E8-GEF-UNDESA-UNESCAP Financing Sustainable Electrification HCB Initiative South-East Asia Dialogues, September 8-10, 2009, Bangkok, Thailand e8-GEF-UNDESA-UNESCAP.

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e8-GEF-UNDESA-UNESCAP Financing Sustainable Electrification HCB Initiative South-East Asia Dialogues, September 8-10, 2009, Bangkok, Thailand e8-GEF-UNDESA-UNESCAP Financing Sustainable Electrification South-East Asia Dialogues Bangkok, Thailand, September 8-10, 2009 Risks of Clean Tech Investments in South-East Asia Peter Greenwood Executive Director- Strategy CLP Holdings

e8-GEF-UNDESA-UNESCAP Financing Sustainable Electrification HCB Initiative South-East Asia Dialogues, September 8-10, 2009, Bangkok, Thailand Technical Risks Limited level of clean tech deployment in Southeast Asia (other than hydro) Emerging and evolving clean tech lack track record Energy infrastructure not equipped for high penetration of clean technologies Adaptation of clean tech to local conditions for Southeast Asia Intellectual Property (IP) risks - technology companies may be selective in term of markets

e8-GEF-UNDESA-UNESCAP Financing Sustainable Electrification HCB Initiative South-East Asia Dialogues, September 8-10, 2009, Bangkok, Thailand Economic Risks: Clean Tech is Expensive Clean Energy is seriously out of the money – and seriously out of the market > $400 / MWh *Notes: NGCC = Natural Gas Combined-Cycle

e8-GEF-UNDESA-UNESCAP Financing Sustainable Electrification HCB Initiative South-East Asia Dialogues, September 8-10, 2009, Bangkok, Thailand …and the Major Costs are Upfront There are no small (worthwhile) bets in advanced clean technology 200MW CO 2 mineralisation ~USD 580M CO 2 storage tenement ~USD 200M – 370M 500MW IGCC ~USD 1.5B 99MW windfarm ~USD 120M

e8-GEF-UNDESA-UNESCAP Financing Sustainable Electrification HCB Initiative South-East Asia Dialogues, September 8-10, 2009, Bangkok, Thailand Economic Risks: CER Revenue Uncertainty Source: Point Carbon website, Secondary CER OTC Assessment, 14-August-2009 Secondary CER Prices (€) Volatility of CER prices Uncertainty in CERs generated due to resource and energy production variability (e.g. wind power) Average, Maximum and Minimum Values of Monthly Capacity Factors, Germany, , Showing the Long-Term Pattern of Wind Power Variability

e8-GEF-UNDESA-UNESCAP Financing Sustainable Electrification HCB Initiative South-East Asia Dialogues, September 8-10, 2009, Bangkok, Thailand Regulatory Risks NB: - The target for Vietnam is an aspirational target, i.e. one which has not yet been passed into law. - Philippines does not have a % renewable energy target, but has installed capacity targets for different types of renewable energy. - Hong Kong, Indonesia, Vietnam, and Philippines do not offer feed-in tariffs for renewable generation at present Stable and consistent clean tech policies and incentives are yet to be developed in some countries Uncertainty and volatility of regulations hinder investment and deployment

e8-GEF-UNDESA-UNESCAP Financing Sustainable Electrification HCB Initiative South-East Asia Dialogues, September 8-10, 2009, Bangkok, Thailand Regulatory Risks Even within national markets, state or provincial regulation can become the major driver (or risk) to growth

e8-GEF-UNDESA-UNESCAP Financing Sustainable Electrification HCB Initiative South-East Asia Dialogues, September 8-10, 2009, Bangkok, Thailand Environmental Risks Long-term environmental impacts of unproven technologies are not clear –E.g: Potential CO 2 leakage from geological storage (CCS) Renewable energy resources are vulnerable to climate change impact

e8-GEF-UNDESA-UNESCAP Financing Sustainable Electrification HCB Initiative South-East Asia Dialogues, September 8-10, 2009, Bangkok, Thailand Project Risks New, start-up technology vendors may not be able to honour commitments until product life (e.g. out of business before end of performance guarantee) Small markets may only afford or accept projects below critical mass, rendering less competitive cost structures (e.g. high overheads, limited choice of supplier/partner) Off-taker may have financial difficulties to pay dues Small clean tech projects in small markets are price takers and vulnerable to changes in major markets

e8-GEF-UNDESA-UNESCAP Financing Sustainable Electrification HCB Initiative South-East Asia Dialogues, September 8-10, 2009, Bangkok, Thailand Advanced Technology Deployment Risk Hurdles Project Economic Technical Environmental Regulatory

e8-GEF-UNDESA-UNESCAP Financing Sustainable Electrification HCB Initiative South-East Asia Dialogues, September 8-10, 2009, Bangkok, Thailand Contact Information: Tel: Fax: Website: