Home 
Regions and Countries Regional Cooperation Greater Mekong Subregion Publications Proceedings of Ministerial, Forum, and Working Group Meetings Fifth Meeting of the Experts Group on Power Interconnection and Trade (EGP5)
Fifth Meeting of the Experts Group on Power Interconnection and Trade (EGP-5)Day 1: 19 June 2001IntroductionThe Fifth Meeting of the Experts Group on Power Interconnection and Trade (EGP-5), was held in Kunming, Yunnan Province, PRC on 19-21 June 2001. The Meeting was co-organized by the Office of the Steering Group of the Subregional Economic Cooperation of Yunnan Province, PRC, and the Asian Development Bank (ADB). The participants included delegations from Kingdom of Cambodia, the People's Republic of China (PRC), Lao People's Democratic Republic (Lao PDR), Royal Kingdom of Thailand, and the Socialist Republic of Viet Nam. Representatives from the World Bank, Southeast Asia Center for Training in Energy for Development (SEACTED), Mekong River Commission Secretariat (MRCS), KfW (Germany), Japan Bank for International Cooperation (JBIC), the Advisory Panel, Norconsult and ADB also attended. The list of participants is attached as Appendix 1. The Meeting was divided into three major daily sessions. Day 1 took up Norconsult's Interim Report for the Study on the Regional Indicative Master Plan on Power Interconnection in the GMS (the "Master Plan Study"). Sections covered included the Long Term Power Demand and Supply Options, by country and GMS-wide. Day 2 discussed the interconnection candidates for study and the Institutional and Regulatory Arrangements of the Master Plan study and presentations by GMS countries of their proposed Work Plans (2002-2004) for the energy sector. SEACTED also presented on Human Resource Management and Development for Power Utilities in the GMS. Day 3 reviewed the latest draft of the Inter-Governmental Agreement (IGA). The Agenda and Program of the Meeting is attached as Appendix 2. Opening SessionMr. Zhao Songyu, Director General, Office of the Steering Group of the Subregional Economic Cooperation of Yunnan Province, PRC, introduced the distinguished guests of the EGP-5 meeting, namely: H.E. Shao Qiwei, Vice Governor, Yunnan Province; Mr. Natin Patel, Senior Project Specialist, Office of the Director, Infrastructure, Energy, and Financial Sectors- West (IWD), ADB; Mr. Li Hainan, Deputy General Manager, Yunnan Electric Power Group Co. Ltd.; and Mr. Prutichai Chonglertvanichkul, Assistant Director, System Planning Division-Transmission, EGAT, and the Chairman of the Experts Group on Power Interconnection and Trade (EGP). H.E. Shao Qiwei welcomed the participants to the Meeting and congratulated them for the successful opening of the meeting. He noted that Yunnan Province is richly endowed with hydropower resources and cited the "West Development Strategy" of PRC for the Province's enhanced cooperation with GMS countries in the area of power interconnection and trade. He further cited the transmission interconnection with Thailand, of the Jinghong hydropower project as a model of cooperation in energy among PRC, Thailand and Laos. He added that the EGP meeting, supported by ADB, provides the opportunity for exchange of ideas on cross border energy transmission that contributes to optimization and integration of the subregional power system. He assured more active cooperation by Yunnan Province with the GMS countries in energy development, under the unified arrangement of the Central Government of China. Lastly, he invited everyone to find time to enjoy the various scenic spots and interesting wildlife in Yunnan Province. Mr. Patel warmly welcomed the participants to the Meeting and thanked the Government of PRC, particularly the Foreign Affairs Office of Yunnan Province, for the strong support in organizing the Meeting. He cited the GMS Program's successes since it began in 1992, particularly in transport, energy, HRD, and tourism, among other sectors. He mentioned that the challenge in energy cooperation in GMS is in finding common solutions acceptable and advantageous to all. He announced the appointment of the four members of the Advisory Panel and introduced them to the body. He expected the Panel to provide valuable suggestions in moving forward the GMS countries' goal of an integrated regional power market. He then outlined the agenda of the meeting, particularly the review of the Master Plan's long-term demand and supply options for the first day. On the second day, there will be review of the institutional and regulatory arrangements as well as the EGP work plan proposals of the GMS countries. Finally, he noted that the Inter Governmental Agreement (IGA), will be discussed and hopefully finalized on the third day. Objectives of the MeetingMr. Prutichai welcomed the participants and thanked the Government of PRC and ADB for support to the meeting. He cited the workshop last February in Bangkok, on reliability aspects of power interconnection, and thanked the EGP members and donors for their participation here. He mentioned the accomplishment of the EGP, and suggested inclusion of technology transfer in the Master Plan, to equip the GMS countries with capacity to update the plan. He cited importance of the IGA and the aim to have the Ministerial Meeting endorse this next year. He expressed confidence the meeting will yield fruitful discussions. Study on the Regional Indicative Master Plan on Power Interconnection in the GMSPresentation of Proposed Approach for the StudyMr. Asbjorn Vinjar (Norconsult) provided a brief background of the Master Plan study, and that draft reports were prepared by the team earlier and distributed to the GMS country participants for their comments. Mr. Vinjar then showed the work plan, which detailed the project activities and outputs already achieved so far. The work plan also listed the outputs and activities to follow from this EGP meeting on the Interim Report, and hoped that the meeting yields substantive comments to improve the contents of the Master Plan study. Mr. Vinjar then introduced his Norconsult colleagues: Mr. Truls Holtedahl, who will present the Demand Forecast; and Mr. Gerard Doorman, who will present on Generation and Transmission. On demand forecasts, Mr. Holtedahl said that a comparison of previous forecasts (Norconsult 1995, Newjec 1996) with actual demand was shown in the Report, which also contained brief comments on the approach and relevance of existing country forecasts. Selected indicators, recent economic developments and a summary of power market characteristics of the GMS countries were shown. Recent growth rates in power sales, the relationship between power sales and GDP, and an indication of present tariffs, were given as the bases for the demand forecasts. On generation and transmission, Mr. Doorman noted the objectives of the study and referred to two (2) scenarios, the Limited Power Cooperation Scenario and the Extended Power Cooperation Scenario, which were subject to analyses. The main features of the proposed scenarios were given in the Report, and it was shown which costs were included in the analyses. The calculation of generation costs with the EMPS computer model was described briefly. Finally, reference was made on the main options for extension of Project Development Plans up to 2020. Presentation of Long Term Power Demand and Supply OptionsOn long term power demand, Mr. Truls Holtedahl (Norconsult) showed the important features of the power sector for each country, and gave an overview of demand in recent years. He referred to the approach for the demand forecast for each individual country, together with the main assumptions. Results for the years 2005/ 2010/ 2020 were given in terms of supply requirements (GWh), peak load (MW) consumption per capita and annual elasticity with respect to GDP. A regional breakdown within each country was also shown. Finally, summary energy requirements and peak load forecasts for the whole GMS, based on the country forecasts were presented. On long term supply options, Mr. Doorman presented the following figures for each country:
An overview was given on potential supply options for each country. Special issues related to individual countries (gas consumption in Thailand and Viet Nam, grid development in Cambodia) were also commented on. He pointed out which important data are lacking. Details of presentations by GMS country, including comments and observations on demand and supply options by the EGP members and the Advisory Panel during the meeting, are presented in Appendix 3. It would be noted that side meetings/ discussions were scheduled between Norconsult and representatives of Thailand, Viet Nam and Yunnan, to further clarify a number of demand/ supply forecasting assumptions and other issues. Presentation of Long Term Power Demand Overall GMS and Supply OptionsDemand. Mr. Holtedahl presented tables on the growth rates overall for the GMS up to 2020, the energy requirement forecasts, and the peak load forecasts. He also presented the shares of each country to total energy requirements of GMS for the period 2000 to 2020. He also presented data on consumption per capita and showed great variations among the countries. These forecasts yielded fairly similar demand figures for 2020, compared with the previous forecasts done in 1995. The difference was in the reduced share of Thailand and increased share of Viet Nam. Mr. Holtedahl showed results of a review by WB of two hundred (200) forecasts in 45 countries, which revealed historic bias toward overestimation, and better accuracy in wealthier countries, among others. The solution to this would be to plan/ manage resources flexibly, to allow for corrections to surpluses or deficits. Mr. Chavalit noted possible lowering of prices due to power pools, and asked what effect this might have on demand. Mr. Holtedahl said most GMS countries have low tariffs currently that can be said to partly reflect the possible future impact of power pools. Mr. Damrong (Thailand) noted that the pre-investment study for the East West Economic Corridor (EWEC) identified increased private investment activity, and this could impact on demand along the EWEC. Mr. Kim however said he did not expect the EWEC to substantially affect overall demand, though local effects could be evaluated further. Norconsult did not have data on EWEC to simulate demand impact along the corridor. However, it was suggested that Norconsult should cooperate with the ADB experts concerned with the EWEC pre-investment study to preliminarily estimate power demand arising from an increase in the number of private investment activities identified in the pre-investment study. Supply. Mr. Doorman showed a chart of the GMS fuel mix, for 2000 and 2020. Gas (45%) and hydro (32%) dominated in 2000, but these shares referred to installed capacity. Current dominance of gas was due to Thailand's dependence on it. For 2020, the chart showed that gas and hydro would retain their shares but coal would rise to 22%. Mr. Vu Van Thai and Mr. Chavalit called for inclusion of renewable energy, but Mr. Kim clarified that the study focused on electric power and not total energy; the current share of renewables in power supply was found to be very small. However, Mr. Thai and Mr. Chavalit noted that renewable energy in general, especially for power generation, is the main policy being promoted in Thailand and Viet Nam, in order to reduce dependency on oil imports. Therefore, renewable energy would be more important in the long-term development plan for GMS countries. Mr. Hoda discussed the various scenarios of gas development in the region, and in particular its implications on power generation in Thailand and Viet Nam.
Mr. Prutichai noted the early start of the second day meeting to cover the topic not covered earlier. He introduced Mr. Hans Woldstad (Norconsult) to present interconnection candidates. Presentation of Interconnection Candidates to be StudiedMr. Woldstad noted that the transmission part of the study started with data collection and review of the existing systems and future development plans. The next phases, he observed, would be the transmission system modelling and studies with main focus on power interconnections. He observed that there were ongoing planning activities, and new Power Development Plans (PDPs) and various study reports have been issued after consultant's field visits to the countries. He expressed the need to be updated on these. He added that his presentation focused on the transmission study approach, the types of calculations to be carried out, and the planning criteria. His presentation also referred to, and commented on, the basis for power interconnection in terms of pure technical considerations. As a consequence of the observations made, Mr. Woldstad presented a list of interconnection candidates for further study. He noted that there are other potential interconnection candidates in GMS that could not be studied due to lack of important information. Comments. Mr. Daovong asked about the follow up steps to the Interim Report. Mr. Woldstad replied that modelling systems would be done using data so far generated. Mr. Daovong suggested that consultants focus on the general links between countries and not on specific local data. Mr. Crousillat (WB) questioned the benefit of doing a master plan that included projects that are uneconomic/ uncompetititve. This arose from comments to include committed but uneconomic projects and those with MOUs. Mr. Kim clarified that consultant's role is to evaluate which projects should be prioritized in the regional sense, even if committed/ uneconomic projects were included in the country supply options. Mr. Hotte said that MOUs should not be associated with specific plants, since it would be the master plan's role to specify the projects best placed to meet MOU requirements. Mr. Crousillat (WB) recommended that consultants be sensitive to the market, and assess which projects pass the viability test. Mr. Phetsavanh (Lao PDR) suggested that options for the line from Yunnan to Thailand be shown in the report. Presentation of Work PlanCambodiaMr. Tun Lean first provided the generation and transmission plan of Cambodia for the medium and long term. He then presented the work plan which included the following: development of transmission from Takeo to Sihanoukville; development of transmission link between southern and northern grids; development of Battambang 1,2 hydro; and study of integrated development of Cambodia's gas reserves. Mr. Kim suggested that cost estimates be provided for the proposed studies. Lao PDRMr. Daovong proposed the following studies: a) FS for 500 kV interconnection between Thailand, Lao PDR and Viet Nam (cost: $300-400,000); and b) FS for 500 kV interconnection for the power transfer from Se Kong Se San basin to the link between Viet Nam-Cambodia-Lao PDR-Thailand (cost: $400-500,000). ThailandMr. Prutichai reviewed the accomplishments in GMS power cooperation. Ongoing efforts included the Master Plan and the IGA. He mentioned that the ultimate goal was to move the regional market from single buyer to bilateral contracts to competitive market (power pool). Target policy milestones are as follows: IGA (2002); Institutional Framework (2003); Market Operating Agreement or MOA (2004). Technical milestones are as follows: Master Plan (2002); Internal Reinforcement (2002); Transmission Pricing (2003); and Priority Hydro Projects (2003). Proposed activities are as follows: MOA (2004); Transmission Pricing and Ancillary Service (2003); Priority of Hydro Projects (2003); and Training and Workshops (2002-2004). Workshops would cover such topics as structure options for regional market, open access to transmission, and power sector reform (competition). Viet NamMr. Anh Tuan presented the following proposals: FS for interconnection of Viet Nam-Thailand-Lao power systems (cost: $1.8 million); study on establishment of monopolistic state- owned national transmission operator and on regional system transmission operator (cost: $900,000). For each proposal he presented the rational, objectives, timing and budget. Yunnan Province of PRCMr. Yang showed maps on locations of generation and transmission projects that are under construction or for which FS were completed or ongoing. The EGP proposals for 2002-2004 included: group visits to power projects in GMS countries; and observation tours on power trade practices in other regions. Mr. Prutichai said that the EGP members would select the most appropriate proposals for the group's work plan. Mr. Kim suggested selecting the proposals that have regional perspectives, and requested countries to submit more proposals, and their scope, by end of August. Existing Practices, Planning Criteria and Technical CoordinationMr. Woldstad noted that planning criteria were thoroughly discussed in February 2001 in Bangkok. He showed existing practices for frequency and normal voltage levels. He also showed tables on permitted frequency variations and voltage control practices. He then discussed supply quality in terms of load shedding. He said that power systems that practice severe and long lasting load shedding have low reserves that could threaten interconnection. He said that on near term only a few countries could satisfy planning criterion for long term network planning. Power stability criteria were established earlier in Bangkok. On technical coordination, he said that automatic generation control (AGC) should be taken into account by systems with interconnection. AGC is considered in detail in the FS for interconnection and not in the Master Plan. It was noted that only Thailand, Viet Nam and Yunnan have AGC. Mr. Chavalit asked about common criteria that would be used in the study. Mr. Woldstad replied that this would be further evaluated, but countries with stricter standards may serve as guide. Institutional and Regulatory ArrangementsMr. Vinjar explained that the purpose of his presentation was to get a verification of the content of the report, and to invite discussions on specific issues. He went through the main features of the existing institutional structure, legal framework, expressed policy and ongoing reforms. Various forms of ownership and organizational structures were discussed. The different functions in electricity were presented and viewed in relation to the roles the public and the private sector can play in power supply. National administrative tasks, such as coordination of development planning and regulatory functions in the power sector, were dealt with. Institutional and policy issues that are of importance for cross border power trade and cooperation between the GMS countries were pointed out, and recommendations on structural and legislative reforms were proposed. Comments. Mr. Hotte noted that the study did not refer to a regional transmission network organization to operate the interconnected network. Ms. Minogue said the work on this has been started by the EGP and could be tackled in the MOA. Mr. Patel suggested information on the work of EGP in this area should be integrated in the Master Plan study. Mr. Vinjar said this issue would be referred to in the study. Mr. Kim clarified that detailed treatment of the regional network operator is beyond the scope of the study, which will be part of future MOA discussions of the EGP. Mr. Vinjar expressed preference for an administrative body taking on regulatory role, within a free market system. On the suggestion that the regulatory function could be included as part of the electricity administration work, Mr. Hotte raised the question on possible conflict of interest if this administration should deal with electricity supply planning. Mr. Vinjar said that electricity network planning should primarily take place in the national transmission unit, and the administration unit should deal with electricity supply planning merely in macro as part of the overall energy supply planning of the country. Mr. Crousillat's view was that regulation should be independent of political influence and that an arrangement whereby the regulatory functions would depend on the authority of a ministry, could not guarantee a depoliticized process. On institutional reform, Mr. Hotte noted that if private investors could own transmission lines, then the report should be clear on this. Mr. Vinjar replied the private operator could own the whole or part of the main transmission network, but should then be subject to the same licensing conditions as if the main transmission system was owned by the state. On training in legal and institutional reforms, Mr. Vinjar proposed that GMS trainees meet on the job, with personnel dealing with the same subjects in other countries where reforms are in place. Mr. Kim suggested the consultants undertake their study in accordance with the TOR in the study, i.e., institutional and regulatory arrangements to power interconnected master plan, and not the broader aspects of the institutional and regulatory framework of the regional market. Mr. Kim distributed a list of additional data that Norconsult asked the EGP members to supply by 20 July 2001. Mr. Prutichai thanked the consultants for the comprehensive presentations and expressed his hope that the comments made during the meeting would be considered for integration in the report. He also proposed to ADB to hold another presentation on the master plan before the next EGP/EPF meeting later this year. Human Resource Management and Development for Power Utilities Sector in the GMSMr. Chuchat Techaganonta (EGAT), presented EGAT's human resource management concepts that served as basis for EGAT's HRD program. He enumerated the HRD process, which included organization analysis, establishment of Steering Committee, competencies listing, training needs assessment, HRD plan formulation, and implementation/ evaluation. He then presented a slide show on EGAT's South East Asia Center for Training in Energy for Development (SEACTED) which detailed its project alliances, mission/ objectives, principles of operation, as well as training facilities. Finally, he outlined SEACTED's proposed HRD collaboration in the GMS, as contained in its GMS Power Industry Capabilities Building Plan. The HRD Plan included among others, visit to regional utilities, power utilities seminar, and integrated power industry capacity building plan, among others. Prospective project benefits were mentioned which included increased competitiveness and reduced fuel consumption. Comments. Mr. Hoda asked about responsibility for HRD in the master plan study. In accordance with the terms of reference, the consultants needed to establish the human resources and training needed to implement the master plan. Mr. Vinjar said that Norconsult so far had worked only on HRD for institutional/ regulatory aspects. Mr. Kim clarified however, that Norconsult's TOR includes HRD for the master plan. Mr. Patel asked about funding for SEACTED's program. Mr. Chuchat mentioned that prospective GMS HRD program may be funded by GMS country investors/ lenders in GMS development projects. Mr. Vinjar added that HRD aspects in the master plan did not have clear funding. Inter-Governmental Agreement on Power Trade (IGA-PT)Ms. Diane Minogue, Consultant, World Bank, provided a session overview and summary of responses by GMS countries on the IGA draft of March 12, 2001. Those that responded acceptance of draft, as is, were Cambodia, Thailand and Yunnan; Lao PDR and Viet Nam had preliminary comments, and Myanmar had not responded yet. The body discussed the needed clearances within each GMS country prior to signing of the IGA. Mr. Prutichai said one option is to raise the IGA directly to the GMS Ministers for adoption. Mr. Thai (Viet Nam) said however, that the Subregional Electric Power Forum (EPF) should first clear the IGA. The body agreed that the draft IGA should be finalized first, and then elevated to senior officials of GMS before presented to the GMS Ministers Meeting for signing. Ms. Minogue went over the comments provided by EdL and proposed changes in response to said comments. Among items discussed included: role of EPF (Art. 4); dispute settlement (Art. 6); and termination (Art. 8.2). Other items involved editorial changes. Approaches for getting the IGA signed by the countries were discussed, and the body agreed to pursue the IGA even if only three counties would sign at first, with others joining later. Additional feedback from GMS officials could be discussed in a later WB workshop on Financing issues. Mr. Patel said that the IGA as finalized in this meeting, could be presented to the EPF later this year. Meanwhile, Thailand and other countries could secure other ministries' comments before the EPF meeting.
The discussions on the draft IGA continued with further comments provide by the EGP members. The Meeting agreed to changes in the following sections of the IGA: Preamble; Art. 3- Definitions; Art. 5- Parties to this IGA; Art. 6- Settlement of Disputes; and Art. 10- Relation to Other Agreements. The final draft of the IGA as shown in Appendix 5, was approved by the Meeting for the consideration of the EPF. Ms. Minogue presented an overview of the process of developing a Market Operating Agreement (MOA). The delegates have been provided with a copy of this for their information. The meeting discussed the possible schedule for the next meeting of the EGP and EPF. The WB has agreed to finance a workshop on the regional power market (Financing Issues) and would like to hold this workshop back-to-back with the planned EGP/ EPF. The Meeting agreed to this request and decided that the next meeting will be held in Hanoi either in late November or early December 2001. The duration of the meeting would most likely be five working days with two days being allocated for the workshop. Adoption of EGP-5 MinutesThe EGP members reviewed the draft minutes and after incorporation of suggested changes, the body therefore approved the minutes of the EGP-5 meeting.
|
© 2009 Asian Development Bank Privacy | Terms of Use |
 Top of page |
Back