Mission Statement

Electric Power Mission to the Philippines, Vietnam and Thailand

June 22-30, 2006

Mission Description

The United States Department of Commerce, International Trade Administration, U.S. Commercial Service, Office of Global Trade Programs is organizing an Electric Power Trade Mission to Manila, Philippines; Hanoi and Ho Chi Minh City, Vietnam; and Bangkok, Thailand, June 22-30, 2006.   Participating firms will have pre-arranged one-on-one meetings scheduled for them by the U.S. Commercial Service in all three countries.   A similar Electric Power Mission held in this region in 2003 was highly successful.   Mission participants will include representatives from U.S. firms offering equipment, services, and technologies for power generation, transmission, and distribution.

Commercial Setting

The Philippines

In 2003, the Philippines generated a total of 52,863 Gigawatt-hours (GWh) of electric power.   Coal-fired plants accounted for 27 percent of total power generated, followed by power plants running on indigenous energy sources such as natural gas (25 percent), geothermal (19 percent) and hydropower (15 percent).  Oil-fired power plants constituted the remaining 14 percent of total power generated throughout the Philippines.

The Philippine Energy Plan, or PEP (2005-2014), projects power demand will continue to grow strongly, at an estimated annual average of 7 to 9 percent.   The Philippine Department of Energy (DOE) estimates that the country will need to add 9,228 MW of new capacity over the next ten years.  

The expected surge in electric power demand – due to such factors as population growth, increased agro-industrial activity, and growth in mining, telecommunications, and commercial and residential construction – will necessitate the addition of new generating capacity.   The Philippine government is providing fiscal and other incentives to encourage investment in the energy sector, notably energy sourcing, power generation and transmission, and rural electrification.   To assist in more efficient market uptake, the Wholesale Electricity Spot Market (WESM) is currently being developed and is expected to become operational by 2006.   The WESM intends to pool electricity output for sale to end-users in real time.   In view of these developments, the Philippines will continue to be a viable market for American electric power equipment, parts, and services.   Significant opportunities await suppliers to projects that will tap the country's indigenous resources such as wind, geothermal, solar, hydro and biomass.   Moreover, the National Transmission Corporation (TransCo) is expanding and improving the country's transmission infrastructure, creating further opportunity.   Distribution companies and electric cooperatives are also interested in products and technology that will reduce system losses and provide more efficient servicing of their respective franchise areas.

Vietnam

Vietnam presently has 28 operational power stations able to generate 8,741 megawatts.   Per capita electricity consumption remained at a modest 400kWh last year.   Vietnam's electric power industry supplied 53 billion kWh in 2005 and predicts to rise to 100 billion in 2010.   Vietnam =s estimated demand for electricity from now to the year 2010 will grow annually at the rate of 10-15 percent.   To meet this demand, an investment of US$ 20 billion by 2010 will be needed to develop 37 new power generation projects (including 22 hydroelectric plants, 8 gas or oil power plants and 7 fueled by coal) and about 4,000 km of 500kV transmission lines together with 100,000 km of low medium and low voltage distribution lines.   To be able to finance such a big investment, the Government of Vietnam has decided to open the electric power generation and distribution sectors to call for investment from other domestic and foreign investors under various forms, including Independent Power Producers (IPP), Build-Operate-Transfer (BOT), Build-Transfer (BT), Build-Transfer-Operate (BTO), Joint Ventures (JVs), and Joint Stock firms. IPPs currently generate about 8.7 percent of total power supply.   Over the next 10 years, Vietnam will allow up to 20 percent of generating capacity to be in the hands of foreign-invested IPP, BOT, and JV projects.

The power industry can be divided into 5 main segments: (1) consulting services, (2) installation, construction, and engineering services, (3) machinery, equipment, and materials, (4) supply of equipment, spare parts, materials, consumables, and overhaul and maintenance services, and (5) investment in new power projects in the form of IPP, BOT, BT, BTO, and JV.   Of these, U.S. firms will be the most competitive and able to find significant opportunities in consulting services, engineering services, supply of machinery and equipment to new power projects, and supply of spare parts to existing power plants.   Given projections for growth of demand for consulting and engineering services in the power sector in Vietnam, increasing openness toward BOT and other private financing schemes by the Vietnamese Government, and the respect for U.S. technology and expertise that is considered to be world class in this field, it is believed that this sector offers significant export opportunities for U.S. companies.

Thailand

The demand for electric power in Thailand has been rising and is projected to increase 6 to 7 percent annually, or about 1,900 MW per year, to keep pace with the country's expected 4- to 5-percent annual economic growth.   Thailand has an installed power generation capacity of 25,970 megawatts dating from September 2004.   While Thailand's electricity consumption in 2004 stood at 15 percent of the country's gross domestic products (GDP), averaging $400 per person per year, the current supply of electric power in the country is depleting (about 20 percent of the power reserve remains), with slower than expected development of new power plants.   The Thai government realized the need for electric power and revised the country's Power Development Plan (PDP) in August 2004.

Under the revised PDP, the Thai government plans to invite participation from private power producers to bid for the right to produce and supply power to the national grids, currently under the authority of the EGAT Public Company Limited (formerly Electricity Generating Authority of Thailand).   The plan calls for construction of 23 new power plants between 2005 and 2010, in order to commence operations and supply electricity to the national power grid from 2011 onwards.   Requirements for the first 14 plants are as follows:

• Four new power plants, each with an annual capacity of 700 MW, as well as alternative energy sources, with a combined annual capacity of 140 MW, will be in service from 2011 onwards.
• Six new power plants, each with an annual capacity of 700 MW, as well as alternative energy sources with a combined annual capacity of 105 MW, will be in service from 2012 and 2013 onwards.
• Four new power plants, each with an annual capacity of 700 MW as well as alternative energy sources with combined capacity of 140 MW, will be in service from 2014 onwards.

This plan opens very attractive opportunities for U.S. suppliers who can offer equipment ranging from power generation to transmission, substation, and distribution networks.

Mission Goals

The mission will seek to increase exports of U.S. electric power equipment, services, and technologies for power generation, transmission, and distribution to the targeted markets and advance specific U.S. business interests.   The mission also will help implement the U.S. National Energy Policy by expanding opportunities for investment and trade in energy-related goods and services in these countries.

The goal is to assist the U.S. electric power industry's small-to-medium-sized enterprises (SMEs) in achieving their export business objectives in the Philippines, Vietnam, and Thailand.   Mission participants will gain first-hand market exposure; meet with potential agents, distributors, and business partners from the private sector; and obtain information that will help them position their firms to take advantage of the strong business opportunities in these markets.

Mission Scenario

The mission will visit Manila, Philippines; Hanoi and Ho Chi Minh City, Vietnam; and Bangkok, Thailand.   Briefings and one-on-one business appointments will be scheduled for members of the business delegation.   The mission will also facilitate meetings with senior government officials and high-level executives in the host markets, World Bank officials involved with donor-funded power projects, Multilateral Bank officials involved with donor-funded power projects (e.g., Asian Development Bank), and Am Cham members, relevant trade associations, and professional organizations

Proposed Timetable

The delegation is scheduled to arrive in Manila on June 21, 2006, with activities to be conducted June 22-23; continue to Ho Chi Minh City for activities on June 26, then to Hanoi, with activities to be conducted June 27-28; and finally arrive in Bangkok on June 28, with activities conducted on June 29-30.   The precise schedule will depend in part on the availability of government and power industry officials, as well as the specific goals and interests of the mission participants.

Criteria for Participation and Selection

• Relevance of a company's business line to mission goals.
• Timeliness of a company's signed application and participation agreement (including a participation fee of $4,300).  
• Potential for business for the company in the Philippines, Vietnam, and Thailand.
• Provision of adequate information on company's products/services, and company's primary market objectives, in order to facilitate appropriate matching with potential business partners.
• Certification that the company meets Departmental guidelines for participation.   A company's product or service should be either produced in the United States, or, if not, marketed under the name of a U.S. firm and have at least 51% U.S. content of the value of the finished product or service.

Any partisan political activities (including political contributions) of an applicant are entirely irrelevant to the selection process.

Recruitment will begin November 4, 2005 and will close April 28, 2006.   The participation fee for the event will be $4,300 per company.   The participation fee does not include travel, meals, or lodging costs.   The mission will target a minimum of eight and a maximum of fifteen companies. Applications received after the closing date will be considered only if space and scheduling constraints permit.  

Mission recruitment will be conducted in an open and public manner, including publication in the Federal Register, posting on the Commerce Department trade mission calendar – www.ita.doc.gov/doctm/tmcal.html – and other Internet web sites, press releases to the general and trade media, direct mail and broadcast fax, notices by industry trade associations and other multiplier groups, and announcements at industry meetings, symposia, conferences, and trade shows.  

Contact

Andy Collier
Global Trade Programs
U.S. & Foreign Commercial Service
U.S. Department of Commerce
1401 Constitution Avenue, N.W., Room 2106
Washington, D.C. 20230
Phone: 202-482-0680
Fax: 202-482-3113
e-mail: andrew.collier@mail.doc.gov