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World energy outlook.

WORLD ENERGY OUTLOOK

The developing countries contain 3.4 billion people, 75 per cent of the world's population, yet consume only 18 per cent of the global electricity production. Among the poorest of the developing countries, consume only 250 KWH per person per year, compared to 10,500 KWH per person annually in the United States and 6,000 in Western Europe and Japan.

Developing countries invest about $ 50 billion each year to build new power plants and distribution systems, yet they are losing the struggle to meet a demand for electricity which is doubling every ten years. Between 90 and 95 per cent of the electricity generated goes to cities and industry. About 1.7 billion people still do not have power.

The developing countries contain 3.4 billion people, 75 per cent of the world's population, yet consume only 18 per cent of the global electricity production. Among the poorest of the developing countries, consume only 250 KWH per person per year, compared to 10,500 KWH per person annually in the United States and 6,000 in Western Europe and Japan.

If the developing countries succeed in catching up economically with the developed countries, their electricity consumption will probably grow at a rapid pace. Average annual electricity consumption in developing countries has grown at 7 per cent for the last 20 years, whereas in Pakistan, annual electricity consumption has been around 11 per cent. These growth rates are exceeding available capital resources and installed capacity is increasingly lagging demand. In India, peak demand now exceeds supply by 10 per cent, in the Dominican Republic by 15 per cent, and in Pakistan by 25 per cent.

Based on the World Bank's intermediate economic growth forecast for developing countries, electricity use in the developing world will continue to grow at over 6 per cent annually. This will require an additional 1,500 GW (Gigawatts) of capacity over the next 20 years at a cost of $2.5 trillion, or $125 billion per year. Current expenditures are $50-60 billion per year. Thus, just to maintain current rates of economic growth will require a doubling of capital investment in electric power generation in developing countries. By virtually all accounts, this amount of capital simply will not be available - and this assessment was made before the opening up of Eastern Europe, which will place additional strains on the availability of capital. Consequently, there must be another answer to meeting the growing demand for electricity in order to sustain economic growth. Fortunately, there is, and that answer is energy conservation.

Despite the insatiable demand for electricity, most developing countries waste large amounts of power. It is not unusual to find a Third World factory using twice as much electricity to make the same product as its competitors in the industrial world. Older manufacturing technologies, poor equipment maintenance, and subsidized energy prices are largely to blame.

There is great potential to improve Third World electric efficiency. With power consumption growing rapidly efficiency improvements would be felt almost immediately and the economic rewards would be great.

A recent study shows that by raising efficiency, projected electricity consumption in Brazil could be cut 30 per cent by the year 2000. The $10 billion required to implement these measures would eliminate the need to build $44 billion worth of new generating capacity. Without efficiency gains, Brazilian planners project that the country's generating capacity will have to grow 150 per cent in the next 15 years - at a staggering cost of $130 billion.

Brazil, the Philippines, and South Korea have some of the best efficiency programmes. In South Korea, there are efficiency standards for buildings, efficiency labels on appliances, and tax deductions for efficiency investments. The government has prohibited the use of elevators in the first three floors of buildings.

Removing electricity price subsidies is a prerequisite for efficient power use. Low, subsidized electricity prices encourage waste. Power authorities need to raise prices and adopt "time-of-use" rates that discourage consumption at peak periods. However, realistic pricing of power for industry and urban consumers reinforces the need to provide "lifeline rates" for the poor.

But prices are not enough. Often, consumers lack the knowledge or financial incentive to make efficiency investments, even when the potential savings are obvious. Programmes that have proved effective in promoting greater efficiency include educational campaigns, energy audits for homes and factories, and minimum standards for electricity-using equipment.

The next step is to begin investing directly in increased efficiency, an approach that is becoming increasingly common in the United States. The Austin, Texas, municipal utility has developed a programme consisting of utility payments to customers for investments in weatherization and the replacement of inefficient appliances. This "conservation power plant" will save 553 megawatts of power, and will cost only one-third as much as a coal-fired plant of comparable size.

Increased attention to electricity efficiency would be a significant step towards reducing Third World indebtedness. And, unlike the economic austerity programmes many countries have been forced to adopt, energy efficiency can help to restore the economic competitiveness of developing countries.

China

In the next five years China will give a 40 per cent boost to its power industry, which is now a weak link in its national economy. The country plans to increase its installed capacity from the present 86.300 million kw. to 120.7 million kw. by 1990. Development will include expansion in areas of traditional power supply - thermal and hydro - and will introduce a new source for China - nuclear energy. Construction of thermal power plants will dominate the next five years. Such plants will have a combined capacity of 36.9 million kw. accounting for about 70 per cent of the total capacity planned for the period.

At least 34 thermal power plants will start construction in the next five years. They will be located mainly at China's coal-producing areas in the northwest and east. China also will expand some existing coal-fired power plants in its coastal provinces.

Meanwhile, exploitation of rich hydropower resources has been receiving equal attention. In hydropower development, China will concentrate on the upper reaches of the Yellow River, the middle and upper reaches of the Yangtze, and on the Hongshui River in the South. Seventeen water-power stations are now being built on the Yellow, Yangtze and Hongshui rivers and in northeast and east China. They will add 7.4 million kw. to China's generating capacity by 1990. Among these hydropower projects are the country's largest, the Gezhouba Dam on the Yangtze in central China, and the second largest, the Longyang Gorge Dam on the upper reaches of the Yellow River. The former, which has been operational partially since 1981, will have a capacity of 2.7 million kw. when completed. The latter, with a designed capacity of 1.3 million kw. will start partial production shortly.

While speeding up completion of waterpower stations now under construction, China will start a number of new ones, each with a capacity of 1 million to 3 million kw. China will continue encouraging peasants and rural communities to build small hydropower stations with their own funds. The goal is to add 3 million kw. to the present generating capacity of nearly 10 million kw. of the country's small water power stations, which number 74,000.

Simultaneously, China is developing a new source for power - nuclear energy. Under construction are two nuclear power stations in coastal Zhejiang and Guangdong provinces. To match increased generating capacities, China also will speed up construction of extra-high voltage power transmission lines. The power ministry plans to put up 3,500 kilometers of high-tension lines during 1986-90.

Bangladesh

The Bangladesh Power Development Board emerged as a separate organisation on May 1, 1972 after bifurcation of the erstwhile Bangladesh Water and Power Developing Authority (WAPDA). The main object of the Board is to harness the power resources of the country in productive pursuits. With this aim in view, the Board has been entrusted with the responsibility of preparation and execution of comprehensive plans and necessary schemes for power generation, transmission and distribution as well as running the power system in the country.

The new investments in generation, transmission and distribution are financed under the Annual Development Programme of the government and distribution are financed under the revenue budget. Bangladesh has started financing local currency portion of the ADP partially. In June 1989, PDB's generation capacity was 2365 mw compared to 1016 mw in June 1986. With substantial improvement in generation, the Board has been able to meet country's maximum power demand, estimated at 1932 mw in June 1989. It does not need to resort to loadshedding any more.

PDB's generation capacity exceeded 2200 megawatt by March 1989. In June 1989 the transmission and distribution network comprised 1792 km of 230 kv, 132 kv and 66 kv lines, 8158 km of 33 kv lines and 28,144 km of 11 kv and low voltage distribution lines. A total of 443 up-zilas and about 3938 villages have been electrified. More than 10428 irrigation pumps and tubewells of these areas have been provided electric connections. The number of PDB consumers rose from 0.81 million in 1984-85 to 1.15 million in 1988-89. More power stations and generating units are now under construction against a peak demand of 1823 mw. Simultaneously long term planning is under way to meet the demand beyond 1990. Schemes in the transmission and distribution sides have been taken up according to requirements.

The only hydro-electric power station on the Karnafuli river is located at Kaptai. The project was completed in 1962 with two units of a total capacity of 80 mw. The 3rd unit was added in 1931 raising the capacity of the station to 130 mw. Two additional units with a capacity of 100 mw were commissioned in 1987-88.

Rural Electrification Board

Rural Electrification Board (REB) is an autonomous body under the Ministry of Energy and Mineral Resources. It was established on October 31, 1977 under Rural Electrification Ordinance. The Board started functioning from January 1978. REB is a public utility organisation. Its main objective is to provide electricity in the rural areas of Bangladesh through Rural Electric Societies called Palli Biddyut Samities. The Government has adopted the cooperative concept of rural electrification, envisaging decentralisation of the operation and management of the system. This concept has been given a concrete shape on the basis of the experience of different developed as well as developing countries.

Under an on-going development programme of REB, efforts are underway to construct 4485 km distribution line and 21 sub-stations with a project of connecting 71975 domestic, 11722 commercial, 3293 irrigation and 1621 industrial consumers.

Canada

Water-power is the largest source of electrical generation in Canada, providing nearly 69 per cent of all the electric power produced. While hydro power will remain the largest source of electricity for many years to come, nuclear power, which currently accounts for 9 per cent of generating capacity, will become an increasingly important source of electrical energy in the future. Canada has developed the CANDU reactor, and is also a major producer and exporter of uranium. It has adopted stringent safeguards governing the export of uranium and CANDU reactors.

Canada also has large coal resources, located primarily in the West, but also in the Atlantic provinces of Nova Scotia and New Brunswick. Following a long period of stagnation, coal production has in recent years been expanding rapidly under the stimulus of both export and domestic requirements.

Canada has initiated research and development programs in connection with such renewable energy sources as solar, biomass, wind and tidal power. Though these sources are making only a small contribution to current energy production, their importance is certain to increase.

The goal of Canada's national energy policy is self-sufficiency that is, the supplying of Canadian energy requirements from domestic energy resources to the greatest extent practicable. In particular, Canada seeks to eliminate its need for imported oil by 1990. In order to gain this objective, Canada must not only encourage the development of new domestic energy supplies but must also encourage more efficient use of existing energy resources through conservation and substitution of more plentiful fuels for oil. The federal and provincial governments have established comprehensive energy conservation programmes, including assistance for home insulation.

India

With some 61,000 MW of installed generating capacity, India plans to boost capacity 38,000 MW during the Eighth Plan period (1990-95) to sustain the country's goal of 6% growth rate. This additional generating capacity calls for a staggering Rs. 1,280 billion (Rs. 17.27: US$ 1) investment. Since the government is in-capable of mobilizing the required resources, it had to seek both foreign and private investment, and reverse its policy of reserving natural gas primarily as feedstock' for fertilizers and petrochemicals. The package announced in June 1990 seeks to remove some of the major sore points and incorporate specific financial incentives to attract foreign and private participation. The package's salient features include: a) Who can Invest: MNC's investment must fall within the general policy framework on foreign investment. A special board composed of secretaries of ministries concerned will clear application from overseas investors. Private firms, including conglomerates, won't need to seek clearance under the Monopolies and Restrictive Trade Practices Act. This should ensure that large business won't be hampered by bureaucratic hurdles and should promote more investments. b) Norms for Financing Investment: Promoters must contribute at least 11% and a minimum 60% of funds must come from sources other than financial institutions. These regulations ensure additional funds are mobilized, although they also are likely to be a major stumbling block for private industry. A debt-equity ratio of 4:1 is permitted. c) Mode of Operation: Companies may operate as licensees, independent generating companies such as state-owned National Thermal Power Corp. (NTPC) or in association with the central or state government. All firms will fall under the Electricity Supply Act of 1948. d) Tariff Fixation: Companies may sell power based on a standard two part tariff determined from operational norms, plant load factor (PLF) and depreciation notified by the government. Captive power-generating units also may sell their surplus power based on the two part tariff. e) Rate of Return Permitted: The allowed rate of return will rise from 12% to 15%. Parliament is about to amend the 1948 electricity act.

Thailand

Under Electricity Generating Authority of Thailand (EGAT) current power development plan, Thailand's total power generation capacity is to be increased from about 7,760 MW as of May 1990 to about 18,630 MW in FY2001 to meet future demand, which is projected to grow at an average annual rate of about 9 per cent in the 1990s. Projects under construction will add about 3,665 MW by mid-1993. The major thrust of development during the decade will be the continued exploitation of lignite, gas and hydro resources.

The Asian Development Bank in June 1990 approved a loan of the equivalent of $48.8 million from its ordinary capital resources to help the Electricity Generating Authority of Thailand (EGAT) reinforce its power supplies in the central and north eastern areas of Thailand as well as in and around Bangkok. The borrower of the loan will be EGAT, with the Kingdom of Thailand as the guarantor.

The Project, called Transmission System for Mae Moh Power (Units 10 and 11), is designed to erect a 333 km, 500 kV double circuit line from Mae Moh in the north to Tha Tako in central Thailand to transmit the electric power generated at the two 300 MW lignite - fired units now under construction. It will also involve the expansion of the substations at Mae Moh, Tha Tako and Nong Chok (Bangkok).

Mae Moh Units 10 and 11 are part of the Government's strategy to utilize lignite to develop indigenous energy supplies. Nine lignite-fired are already installed at Mae Moh some of them have been in operation for years - with a total capacity of 1,425 MW. Units 10 and 11 will add another 600 MW by mid-1992. The Bank loan will finance a part of the foreign exchange component of the estimated total project cost of $ 210 million. It is repayable over 20 years, including a grace period of four years, at an interest determined in accordance with the Bank's pool-based variable lending rate system. There is a commitment charge of 0.75 per cent per annum levied on a staggered basis in line with the current Bank policy.

Saudi Arabia

The power generation in the Kingdom has increased by 1,248 per cent in a period of 12 years going up from 1,173 megawatts in 1975 to 14,644 megawatts by the end of 1987. This enabled the country to supply electricity to more than two million subscribers and more than 2,000 factories around the Kingdom in addition to thousands of farms, hospitals, schools and other establishments.

According to a report the industrial power consumption rose from 11,656 MKwh to 12,029 MKwh during the same period registering an increase of 3.2 per cent. This can be explained by the establishment of more factories and plants which now stood at 2,061, according to the latest industrial figures. Electricity is generated by five regional power companies which are the Saudi Consolidated Electric Companies (SCECO's) of the central, western, eastern, southern and northern regions in addition to the Saline Water Conversion Corporation (SWCC) through its various plants which have been a good source of power generation. The largest producer and industrial consumer remained to be the Eastern Province where the bulk of the Kingdom's industrial plants are situated. There the production rose by 11.3 per cent from 17,544 MKwh to 19,519 MKwh.

In the Northern Province the power generation rose by 19.9 per cent from 853 MKwh in 1985 to 1,023 MKwh in 1986 while in the Central Province it went up by 8.3 per cent and in the Western Province by six per cent from 11,577 MKwh to 12,268 MKwh.

According to Ministry of Industry and Electricity the maximum load in 1975 was 848 megawatts which increased to more than 11,000 megawatts in a few years marking a rise of 1,297 per cent. The 110-KV distribution lines reached more than 14,000 kilometers while those less than 69 KV reached more than 55,600 kms by the end of 1986.

The total number of subscribers in the services of the entire electricity companies was 351,531 in 1975. This number increased by 580 per cent to reach 2,036,000 in 1987. Last year alone, a total of 150,486 new subscribers joined the electricity companies in various parts of the Kingdom. They were distributed as: Eastern Province 14,278; Central Province 42,072; Southern Province 37,592; Western Province 45,393 and Northern Province 11,151.
 Energy Consumption Per Capita
 (Kg. of Oil equivalent)
Countries 1984 1985 1986 1987
Bangladesh 40 43 46 47
India 187 201 208 208
China 485 515 532 525
Pakistan 188 218 205 207
Sri Lanka 143 139 139 160
Zambia 422 412 381 380
Indonesia 205 219 213 216
Philippines 271 255 182 241
Egypt 562 588 577 588
Nigeria 129 165 134 133
Thailand 320 343 325 330
Peru 575 543 478 485
Turkey 634 712 750 763
Tunisia 495 546 499 496
Colombia 758 755 728 757
Brazil 753 781 830 825
Malaysia 716 826 762 771
Poland 3197 3438 3369 3386
Republic of Korea 1171 1241 1408 1475
Hong Kong 1162 1264 1260 1525
Singapore 2520 2165 1851 4436
Iran 1044 1026 958 955
Iraq 692 662 734 732
Libya 3107 3042 2259 2674
Saudi Arabia 3602 3653 3336 3292
Kuwait 3974 4569 4080 4715
U.A.E. 5369 5102 5086 5094
New Zealand 4005 3823 4127 4211
Belgium 4402 4666 4809 4844
United Kingdom 4402 3603 3802 3805
Austria 3345 3217 3400 3465
Netherland 4744 5138 5201 5198
France 3516 3673 3640 3729
Australia 4763 5116 4710 4821
Germany 4238 4451 4464 4531
Japan 3135 3116 3186 3232
Sweden 5728 6482 6374 6453
Canada 9148 9224 8945 9156
Norway 8575 8920 8803 8932
Switzerland 3777 3952 4052 4105
United States 7302 7278 7193 7265
USSR 4627 4885 4949 --


Source: World Bank Development Reports
COPYRIGHT 1991 Economic and Industrial Publications
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Publication:Economic Review
Date:Mar 1, 1991
Words:3383
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