1. 1 Key issues framing the SEA scope Related to electricity demand and power trade development in the LMB and GMS Briefing to TNMC Based on the Presentations Made to NMCS/Line Agencies And separate CSO/NGO Consultation Meetings In Viet Nam, Lao PDR and Cambodia

2. 2 Purpose of this Presentation 1.Trends in electricity demand-supply in the LMB/GMS 2.Linkages to the GMS sustainable energy futures – and regional context of cross-border power 3.Proposed mainstream dams in relation to the above trends (multiple seller- multiple buyer) Illustrate /explore: Focused on the opportunities side of the Development “Opportunities-Risk” Equation

3. 3 LMB Selected indicators 2004 CambodiaLao PDRThailandViet Nam Population (million) (2004) 13.85.864.282.1 GDP (current USD billion) 4.92.2150.141.2 GDP per capita (current USD) 3614202,519551 FDI (USD million)131171,0641,610 FDI/capita (USD)9.52.916.619.6 Electricity use per capita (kWh) 451601,752 (2003)433 (2003) Energy use per capita (kgoe) 180.0355.01,405.7 (2003)544.3 (2003) Fuelwood share in total primary energy 88%67%16%49% Source: Economics of energy integration, ADB, 2008

4. 4 Regional GMS energy issues Dependence on traditional sources of energy (e.g. fuelwood) 20 % of GMs population (74 mil.) no access to electricity Energy consumption in GMS is only 2/3 of the world average for developing countries Energy poverty widespread 1993-2005 8% annual growth in energy consumption 21% of total energy consumed in the region imported Volatile energy prices and limited alternative energy sources mean the region is vulnerable Energy vulnerability high and rising Energy supplies low and unpredictable – overall quality low Lack of competitive pressure on energy suppliers Policy regimes inadequate to address emerging challenges Energy productivity and policy Source: Building a sustainable energy future the GMS, ADB 2009

5. 5 Electricity consumption in LMB / GMS Electricity consumption in LMB / GMS relative to other countries + Human Development Index Per Capital Electricity Use Source: Building Sustainable energy futures in the GMS, ADB, 2009 UN Human Development index + Per Capital Electricity Use (2005) 4,000 kwh / yr /pc As turning point In HDI Per capita electricity use

6. 6 Source: Building a sustainable energy future the GMS, ADB, 2009 Significant differences in urbanization and household electricity consumption in LMB CountryUrbanization Ratio Per capita household consumption (KWh) Share of residential sector in total electricity consumption (%) Cambodia17%2952.0 Lao PDR21%9553.0 Thailand33%40921.0 Vietnam27%24242.0

7. 7 Overall trend in GDP growth + electricity consumption in GMS correlated Thailand growth of net electricity consumption and GDP 1982- 2006 Example: Growth + Electricity No trend decoupling of overall energy consumption seen yet - as in OECD economies

8. 8 High economic growth in the LMB 1985-2005 Source: Building a sustainable energy future the GMS, ADB 2008

9. 9 What about the current economic crisis? Source: World Bank 2009 e – expected f - forecast Current downturn in rate of economic growth in the GMS

10. 10 Trend with last Asia economic downturn Source: EIA 2009, UNSD 2009 electricity consumption, total energy and GDP - 1982-2006 Thailand growth rates:

11. 11 Changing economic environment? Power sector projections based on the assumption of continuing rapid economic growth in the region (between 6.3 and 7.6 % to 2025 for the GMS region) Can these levels of growth continue to be expected with the global economic downturn? What does this mean for likely future energy demand in the region – especially where growth has been dependant upon exports? What does this mean for investment in the energy sector? And more specifically investment in hydropower?

12. 12 Projected growth in grid power demand in LMB Countries 2005-2025 Source: Economics of energy integration, ADB, 2008 (base case projection)

13. 13 What this means from a Regional Power Planner Perspective What this means from a Regional Power Planner Perspective Grid Based Generation Expansion time Energy Demand Need for new generation delayed through demand-side management & supply-side efficiency measures Future Capacity Additions Natural Gas? Coal? Oil? Hydro from tributaries or LMB mainstream? Nuclear? Co-generation, etc Grid-scale biomass Grid-scale Wind, Solar Other Grid-scale renewable? Existing Capacity Natural gas Coal Oil hydropower biomass Etc. Projected energy demand Projected energy demand with demand management Supply *RoW = Rest of World Today Other: Power Import Replacement Plant Fuel-Switching

14. 14 GMS energy resources – for grid-scale electricity generation (ADB) Source: Economics of energy integration, ADB, 2008 Hydro (MWyr/yr) - ADB Other renewable sources - Different grades

15. 15 From ADB Four GMS Scenarios – new generation capacity to 2025 Electricity Generation Scenarios – Fuel Type Hydropower Between 62,000 – 93,000 MW Between 217,000 – 238,000 MW One Interpretation – GMS Energy Futures ADB

16. 16 Trends in GMS cross-border power trade? Inter-government Agreement on Regional Power Trade (2002) GMS Power Trade Road Map - as reference Existing Bilateral Power Trade MOUs, subject to PPAs – E.g. Thailand’s MOU’s with Lao PDR (5,000 MW) Cambodia Others, including China Cross-border trade is the key motivating factor for 11+ proposed LMB hydropower schemes (buyer + seller perspectives) Policy + Legal Framework Why? Under Integrated GMS Scenario

17. 17 Trend in cross-border Power Trade Exports Imports CambodiaLao PDRThailandViet NamRoWTotal Cambodia-74 Lao PDR-2,628 Thailand2,033-3,2345,267 Viet Nam521- RoW- Total2,6283,234- Source: Economics of energy integration, ADB, 2008 Trade flow (GWh) in 2005 2025 Exports Imports CambodiaLao PDRThailandViet NamRoWTotal Cambodia-401555 Lao PDR22-5057129 Thailand9,48242,458-147,269*199,209 Viet Nam3,61225,988-5,91835,518 RoW644584-1,228 Total13,11669,130649153,244- 2025

18. 18 2005 2025 Projected electricity trade within 2005-2025 One Trend Scenario – GMS (ADB) Source: Building a sustainable energy future the GMS, ADB, 2009 ? Under Integrated GMS Scenario

19. 19 11+ Proposed LMB Mainstream dams in the Context of Cross-Border Trade 12-14,000 MW and up to 65,000 GWh av. annual 11.5% of installed capacity in LMB by 2020 9.3% of power produced in the LMB by 2020 5% of new generation capacity in GMS by 2025 (ADB Base case) Abut 10 Nam Theun 2’s All LMB schemes together represent near:

20. 20 Potential Markets for Mainstream Dams Thailand PRC Lao & Cambodia Viet Nam 2,600 MW Luang Prabang1,410 MW Sambor 2,600 MW Stung Treng 800 MW 8 in operation, under construction and planned, total 13,800 MW 980 MW -A proportion of generation for domestic power expansion -Units from schemes, subject to agreements 1,410 MW 1,230 MW 1,260 MW 1,320 MW 1,200 MW 1,872 MW 800 MW Pak Beng1,230 MW Xayabori 1,260 MW Pak Lay1,300 MW Sanakham 1,200 MW Ban Khoum1,827 MW Lat Sua 800 MW Don Sahong 360 MW Myanmar -No mainstream projects proposed 360 MW Installed Capacities (MW) subject to change

21. 21 5 general themes in discussions to date (in Cambodia, Lao & Viet Nam) 1.National policy framework - what policies are relevant to place decisions on LMB mainstream dams in a basin-wide sustainable context? 2.Demand - Is the power needed? Is the picture changed with the economic downturn? 3.Supply - Other options to meet electricity needs? theoretical and practical ? What lead time is needed? 4.Priorities – to meet urban or rural needs? 5.Transboundary dimensions - What are the opportunities and constrains? Sharing benefits? Mechanisms? Summing Up Framing Issues Regional Energy Demand / Power Trade

22. 22 Tariff measures? Preferential Energy Rates? Subsidy on power saving? Carbon Tax? Distribution Loss Reduction? Structural Change in Demand? End-Use Efficiency? Power Factor correction? Bulk metering? Conventional Thermal? gas, coal, oil Hydro Tributaries? Hydro Mainstream? Grid-scale Renewable? E.g. wind, biomas, solar Nuclear? Decentralized Systems? Other non Conventional? Electricity Imports? Supply-side efficiency? Improved facility operations? Improved cost recovery? Policies to attract investors? Public and private sector roles? Power Sector Structural / Infrastructure options Demand-Side Management Options Supply-Side Options Non-StructuralOptions e.g. NGO / CSOs and others advocate expanding consideration of options Change for SEA: Measure and Manage Expectation

23. 23 How will the SEA address divergent views? On the power and energy theme SEA now at Preparation Stage – consultation oriented. Focus on the 11+ mainstream dams Systematically bring existing information in a timely way to feed immediate needs (e.g. MRC Procedures) + longer term planning Inception Report and Baseline Assessment - to follow Trend analysis Trend analysis - how mainstream dams impact on development trends Scenario analysis Scenario analysis - ‘With and without’ mainstream dams scenario’s feeding new information to MRC Hydropower Database > BDP Scenario. Opportunities and Risks Opportunities and Risks – analysis of development opportunities and risks, mitigation and enhancement using the SEA Framework

24. 24 Thank you