Jong Inn Kim Principal Energy Specialist Energy, Transport, and Water Division, Asian Development Bank ROUNDTABLE APEC Energy Trade and Investment Cairns, Australia 1 October 2008 Perspectives on Enhancing Energy Trade & Investment

Outline Views on the study Views on the study – Views – GMS Experience Cleaner Energy Technologies/Projects Cleaner Energy Technologies/Projects – Barriers – Enabling Environment – Capacity Building

Importance of Energy Trade and Investment in Asia Energy demand will grow as economic growth in Asia – hugh investment requirements Energy demand will grow as economic growth in Asia – hugh investment requirements Energy resources and demand are uneven – regional energy trade & cooperation Energy resources and demand are uneven – regional energy trade & cooperation Financial resources are uneven – private sector participation, PPP, foreign investments Financial resources are uneven – private sector participation, PPP, foreign investments Achieve adequate, reliable and affordable energy supplies in a socially, economically and environmentally sustainable manner Achieve adequate, reliable and affordable energy supplies in a socially, economically and environmentally sustainable manner Key issue is how to facilitate energy trade and investment, especially private sector investment ??? Key issue is how to facilitate energy trade and investment, especially private sector investment ???

Views on the Study Well prepared and comprehensive report Well prepared and comprehensive report –Identified 4 Border barriers, 9 Behind-the-border barriers, and 3 international collaboration barriers –Attempted ranking and prioritization of barriers by multi-criteria analysis –Discussed role and effectiveness of international bodies and current arrangements Information on GMS activities (Box 1 & p. 29) Information on GMS activities (Box 1 & p. 29) Information on ADB (Table 9) Information on ADB (Table 9) –APEC coverage: 17 members (except Russia, Mexico, Chile, Peru) –Energy type: all

Views on the Study More practical approach on ranking and prioritization of barriers is suggested More practical approach on ranking and prioritization of barriers is suggested For energy type, such as primary energy and secondary energy differently For energy type, such as primary energy and secondary energy differently Gas, Oil, Coal, Uranium Gas, 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 APEC In-depth study for developing members of 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$601 The 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 (GMS)

Thailand Hydro: 12,700 Coal: 2,400 Gas: 943 Oil: 124 Cambodia Hydro: 15,000 Gas: Oil: Myanmar Hydro: 100,000 Coal: 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 Milestones GMS Program (1992) GMS Program (1992) GMS Study (1994) GMS Study (1994) Policy Statement on Regional Power Trade (2000) Policy Statement on Regional Power Trade (2000) Inter-Governmental Agreement on Regional Power Trade (2002) Inter-Governmental Agreement on Regional Power Trade (2002) Regional Power Trade Coordination Committee. PTOA (2003 ~ ) Regional Power Trade Coordination Committee. PTOA (2003 ~ )

Developing the GMS Power Market: Benefits Through power trade, GMS countries will be able to: Through power trade, GMS countries will be able to: Optimize investments in power reserves to meet peak demand Optimize investments in power reserves to meet peak demand Achieve more reliable supply Achieve more reliable supply Reduce operating costs Reduce operating costs Reduce greenhouse gas emission and pollutants Reduce greenhouse gas emission and pollutants Increase consumer access to the cheapest power sources available Increase consumer access to the cheapest power sources available

GMS Experience Sharing information and Knowledge Sharing information and Knowledge Recognize differences Recognize differences - Uneven distribution of resources - Location of demand centers and its structure - policy and regulatory frameworks - Technical, Institutional, Cultural, Social etc, Convince benefits of regional cooperation on power interconnections and trade Convince benefits of regional cooperation on power interconnections and trade Commitments from members Commitments from members

Why Cleaner Energy Projects in Asia? Energy Security Energy Security –Increasing demand for energy –Volatility in energy prices Climate Change Climate Change –Significance of global warming and climate change –Need to promote low carbon emission options and technologies Cleaner Energy: Renewable Energy and Energy Efficient Technologies Cleaner Energy: Renewable Energy and Energy Efficient Technologies

Barriers High up-front costs or lack of appropriate financial instruments High up-front costs or lack of appropriate financial instruments High transaction costs High transaction costs Price distortions Price distortions Lack of information/awareness Lack of information/awareness Perceived high risks of new technologies Perceived high risks of new technologies Inadequate institutional capacities Inadequate institutional capacities

Interventions to Develop Enabling Environment Need for effective policy & regulatory framework, and innovative financial approaches for scaling up clean energy technologies and practices. Need for effective policy & regulatory framework, and innovative financial approaches for scaling up clean energy technologies and practices. Given the range of energy uses and stakeholders involved, a mix of policies, regulations, market- based mechanisms, new technologies and good practices are necessary Given the range of energy uses and stakeholders involved, a mix of policies, regulations, market- based mechanisms, new technologies and good practices are necessary –Small projects may be fooled together –Increase of availability of concessional financing –Adjustments in energy pricing –Promote RD&D, especially dissemination and public awareness –Effective knowledge sharing for building institutional capacities

Capacity Building Thematic areas to be covered by capacity building activities to promote CEP Thematic areas to be covered by capacity building activities to promote CEP –Identification of policy, regulatory and institutional constraints against greater use of EE, RE and greenhouse gas abatement technologies –Preparation of pre-feasibility and feasibility studies that are promising and qualified for financing –Development of specific financing schemes using existing and emerging national and international financing mechanisms Knowledge sharing and dissemination of good practices Knowledge sharing and dissemination of good practices

Thank you Shared Energy Future – Acting Now