Strategy of World Bank for Supporting Power Sector Projects in Central Asia

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CopenhagenApril 29, 2002

Strategy of World Bank for Supporting Power Sector Projects in Central Asia

Presentation byRaghuveer Sharma

Team Leader, Central Asia Energy ProgramsThe World Bank, Washington DC, USA

Conference onSustainable Development and Ecologically Secure

Functioning of Uzbekistan’s Energy Sector – Perspectives and Problems

September 20 to 22, 2005Tashkent, Republic of Uzbekistan

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Strategic Context

• Fast growing demand for energy in Asia (China, India, but also Iran and Pakistan)

• Significant inefficiencies and large investment needs in Central Asia’s energy sectors

• Integrated power transmission systems, but domestic self-sufficiency strategies

• World Bank objective: – Unlocking power sector potential through exports– Priority investments to maximize efficiency gains

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Central Asia’s Electricity Export Potential

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Installed Capacity

0

10000

20000

30000

40000

I nstalled hydro capacity (MW) I nstalled thermal capacity (MW)

Installed thermal capacity (MW) 16300 15000 694 763 318 318 8573 9873 2528 2651 28413 28605

Installed hydro capacity (MW) 2200 2200 2790 2950 4037 4037 1710 1710 1 1 10738 10898

1994 2002 1994 2002 1994 2002 1994 2002 1994 2002 1994 2002

Kaz Kyr Taj Uzb Tur CA

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Annual Generation still less than in 1990

80000

85000

90000

95000

100000

105000

GWh

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Power Generation by CA Power System in 1993-2003

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Annual Load CurvesEssentially Winter Peaking System

Central Asian Power System

Annual Load Curves 2000

0.0

1000.02000.0

3000.0

4000.0

5000.06000.0

7000.0

8000.09000.0

10000.0

Months

GW

h

Central Asia UPS

Kazakhstan South

J SC Kyrgyzenergo

Bark i Tojik

Kuvvat Turkmenistan

Min. of Energy of Uzbek.

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Central Asia and its Neighboring Electricity Export Markets

Rogun HPPInvestment US$2,455 mil.Capacity 3,600 MWAnnual Generation 13,000 GWhAIC of Generation 2.83 cents/kWh

Vaksh Cascade of HPPsActual Annual Generation 14,000 GWhAdditional Generation by the existent Cascade with Rogun HPP 300-1,500 GWh

Sangtuda HPPInvestment US$370 mil.Capacity 670 MWAnnual Generation 2,700 GWhAIC of Generation 1.97 cents/kWh

Talimarjan TPP Unit #1 Units #2-4Investment US$ mil. 100 1,200Capacity MW 800 2400Annual Generation 4,538 13,613AIC of Generation cents/kWh 1.68 2.76

Kambarata 1 HPPInvestment US$1,940 mil.Capacity 1,900 MWAnnual Generation 5,100 GWhAIC of Generation 7.17 cents/kWhKambarata 2 HPPInvestment US$280 mil.Capacity 240 MWAnnual Generation 1,116 GWhAIC of Generation 3.72 cents/kWh

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Central Asia - Supply/Demand Forecasts

Summers

0

20000

40000

60000

80000

100000

120000

2005 2010 2015 2020 2025

GWh

Supply Demand

Winters

0

20000

40000

60000

80000

100000

120000

140000

2005 2010 2015 2020 2025

GWh

Supply Demand

Annual

0

5000

10000

15000

20000

25000

2005 2010 2015 2020 2025

GWh

Supply Demand

Surplus for Export

0

10000

20000

30000

40000

2005 2010 2015 2020 2025

Summer Winter

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Central Asia Regional Demand Supply Assessment Summary

• There is a shortage in the winter months currently– But this shortage is small – 5% of demand in those months

• Can be made up by loss reduction, efficiency improvement

• And trading for electricity• Even now, there is quite a surplus in summer – 11000

GWh available for export – minimum of 6000 GWh

-1500

-1000

-500

0

500

1000

1500

2000

2500

3000

1 2 3 4 5 6 7 8 9 10 11 12

Months

Central Asia Regional ViewExportable Surpluses in 2005

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Possible Transmission Links for Exports

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Estimates of Transmission Costs

Almaty-Urumqui 500 kV DC LineLength 1050 kilometers

Annual Power Transmission 10000 GWh

Investment US$ Mn.210Cost of Transmission 0.83 USc/kWh

SS Surhan-Mashad 500 kV AC Line

Length 1150 kilometers

Annual Power Transmission 10000 GWh

Investment US$ Mn.320Cost of Transmission 0.53 USc/kWh

Kabul-Tarbela 500 kV AC LineLength 360

kilometersAnnual Power Transmission 2000

GWhInvestment US$

Mn.90Cost of Transmission 0.66 USc/kWh

Kandahar-Karachi 500 kV AC LineLength 900


GWhInvestment US$ Mn.227Cost of Transmission 0.97 USc/kWh

Kabul-Kandahar 500 kV AC LineLength 490



SS Surhan-Kabul 500 kV AC LineLength 515



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Competitiveness of Central Asian Electricity in Neighboring Markets

Table 5. 1: Marginal Costs of Generation in Target Markets versus Import Costs (cents/kWh)

Target Market

Marginal Generation

Cost in Target Market

Supply Options Transmission

Cost

Total Landed Cost of Imports

Afghanistan 3.7 Sangtuda I, Rogun I, Talimardjan I and II

0.51 2.26 – 3.43

Iran 3.6 Sangtuda I, Rogun I, Talimardjan I and II

0.54 2.29 – 3.46

Pakistan 5.6 Sangtuda I, Rogun, Talimardjan I and II, Kambarata II

0.51 2.26 – 3.75

China 3.6 Sangtuda I, Talimardjan I 0.72 2.47 – 3.16

Russia 3.0 Sangtuda I, Talimardjan I 0.55 2.30 – 2.99

Based on Crude Oil prices at US$30/barrel

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CopenhagenApril 29, 2002 • Afghanistan

– very keen but needs are small – Will have payment problem, although

under World Bank encouragement willing to use Donors Trust Funds

– Best approach is to supply electricity in exchange for right-of-way to reach Iran and Pakistan

• Pakistan and Iran are real markets– Both have asked World Bank to help

create electricity trade with Central Asia– Both keen to trade with Central Asia

Electricity Exports- Strategic Considerations

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• Market Risks are real

– Electricity is often equated with national security

– Dependence on imports for large part of need is

not politically viable

• Need to invite importers to have

shareholding in the projects

– This is one way of getting them to commit to

import

• Russian Strategic Interests and Actions

Other Strategic Considerations

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Russia and CISCurrent Energy Interests

Source: The Economist

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A Strategy for Energy Sector Development

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Central Asian RepublicsPower Development and Trade Strategy

Loss Reduction &Rehab. Programs

Transmission Links:North-South Project

Power Trading Capacity: Sangtuda

Lev

el o

f R

isk

Low

High

Time Frame

Near-Term1- 5 yrs

Medium -Term3 - 10 yrs

Long -Term8 - 15 yrs

Domestic & RegionalCapacity Balance:

Bishkek II & Talimardjan I

Export MarketNegotiation

South TransmissionLinks Development

Export Capacity PPP:Rogun & Talimardjan II

Russia

Afghanistan

Pakistan

IranChina?

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World Bank’s Central Asia Energy Program

Kazakhstan Kyrgyz Republic

Tajikistan Uzbekistan

Regional

Loss Reduction

and Rehabilitatio

n

•Public Private Partnership (PPP) for generation and distribution rehabilitation

•Power Plant Rehab•Policy Loans•TA Credit• Distribution PPP

•Pamir Private Power•Energy Loss Reduction Project•Strategy advice

•Policy and Strategy advise•New project for efficiency improvement

Build Winter Capacity

Develop Electricity

Trade Infrastructur

e

North South Transmission Line Project

Water Energy Nexus

Develop Electricity

Trade Capacity

New capacity under PPP

Sangtuda I project as IBRD enclave

Regional Export Potential

Strategy of World Bank for Supporting Power Sector Projects in Central Asia

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