Regional Energy Opportunities for Pakistan and Afghanistan Haroon Sharif Advisor, Regional Economic Cooperation The World Bank SDPI Annual Conference, December 10, 2014 1
Presentation Outline A. Reducing Energy Shortages through Cooperation B. CASA-1000 C. Emerging Regional Markets 2
Power wer Sho hortage tages s ar are ha havin ing a h a hug uge im impac act t on j n jobs bs an and growth wth Severity of Constraints Reported by SAR Benchmark and Expanding Firms Urban Formal Sector PoliticalInstability 2.6 Electricity 2.2 Corruption 1.8 TaxAdministration 1.7 GovPolicyUnc 1.4 MacroInstability 1.3 Competit 1.2 CrimeTheftDisorder 1.1 AccessLand 1.1 Customs 1.1 InadEducLabor 1.1 Benchmark Firm LaborReg 1.0 Transport 1.0 Expanding Firm BusLicensing 0.9 Courts 0.9 Telecoms 0.7 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Severity of Constraint [0=No Obstacle. 4=Very Severe Obstacle]
Al All S l SAR AR coun untries ries su suffe fferin ring g fr from se severe re ene nergy rgy sh shortages ages an and the he si situa uatio ion n is is becomi oming ng worse se Low access and low consumption High peak shortages are a per capita constraint to growth • Peak Shortages of 1 GW in Bangladesh, 2- Figure 1: Access to Electricity 4 GW in Pakistan and 12 GW in India 100% • 60 percent of Indian firms rely on captive 90% or back-up generation (compared to 20 percent in China) 80% • In Pakistan, cost of industrial load 70% shedding to the economy has resulted in 60% loss of 400,000 jobs and US$ 1 billion 50% worth of exports • In Bangladesh, power shortages have 40% accounted for GDP losses of 1-2% 30% • In Nepal, the load shedding amounts to 20% 16 hours a day and are expected to go up 10% to 19 hours a day in the upcoming dry season 0% AFG NEP BNG BHU IND SL PAK Total 34% 37% 46% 67% 70% 75% 86% Urban 78% 87% 85% 98% 94% 94% 98% Rural 22% 27% 32% 55% 60% 74% 80%
Binding Constraints to Growth in South Asia: electricity tops the list 100 Electricity 90 Transport 80 Telecommunication 70 60 50 % 40 30 20 10 0 Afghanistan 2005 Afghanistan 2007 Bangladesh 2002 Bangladesh 2007 India 2002 India 2005 Pakistan 2002 Pakistan 2007 Sri Lanka 2004 Total 5
Kyrgyz Republic and Tajikistan are endowed with vast hydropower potential… Kazakhstan Reserves : Oil 30 billion bbl Natural Gas 85 TCF Coal 31.3 billion tons Kyrgyz st an Hydro Power 20,000 M W Reserves : Oil 0.04 billion bbl Natural Gas 0.2 TCF Coal 0 .9 billion tons Hydro Power 26 , 0 00 M W Uzbekist an Reserves : Oil 594 m illion bbl Natural Gas 66 TCF Coal 3.3 billion tons Hydro Power 1 , 7 00 M W Turkmeni stan Taji kist an Reserves : Reserves : Oil 600 m illion bbl Oil 0.01 billion bbl Natural Gas 280 TCF Natural Gas 0.2 TCF Coal Modest Coal 3.6 billion tons Hydro Power Modest Hydro Power 40 , 0 00 M W
The proposed CASA-1000 transmission facilities would: maximize the use of 1,300 MW renewable summer electricity surplus from existing plants in Central Asia (Kyrgyz Republic & Tajikistan) and provide electricity to consumers in electricity deficient South Asia (Afghanistan & Pakistan) 7
The CASA-1000 project includes: 500 kV line Datka-Khudjand (477 km), with Tajik network transferring Kyrgyz exports to Sangtuda. Tajikistan Grid Strengthening. 1300 MW AC-DC Convertor Station at Sangtuda. 750 km HVDC line Sangtuda-Kabul- Peshawar. 300 MW Convertor Station at Kabul (with both import & export capability). 1300 MW DC-AC Convertor Station at Peshawar. Final Report of Feasibility Study Update available at: http://www.casa-1000.org/1)Techno- EconomicFeasbilityStudy_MainRep_English.pdf http://www.casa-1000.org/2)Techno- EconomicFeasbilityStudy_MainRep_Russian.pdf 8
CASA1000: Some Project Characteristics 1. Enabling trade of surplus hydro power, initially, from Kyrgyz Republic and Tajikistan to Afghanistan and Pakistan. – High Voltage Transmission Infrastructure and Systems linking Kyrgyz Republic, Tajikistan, Afghanistan and Pakistan – Brings 1000 MW of clean electricity to Pakistan (300 MW to Afghanistan) 2. Project cost $1.2 Billion; projected completion date 2017-18 – $200 Million contribution of Pakistan and $300 Million for Afghanistan 3. Benefits – Significant revenues for exporting countries; help fund winter shortages in Central Asia – Meeting severe power shortages in Pakistan and replace polluting fuel oil based power with clean hydro power – Establishes Afghanistan as a viable transit country, enhancing growth prospects 4. Implementation Status – 80% Financing approved ($550mn from the World Bank) – Commercial agreements signed and Tendering process in place 9
Possible increases in interconnection capacity 10,000 MW 600 MW 10,000 MW 500 MW 500 MW 1000 MW Source: Based on Govinda Timilisina/The World Bank & An Overview of Energy Cooperation in South Asia (2013)/ADB
Emergence of a Regional Electricity Market 1. CASA-1000 has opened doors for other countries to use open access of the transmission line; 2. Pakistan and Afghanistan are looking at wider energy cooperation; 3. Pakistan and Afghanistan looking at leveraging the regional potential; 4. A classic example of South Asia – Central Asia Connectivity; 5. Narrative shifting from security to economic cooperation; 6. Huge demand to fill knowledge gaps and institutional capacity. 11
SAARC RC Region onal l Energy Trade e Maste terpla rplan CASA 1000 TUTAP Pakistan- India TAPI Nepal - India Iran - Pakistan 4-Border Interconnection IPI Bangladesh - India Power Transmission Existing Under Construction Projected Myanmar- India Gas Pipeline Projected Installed Transmission Capacity: ~1,500 MW Sri Lanka - India Projected Additional Trade Capacity: Power: ~ 4,300 MW Gas: over 180-210 million mscmd 12
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