Transcript Clean Energy and Development Investment Framework

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Energy Scenarios:
From the Present to the Next Decade
Thailand Infrastructure Dialogue
Bangkok, Aug 28, 2006
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World Bank
Global Review of Energy Policies
At its Annual Meeting in Singapore, in September 2006, the Bank will present the
‘Clean Energy and Development
Investment Framework’
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It is a serious response to today’s cascade of severe energy challenges.
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Current development scenarios have failed due to rapid price increases of
fossil fuels. Net oil-importing countries have lost around 3.5 % of GDP.
Businesses – and the economy – suffer from higher prices, and heavier
costs for energy
Households – and society – suffer from reduced benefits of energy
The evidence of climate change is requiring additional drastic steps in the
energy, transport, and industrial sectors to adjust to change and reduce
further climate change by reducing greenhouse gases from energy use and
production.
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RE+EE 48% growth
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Magnitude of Energy Needs
Demand in 2006 is 4,300
million tons of oil equivalent.
Demand will rise 60% by
2030.
Total annual investment in renewable
capacity:
2004: US$ 30 billion
2005: US$ 38 billion
Required annual investment
in NICs and developing
countries between 2005 and
2030 = US$ 300 billion of
which 73% for electricity.
2005: Annual investment levels
(excluding large hydro):
Public sector cannot meet
needs. Policy changes are
required to facilitate private
sector investment
China: US$ 7 billion
Germany: US$ 7 billion
USA: US$ 3.5 billion
Spain: US$ 2 billion
Japan: US$ 2 billion
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…Different investment
characteristics
• Low(er) carbon
• Incorporate security and climate change risks: diversify technologies
-> clean coal, oil and gas fueled, hydro and wind turbine, solarPV
and solar heat, etc.
• Diversify operations due to less firm energy capacity (droughts ->
empty reservoirs, no wind, high cost for gas and oil)
• Challenge and opportunity: diversified ownership: public, private,
communities, etc.
• Diversified maintenance and operation standards, need for different
regulations.
• Changing Financing Terms and Conditions:
– Longer terms and different risk patterns:
• Lend against Power Purchase Agreements
• Reinsurance against security and weather conditions
Diversified Technologies
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Diversified Ownership
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What other countries are doing
• USA: 22 states have renewable portfolio standards
(RPS) targets
• Germany: Feed-in laws greatly stimulated capacity in
wind (total installed capacity 18GW)
• Spain: wind capacity of 10GW meets 6% electricity
demand now and 12% in 2010
• China: Renewable Energy Law, including feed-in tariffs for
biomass but not wind. Aims 15% of electricity from RE in
2015
• Japan: 830,000 grid-connected solar rooftop programs
• Brazil: 2005: 15 billion liters of ethanol (equalled by USA)
• Netherlands: 50%+ consumers buy Green Energy
Certificates
Energy Impact on Competitiveness
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With generators
Percent with generators
Losses from outages
80
72%
60
40
Mean losses due to
power outages (percent)
9%
71%
6
5.4%
Total Factor Productivity of Micro, Small,
Medium and Large Enterprises can differ 4
between
countries by42%more than 60%
3.3%
due to Energy and Infrastructure27%factors
2%
2
20
0
0
Bangladesh
India
Pakistan
China
EAP to account for 30% of global
energy demand growth 2002-20 (IEA 2004)
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2002
2010
USA+Canada
South America
Rest of the World
2020
EU
South Asia
Developing East Asia
Japan+Korea
EAP in 2010: Coal dominant, oil & gas rising
Primary energy consumption (IEA 2004)
2,500
Biomass
2,000
Other
renew ables
Hydro
1,500
Nuclear
1,000
Gas
Oil
500
Coal
Japan+Korea
2002
EU 2002
USA+Canada
2002
EAP 2010
(BAU)
China 2002
0
EAP 2002
• Fastest growth in energy
demand of any region in world
• Coal will account for nearly half
of primary energy 
environmental impacts
• Oil imports to rise  security
concerns
• Gas low; renewables low –
aggressive promotion needed
• Power generation dominated
by coal (~50 -75%); oil (~10%);
gas (~10%); rest renewables +
nuclear
• Biomass to remain significant
Primary energy (Million tons oil equiv)
EAP energy trends 2005-2010
Million tons oil equivalent (Mtoe)
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5
Indonesia, Vietnam
& Philippines
4
S. Korea, Thailand,
Malaysia
3
2
USA
1
2000
2001
2002
1998
1999
1995
1996
1997
1993
1994
0
Future: Plenty of room for growth
In transport, vehicle ownership is still low
200
Japan 492
150
100
Malaysia
South
Korea
Thailand
Cambodia
Mongolia
EAP
Average
= 10
Philippines
50
Indonesia
• China 1.8 billion
• Thailand 34 million
China
6
Vietnam
People affected by
climate change events
over a 14 year period
(1990-2004)
7
1990
1991
1992
•1/3 of land in China is
affected by acid rain
Environmental cost: High fossil fuel use is leading
to increasing Greenhouse Gas emissions
China
Global and domestic
environmental impacts
Billions of tons of CO2 from fossil
fuel consumption
Development challenges
Passenger cars/1000 persons,
2002
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Development challenges
6,000
5,000
4,000
3,000
2,000
1,000
EAP has not exploited most of its
hydropower potential
Indonesia
Vietnam
Philippines
PNG
Lao PDR
Cambodia
Mongolia
0
Timor
Leste
• Investment needs dwarf
public resources
• Energy efficiency is low
• Unexploited
hydropower potential
EAP medium-term needs in power (excl.
China)
US$ million per year
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Renewables least cost energy
solution?
• Netherlands last week stopped
applications for subsidies
• Fiji aims to have Electricity supply 100%
from renewables by 2012 in least cost
scenario.
• Shipping and Transport Companies in
Pacific switching to Coconut Oil.
• Renewables profitable investments …..
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Practical Examples
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Practical Examples
• Long-term finance even at the micro-level,
in Papua New Guinea now lets teachers
reduce their energy costs by switching to
renewables
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COST
This project transforms the initial
high investment cost (US$250 – US$1,000)
into less than….the current monthly
cost of kerosene and torch
batteries used for lighting, resulting
in…….
S A V I NG S
TIME
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Clean Energy Financing Vehicle
The Clean Energy Financing Vehicle (CEFV) will
 provide a mechanism to transfer high efficiency technology
 blend grants and carbon finance to buy down the costs of new
technologies and mitigate technology risks.
The Vehicle will provide include:
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Power rehabilitation financing, with repayment provided from
increased efficiency and capacity, plus carbon emissions reductions.
Project development fund, to increase “Bankable” projects with
private sector participation
Venture capital funds for technology adoption
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Carbon Finance Business
• Relatively new business; launched in 2000
• Two Carbon Finance business lines: IBRD Carbon
Finance and IFC Carbon Finance.
• About $1.4 billion in funds under management since
2000
• Leverage public and private investments for projects
that generate greenhouse gas emission reductions
World Bank Carbon Finance Products
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Total funds under management: ~ $1.7billion
Prototype Carbon Fund. $180 million (closed).
Multi-shareholder. Multi-purpose.
Netherlands Clean Development Facility. $222 million.
Netherlands Ministry of Environment. CDM energy projects.
Community Development Carbon Fund. $128.6 million (closed).
Multi-shareholder. Small-scale CDM energy projects.
BioCarbon Fund. $63.5 million (open).
Multi-shareholder. JI and CDM LULUCF projects.
Italian Carbon Fund. $100 million (open to Italian participation).
Italian Multi-shareholder. Multipurpose.
Netherlands
ECF
Spanish
CF
Danish CF
Netherlands European Carbon Facility. $40 million with IFC.
Netherlands Ministry of Economic Affairs. JI projects.
Spanish Carbon Fund. $280 million (open to Spanish participation).
Spanish Multi-shareholder. Multipurpose.
Danish Carbon Fund. $75 million (open to Danish participation).
Danish Multi-shareholder. Multipurpose.
78% in East Asia
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some Thai projects submitted for financing from other
funds
Declining Supply from
Existing Hydro (Wailoa) in Fiji
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100%
90%
80%
Percent Share
70%
60%
50%
40%
30%
20%
10%
0%
1997
1998
1999
2000
Wailoa
2001
2002
VLIS Diesel
2003
2004
2005
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2006 Supply & Demand
FEA - Fiji installed Capacity
Hydro
Hydro
Wind
Biomass
Diesel to be run on coconut oil
Total
Firm
Variable
72
6.6
10
5
88
160
21.6
When the wind blows, or when it rains, and the Variable
hydro and wind can generate, FEA needs to close the valves
from the reservoir to save water for peak demand.
While we have the technologies, we need to develop the
experience to operate systems with multiple energy sources
with variable availability.
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Overview of Bank presentations
• Peter Meier, economic analysis of RE benefits
• Jan Hamrin, how to promote renewables
• Dr. Masami Kojima, one possible technology: the
challenges and promises of biomass and biofuel
• Ashok Sarkar EE in Global Context
• Vincent David, EE in Canada, Ireland and EU
• Takeshi Sekiyama, EEE in Japan.
• Mr. Chandrasekhar, Entrepreneur
• Mr. Guido Delgado, Banker and Energy expert
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Thank You !
Antonie de Wilde
Coordinator
Asia Alternative and Sustainable Energy (ASTAE)
East Asia and Pacific Region
Contact: [email protected]