Transcript Document 7301995

» Sustainable Development of Hydropower –
An International Perspective
Sanjeev Aggarwal
23rd September, 2008
Contains Forward Looking Statements
AES: Global Leader in Power and Alternative
Energy
Fuel Type
Renewables
Coal
19%
Other
7%
Thermal
41%
33%
Gas
Geography
Asia &
Middle East
14%
Europe,
CIS & 27%
Africa
Latin
America
26%
33%
North America
Revenue: $13.6 billion; Generation: 43000 MW; Distribution: 11 mn Consumers
29 Countries
Spread of AES Capabilities
Thermal Generation
Coal Mining
Distribution
16,700 MW Coal
16,500 Gas/Oil
Hydroelectric
~ 6 MTPA
LNG
13 utilities
100mn consumers
Wind Power
7500 MW
1 operating
3 under development
1000 MW under operation
2500 MW being developed
 Presence across all fuel sources
 Integrated operations: Mining → Generation → Distribution
AES in Asia : A Strong & Diversified Presence
Fuel
Middle East
Pakistan
China
Sri Lanka
Gas
Oil
Coal/ Hydro/ Oil & Gas
Capacity
(MW)
1,183
730
2,839
Diesel
168
India
Coal
420
Philippines
Coal
600
Kazakhstan
Coal / Hydro / Distribution
Total
2,950
8,890
AES – Hydro Experience
 Hydro-electric projects comprise
approximately 17% (7500 MW) of
the total installed capacity.
 AES has the requisite experience
in building/acquiring,
expanding/upgrading and
operating 32 hydroelectric projects
around the world.
Barrigon Dam Under construction –
working day and night!
 Requisite strengths for hydropower
development
 a global footprint
 familiarity with hydropower
technology and markets
– Our plant in Chile was commissioned in 1923
Barrigon Dam and Reservoir today
AES – Hydro Experience
» Hydro Development in Nepal
› Each nation has its own set of God’s bounty,
which helps it to grow
–Middle East, Russia have oil
–Australia, Indonesia, South Africa have Coal
–India has human resources – Services Industry
–China has manufacturing skills
›Nepal has its rivers!!
AES Corporation
7
» The Good Qualities of Hydro Power
›Economical
– Renewable and clean energy with large range of
project size, from micro to mega
– Very long asset lifetime with low O&M cost and with no
dependence on fuel prices
– May produce cheap electricity (not always…)
– Well-proven and simple technology
›Environmental
– Flood control function of the project will reduce the
damage to the environment and ecosystems
– Replacing fossil fuel fired station: no atmospheric
pollution
AES Corporation
8
» The Good Qualities of Hydro Power (contd)
›Social
– Construction largely related to civil works with intensive
domestic employment/material
– Water storage can be multi-usage like drinking water,
irrigation, river flow regulation…
– May attract secondary activities like tourism, sports…
– Potential mainly located in emerging countries with
benefits often to remote and less developed regions
with improved local infrastructure
AES Corporation
9
» Issues with Hydropower
› Economical
– Not entirely predictable/dependable energy
– Often far away from consumer centres
– Long development time + construction time
– High variability of development/construction cost
› Social
– May lead to population displacement
– May flood agricultural or cattle land
– Possible cross-border issues (river flow changes)
› Environmental
– Reservoirs change landscape (better or worse)
– Possible impact on ecology, wildlife and forests
AES Corporation
10
» “Sustainable” Hydro Development : What does it
mean?
› Sustain means “to keep going”
– Financial benefits that keep going (& …. coming)
›To the economy
›To the investors
›To the community at large
› Sustain means “to bear up”
– Environmental Impacts that are bearable
›Ecologies should not crumble under the development weight
›Today global community is impacted and is involved
– Social impact that can be withstood
›Should not decimate the very beings for which the development
was meant.
AES Corporation
11
» “Sustainable” Hydro Development for Nepal
› Nepal may develop other resources but the
prime movers are:
– Hydro resources
– Tourism
›Mindless exploitation will leave nothing for the
coming generations
›Nepal has to move ahead with development of
hydro resources
– …..and move ahead in a way which is sustainable.
AES Corporation
12
» Creating a Sustainable Financial Structure
›Sharing of revenues with the government
– Free equity and free power
– Boost to economy – export from Bhutan to India; Lao
PDR to Thailand
›Local area development
– Share the Benefits with local community: local
infrastructure
– In China, stock-sharing modes of a company are
diverse. Besides capital, the right of land use, labor
force, equipment, technology, construction fund, water
rights, etc. can also be taken as shares
– Build local capabilities
AES Corporation
13
» Creating a Sustainable Social Structure
› Hydro power projects last longer than average human
lifetime!!
› Win Win proposition for all stakeholders
– Schools, dispensaries, roads, electrification
› Consultative process should involve communities, public,
environmental agencies and NGOs from the beginning
“Taking progress to the most remote areas of the
country, AES El Salvador has invested in over
280 rural electrification projects since 2000.
These have directly benefited more than 17,000
Salvadoran families, turning the dream of having
a better quality of life into reality.”
AES Corporation
14
» Creating a Sustainable Environment
›Climate change – we can all see it happening.
– Erratic river flows
– Floods
Greenhouse Gas Services LLC (GHGS), our venture with GE Energy
Financial Services is working with Google to co-develop projects that
create GHG credits.
›Mindless deforestation
AES Tiete (Brazil) has already planted 3 million seedlings and reforested
1.8 thousand hectares in Sao Paulo
›Impact on local flora & fauna
AES has its internal environmental standards with an objective to meet or
better the local standards
AES Corporation
15
» “Sustainable” Hydro Development :
What an Experienced Developer Can Do
› Bring best management practice
– Bring commercial and free market expertise
– Bring up-to-date technical expertise
› Secure funding
– Most important for developing market; Global credit crunch
– Access to debt markets: local, foreign, multilaterals
– Project financing: capital intensive, structured, contingency support
› Help in development of local population
– Sensitivity to local issues
– Commit to fair treatment of project affected people
› Commit to minimal and acceptable environmental impact
AES Corporation
16
» How the Government can help us
›Secure timely granting of licenses and permits
›Focus on basin wise planning and creating
associated infrastructure of access roads &
transmission
›Facilitate resettlement of displaced population
›Set rules for use of water and abide by them
›Provide law & order support
›Limit unjustified actions by NGO’s
›Help development of domestic financial markets
And we can see the objective of 10,000 MW coming through….
AES Corporation
17
» Conclusion:
Hydro power is great but…
›has its economical, social and environmental
costs
›The development of these assets usually have
more positive repercussions for local community
than the negatives
›The environmental commitments need to be
made and followed but they should not outweigh
the economic benefits
›Government, with the help of experienced
developers, can achieve the goals of sustainable
development.
AES Corporation
18
Thanking You
AES Corporation
19