REGIONAL POWER MARKET AND CROSS- Republic of Korea BORDER - - PowerPoint PPT Presentation

REGIONAL POWER MARKET AND CROSS- BORDER INTERCONNECTIONS TRAINING

Asian Development Bank 29th – 4th Dec. 2015, Republic of Korea

Presented by:

Sanjayan Velautham

Executive Director ASEAN Centre for Energy (ACE)

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OUTLINE

• Introduction – ASEAN & ACE
• Overview of the ASEAN Plan of Action for Energy

Cooperation (APAEC)

• Details on the ASEAN Power Grid
• Overview of the ASEAN Energy Outlook
• Opportunities, Challenges and way forward.

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ASEAN: A Community of Opportunities

Total Trade USD 2.5 trillion

The AEC Blueprint, signed in 2007 in Singapore … to establish ASEAN as a single market and production base with the goal of making ASEAN more dynamic and competitive.”

electricity consumption: 1178 kwh/cap

About half of world´s average

GDP per capita: 3,831 USD

High disparity within the region

population: 625 million area: 4,480,106 km²

8.5 % of world´s population 56% living in rural areas

energy intensity: 0.435 koe / $05p

world´s average 0.16 koe/ $05P

GDP growth 2003-2013: 5.1 %

Remarkable sustained growth rate

“Thinking Globally, Prospering Regionally ASEAN Economic Community”

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AEC : The FOUR Pillar ASEAN was proclaimed a Community through a Declaration signed by ASEAN Leaders at their 27th Summit in Kuala Lumpur on 22 November 2015. Charts the path for ASEAN Community building over the next ten years.

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ACE in ASEAN’s Structure

 Intergovemental Organisation on Energy Matters  7 specialized areas  ACE reports into the Head of Energy Ministries

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ACE VISION & MISSION

• Vision

The Centre as catalyst for the economic growth and development of the ASEAN region by initiating, coordinating, and facilitating national as well as joint and collective activities on energy.

• Mission

ACE will accelerate the integration of energy strategies within ASEAN by providing relevant information and expertise to ensure that over the long-term, the necessary energy development policies and programs are in harmony with the economic growth and the environmental sustainability of the region.

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ACE GOALS

• To establish the Centre as a regional center of excellence
• To strengthen the region’s capability in addressing energy challenges
• To promote the cooperation and integration in energy security, availability and

affordability - towards sustainable energy development

• Development of an institutional memory – energy data base hub for ASEAN
• To enhance the development of ASEAN energy expertise
• To promote private sector investment and participation in energy activities of the

region.

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ASEAN ENERGY BLUEPRINT (APAEC)

• The ASEAN Plan of Action for Energy Cooperation (APAEC)
• Phase I – 2016-2020
• 7 Areas of Focus

ASEAN Power Grid Trans ASEAN Gas Pipeline Coal & Clean Coal Technology  Energy Efficiency & Conservation  Renewable Energy  Regional Energy Policy and Planning  Civilian Nuclear Energy “Enhancing Energy Connectivity and Market Integration in ASEAN to Achieve Energy Security, Accessibility, Affordability and Sustainability for All”

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PROGRAMME AREA NO.7 – CIVILIAN NUCLEAR ENERGY

To enhance cooperation in areas such as public information/awareness, capacity building, including human resource development, education & training, nuclear safety, emergency preparedness and regulatory framework of civilian nuclear power plants (NPPs) in ASEAN

Outcome-based Strategies  Build up capabilities on nuclear energy, regulatory frameworks, safety on emergency

response and preparedness, amongst policy makers and technical officers.

 Improve public understanding on nuclear power generation in the ASEAN region.  Strengthen regional cooperation on nuclear.

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PROGRAMME AREA NO.6 – REGIONAL ENERGY POLICY AND PLANNING

To support energy connectivity and integration in ASEAN, the REPP-SSN will take a longer term view of global trends and its cross-cutting nature to address key energy challenges to enhance security, accessibility and sustainable development.

Outcome-based Strategies

 To better profile ASEAN’s energy sector internationally.  Raise the level of data and analysis on ASEAN’s energy policy and planning.  Strengthen collaboration with DPs and IOs.

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PROGRAMME AREA NO.5 – RENEWABLE ENERGY

To address the challenges of sustainable energy growth and climate change, the AMS have been following a deliberate policy of diversifying and using indigenous energy sources efficiently at the national level.

Outcome-based Strategies  Aspirational target to increase the component of RE to 23% by 2025 in the ASEAN

Energy Mix.

 Enhance awareness on the role of renewable energy among policy makers, private

sectors and public.

 Enhance R&D network on RE technology development and utilisation within the

region.

 Increase the promotion of renewable energy financing schemes

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PROGRAMME AREA NO.4 – ENERGY EFFICIENCY AND CONSERVATION

With the growing focus on energy security, energy efficiency is considered as a critical step for ASEAN to achieve sustainable economic growth, market integration and mitigate the adverse impacts of climate change. Setting aspirational goal of reducing energy intensity in ASEAN by 20% by 2020 as a medium term target and 30% by 2025 as a long term target based on the 2005 levels.

Outcome-based Strategies  Harmonisation and Promotion of Energy Efficiency Standards and Labelling on various

kinds of energy-related products.

 Enhancing private sector participation including Energy Service Companies (ESCOs)

for EE&C promotion.

 Developing green building codes which support the use of high energy efficient

products.

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PROGRAMME AREA NO.3 – COAL AND CLEAN COAL TECHNOLOGY

Coal is expected to continue to be a major fuel for power generation in the future. Consequently, CCT is important in helping to ensure that coal is used in a sustainable manner that will contribute to significant improvements in coal utilisation efficiency and environmental performance compared to existing coal plants.

Outcome-based Strategies  Promote clean coal technologies for power generation to contribute to clean energy

development and economic competitiveness.

 Increase the level of awareness of the public on the benefits of coal use.  Promote intra-ASEAN coal trade and increase investment in CCT.  Conduct policy research to enhance coal development and use, and build capacity.  Establish a fully functional ASEAN Coal Database and Information System (ACDIS).

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PROGRAMME AREA NO.2 – TRANS-ASEAN GAS PIPELINE

Driven by economic growth, natural gas demand in the region is expected to grow from 14.5 billion standard cubic feet per day (BSCFD) in 2013 to 23 BSCFD by 2035. The strategic focus of TAGP will expand from piped gas to LNG as the option for gas supply in the region. In this regard, further to the four (4) RGTs, it is expected that there will be at least one additional RGT in operation by 2020. .

Outcome-based Strategies  Enhance gas & LNG connectivity via pipeline and regasification terminals.  Enhance gas & LNG accessibility via pipeline and regasification terminals.  Minimise environmental impact of CO2 and other environmental contaminants on gas

field development and utilisation.

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PROGRAMME AREA NO.1 – ASEAN POWER GRID

Electricity demand in ASEAN is expected to grow by 7 to 8% per year for the period 2016-

• 2020. To meet this demand, HAPUA’s strategy to accelerate the realisation of the APG is

to first encourage on a cross-border bilateral basis, then gradually expand on a sub- regional basis, namely; System A (North System), System B (South System) and System C (East System) and finally to a fully integrated ASEAN power grid system.

Background  ASEAN established the electricity interconnecting arrangements through the APG in

the Second ASEAN Informal Summit in Kuala Lumpur on 15 December 1997.

 HAPUA, as SEB, is tasked to ensure regional energy security by promoting the efficient

utilisation and sharing of resources.

 To date, six (6) out of the 16 power interconnection projects for the APG have been

implemented, with a total of 3,489 MW in power exchanges and purchase achieved.

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The Heads of ASEAN Power Utilities/Authorities (HAPUA), a specialist organization of the chiefs of the respective authorities in the country.

HAPUA

AMEM Reporting Line Consultation Line ASEAN Secretariat SOME HAPUA Council HAPUA Secretariat HAPUA Working Committee (Country Coordinator) ASEAN Power Grid Consultative Committee (APGCC) Working Group #3 Distribution & Power Reliability and Quality Chair : Singapore Vice Chair : Myanmar Working Group #4 Policy & Commercial Development Chair : Philippines Vice Chair : Cambodia Working Group #5 Human Resource Chair : Malaysia Vice Chair : Brunei Working Group #1 Generation Chair : Indonesia Vice Chair : Lao PDR Working Group #2 Transmission Chair : Thailand Vice Chair : Vietnam

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AIMS - identify and propose a viable overall electrical power transmission network linking the ASEAN member countries. A Working Group (AIMS WG), consisting of personnel and experts from every power utilities/authorities of the ASEAN member countries, was formed to conduct the power system interconnection study. Categorized into three main components i.e. (1) the optimization of long-term power development plan, (2) the network analysis, and (3) the identification of regulatory and commercial issues

ASEANASEAN INTERCONNECTION MASTER PLAN STUDY (AIMS)

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• 1. To accelerate the development and completion of the following APG Projects

identified under AIMS II by 2020.  APG Priority Projects: Project 13 (2017), Project 8 (2018) and Project 4 (2020).  APG On-going Projects: Project 2 (TBC), Project 9 (2019) and Project 10 (2016).

• a. Conduct a study and identify areas where indigenous resources can be fully utilised

to benefit the region.

• b. Conduct a study on the ASEAN Primary Energy Resources for Power Generation.

OUTCOME-BASED STRATEGIES

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ASEAN INTERCONNECTION PROJECTS (UPDATED IN MAY 2015)

Earliest COD

1) P.Malaysia - Singapore (New) post 2020 2) Thailand - P.Malaysia

• Sadao - Bukit Keteri

Existing

• Khlong Ngae - Gurun

Existing

• Su Ngai Kolok - Rantau Panjang

TBC

• Khlong Ngae – Gurun (2nd Phase, 300MW)

TBC 3) Sarawak - P. Malaysia 2025 4) P.Malaysia - Sumatra 2020 5) Batam - Singapore 2020 6) Sarawak - West Kalimantan 2015 7) Philippines - Sabah 2020 8) Sarawak - Sabah – Brunei

• Sarawak –Sabah

2020

• Sabah – Brunei

Not Selected

• Sarawak – Brunei

2018 9) Thailand - Lao PDR

• Roi Et 2 - Nam Theun 2

Existing

• Sakon Nakhon 2 – Thakhek – Then Hinboun (Exp.) Existing
• Mae Moh 3 - Nan - Hong Sa

2015

• Udon Thani 3- Nabong (converted to 500KV)

2019

• Ubon Ratchathani 3 – Pakse – Xe Pian Xe Namnoy

2019

• Khon Kaen 4 – Loei 2 – Xayaburi

2019

• Nakhon Phanom – Thakhek

2015

• Thailand – Lao PDR (New)

2019-2023 10) Lao PDR – Vietnam (New) 2016-TBC 11) Thailand - Myanmar 2018-2026 12) Vietnam - Cambodia (New) TBC 13) Lao PDR - Cambodia 2017 14) Thailand - Cambodia (New) post 2020 15) East Sabah - East Kalimantan post 2020 16) Singapore – Sumatra post 2020

North South East

PHILLIPINES BRUNEI SARAWAK SABAH WEST KALIMANTAN INDONESIA SUMATRA

Existing Under Construction Future LEGEND

11 9 14 10 13 12 2 4 1 3 16 5 6 8 7 15

CAMBODIA THAILAND LAO PDR VIETNAM MYANMAR PEOPLE’S REPUBLIC OF CHINA YUNNAN

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STATUS OF ASEAN INTERCONNECTION PROJECT

Exist On-going Future Total

Northern System 2,659 3,942 15,774-18,924 22,375-25,525 9 Thailand - Lao PDR 2,111 3,352 1,865 7,328 10 Lao PDR -Vietnam 248 290

• 538

11 Thailand - Myanmar

• 11,709-14,859

11,709-14,859 12 Vietnam - Cambodia 200

• 200

13 Lao PDR - Cambodia

• 300
• 300

14 Thailand - Cambodia 100

• 2,200

2,300 Southern System 450 600 1,800 2,850 1 P.Malaysia - Singapore 450

• 600

1,050 4 P.Malaysia - Sumatra

• 600
• 600

5 Batam - Singapore

• 600

600 16 Singapore - Sumatra

• 600

600 Eastern System

• 430

600 1,030 6 Sarawak - W.Kalimantan

• 230
• 230

7 Philippines - Sabah

• 500

500 8 Sarawak - Sabah - Brunei

• 200

100 300 15 E.Sabah - E.Kalimantan

• Northern - Southern System

380 100 300 780 2 Thailand - P.Malaysia 380 100 300 780 Southern - Eastern System

• 3,200

3,200 3 Sarawak- P.Malaysia

• 3,200

3,200 Grand Total 3,489 5,072 21,674-24,824 30,235-33,385

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2: Initiate multilateral electricity trading.  LTMS power integration project.  PART 1: Technical Viability Study  PART 2: Legal & Regulatory Framework  PART 3: Commercial Arrangement  PART 4: Tax & Tariff Structure

OUTCOME-BASED STRATEGIES – CON’T

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QUESTION

 Is the APG a good thing?  What are the benefits the APG will bring to ASEAN – your thoughts

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SAVINGS AND BENEFITS

There are four main benefits of the interconnections which are:

• Peaking plant reduction
• Reserve cost reduction
• Operating cost reduction
• Reliability enhancement

THE 4TH ASEAN ENERGY OUTLOOK (4AEO)

Controlled approach

Fraunhofer developed a regional model to countercheck and discuss findings

Cooperative Approach

National ASEAN officials developed country projections and included knowledge on national policies and projections

Harmonized approach

The ASEAN Centre for Energy (ACE) and Fraunhofer guided country representatives in the development of national models

4AEO SCENARIOS

Both scenarios based on AMS socio-economic and policy framework assumptions

Advancing Policies Scenario (APS)

Successful implementation of stronger policies as defined by the AMS’ official targets for renewable energy and energy efficiency.

Business as Usual Scenario (BAU)

Continuation of past developments while taking into consideration future changes in activities driving energy consumption

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HISTORICAL COMPARISON

Total Primary Energy Supply, by ASEAN countries

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FINDINGS : TOTAL PRIMARY ENERGY SUPPLY (TPES)

• 150

300 450 600 750 900 1,050 1,200 1,350 1,500 1,650 1,800 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Mtoe Historical BAU APS 1, 1,468 468 Mtoe

• e

1, 1,685 685 Mtoe

• e

BAU ( ( CAGR)– 4. 4.7 % 7 % APS ( CAGR GR)– 4. 4.0 % 0 %

BAU APS Coal 7.0% 5.3% Oil 2.7% 2.7% Natural gas 5.5% 3.3% Renewables 5.3% 7.4% Year BAU APS 2013 10.2% 10.2% 2020 10.6% 15.4% 2035 11.2% 20.0%

CAGR 2013 - 2035 RE % mix of TPES E I % Reduction based on 2005 levels

Year BAU APS 2013

• 8.5%
• 8.5%

2020

• 15.1%
• 18.0%

2025

• 21.7%
• 27.0%

TPES (2013~2035) increases by: BAU - 272% APS - 237%)

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ASEAN INSTALLED CAPACITY AND GENERATION (2013)

Installed Power Capacity for Renewable Energy : 45,584.9 MW

Sources : ACE Database, as of 2013. *Others : Biogas and waste

Renewable Energy 24.8% Non- renewable Energy 75.2%

184,068 MW

Renewable Energy 20.6%

Non- renewable Energy 79.4%

820,834 GWh

Power Generation for Renewable Energy 169,073 GWh

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INSTALLED POWER CAPACITY

• 100

200 300 400 500 600 700 2013 2015 2020 2025 2030 2035 2013 2015 2020 2025 2030 2035 GW

BAU vs APS

Coal Oil Natural Gas Nuclear Hydro Geothermal Other Renewables

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AMS COMMITMENTS IN RENEWABLE

Brunei Darussalam

15 GW installed

capacity in 2030

70.5 MW of ORE in 2030

Indonesia

23% NRE share of

total energy consumption in 2025 1 MW of ORE in 2025

Thailand

25% AE share in total

energy consumption by 2021 2 MW of Tidal & Wave in 2021

Lao PDR

30% RE

share of total energy consumptions by 2025

Philippines

10% RE share

in power generation by 2035

Myanmar

15% - 20%

RE share in installed capacity by 2030

Malaysia

34% RE share in

installed capacity,

13% RE share in

power generation in 2050

Vietnam

6% RE share

in power generation in 2030

Singapore

350 MW

installed capacity of solar by 2020 More than 2 GW of hydropower in 2020

Cambodia

30

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20,000 40,000 60,000 80,000 100,000 120,000 10,000 20,000 30,000 40,000 50,000 60,000 70,000

MW MW

Potential Power Capacity Installed Power Capacity 100,000 170,000

Hydropower Potential vs Installed Power Capacity

3.6 x 3.0 x

KEY FINDINGS: ELECTRICITY GENERATION

Source: AEO4

In 2035:

• BAU of electricity generation reaches 2,883

TWh; while in APS reaches 2,473 TWh.

• Both in BAU and APS, coal share is expected

to significantly grow to 55% and 45% respectively.

• Renewable Energy is predicted to reach 399

TWh with 149 GW in BAU; and 548 TWh with 156 GW in APS

• RE Potential still mainly untapped.

Gas/oil/coal reserves intensively deployed

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CONCLUSION

• Coal supress oil as the biggest share in the total energy mix during the period 2013-2035
• 2013 : Coal 20%, Oil 41%,
• 2035 : Coal 33% , Oil 27%
• Diminishing fossil fuel reserves become relevant in the next 20 years.
• Gas reserves will be depleting depending on the scenario calculations
• BAU between 2020 and 2025

APS between 2025 and 2035.

• Oil deposits will drop to 19% in 2035.
• Coal reserves will be reduced by approximately 60% - where exports are reduced dramatically.
• The diminishing oil, gas and coal reserves require a more detailed view on the RE potential and availability

in the ASEAN region

• Several ASEAN Member countries reduced their energy subsidies in the recent past - a window of
• pportunity

CHALLENGES: ASEAN EXPERIENCES

Considerations Security

 fuel type and suppliers;  storage

Affordability & Accessibility

 LCOE  Avoided cost of generation  Electrification

Environmental Sustainability

 Coal growth

Energy Market Integration Decisive factors :

• Government’s long term

commitment to power development

• Reliable and predictable

policy and regulatory measures

• Establishing local supply

chain

• Access to financing

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POST-2015 VISION

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The ASEAN Heads of State committed to creating a “Post-2015 Vision”. The Leaders’ goal is to realise a community that is:  “politically cohesive, economically integrated, socially responsible and a truly people-oriented, people-centred and rules-based ASEAN.”

AEC - OUR COMMUNITY, OUR JOURNEY 2016 is just the beginning

www.aseanenergy.org

Thank you.