The World Bank’s Energy BusinessEast Asia and Pacific

Presentation to a Joint Energy Delegation tothe World Bank

October 14th, 2008

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Frederic AsselineFrederic AsselineSr Energy SpecialistSr Energy Specialist

Energy and TRansportEnergy and TRansport SectorSector UnitUnitEast Asia and Pacific RegionEast Asia and Pacific Region

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1. Strategic Context EAP Energy Trends2005 – 2010

2. World Bank Group Commitments / EAPRegion (FY 07 – FY 08)

3. Activities associated with the AsiaSustainable and Alternative EnergyProgram ASTAE (FY 07 – FY 09)

4. World Bank Energy Program 2008Onwards

Outline

1- Strategic Context – EAP Energy Trends 2005 - 2010

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EAP to account for 30% of globalenergy demand growth 2002-20(IEA 2004)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2002 2010 2020

Prim

ary

ener

gy (M

illion

tons

oil e

quiv

)

USA+Canada EU Developing East AsiaSouth America South Asia Japan+KoreaRest of the World

Power needs are rising in theEAP, and not only in China

Power generation is dominatedby coal (~75%); oil (~10%);gas (~10%); rest is renewables+ nuclear

EAP

EAP medium-term needs in power (excl.China)

0

1,000

2,000

3,000

4,000

5,000

6,000

Tim

orLe

ste

Mon

golia

Cam

bodi

a

Lao

PDR

PNG

Philip

pine

s

Viet

nam

Indo

nesi

a

US$

mill

ion

per y

ear

The EAP region has the fastestenergy demand growth among allregions in the worldCoal to account for nearly half ofprimary energy � environmentalimpactsOil imports to rise � securityconcerns

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China is the 2nd largest source of global greenhouse gas emissionsIndonesia is the 3rd if biomass is considered

-1000

0

1000

2000

3000

4000

5000

6000

7000

USA China Indonesia Brazil Russia India

MCT

O2e

Energy Agriculture Forestry Waste

Global ranks – highest CO2Emitters

Source:WB, 2007, based on data sources for energy: IEA 2005(except Indonesia, which uses PIE 2005); agriculture, 2005 datafrom USEPA 2006; Forestry: Houghton 2006; waste: 2005 datafrom USEPA 2006

CHINA

INDONESIA

The Bali RoadmapSets a two-years time frame tostrengthen the international response toclimate change

A central element of the roadmap fordeveloping countries is the focus itplaces on creating investmentopportunities by developing climatefriendly technology and finance

Several EAP countries have setambitious targets for renewable energygeneration, energy efficiencyimprovements, and access to electricity– much remains to be done to reachthese targets

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Renewable Energy Targets

5GW (2013)Philippines

3-5%Mongolia

5%Vietnam

8% (2011)Thailand

10%China

2010/2015% ofprimaryenergy

Low Efficiency: Energy consumed per unit ofGDP is still high in major EAP countries

(Energy consumed to produce 1,000 dollars of GDP in 2003)

0.0

0.5

1.0

Source: World Bank WDI Online, BP Statistical Review of World Energy 2004

Diversity: Access levels across region

0%

25%

50%

75%

100%

-1 0 1 2 3 4Population Level (Log of population in millions, 2002)

%of

pop

ulat

ion

with

ele

ctric

ity

acce

ss Indonesia

Vietnam

Philippines

Cambodia

PNG

Mongolia

Laos

Timor-Leste

China Access

Access levels remain low in Indonesia,Cambodia, Lao, Timor Leste, PNG

Energy efficiency is low in the EAPregion compared to OECD average

Energy Efficiency

2- World Bank Group Commitments Energy / EAP Region / EE & RE

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• Manage energy demand growth and increase energy efficiency• Improve the energy sector's ability to attract investment• Mitigate environmental impact of energy sector• Scale up investments for increasing access to modern energy

services

Major Issues/Challenges

The Bank Group’s commitments (EAP Region) FY07

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683668461259273236World Bank GroupTotal Renewables and Energy Efficiency

117175206483219East Asia Pacific RegionTotal Renewables and Energy Efficiency

2624472436716 867Energy Efficiency CommitmentsWorld Bank Group Total

24727711321Energy Efficiency CommitmentsEast Asia Pacific Region

421221218192105169New Renewables CommitmentsWorld Bank Group Total

9310312937018New Renewables CommitmentsEast Asia Pacific Region

FY07FY06FY05FY04FY03FY02(US$ millions)

World Bank Group New Renewable Energy and Energy EfficiencyCommitments in the East Asia Pacific Region FY02-FY07

VietnamPower investmentframework; powergeneration, T&D, GMS

Gas T&D

Rural power

Mongolia, Laos,CambodiaPower transmission forGMS (Cam, Laos);financing for generation;hydro (Laos); systemrehab, commercialization

Rural power; biomass

Heat service/access(MN)

Oil product procurement

IndonesiaPower T&D; powerinvestment framework

Mainstream CDM;gas T&D; geothermal

Rural access (incl.renewables); biomass

PhilippinesPower restructuring,investment framework

Rural powerdistribution efficiency

Pacific IslandsPower generation (TL);commercialization

Rural power; biomass

Oil import security

ChinaEnergy sustainability

Power transmission;regulation

Environmentalcleaning, clean coal,reform of coal mining

Gas T&D, renewablesscale-up (incl hydro)

Power, heat efficiency

VietnamPower investmentframework; powergeneration, T&D, GMS

Gas T&D

Rural power

Mongolia, Laos,CambodiaPower transmission forGMS (Cam, Laos);financing for generation;hydro (Laos); systemrehab, commercialization

Rural power; biomass

Heat service/access(MN)

Oil product procurement

IndonesiaPower T&D; powerinvestment framework

Mainstream CDM;gas T&D; geothermal

Rural access (incl.renewables); biomass

PhilippinesPower restructuring,investment framework

Rural powerdistribution efficiency

Pacific IslandsPower generation (TL);commercialization

Rural power; biomass

Oil import security

ChinaEnergy sustainability

Power transmission;regulation

Environmentalcleaning, clean coal,reform of coal mining

Gas T&D, renewablesscale-up (incl hydro)

Power, heat efficiency

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Country focusChina

• Renewables• Efficiency• Urban heating &

gas (multi-sector)• Desulfurization• Coal sector

restructuring• Long-term energy

sustainability(AAA)

Vietnam• Power generation

(hydro, gas, coal)• Power

transmission &distribution

• Ruralelectrification

• Privateparticipationstrategy for powersector (AAA)

Indonesia• Rural

electrification• Power

transmission &distribution

• Risk sharingframework forpower generationinvestments(AAA)

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Cambodia/LaoPDR/Mongolia

• Power sectorfinancing strategies

• Systemrehabilitation &commercialization

• Rural electrification• GMS (Cam, Lao)• Heat (Mon)

Pacific Islands

• Capacity building• System

rehabilitation &commercialization

• Ruralelectrification

• Hydro

Middle-incomeCountries

• Regional energytrade

• CDM operations• Knowledge

broker role

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Lending:• Cambodia GMS Power Trade

Project• Lao PDR GMS Power Trade

Project• Timor-Leste Energy Services

Delivery Project• Timor-Leste-SF-Gas Seep

Harvesting ProjectGEF:• Mongolia Renewable Energy for

Rural Access• Pacific Islands Sustainable

Energy FinancePCF:• China Inner Mongolia

Huitengxile Wind Farm• Philippines Northern Negros

Geothermal Power

AAA:• Cambodia Oil and Gas Sector

Policy• China Coal Bed Methane

Development Strategy• Fiji Masterplan for Biomass

Utilization• Indonesia Policy Framework for

Regional Electrification• Mekong GMS Power Trade• Timor-Leste PPIAF Power

Regulatory Framework II andHousehold Energy Study

• Thailand Sustainable EnergyPolicies

EAP Region Energy Activities (FY 08)

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Lending:• Fiji FEA Renewable Power Development• Mongolia UB Clean Air Project• Philippines Bicol Power Restoration Project• Vietnam Rural Power Distribution Project

GEF:• Indonesia Geothermal Sector Reform• Regional / Pacific Islands Renewable Energy Development

PCF:• Cambodia Rural Electrification and Transmission Project• Cambodia GMS Power Trade Project• Indonesia Lahendong Geothermal Project• Philippines Burgos Wind Power Project

EAP Region Opportunities (FY 09)

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AAA:

• Cambodia Power Sector Efficiency Study• Indonesia Policy Support for Regional Electrification• Lao PDR Review of Hydro Development Framework• Mongolia Mitigation Sector Reform & Tariff Adjustment• Mongolia Urban Heat Pricing & Regulation• Regional Energy Flagship Study• Regional Training for Access to Renewable Energy• Solomon Islands Supervision of PTF Power Sector Review• Vietnam Hydro Safeguards TA

EAP Region Opportunities (FY 09)

Lending:• China Energy Efficiency Financing• Liaoning Medium City District

Heating• Shangdong Flue Gas

DesulfurizationGEF:• China Thermal Power Efficiency

Improvement• Energy Efficiency• Urban TransportPCF:• China Baotou Steel Ind. Efficiency

CDM• China Guangdong Huizhou CCGT

AAA:• China Generation Pricing,

Trading & Dispatch• China Low Carbon Growth

Strategy• China Pre-Investment in

Scale Up Energy (ESMAP)

China energy opportunities (FY08)

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4- Activities receiving ASTAE Funding

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Objective: Scale-up the use of sustainable energy options in Asiato reduce energy poverty and protect the environment

ASTAESECTORAL WORK

Access

Energy Efficiency

Renewable Energy

CROSS-SECTORAL IMPACTS

Innovative InvestmentDelivery Mechanisms

Development of Institutionaland Regulatory Frameworks

Training and KnowledgeSharing

4- Activities associated withthe Asia Sustainable and Alternative Energy ProgramASTAE

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ASTAE Supported Activities in FY08

East Asia and Pacific Energy Flagship StudyCambodia, China, Indonesia, Lao PDR, Mongolia,

Philippines, Thailand, Vietnam

Pacific Islands Sustainable Energy Financing ProjectFiji, Marshall Islands, Papua New Guinea, Solomon Islands, Vanuatu

VietnamRenewable Energy (REDP)Rural electrification (RE2)Energy Efficiency (SEIER / DSM)

ChinaRenewables / REDP and CRESPEfficiency / EE Financing and HeatReforms

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MongoliaRural electrification / Renewable Energy / Distribution /Electricity Pricing / EE in Power Sector

Timor LesteGas Seep Harvesting Project / Energy ServicesDelivery project

Fiji / Solomon IslandsStrategic Master Plan for Biomass DevelopmentSustainable Energy FinancingSupport to guarantees for Energy Enterprises (SI)

PhilippinesBurgos Wind Farm

Cambodia / Lao PDR /Thailand / IndonesiaRural electrification / ImprovedCook stoves / (Cambodia) /Sustainable Energy Polices(Thailand)

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ChinaImplementation Support to CRESP and REDPFiscal policies and sector regulations / small coal-fired power plants phase-outSupport to heat reform / Tianjin Municipality

VietnamImplementation Support to DSM and REDP ProjectsImpact Studies of Rural Electrification / Documentary and ConferenceMaterial

MongoliaEnergy Efficiency Heating in the periphery ofUlan Bator

ThailandEnergy Efficiency ManagementInformation Systems

Pacific IslandsWind Resources Maps for Pacific IslandsPNG and Fiji Pro-Poor Sub-5WSolomon Islands Rural Electrification andRenewable Energy

ASTAE Supported Activities in FY08-FY09

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ASTAE Supported Activities in FY08-FY09IndonesiaPreparation Support to Wb investment projectCarbon Finance concept developmentImplementation Support GEF project / policy

Pacific IslandsProduction of a documentary and conferencematerial on energizing the pacific islandsPublication on Energy solutions for the Pacificislands

IndiaEnergy Efficiency in Small & Medium Enterprise,implemented bythge South Asia region

ChinaEnergy Efficiency in the Cement sector

Changing role of ASTAEfrom FY09 onwards

Recipient Execution

Re-opening to South Asia

Multi-donor Trust Fund

ESMAP Supported Activities FY 09

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ESMAP Regional Block Grant

Supported Activities in FY09

RegionalGreater Mekong Subregion Power Trade

ChinaRenewable Energy Targets / Assessment

ChinaHeat regulations, North East

ChinaPower Dispatch Energy Efficiency Improvement

VietnamGas Masterplan II

Power Sector Reform� Incentive mechanisms to support the closure of

small, inefficient coal fired plants�Regulatory capacity building�Advise on proposed new Energy Law�Advise on expanding competition in generation

Energy Efficiency and Clean Energy�Support for financial intermediaries to scale-up

energy efficiency lending and equipmentleasing.

�Advise on heat sector regulation andpreparation of heating law

� Low-Carbon Policy Study – Assist policymakers in assessing the costs andimplementation challenges to move to lower-carbon economy.

�Sustainable coal sector strategyRenewable Energy�Developing national renewable resource

assessment methodologies� Wind turbine standards development and

certification centers

Power Sector� FGD implementation on new plants and

retrofits� Improving thermal efficiency of power

plants – proposed conversion to CHP� Evaluating mechanisms to support to pilot

IGCC power generation technology andprepare for carbon capture and storage

Energy Efficiency & Clean Energy� Energy efficiency financing through

financial intermediaries – focus is onindustrial energy efficiency

� Coal Bed Methane Utilization [CBM] –collecting and distributing CBM as LNG tosmall towns

� Heating system efficiency improvementprojects

Renewable Energy� Biomass based CHP plants for heating� Small hydro, wind, biomass, & geothermal

private financing by IFC

AdvisoryLending

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World Bank Energy Program 2008 Onwards

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Thank youJunhui Wu

Sector Manager Energy & TransportEast Asia and Pacific Region

Contact: jwu@worldbank.org

Frederic AsselineContact: fasseline@worldbank.org