumption
  • Responsible for over 50 of Indias energy
  • 70 of electricity production
  • Demand 50 greater than 10 years ago
  • Oil
  • Proven reserves 5 billion barrels of oil 4.5
    of world total
  • Potentially up to 11 billion barrels
  • 25th largest producer of oil 1 of world output
  • 6th largest oil consumer 2.9 of world
    consumption
  • 30 of Indias energy from oil
  • 60 of it imported
  • Estimated consumption of 3 million bpd by 2010
  • 75 increase in consumption in last 10 years

8
Indias Energy Position
  • Gas
  • Reserves 0.5 of world total
  • Consumption growing 4.8 pa
  • Hydro
  • 6th largest producer in the world 3.7 of world
    total
  • Another 30,000 MW under construction
  • Indias energy consumption per unit of GDP
    0.19kg oil equivalent per dollar
  • World average 0.21

9
Indias Position (contd)
  • 6th biggest generator of electricity 4 of
    world total
  • 6th biggest electricity consumer 3.5 of world
    total
  • Electricity consumption generation up 64 in
    last decade
  • Projected 8-10 pa increase till 2020

Indias Primary Energy Resources and energy use
(2006)
10
Environment Sacrificed
  • Environmental cost accelerating
  • Healthcare
  • Agriculture
  • Climate related damage
  • Decreasing quality of supplies increased use
    more pollution
  • IEA estimates 55 increase in CO2 emissions by
    2030
  • China India produce 21 of global CO2 emissions
  • Expected to rise to 36
  • US 23
  • Rest of G7 16
  • Indias carbon dioxide emissions per capita 1
    tonne
  • World average 4 tonnes
  • Developed nations up to 19,000 tonnes
  • Public opinion
  • Civil unrest

11
Alternatives Expensive
  • Coal, gas and oil relatively cheap efficient
  • Energy efficient and renewable technology
    relatively expensive
  • government incentives and legislation required
  • Those countries which can least afford more
    expensive forms of energy production are those
    showing the largest energy growth
  • Production (and related energy use and pollution
    generation) is shifting to the lowest cost
    countries
  • Increasing pressure from consuming countries to
    reduce production cost

12
Infrastructure Needs Upgrading
  • IEA estimates US20 trillion investment required
    in energy supply and infrastructure from
    2005-2030
  • Infrastructure needs upgrading to reduce risk
  • Oil reserves storage
  • Gas pipelines
  • Development of new resources in undeveloped
    countries
  • Legacy systems expensive to replace

13
Existing Solutions
  • Reduce, reuse, recycle
  • Use more Coal
  • Adequate resources for several hundred years in
    India China
  • Dirty difficult to enforce pollution control
  • Massive damage to agriculture water supply
  • Clean coal technology unproven
  • Nuclear
  • Cost current and future
  • Supply of raw material
  • Public concern
  • Risk

14
Existing Solutions
  • Biofuels
  • Planting opportunities in India
  • India has 540m tonnes of crop plantation
    residue
  • 150m tonnes economic in current environment
    19,500MW
  • 537MW under commission, 536MW under construction
  • 1 of global road transport fuel currently
  • On current trends, IEA projects 4 by 2030
  • IEA optimistic scenario is 7 by 2030
  • Currently needs subsidies in most countries
  • Competes with food production
  • Technology needs to be developed to take fibrous
    feedstock
  • Carbon capture/sequestration

15
Existing Solutions
  • Wind
  • 4.4MW installed in India end 2005
  • Up 48 in 2005
  • Growth of 1.5-1.8MX pa planned - another 5MW
    planned by 2010
  • Tax breaks speedy approval process
  • Technology needs further development
  • Efficiency
  • Cost
  • Low speed turbines
  • Solar
  • 250-300 sunny days a year in India
  • Large program already in place
  • 83MW installed PV
  • 3 million m2 solar thermal systems 15m litres
    per day hot water
  • Manufacture in India China India a net
    exporter of modules
  • Technology still inefficient and expensive
  • Need a technology breakthrough to progress
  • Silicon supply shortages

16
Whats Required Long Term
  • Encouragement of energy efficiency
  • Education
  • Cheaper Technology
  • Flexibility on intellectual property
  • Government investment in RD
  • Mass manufacturing
  • Favourable legislation
  • Long term incentives
  • Target the consumer, not the producer
  • Low energy consumer products eg LEDs, Light
    bulbs
  • Quicker planning process
  • True costing of existing fossil fuel resources
  • Carbon credits
  • International co-operation

17
India-EU Co-Operation
  • EU-India Summit in 2005 covered energy
  • Created EU-India Energy Panel, with working
    groups on
  • Energy efficiency renewables
  • Coal clean coal conversion
  • Fusion energy
  • India a huge market for EE solutions
  • Europe has leading EE technology and operational
    know-how
  • Joint ventures
  • Licensing
  • Outsourcing manufacturing

18
India-China Co-operation
  • January 2006 India-China Co-operation agreement
    on hydrocarbons
  • Work together on various topics including
  • Sourcing supplies
  • Refining
  • RD
  • China has low cost manufacturing capability
  • Outsource manufacturing
  • China a large market for EE goods

19
Contact Details
  • Simon Littlewood
  • London Asia Capital plc
  • www.londonasia.com
  • www.londoansiafunds.com
  • www.envirofinance.com
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