sustainalytics - powering_asia

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ISSUES FORRESPONSIBLE

INVESTORS

JAN 2010

POWERING ASIA

Incorporating data fromTRUCOST

Responsible Research is a signatory to theUnited Nations Principles for Responsible

Investment



© Responsible Research 2010 | Green Building: Issues for Responsible Investors | 2

For more information, please contact Responsible Research:

Email: [email protected]: +65 9386 6664

www.espsibleeseah.m

Responsible Research is an independent provider of sectoral and thematic Asian environment, socialand governance (ESG) research, targeted at global institutional investors. Many of these fund managersand asset owners now nd that traditional investment banking reports, nancial models and publicinformation sources can no longer be relied on to cover all risks to earnings and deliver superiorreturns. Companies who do not monitor and report on this ‘non-nancial’ performance not only risknancial penalties for non-compliance with stricter regulatory environments but are also denied accessto substantial pools of global capital which are managed according to sustainable principles.

Our approach is based on analysis of material ESG factors, which change according to sector andmarket. We provide our clients with local market knowledge of important regulatory landscapes inAsia, along with a fresh perspective on local operational and sectoral issues. We offer an annualsubscription model for our monthly sectoral or thematic reports and give our clients access to theunderlying data. Reports can also be commissioned (by investors or foundations) and kept for internaluse or be offered for general distribution, as part of an general effort to promote ESG integration intothe Asian investment process. Our analysts conduct seminars and webinars to discuss ndings, oftenwith contributions from experts, companies and policy-makers.

Responsible Research was founded in 2008 by our Board who have been instrumental in promotingCorporate Social Responsibility (CSR) and SRI practices in Asia for over 10 years and have signicantexperience in the regions emerging investment markets. This team of ve works in collaboration withour full time Asian-based responsible investment analysts and the Responsible Research Alliance, agroup of consultants with subject matter expertise. Together they provide a valuable balance of marketand ESG knowledge, academic rigour, process management, data management, customer relationshipmanagement and senior level contacts. Many of our clients are signatories to the UN backed Principles of Responsible Investment (PRI), aninvestor initiative. As signatories they commit to incorporate ESG issues into their investment analysisand to support the development of ESG tools, metrics and methodologies. As a signatory to the PRIwe voluntarily contribute time and resources to the Emerging Markets Disclosure Project and othercollaborative initiatives. Responsible Research is also a strong supporter of independence in research,without which conict and bias can deliver investment risk. The company is one of the foundingmembers of the Asian Association of Independent Research Providers and also of the Asian WaterProject.

CONTENTS POWERING ASIA

INTRODUCTION

COMPANY SCORING

RESULTS OF COMPANY SCORING

DISCUSSION

COUNTRY SUMMARIES

CONCLUSION

APPENDIX: COMPANY PROFILESChina Power International Dev. Ltd. (Hong Kong)China Resources Power Holdings Co. Ltd. (Hong Kong)GCL-Poly Energy Holdings Limited (Hong Kong)Hongkong Electric Holdings Limited (Hong Kong)Datang International Power Generational Co Ltd. (China)Huadian Power International Corp. Ltd. (China) Huaneng Power International, Inc. (China)GVK Power and Infrastructure Ltd. (India)KSK Energy Ventures (India)Lanco Infratec (India)Neyveli Lignite Corporation Limited (India) NTPC Limited (India)Power Grid Corporation of India (India)Reliance Infrastructure Ltd (India) Reliance Power Ltd (India) Tata Power (India) Torrent Power (India)Korea Electric Power Corporation (South-Korea)

MMAC Corporation Berhad (Malaysia)Sarawak Energy Berhad (Malaysia)Tanjong Public Limited Company (Malaysia) Tenaga Nasional Berhad (Malaysia)

YTL Power International Berhad (Malaysia)Aboitiz Power Corporation (Philippines)Energy Development Corporation (Philippines) Manila Electric (Philippines) Electricity Generating Public Company (Thailand)Glow Energy Public Company Limited (Thailand)Ratchaburi Electricity Generating Hldg. (Thailand)

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INVESTORS INTRODUCTION




The development of Asia’s electricity generation industry will shape the future ofour climate. Global consumption of marketed energy is projected to increase by44 percent from 2006 to 2030. The largest projected increase in demand is forthe emerging non-OECD economies on average 2.3 percent per year, comparedto 0.6 percent for OECD energy use. China and India are the fastest growingnon-OECD countries and are expected to make up 28 percent of world energyconsumption by 2030. In a business-as-usual scenario greenhouse gas (GHG)emissions are expected to rise similar to the growth in energy use. Due to thelong life span of power plants, the technology choices on the fuel mix of Asia’sgrowing electricity sector made in the next few years will effectively “lock in”greenhouse gas emissions for the next 30 to 40 years.

Against this background, we report on the importance of non-renewable electricitygeneration in fuelling Asia’s continued economic growth, but also note caseswhere the development of a country’s renewable energy sources are encouragedby a desire for energy security. We also look at how the provision of power canbe used as a political tool in certain countries

The World Business Council on Sustainable Development denes several speciccurrent ‘sustainable development’ challenges for the electricity generationsector that include diversifying and de-carbonizing the fuel mix and acceleratingresearch and development. They have also highlighted the need to focus on end-user efciencies that can have impacts as great as changing productive capacityand are less capital intensive.1 As transmission and distribution losses as wellas inefcient use of electricity is such big issue in many developing marketsthere is also potentially great economic and environmental returns from simplyreinforcing and smartening the grid infrastructure.

Our research, complemented by Trucost™ data on emissions, has identiedsome clear leaders in the areas of environmental performance, managementand in terms of CSR reporting and corporate governance. We have found largecompanies that are excellent reporters but have a high-impact business model.There are also examples of smaller companies with a large share of renewableenergy generation. Some of these are theoretically ‘investable’ to those lookingto lower a portfolios carbon footprint, but have poor reporting or governance.

The companies under examination have varied business models; some are fullyintegrated monopolistic national power companies, others are small Independentpower producers. They may focus just on transmission, distribution and/orgeneration. Some rely solely on imported fossil fuels, while others have largedomestic reserves of clean burning natural gas.

Of the companies in our universe, the biggest CO2 emissions producers wereKepco (Korea), Huaneng Power (China) and NTPC Ltd (India). These ‘global

warmers’ are estimated to each produce a staggering 180 mtCO2 or moreannually. In terms of the intensity of emissions (measured against revenues),China Resources was found to have the worst record at an estimated 28,845tCO2/US$m revenue. Compared to HK Electric, which still burns 68% fossil fuel,yet has an intensity of only 6,091 tCO2/US$m revenue, it is clear that there aresome fossil fuel burners who are more efcient than others. In China most ofthe IPPs rely to a large extent on fossil fuels including Huadian Power and ChinaResources Power.

The power generation companies with the largest contribution to earningsfrom renewable energy include Aboitiz Power Corp and Energy DevelopmentCorporation (Philippines). Tenaga Nasional (Malaysia) and Tata Power (India)are also found to have relatively low emissions intensity despite having lowercontributions from renewables.

The clear leaders in terms of CSR reporting and management were found bothin developed markets with strong regulatory control (CLP Holdings (HK) and HKElectric (HK)) and, unexpectedly, in emerging markets; (Tata (India), Datang(China), Electricity Generating Corporation (Thailand)).

IntroductIonStrong environmental management is important in this sector. Climate changeimpacts should be recognised and managed at a company level. Potentialimpacts of climate change could include ooding, brownouts and unplannedoutages. Access to cooling water supplies also remains a critical issue to consider.Companies who remain on top of these issues will be able to identify opportunitiesfor new products and services, but may need to adapt internally and import thenew management skills they need to grow in this new lower carbon environment.

Generally, environmental management is poor within this sector. We scored thesector on environmental and climate change management separately. No companyin our universe has yet achieved global best practices where environmentalimpacts are strategically measured, managed, certied and targets are set. Over60 percent of the companies covered reported zero relevant information or hadno identiable management of the issues. Kepco (Korea) contributes the mostto GHG emissions amongst listed Asian power companies (total estimated CO2emissions) but is one of the top two performers on environmental management.Conversely, some IPPs with a high proportion of generation from renewables

showed no awareness of environmental management and therefore scoredpoorly.

Corporate governance within the power sector varies greatly according toregulatory environment, business model, stock market listing and reportingrequirements, peer group performance and shareholding structure. ChinaResources (HK), CLP (HK) and Reliance Infrastructure (India) perform equallywell at the top of the league but the Malaysian operator, Tanjong, also deserves aspecial mention for its Board committee structure and independence of directors.YTL (Malaysia) also performs well but would be better placed if there were moreindependence on the Board and if it were to have to have separate remunerationand nomination committees.

The poorest performance on corporate governance indicators are also in India –NTPC Ltd, Torrent and Power Grid Corporation which appear to have extremelypoor disclosure and whose board structures do not seem to support the interestsof minority shareholders. They also have the same individual serving as CEO andChairman; this is typically seen as an indicator of poor corporate governanceby most governance observers. Kepco (Korea) has a history of poor corporategovernance which adds to the concerns for most responsible investors.

A nal note on performance should be made regarding losses in transmission anddistribution. The highest disclosed T&D losses are, not surprisingly, reported inIndia; NTPC Ltd (22%), Reliance Infrastructure (21%) and Tata Power (15%).

Chart showing Carbon Intensity of our universe




Responsible investors in Asia will need to remain aware of the complexity andinter-linkages in the issues of power generation for sustainable development. Ifwe are to secure balanced global growth, eradicate poverty and minimize thedevastating impacts of climatic change there are bound to be trade offs anddisappointments. Investors should also be aware of the complicated long-termecosystem impacts of renewable energies. Hydroelectric plants, for example, havebeen associated with extremely high methane emissions when the reservoirs areat a low level, and we do not yet know the long-term social and economic costsof resettlement from fertile river valleys and diversion of ‘source’ rivers. Biomassgeneration can have long reaching negative environmental impacts in terms ofreduction in overall biodiversity when primary forest is converted to intensivelyfarmed monoculture plantation.

There is also the inevitable question of who will end up paying the price forour ‘stewardship’ of radioactive uranium and plutonium. The World Nuclear

Organization itself admits that that there are ‘no nal disposal facilities (asopposed to interim storage facilities) in operation in which used fuel can beplaced.’ Their website states that, ‘There is currently no pressing technical needto establish such facilities, as the total volume of such wastes is relatively small...The general consensus favours its placement into deep geological repositories,initially recoverable.’ 2

We look to global responsible investors who participate in the Asian powermarkets to add these issues to their decision-making criteria and collaborate andengage with these companies to develop more sustainable growth horizons andbetter disclosure. This process should enable long term capital ows to supportinvestment in cleaner generation and more efcient distribution with an aim ofreducing the carbon intensity of the sector over time.


INVESTORS COMPANY SCORING

Source: Bloomberg’s 19th Decemeber 2009

Companies Covered by Market Capitalization (In US$ m)




We scored 30 Asian electric utilities companies in 7 markets according to specicenvironmental and social criteria and according to several corporate governancemetrics.

Companies were selected based on market capitalisation (we had a target ofUS$500m free oat and above) and location (we covered China, Hong Kong,Korea, Malaysia, the Philippines, Thailand and India). There were no qualifyingcompanies in Indonesia, Singapore and Taiwan.

The scoring covers different aspects of the companies′ ESG performance. Thescoring was performed on the basis of publicly available information found oncompany websites, annual reports and environmental, sustainability and CSRreports. In some cases, it was difcult to locate precise information, for exampleinformation on CO2 intensity measured in g CO2 / MWh.

Where possible, we took data from recent disclosures. However, not all thedesired information is available in one easily accessible location and in a

comparable format. Some companies do not report on all the issues of interest tothis research paper. We have collected information according to the parametersof the report (publicly available information) on a ‘best efforts’ basis but cannotguarantee that it is factually correct. The scoring covers different aspects of thecompanies′ ESG performance and is, itself subjective.

Responsible Research cannot guarantee completeness and accuracy as thecompanies themselves have provided much of the information. Other risksto accuracy include that we may have collected data on different dates andtherefore the most recent improvements in reporting may not be included. Lastly,there may be omissions if i nformation has been released outside the website orpublished reports, for example expansion plans of utilities may only show partiallong term strategy. Where we note ‘n/a’ the information does not seem to beavailable publicly.

The emissions data and information on reported controversies was taken fromTrucost™ and RepRisk™, both widely acknowledged as global leaders in their eld.Trucost™, a specialist in assessing environmental impact, provided quantitativedata on CO2 emissions and environmental impact. Trucost™ measures emissionsof GHG from sources directly owned or controlled by a given company, addsemissions that arise from purchased electricity consumed in owned or controlledequipment or operations, and includes all GHG emissions from business traveland supply chains. GHGs are measured either by recording emissions at sourceby continuous emissions monitoring or by estimating the amount emitted usingactivity data (such as the amount of fuel used) and applying conversion factor

We provide the following information (where relevant to the business model):• The country in which it is listed• The business model• The generation capacity in MW• The split of the companies’ generation capacity into fuel sources• Capacity expansion plans (where available)• Operational efciency metrics, for example generation efciency of

thermal plants or distribution losses for transmission and distributioncompanies (when disclosed)

• Quantitative estimates from Trucost™ on 2008 CO2 emissions:o CO2 emissions intensity (the cost associated with the CO2 emissions

assuming a carbon price of 32 USD/t CO2 equivalents)o the cost of total direct environmental impacts).

Sig aegies:We reviewed companies for sustainability according to their disclosure andperformance in these six main areas:

1. CSR Management and Reporting2. Environmental management3. Climate Change Management4. Health and Safety Management5. Corporate Governance6. Controversies

the Asia uiliies Evime a Sial raigWe have selected the following weightings of our scores on the 30 companies to

deliver a ranking within the sector for sustainable investors.

ne Asia uiliies Evime a Sial raigIt is not easy to make ne distinctions on sustainability issues based ondisclosure alone. The scoring and weighting system we have selected toidentify sustainable utility leaders in Asia is signicantly impacted by acompany’s climate change score, which in turn relates to its fuel mix, adecision which is typically dictated by government policy, not the Board.The scores are, of course, therefore partly a reection of a company’s fueland generation mix based on domestic resource availability and relatedgovernment policies. It may not be correlated to other material dynamicvariables or inform on whether a particular management team is doinga good job with the cards they have been dealt. Further work needs tobe done in this sector over time to develop deeper strategic sustainabilityratings based on a blend of governance, active strategy implementation,adaptation and mitigation.

cSr maageme & epig:Companies should be transparent about how they address environmental

and social issues to allow for informed decision-making by clients,regulators, stakeholders and investors. A Corporate Social Responsibilitystrategy is most effective if there is senior management and/or board levelcommitment. Issues that should be addressed include among others CSRreporting, stakeholder management, community relations, land acquisitionand resettlement for new projects and participation in Global Compact.

Sig:0: no relevant CSR disclosure (beyond philanthropy)1: examples of CSR initiatives, no or very little quantitative information,

some management commitment2: comprehensive reporting (i.e. companywide, including quantitative

data, possibly GRI compliant) clear management commitment to CSR




Sig:0: no relevant information on climate change1: the company acknowledges that climate change is an issue, provides

some data on greenhouse gas emissions and undertakes some effortsto increase efciency / reduce emissions

2: the company provides comprehensive data on greenhouse gasemissions. It has set clear targets for improvements of efciency orreduction of emissions and achieved improvements.

Not yet applicable for Asia: The company provides comprehensivequantitative data on greenhouse gas emissions; it has a clear set of targetsfor the improvement of efciency or reduction of emissions, in addition to asummary of achieved improvements.

Healh & Safey Maageme:

Companies that take care of their employees tend to have higher staffretention, higher productivity and higher employee motivation. Hence, thereis a sound economic rationale behind investing in a strong Health & Safetyprogram.Relevant questions:

• Do employees undergo Health & Safety training?• Does the company have a Health & Safety management system in place?• Does the company report on work related accidents, injuries and fatalities?• Does the company report on human rights issues?• Does the company comply with international Health & Safety standards?

Sig:0: No mention of Health & Safety management at all.1: A Health & Safety management system is in place. The company

invests in training, but doesn’t report on work related accidents orfatalities, or human rights. The company’s Health & Safety programdoesn’t comply with international Health & Safety standards.

2: The company has a Health & Safety team in place, provides trainingto employees, reports on work related accidents and has received aninternationally recognized certication.

cpae Gveae:

We analyzed and scored the following corporate governance measures:separation of Chairman and CEO, independency of board, independence of

Audit Committee, independence of Remuneration Committee, independenceof Nomination Committee and disclosure of remuneration.

Sig:0: no separation of chairman / CEO2: Separation chairman / CEO:

Independency of board0: Between 0%-32% of the board is independent1: Between 33%-65% of the board is independent2: Between 66%-100% of the board is independent

Independence of Audit Committee0: Between 0%-32% of the Audit Committee is independent1: Between 33%-65% of the Audit Committee is independent2: Between 66%-100% the Audit Committee is independent

Evimeal maageme:

Considering the impact that power utility companies have on the environment,Asian utilities should be prepared to measure and manage their environmentalrisks. Environmental impacts differ between fuel types, for example the generationof nuclear waste for nuclear power generators, biodiversity impacts in the caseof hydropower and air pollution from coal red power plants.

Relevant questions include:

• Does the company disclose local air pollutants, i.e. SOx, NOx andparticulates (absolute and per MWh)?

• Does the company have an environmental management strategy orguidelines in place?

• Do companies perform comprehensive environmental impact assessmentsbefore constructing new plants?

• Does the company invest in emissions reduction technology? Does itachieve emission reductions?

• Does the company disclose water use? Are reductions in water consumptionachieved?

• For nuclear power operators: How is nuclear waste handled? Are thereprovisions for the decommissioning of used plants? How high are theseprovisions?

Sig:0: no indication of environmental management that goes beyond legal

compliance, no relevant information on climate change. No managementteam in place.

1: Environmental management system in place but few details given aboutits scope. The company provides some data on environmental impacts

2: A well-dened environmental management team is in place. The companyhas environmental goals and targets but important data is missing,for instance, information on water use or emissions. Some proactiveenvironmental initiatives, for example some emissions reductionsachieved.

Not yet applicable for Asia: A comprehensive and certied environmentalmanagement system. The company is aware of its environmental impact andaddresses them in a structured way across the whole company..

climae chage Maageme:

Greenhouse gas emissions represent the power utility sector’s biggest inuenceon the environment. Due to the potential for upcoming CO2 regulation in Asia,GHG emissions have the potential of becoming a nancial risk for companies.Relevant questions include:

• Is the company aware of the issue of climate change?• Does the company know its carbon footprint?• When requested to do so, did the company answer the Carbon Disclosure

Project (CDP) questionnaire?• Does the company undertake efforts to increase its energy efciency?• Are there targets for reduction of CO2 emissions?• Have reductions been achieved (in absolute and relative terms)?• Are there programs for demand side management, for example smart

metering, peak load shaving and support of customers in energy efciencyimprovements.




Independence of Remuneration Committee0: Between 0%-32% of the Remuneration Committee is independent1: Between 33%-65% of the Remuneration Committee is independent2: Between 66%-100% the Remuneration Committee is independent

Independence of Nomination Committee0: Between 0%-32% of the Nomination Committee is independent1: Between 33%-65% of the Nomination Committee is independent2: Between 66%-100% the Nomination Committee is independent

Disclosure of remuneration0: No disclosure what so ever1: Partial disclosure2: Full disclosure

cvesies a repaial risk:

We also provide data on some controversial issues in which the studied companiesare, or have been, involved and for which, as a result, they have received negativepublicity. The data on controversies was derived mostly from the internet-basedtool RepRisk™ that screens global media regarding negative press coverage ofcompanies, projects and organizations. This information was complemented byinformation from other sources, such as the Business & Human Rights ResourceCentre.


INVESTORS

RESULTS OFCOMPANY SCORING




Companies with scores of 60% and above, a total of six, could be considered ‘sustainability’ leaders in the Asian utilities sector. CLP Holdings Limited andElectricity Generating Public Company both received over 80% for theirenvironmental and social performance and thereby outperformed all othercompanies in our universe. Other leaders include Hong Kong Electric HoldingsLimited, Datang International, Reliance Infrastructure and Tata Power. Thereseems to be a strong correlation between the size of Asian utilities andenvironmental and social performance. Six of the top ten companies by marketcapitalisation are recognized as leaders here.

Many laggards in the environmental and social rating, such as Neyveli, Huadian,Huaneng and China Resources, have high carbon intensity, dened as tonnes ofCO2 emitted per one million US Dollars of revenue.

National average environment and social scores ranged from 16.3% to 82%.Chinese utilities had the lowest average score and Hong Kong the highest.

Malaysia (25.6%) and India (25.8%) were the poorest performers after Chinabut Thailand had a national average score of 54.3%,

Despite the low average rating of Chinese utilities, there are some notableexamples of companies improving their disclosure and performance. Datang, forexample, published quite an extensive sustainability report in 2008, in which thecompany provided detailed data on emissions of SO2 and NOx and water andwaste treatment.

Efiey meis:

We also reviewed declared operational efciency metrics, which give an indicationof how well a company runs its business given its line of business.

The new mandatory reporting on coal consumption per MWh of electricityproduced for Chinese utilities has led to much improved disclosure there (seetable below), although signicant differences among companies is still seen.China Resources Power and China Power International have lower efcienciesthan Huaneng, Huadian and Datang. In general, the newer and larger a coal-redpower plant is, the more efcient it is. China Power International, for example,has a large proportion of old plants.

For distribution and transmission companies, system losses are the most relevantmetric, not only from an environmental point of view, but also from a protperspective: decreasing system losses directly affects a company’s margin andprots. We were unable to nd information on system losses for four out of the 12transmission and distribution (T&D) companies. Some of the companies reportingon this metric have very low losses. Most notably Korea Electric Power, followed,surprisingly by Torrent Power, which scores 0 points in our Environmental andSocial scoring. Some of the T&D systems in India and Malaysia show very highsystems losses: NTPC, Reliance Power, and Tenaga Nasional.

cpae Gveae

The table below gives an overview of the six Corporate Governance metrics thatwe looked at. The average corporate governance scoring was 7.2. The bestthree utilities in terms of corporate governance are China Resources Power, CLPHoldings and Reliance Infrastructure which all scored an 11. The worst corporategovernance performers, according to our metrics, are Kepco and Power GridCorporation of India which both scored a three out of 12. Compared to its peersin Asia Kepco’s Corporate Governance reporting is lacking in transparencyand minority shareholders rights may not be represented with this structure;information on its board, remuneration committee and nomination committeeis lacking. It is the only company in our universe that doesn’t report on theseissues.

Use of Coal by Chinese IPPs- Information from company websites

Country Coal efficiency (g CO2 / MWh)

na ower n erna ona ev. . HKG .na esources ower o ngs o. HKG 340.5

a ang n er. ower enera ona o CHN .ua an ower n erna ona orp. . CHN 326.2uaneng ower nerna ona, nc. CHN .

- o y nergy o ngs m e . HKG -

System losses at Asian power utilities with a Transmission and Distributionbusiness

Table showing Corporate Governance metrics of Asian power utilities




Many power projects are highly controversial in their planning and constructionphases and some continue to be controversial l ater on when they are perceivedto contribute to local environmental pollution. Larger utilities, especially, aretherefore regularly mentioned in relation to controversies on land rights andresettlement, and receive complaints because of local pollution. The constructionof hydro dams tends to be particularly difcult, as dams require large areas ofland and mostly need to resettle local communities.

On top of this environmental and social controversy, some companies areinvolved in activities that may constitute grounds for exclusion from a screenedinvestment portfolio. Some examples include Tanjong Public Ltd, which has agaming business as well as Power Grid Corporation of India and Kepco, whichhave been implicated in activities in Burma, a country governed by a militaryregime. Lastly we note that Tata Power manufactures tanks for the Indian military.

case Sy: cLP, a leae i cSr Maageme a repig CLP has emerged as a clear leader in the sector in Asia. The companyrecognised early on that the reality of climate change was going to bring risksand opportunities to their business model and that they needed to responddecisively and strategically. They participated in the rst round of the CarbonDisclosure project in 2002 and set internal renewable energy targets of 5% ofgenerated power in 2004. It reached this gure in 2007 and nalised its long-term CLP Group Climate strategy in the same year. By this time they alreadyhad in operation a both a nuclear plant (since 1994) and an advanced coal plant(2006) and were researching alternative energy sources for future investment.

CLP has continued to participate in global coalitions and reporting initiativessuch as the World Business Council on Sustainable Development and theGreenhouse Gas Protocol. They use the GRI reporting guidelines andhave selected the EN16-18 criteria to report on total direct and indirectgreenhouse gas emissions by weight. They will also report on their initiativesto reduce greenhouse gas emissions and dene the reductions achieved.

Opportunities have come their way since they began their low carbon strategy: theyhave been recognised by the DJ Sustainability Index and by the Innovest ClimateLeadership Index as ‘Best in Class’ and, in fact, are the only HK based company tomake the DJSI Asia Pac 40 index. Since 2005 they have been managing CDM projectsunder the Kyoto Protocol and, in 2003, they launched an Energy Innovation Fund.

Today CLP actively manages its emissions and has set long-term targets forfurther reductions. Their aim is to reduce emissions from 0.84 kg CO2/kWh to 0.2 by 2050 (their estimates), which is a 75% reduction to supportthe 550ppm global emissions target. CLP aims to achieve the reductionsthrough changing their fuel mix to favour clean coal, nuclear and naturalgas, and to invest in renewable energy generation. They will also achievesubstantial reductions from their work on grid efciencies and conservation.

The company recognises that they should also focus on improving disclosurein order to improve performance, enhance their brand and reputation. CLPhas a strategically managed community outreach and investment programmewhich enables it to engage more easily with its stakeholders. Despite its leadingposition with respect to CSR reporting and performance, one has to note thatCLP has a high percentage of coal in its generation mix (including relatively old

and inefcient plants) and is continuing to expand its coal red capacity


INVESTORS DISCUSSION




The company ranking according to indicators for greenhouse gas intensity, whichwas presented earlier, may give the impression that companies are activelymaking choices when it comes to using innovative or efcient technologies. Forthe most part companies do not have this exibility. Most fuel choices are stilldictated by governments or others for a variety of reasons:

The sector is still in the process of privatization. Governments still own acontrolling stakes, and take the decisions. In addition, due to the long life spanof power plants, today’s generation mix is mostly a legacy of past decisions. Inmany countries, fuel choice is partly dictated by natural conditions, namely localavailability of coal and gas, and natural potential for renewable energy.Investments in certain fuel imports, for example natural gas via pipelines orLNG terminals are expensive and are generally supported by governments forreasons of energy diversication and security.

Therefore when investing in a company with a very low carbon intensity and

a high percentage of renewables, such as the Philippine Energy DevelopmentCorporation, it does not necessarily correlate that it is an innovative, forwardlooking company. Rather, it could be a company that happened to be in theright geographic location and regulatory environment to take on a low-carbonbusiness prole. Expansion plans can give an insight into how forward-looking acompany is, especially if one goes into details to understand what type of coal-red technology or gas red plant is being installed, and how efcient and cleanthe proposed technologies are.

The efciency metrics that we looked at give an insight into how well a companyoperates its existing asset base. Unfortunately companies, generally, do notall report the same metrics, and many don’t address the efciency of theiroperations at all.

The scoring shows how, in general, the larger players have the most advancedESG reporting and management systems. This pattern of ESG performance canbe observed in most sectors. In our utilities universe, there are some notableexceptions of relatively large companies such as Tenaga Nasional and Chineseutilities Huaneng Power and China Resources Power being laggards. There arealso small companies such as Electricity Generating Public Company with leadingESG performance scores. But overall large companies still tend to have the bestESG performance.

These large companies tend to be large polluters, in absolute terms, and havean insignicant percentage of renewable energy in their generation portfolios.

Still they may be best positioned to shift their fuel mix to non-traditional sourcesusing the latest technologies and proting from transfer of cleaner technologiesfrom developed countries when governments get more serious about the issueof climate change. The governmental backing NTPC receives from Japan and theUS when it comes to research and application of clean coal technologies clearlyillustrates this potential.

cpehage upae:

Despite global frustrations at the lack of tangible progress at Copenhagen, wefeel that the debate has come a long way, especially as the countries in ouruniverse, notably China and India, have collaborated on responses and begunto form a collective developing country action group which can engage with theUSA. The Copenhagen round resulted in US$30bn of ‘climate change aid’ todeveloping nations to be given next 3 years and a stated goal of US$100bn ayear to developing countries by 2020 to fund research, development, adaptationand mitigation strategies. Still, we think that it would have been helpful forbusiness to get a clearer understanding of the direction of global climate policyfrom the Copenhagen conference. The next steps to watch out for will be thenationally appropriate mitigation actions that developing countries will submit tothe UNFCCC by January 31st, 2010, and a renewed attempt for a global climatedeal at the next UNFCCC climate conference in Mexico at the end of 2010.

Please note that there are no ‘Annex 1’ countries in our coverage and none are,therefore, obliged to report on progress under the United Nations FrameworkConvention on Climate Change. Some do, however, and we include reference tothose submissions here.





INVESTORS

COUNTRYSUMMARIES




China’s alternative energy outlook is promising. At the end of 2008, wind powerin China accounted for 12.2 GW of electricity generating capacity. The original2010 target set by the Chinese government, in 2007, was 10 GW. However someestimates suggest that by next year the total installed capacity will be closer to20 GW. According to the newest NDRC plan China aims to have 30 GW of windgenerating capacity by 2020 (equivalent to 85 MT of CO2 abatement). In April2009 a senior energy ofcial13 reported that China is well on its way to having 100GW of wind power capacity by 2020. As a result of the successful early uptakethe Vice Chairman of NDRC proposed revising the target to 100 GW wind by 2020in June 2009.

In 2007 the government announced plans to expand China’s installed solarcapacity to 1,800 MW by 2020. Central to the PRC Government’s plans is the “Golden Sun” stimulus program. Under this program the Ministry of Financesubsidizes half of the construction costs of an on-grid solar power plant, includingtransmission expenses. The Ministry of Finance will also pay subsidies of up to70% to develop independent photovoltaic power generating systems in remoteregions. In May 2009, the Director of the NDRC Energy Research Institutechanged the 2007 goal and announced plans to increase China’s solar power

capacity to 20GW by 202014 15 (equivalent to 55MT of CO2 abatement).

Recently China has underlined its renewable ambitions when the presidents ofthe United States and China announced joint initiatives in mid November 2009.These plans are aimed at boosting renewable energy, sharing data and bestpractices on grid modernization, energy efciency, the use of electric vehicles

and launching a U.S.- China clean energy research centre.

There is clear potential for cleaner energy in China. Wind resources are mainlydistributed in the North-Western provinces and coastal areas. The ChineseMeteorology Research Institute estimates China has 253GW onshore and 750GWoffshore wind power potential. Researchers from Harvard and Beijing TsinghuaUniversity have found that China could meet all it’s electricity needs from wind

power through 203016.

ree Eves:

China’s leaders are facing up to the challenge of how to maintain buoyanteconomic growth while avoiding the catastrophic impacts of climate change.China has therefore enacted signicant carbon reduction measures—mainly inenergy efciency and renewable energy—that have economic co-benets. Thepotential for further reductions is great and China is on the path to successfully

limit its growth in CO2 emissions

17

.The Chinese government’s concerns about energy security and the effects ofclimate change have catalyzed policies that are signicantly lowering China’senergy intensity and rate of GHG growth. Chinese leaders announced multilateralcooperation on climate change during Mr. Obama’s visit to China in November2009 but it seems they expressed valid concerns that the gap between developedand developing countries on legally binding emission targets is too great to

overcome at the Copenhagen round.

China released its rst National Communication on Climate Change in December2004. The State Development Planning Commission and the National CoordinationCommittee on Climate Change authored the report. It is available online at theUNFCCC website. There has been no communication on agreements following

Copenhagen.

Total installed generation capacity (MW) NA

Energy mix (as % of total installed capacity)3Thermal (80.95%), Hydro (16.41%),Nuclear (1.99%), Renewable (0.65%)

Total elect rici ty generated 2008 (TW Hours) 3,433.4 bil lion

Electricity demand growth rate4 5.23% (2008), 3.75% (Expected2009)

Price of electricity per kWH (USD cents Nov-09)5 7.14

CO2 intensity of coal-red elect. generation6 893

CO2 intensity of elect. generation7 758

CO2 emissions (from all sources, 2008)8 9 6,896.5 million metric tones

CO2 emissions per capita (from all sources, 2008)10 6.26 metric tones

The National Development and Reform Commission (NDRC), a central governmentagency, regulates the Chinese electricity market. The market has been movingtowards privatisation for several years and Independent Power Producers havebeen operational since the late 1990s. Today around 40% of the power generationcompanies are privately owned with virtually all other parts of the industry beingstate-owned. Provincial governments determine power-purchasing prices, butany price adjustments need to be approved by the NDRC.

The Chinese government has taken signicant steps to increase energy efciencyand promote the deployment of renewable energy. Steps taken include:

• The 11th ve-year plan (2006 – 2010): China pledged to cut energyconsumption per unit of gross domestic product (GDP) by 20%, or 4%each year.

• In early 2009, China passed a national stimulus bill, allocating $147.6billion to energy efciency and R&D, and $50.9 billion to pollution control.In June 2009, the government also announced US$ 87.8 million insubsidies to promote the use of energy-saving lighting products11.

• The National Development and Reform Commission (NDRC) have setambitious targets for alternative power generation. It is expected that10% of consumption will be delivered form alternative sources in 2010and up to 15% by 2020.

• The Renewable Energy Law of 2006 and subsequent regulations providesupport measures for alternative energy projects including mandatory

off-take of all renewable energy-sourced power generation. Portfoliostandards require power producers with capacity above 5GW to haveattributable non-hydro renewable power capacity of at least 3% of totalinstalled capacity by 2010, and 8% by 2020.

• In the summer of 2009 China announced a series of incentives forrenewables, including: a xed feed-in tariff for wind power projects withfour differentiated tariffs for different classes of wind power; subsidiesto promote the use of energy-saving light bulbs; and subsidies to userenewable energy in green building projects in pilot cities and rural areas.The Chinese government also offers tax exemptions and a government-backed renewable energy fund. The government is expected to establisha preferential feed-in tariff for solar by the end of 2009. The solar feed-intariff is expected to fall between $0.16 and $0.22 per kWh of electricityproduced at large-scale solar PV arrays.

• On Nov 29th 2009 China pledged to cut the amount of carbon dioxideproduced for each unit of GNP by 40-45 percent by 2020, compared to2005 levels.12

cHInA




Total installed generation capacity (MW) 18 10,664

Energy mix (as % of total installed capacity)19Oil (63.7%), Coal (26.3%), Gas(10%)

Total electricity generated 2008 (TW hours)20 38

Electricity consumption per capita (forecast 2009)21 3%

Price of electricity per kWH (USD cents, Nov 09)2211 (domestic HK Island),15 (commercial HK Island),11 (average price, Kowloon, N.T)

CO2 intensity of coal-red elect. generation 23 890 g CO2/kWH

CO2 intensity of elect. generation 24 775 g CO2/kWH

CO2 emissions (from all sources, 2008)25 77.7 million metric tonnes

CO2 emissions per capita (from al l sources, 2008) 11.09 metric tones

The Hong Kong energy market has been fully privatized and operates as aregulated duopoly. Only two power utility companies generate, transmit anddistribute electricity in Hong Kong: China Light & Power and Hong Kong Electric.Electricity prices differ between Hong Kong Island and Kowloon/ New Territories,suggesting that the market is not fully deregulated. Hong Kong Electric and CLPare also seemingly in collusion - each company has a well-dened ‘territory’ inwhich it operates with no competition. Hong Kong’s two power utility providersare now preparing to open the grid to renewable power from new IPPs, in HongKong and Mainland China, and to provide necessary services.

Hong Kong is not a party to the UN Framework Convention on Climate Change.However, it is the Hong Kong Special Administrative Region’s voluntary policyto contribute to international efforts to reduce GHG emissions The Hong KongSAR government has taken some steps to promote the use of renewable energy,reduce CO2 emissions and increase energy efciency. These steps are:

• Setting a renewable energy target of 1-2% of total power generation by2012.

• In July 2009, Hong Kong ofcials adopted a regulatory system thatprovides nancial incentives for electric utilities to reduce GHG emissionsto regulatory limits26. The long-term agreement, called the “Scheme ofControl”, between the Hong Kong government and electric generating

companies CLP and Hong Kong Electric ties future electricity rate levelsto GHG emission reductions.

There is limited potential for alternative energy due to limited land availability.There is, however, considerable potential for solar energy. Other forms of powerare likely to be brought in from the Chinese mainland grid over time.

Recent Events:

Hong Kong has made no unilateral attempt to join the Copenhagen conferenceand has issued no National Communication on Climate Change. Civil societyhas been actively participating in the discussions on future renewable energysourcing.

Total installed generation capacity (31-10-0927) 153,694.09 MW

Energy mix (as % of total installed capacity)28Coal (53%), gas (11%), oil (1%), hydro(23%), nuclear (3%), renewable (9%)

Total amount of electricity generated 2008 (TWH)29 834.3

Electricity demand growth rate3031average 3.6% for past 30 years,7.8% from 1981- 2000

P ri ce of el ec tr ic ity per kWH (U SD cents ) 8 domest ic , 18 commerc ia l

CO2 intensity of coal-red elect. generation 32 1,252 g CO2/kWH


CO2 emissions (from all sources, 2008)34 1,419.4 million metric tones

CO2 emissions per capita (from all sources, 2008) 1.18 tonnes of CO2 per capita

India’s electricity sector is dominated by ‘public sector undertakings’ (PSUs).Major PSUs involved in the generation of electricity include: National ThermalPower Corporation (NTPC), National Hydroelectric Power Corporation (NHPC)and Nuclear Power Corporation of India (NPCI). Besides PSUs, several state-level corporations, such as Maharashtra State Electricity Board (MSEB), arealso involved in the generation and intra-state distribution of electricity. ThePowerGrid Corporation of India is responsible for the inter-state transmission ofelectricity and the development of a national grid.

The Indian electricity industry was restructured as a result of the 2003 ElectricityAct. This unbundled the vertically integrated electricity supply utilities in theIndian states and set up State Regulatory Commissions (SERCs) to set electricitytariffs. The Indian power util ity sector remains strongly regulated.

Under the Electricity Act SERCs had to set ‘Renewable Portfolio Standards’. Thealternative energy mix ambitions that were formulated were quite conservativegiven the current expansion rate. The following announcements have been made:

• 2008: Goal of 10% of primary energy from renewable sources by 201235.

• 2008: ambition to generate 4-5% of electricity from renewable sourcesby 201236, a physical target of 15,000MW (excluding nuclear and smallhydro) by the end of the XI 5-Year Plan (2007-2012). Wind capacity is tototal 12,300MW, making India one of the largest markets for operatingwind turbines in the world.

• 2008: 15-17% of primary energy is expected to come from renewable/alternative sources by 2025 (5% biofuels; 5% geothermal; 5% biomass,solar, wind, nuclear & hydro; and 2% coal liquefaction)37.

• November 2009: India issued solar power targets, with plans to boostoutput from near zero to 20GW by 2022. The solar mission also outlinesa system of paying households for any surplus power generated fromdomestic solar panels fed back into the grid.

• India has 16 nuclear power plants although nuclear energy accounts foronly 3% of India’s energy consumption (3779MW). An additional sevenreactors are under construction with proposals for 24 more, generating20,000MW of power by 2020.

India has several policies in place which aim to stimulate renewable generationcapacity additions:

HonG KonG IndIA




• As of 2008, 10 out of 29 Indian States have implemented quotas forrenewable electricity and have introduced preferential tariffs forrenewable electricity. Several others have implemented scal incentivesincluding an energy buy back, preferential grid connection, and electricitytax exemptions.

• At the federal level there are a number of measures that help driverenewable electricity development, including scal incentives such asincome tax exemption for 10 years, 80% accelerated depreciation, salestax exemption and excise duty exemption.

• In June 2008, the Ministry of New and Renewable Energy (MNRE)announced a national generation-based scheme for grid-connected windpower projects under 49 MW, providing an incentive of €0.7 cents perkWh.

The Government of India has an ambitious mission of ‘Power for all by 2012’.This mission would require that India’s installed generation capacity should beat least 200,000 MW by 2012 from the present level of 147,402 MW . Powerrequirements are expected to double by 2020 to 400,000 MW. Hence, there isgreat potential for alternative energy.

Wind capacity is already at 7,600 MW, and expected to reach 10,500 MW by2012. This implies capacity addition of only 600 MW per annum, while thecurrent annual run rate is greater than 1,000 MW. From 2002 to 2007 Indiaplanned to construct 3,075 MW of renewable grid connected capacity, but theactual capacity addition exceeded 6,000 MW by 2006 with a large share of thiscoming from growth in the Indian wind market. Wind is expected to add morethan 10,000 MW of additional capacity by 2012.

The potential for wind power generation for grid interaction has been estimatedat 45,000 MW38. However, wind turbine manufacturers believe the potential ishigher, at 100,000 MW. India’s wind, small hydroelectric and biomass sourceshave the potential to generate 80,000 MW. India is the eighth largest consumerof hydroelectricity with the potential to produce 150,000 MW of energy.

India nuclear program is large: 17 units in operation (3.8 GWe), 6 underconstruction, 19 planned or proposed, with 5 additional research reactors. Indiahas achieved independence in its nuclear fuel cycle. Nuclear power currentlysupplies less than 4% of electricity in India. The units under construction aredue for completion by 2010. A further 24 units are planned or proposed, to give20 GWe by 202039.

Electricity losses in India during transmission and distribution are extremely highand vary from 30% to 45%. Therefore dealing with energy efciency is vital tothe Indian uti lity sector.

• India’s eleventh 5-Year plan has pledged to increase energy efciencyby 20% by 2016-17 through improving automobile efciency, expandingpublic transport, electrication of railways away from diesel andencouraging bio-diesel and coal-to-liquid projects40.

ree Eves: Developing countries such as India are hesitant to accept binding targets thatwould limit their growth in GHG emissions, as they still need to bring millionsof people out of poverty. About 56% of India’s 1.1-billion plus population hasno access to electricity. “India is making a very strong case for internationalsupport for its climate actions, but in the process it is also skirting its unilateralobligations,” said Siddharth Pathak, Greenpeace’s main climate campaigner inIndia41.

India has joined the BASIC country grouping (Brazil, South Africa and China)which presented a counter-draft that will be presented by China in Denmark.It is the rst major India-China accord on international affairs and is likely toimpact not just the dimension of the talks on climate change but internationaldiplomacy as a whole. The draft includes a commitment to “national appropriate”but voluntary actions. Most developing countries are not willing to accept the

concept of setting a ‘peak’ year for emissions or international MRV on theirefforts. 42

India has valid concerns that developed countries will set up trade barriers andresort to protectionism in the name of emissions reductions. They also believedeveloped nations should fund the reversal of forest degradation. India has notyet supplemented its last national communication on Climate Change, a 292-page report which was submitted in June 2004 by the Ministry of Environmentand Forests.




Total installed generation capacity (31-10-0943) 24.3GW

Energy mix (as % of total installed capacity)44Renewable (32.4%), Hydro (0.5%), Gas(18.60%), Oil (33%), Coal (15.5%)


Electricity demand growth rate (Oct 2009)46 7%

Price of electricity per kWH (USD cents, 2007)47 6.77



CO2 emissions (from all sources, 2008)50 376.3 million MT

CO2 emissions per capita (from all sources, 2008) 1.63 MT

The Government is seeking to unbundle the state-owned electricity utility, PLN,and break it up into several competing limited liability corporations. It is alsoplanning to re-examine the pricing tariff structure. Energy sector reform haslong been geared towards increasing the role of private participation in thesector. The 1985 Electricity Act gave the government the right and obligation tosupply power, and permitted the establishment of independent power producers.Although regulations promoting the development of renewable energy are inplace, only a few renewable power generation assets have been connected tothe grid buys its electricity on independently negotiated contracts. The Presidentsets electricity tariffs jointly with the Minister of Mines and Energy.

The ‘National Energy Policy’s Presidential Regulation No.5 /2006’ aims to createa sustainable energy system and reduce Indonesia’s dependence on oil. HoweverIndonesia’s ‘business as usual’ projections for energy demand growth assumethat the share of power generated from coal will continue to increase from 37%reaching 66% by 2016. Renewable targets to be achieved by 2025:

• Energy price elasticity should be less than 1;

• The share of oil should be less than 20%, coal to be at least 33%, naturalgas at least 30%, 15-17% of primary energy to come from renewable/alternative sources by 2025 (5% biofuels; 5% geothermal; 5% biomass,solar, wind, nuclear & hydro; and 2% coal liquefaction). The totalinvestment needed for this development through 2025 is estimated to beUS$13.2 bn.

• The government aims to raise the use of new and renewable energysources in power generation from the current 0.2% to 4% by 2020.

• Indonesia’s President Susilo Bambang Yudhoyono has promised cuts inCO2 emissions from ‘business as usual’ projections of up to 26% by 2020and 41% by 2050, with funding and technological support from developedcountries.

To support the development of new and renewable energy and to stimulatean increase of energy efciency the Government has issued legislation 51, anddeveloped incentive schemes52, such as:

• The Energy Law (Law No. 30/2007) issued which states that localgovernments should provide incentives for renewable energy developers.

• Regulations on power purchasing tariff for small capacity (up to 1 MW) aswell as medium capacity (more than 1 MW up to 10 MW) 53. Based on theseregulations, the utility is obliged to buy electricity from developers with

the tariff 60 % of the utility’s production cost if the electricity is connectedto the lower voltage grid, and 80 % of the utility’s production cost ifconnecting to the medium voltage grid.The Biofuel Road Map creates arole for biofuels as a source of energy in the household and commercialsectors, as well as the transport and power sectors. From 2005-2010, theuse of biofuels is planned to contribute 2% of total energy mix and it willincrease to 3% from 2011-2015, and 5% from 2016-2025. To encouragebusiness activity in biofuels the government has issued GovernmentRegulation No.1/2007 to reduce income taxes on investment activities.

Despite massive potential, power plants using renewable energy sourcescontribute only a small portion of the country’s total installed power capacityof about 22,000 MW. Indonesia has a huge potential in biomass energy thatremains a controversial but promising potential solution. The current installedcapacity is 445 MW and the potential of biomass from forestry, agriculture andplantations, is thought to be equivalent to 50,000 MW 54. The emissions reductionargument for biofuels production in Indonesia is complex. Unless using existingwaste materials from agribusiness, one has to factor in the potential reductionof primary forest cover for conversion to plantations to produce the feedstock.

Current installed capacity of solar PV is estimated at only 0.5 MW and is mostlyused for rural electrication, small scale water pumping, and telecommunications.The installed capacity of hydropower (mini and micro) plants is 54 MW.55 Thetotal potential is thought to be around 75,000 MW. The installed capacity ofgeothermal energy is 800 MW, with total potential of 27,000 MW 56.

Nuclear is under consideration in Indonesia with plans for two 1000 MWe units. Adecision is likely in 2010, wi th commercial operation from 2016 onwards. Tendersfor the next two units are planned for 2016, for operation from 2023. Thegovernment has apparently reserved US$8 billion of spending for four nuclearplants to produce a total of 6 GWe to be in operation by 2025. The current planis to meet 2% of power demand using nuclear by 201757.

ree Eves:

A World Bank study cited Indonesia as the world’s third-largest emitter ofgreenhouse gases, a title the government has strongly denied, based on themethodology used58. Indonesia is seen as a key player in forthcoming internationalclimate talks in Copenhagen because its greenhouse gas emissions from peatbogs and deforestation are a major contributor to global warming.

Indonesia plans to reduce its GHG emissions by developing more geothermal

and waste energy sources, increasing power plant efciency, reducing illegallogging by 43% and restoring production forests by 35%. It is said to have aninternal target of a 20% cut in emissions by 2020, and says it could achieve a41% reduction if developed nations provide nancial assistance59.

Indonesia has not issued a National Communication to UNFCCC since itsambitious and comprehensive 117-page report in 1999 by the State Ministry forthe Environment Ofce.

IndonESIA




Total installed generation capacity (31-10-09)60 23,300 MW

Energy mix (as % of total installed capacity)Coal (34.2%), Oil (0.9%), Diesel (1.4%),Gas (56.6%), Hydro (6.9%)


Electricity demand growth rate (2009)62 -2.6%

Price of electricity per kWH (USD cents, Jul 08)63 Average commercial price: 8




CO2 emissions per capita (from all sources, 2008) 5.46 metric tonnes

The Department of Electricity and Gas Supply acts as the market regulator with

the Ministry of Energy, Green Technology and Water, the Energy Commission(Suruhanjaya Tenaga), and the Malaysia Energy Centre (Pusat Tenaga Malaysia)also contributes to policy and tariff direction. Government-linked energycompanies Petronas and Tenaga Nasional Berhad are the dominant players.The Malaysian energy policy is based on: 1974 Petroleum Development Act,1975 National Petroleum Policy, 1980 National Depletion Policy, 1990 ElectricitySupply Act, 1993 Gas Supply Acts, 1994 Electricity Regulations, 1997 Gas SupplyRegulation and the 2001 Energy Commission Act.

According to the Malaysian Energy Commission, an estimated total investmentof RM 30 bn (approx US$8.8 bn) is required to be spent in the electricity supplyindustry over the next 5 to 10 years. Of this total, 60% will be invested inpower generation, while the rest will be split equally among transmission anddistribution67.

The Ministry of Energy, Green Technology and Water has identied the followingobjectives:

• To follow the Fuel Diversication Policy (9th Malaysian Plan), set out in2006. This has a target of renewable energy providing 5% of electricitygeneration by 2005 (equal to 500 MW-600 MW of installed capacity) and10% by 2010.

• The current grid-based ‘small renewable energy programmes’ (SREP)incentivizes the connection of small renewable power generation plants

to the national grid.• To accelerate investments in the palm-oil industry for power generation.

Government has launched the Biomass-Based Power Generation andCogeneration (BioGen) Programme68.

• Achieve 5 MT of GHG abatement in 2012 and 5 MT of GHG abatement in2020 through the use of renewable energy

The policies have been reinforced by scal incentives, such as investment taxallowances69. Other policy instruments and institutional mechanisms are inplace to drive the renewable and energy efciency strategies. Companies enjoyincentives such as pioneer status, import duty and sales tax exemption forequipment used in energy conservation. In addition, preferential loans, grantsand other funding structures are in place for renewable energy development. TheMalaysia Electricity Supply Industry Trust Account (MESITA) is a social obligationfund contributed to by the major power utilities. Each utility contributes 1% of

their annual revenue to the fund. The proceeds are used to assist governmentprojects and studies on rural electrication, renewable energy and energyefciency.

Other supporting policies include the Renewable Energy Power PurchaseAgreement (REPPA), which is a Malaysian government regulation dealing withpower purchases between the power utility TNB and private investors. Underthe REPPA, renewable electricity producers are given a license for a period of 21years from the date of commissioning of the plant. REPPA also allows independentpower producers to sell electricity to the grid. Revenues from generating CertiedEmissions Reductions under the Clean Development Mechanisms also supportthe growth of the renewable sector in Malaysia.

There is large potential for biomass power generation in Malaysia due to thewaste product of the booming palm oil industry. The country is also consideringthe construction of a nuclear power generator70. A comprehensive energy policystudy, including the potential for nuclear, is due for publication shortly. The state-owned utility TNB is tentatively in favour of nuclear power and in August 2006the Malaysian Nuclear Licensing Board said that plans for nuclear power after2020 should be brought forward and two reactors built much sooner.

ree Eves:

Minister Chin of the Ministry of Energy, Green Technology and Water said inlate 2009 that there would be no independent action from the government toencourage efforts towards an agreement at Copenhagen. 71

The only National Communication on Climate Change was from the Ministry ofScience, Technology and the Environment in 2000. This 131-page document,which included a sectoral inventory of GHG emissions, was funded by the GlobalEnvironmental Facility (GEF) and the United Nations Development Programme(UNDP).

MALAYSIA




Total installed generation capacity (2008)72 15,936 MW

Energy mix (as % of total installed capacity)Coal 28%, Geothermal 17%, Hydro14%, Natural gas 32%, Oil 9%


Expected electricity demand growth rate (2008-2013)74 27%

Price of electricity per kWH (USD cents, Oct 2009)75 8

CO2 intensity of coal-red elect. generation 76 1,008 g CO2/kWH




The Philippine government has been in the process of restructuring the Philippinepower market since serious shortages arose in the early 1990s. The purpose ofthe restructuring was to provide reliable power to aid economic growth anddevelopment. The ‘Republic Act No. 9136’ or the ‘Electric Power Industry ReformAct’ (EPIRA) ushered in the restructuring of the electric power industry andprivatization of government interests in generation and transmission with an endin view of having competition in electricity generation and supply.

The independent regulator ‘Energy Regulatory Commission’ (ERC) overseesall these reforms. ERC is active not just in the regulated sectors, but also inthe wholesale and retail markets. It delivers regulatory policies to support theState’s policy of promoting “the utilization of new and renewable energy sourcesin power generation” while ensuring electricity prices are reasonable, reectiveof true cost, and free from cross-subsidization and other distortions. Among thepowers granted to the ERC is the power to set the rates of the 140 distributionutilities (DUs) operating throughout the country.

Philippines alternative energy mix ambitions and energy efciency goals:

• 2001: to increase renewable energy capacity by 100% by 2013 and have 9GW of renewable capacity by 2020.

• 2001: to achieve 20 MT of abatement in 2012 and 30 MT of abatement in2020

• Under the ‘Renewable Energy Policy Framework’ (2003) the governmentaimed to develop more than 4,000 MW of additional renewable energycapacity. In fact plans are to source 40% of the country’s primary energyneeds from renewable sources between 2003 and 2013 – or a 100% increasein the target of renewable energy capacity from the current production of4,698 MW to 9,147 MW by 2013. This goal is to be achieved through:

- The installation of an additional 1,200 MW of geothermal capacity by201379, resulting in an increase of about 60% from the 2002 level of1,931 MW.

- The installation of up to 2,950 MW of additional hydro capacity to beinstalled by 2013 on top of the 2002 level of 2,518 MW, reaching atotal of 5,468 MW.

- The installation of up to 548 MW from other RE sources by 2013 (417MW from wind-based power, the remaining 131 MW will be sourcedfrom solar, ocean and biomass80).

• In February 2008, Philippines President Gloria Arroyo announced that thecountry will phase out incandescent bulbs by 2010, making it the rstplan of its kind in Asia. Under the project, 13 million compact uorescentlamps (CFLs) will be distributed, free of charge, to homes and businessesthroughout the Philippines. The project is estimated to save US$100 mill ionin annual fuel costs, and allow the deferment of US$450 million in newpower plant construction costs.

• The Renewable Energy Act (Dec 2008) provides scal and non-scalincentives for renewable energy investors, including tax credits on domesticcapital equipment and services, special realty tax rates on equipmentand machinery, tax exemption of carbon credits, duty-free importationmechanisms, and income tax holidays, among others81. End users are alsooffered net-metering and green energy options. The Act covers biomass,solar, wind, geothermal, ocean and hydro.

There is considerable potential for renewable energy generation development inthe Philippines. Wind is plentiful, although the situation is complicated by the 25or so typhoons that arrive each year. One 8 MW project was commissioned inOctober 2008 bringing total capacity to 33 MW82. Foreign investors, however, aregenerally reluctant to invest due to constitutional restrictions on land ownership.Under Philippine law, foreign stakes in land ownership is limited to 40%. This

equity issue may only be resolved by amending the national constitution.

The Philippines are the world’s second largest producers of geothermal power. ThePhilippines plan to hold this position through signicant investments in this eld. Topromote wide-scale use of renewable energy and to complement the government’sprogram on rural electrication, 30 islands have been targeted as locations forhybrid power systems. In addition, 1,500 barangays (small towns) are programmedto be electried using renewable power systems. The Asian Development Bankpromised the Philippines US$2 billion in June 2009 for renewable programs.

The Philippines have one nuclear power reactor completed, however dueto litigation concerning bribery and safety deciencies operations have beenaborted. In the context of an overall energy plan for the country the governmentset up a project to study nuclear energy, to reduce dependence on imported oi land coal in 2007. In 2008 an IAEA mission commissioned by the governmentconcluded that the existing nuclear plant could be refurbished and economicallyand safely operated for 30 years83.

ree Eves:

The Philippines has noted its support for the Copenhagen Accord, and wasinvolved in brokering the agreement. The country is also looking to the ReducingEmissions from Deforestation and Degradation (REDD) program, developed atCopenhagen, to protect forestry areas. The Philippines has not disclosed CO2abatement goals.

The Philippines Inter-Agency Committee on Climate Change published the rstNational Communication on Climate Change in 1999 for the UNFCCC with fundingprovided by the Global Environment Facility (GEF) through the United NationsDevelopment Programme (UNDP). It has not updated this Communication.

PHILIPPInES





Energy mi x (as % of to ta l i ns ta ll ed capaci ty ) Natu ra l gas 70%, Oi l 30%


Electricity demand growth rate (Expected 2009)86 0.5 – 2%

Price of electricity per kWH (USD cents, Oct 2009)87 15.34

CO2 intensity of coal-red elect. generation 88 -


CO2 emissions (from all sources, 2008)90 173.2 million metric tones

CO2 emissions per capita (from all sources, 2008) 37.59 metric tones

Public Utilities Board (PUB) was the sole provider of electricity in Singapore untilthe 1990s. In 1995, the Government decided to undertake industry reforms.The rst step was to have the electricity and gas assets and services in the PUBcorporatized under a separate vertically integrated power corporation, SingaporePower. PUB remains as a regulatory body for the electricity industry. An electricitymarket was subsequently started in 1998, with the generation companies inSingapore Power competing with each other for the dispatch of electricity.

Senoko is a privately owned Singaporean utility with strong ESG performanceand CSR Management. It has participated in Singapore’s deregulated electricityretail market since 2001 and is one of the leading energy service providers tocontestable customers. It produces an excellent annual Environmental Report,which states that the replacement of its oil-red generation with state-of-the-art gas-red combined cycle turbine technology, at a cost of S$600m, reducedits carbon dioxide emission by 2.5 million tons per annum. To date, 95% of itselectricity generation comes from clean natural gas-red generating plants. Itreduced nitrogen-based emissions by retrotting the burners of four older gasturbines at an additional cost of $17m.

In 2000, the Government decided to take further steps to open the electricitysector to competition. This decision led to the separation of the electricity gridfrom the generation and retail companies, which can operate in the commercialdomain. The Energy Market Authority (EMA) was formed in 2001, as the industryregulator and system operator, and facilitates the wholesale electricity market.Since then new generation companies have entered the market. On 1 January2003, the National Electricity Market of Singapore (NEMS) commenced operation.

Generation companies bid every half-hour to sell electricity into the new wholesaleelectricity market. As a result, prices reect more closely changes in the supplyand demand of electricity. By 2007, about 10,000 accounts, representing about75% of electricity consumed in Singapore, had been made contestable.

Singapore currently has no renewable energy targets. According to commentatorsin an article ‘Singapore is Not Ready for Renewable Energy’ 91 the governmentis not in favour of stimulating renewable energy generation through subsidies,as David Tan, Deputy Chief Executive of the Energy Market Authority, hassaid. Without subsidies, the use of renewable energy such as solar energy isstill not price competitive. However, Singapore is well placed to provide PhotoVoltaic capabilities and serve as exporter for the region. The National ResearchFoundation has provided $170 million for solar research and there are manygrants available to support growth in the sector.

ree Eves:

Although there has been much deliberation between Singapore’s Ministers,National Environment Agency and NGOs, a clearly dened strategy is lacking.As one of its climate negotiators commented, it is ‘a small country that lacksalternative energy potential92.’

Senior Minister Professor S Jayakumar, Chairman of the Inter-MinisterialCommittee on Climate Change claims that Singapore contributes less than 0.2 percent of global greenhouse gas emissions. In spite of this, Singapore is committedto reducing carbon emissions growth by 16 per cent below the projected 2020level. This is, however, only if a global agreement is reached and other countriesimplement signicant targets of their own.93

Singapore has pledged to reduce emissions growth by 16 per cent below theprojected 2020 level, provided that other countries announce meaningfulemissions cut targets. Prime Minister Lee Hsien Loong noted that ‘if there’s no

agreement, we’re not obliged to hit the 16 per cent target. We have a sustainabledevelopment blueprint which is a 7 to 11 per cent target.’

‘To reach 16 per cent, we’ll have to take new measures. We have to considerwhat these will be, and there’ll be regulations. For example, energy efciencystandards may be necessary.’’ 94

SInGAPorE





Energy mix (as % of total installed capacity)Coal 45%, Hydro 1%, Natural gas13%, Nuclear 38%, Oil 2%


Electricity demand growth rate (Expected 2009)97 1.5%

Price of electricity per kWH (USD cents, Mar 2009)98 10





Privatization of the electricity market in Korea has been slow, primarily due tothe political strength of the existing generating companies along with adversepublic opinion and union opposition. There is still a plan to reform and privatizethe generating capacity and introduce more competition over time but thereis also a desire to maintain the nancial strength of KEPCO as it competes forprojects in overseas markets.

Korea’s Alternative Energy Act was implemented in 1982 and revised in 2002.It constituted the initial framework for the development of renewable energytechnologies and energy efciency. It aimed to secure cost-effective renewableenergy by tting the production strategy to geographical characteristics andthrough cost effective business modelling. It encouraged the installation of waste-incineration plants to generate heat and power. It also promoted residential solarheaters, small hydropower plants and facilities to use methane gas. In 2008the South Korean government announced plans to set up the ‘Act on ClimateChange’. This act supports industries that voluntarily develop and implementGHG reduction plans through various taxation measures, including a carbon tax.Korea’s goals as stated in the ‘Act on Climate Change’ and other legislation aimto:

• Increase the share of renewable energy generation capacity to 5% by

2012 and 9% by 2030, announced in 2007. As part of this initiative Koreais also considering expanding its nuclear power programme.

• A total of 11% of energy consumption from renewable sources by 2030,announced in 2007.

• Mix bio-diesel, mostly from palm oil, into fuel in increased quantities,from 0.5% in 2007 to 3% in 2012.

• Set up a voluntary ‘emissions trading agency’ and a carbon trading marketby 2009.

• Achieve a 2.5 million tonne CO2 reduction by 2012 for large-scaleresidencies and industrial complexes.

• Absorb as much as 12 million tonnes of CO2 through reforestation efforts.

• Stimulate the use of alternative energy through the ‘Renewable PortfolioStandard’. The Government has signed a Renewable Portfolio Agreementwith nine public corporations to increase the use of alternative energy inthe industrial sector. The Government has allocated 1.2 trillion won from2006 to 2008 to lay the groundwork for this plan102.

• Reach average power plant eet fuel efciency of 40 mpg by 2015.

• Reduce emissions to 4% below 2005 levels by 2020, equal to 30% belowCO2 emissions under a ‘business as usual’ scenario (stated in November2009).

Different policies are in place to incentivize the development of renewable energygeneration assets:

• Feed-in tariffs were adopted for solar PV in 2006. The tariffs distinguishbetween systems >30 kWp and systems <30 kWp. The result of thesetariffs has been a huge growth in solar demand.

• In 2008, 533 billion won was slated for the development of alternativeenergy, up from 435 billion won in 2007. In order to meet this goal,investment in research and development will be increased to some 210billion won ($210 million). In January 2009 South Korea announced thelaunch of its $38.1 billion Green New Deal103. The Green New Deal willfocus on pollution control, energy efciency and clean technologies.

Under the plans, $3.32 billion will be spent on clean energy infrastructuretechnology products and constructing low carbon transportation systems.An additional $6.64 billion would be allocated for research and developmentof higher efciency and non-silicon-based solar cells, electric vehicles,highly efcient LEDs, smart metering and rechargeable batteries.

There is considerable potential for renewable energy in South Korea. Accordingto Displaybank, the new “Photo Voltaic Market Creation Plan” announced in 2009is expected to boost the Korean PV instalment market to increase to 200MW by2012104.

South Korea has an extensive eet of reactors: 20 units in operation (17.5GWe), 3 under construction, 5 planned, also 2 research reactors. It meets 35% ofits electricity needs from nuclear power, and this is increasing. The national planis to expand to 28 nuclear power reactors, including advanced reactor designs,and achieve 60% nuclear supply by 2035. Demand for electricity in South Koreahas been increasing strongly105.

ree Eves:

South Korea is impressive in its vision of lowering emissions unilaterally. Thereis a desire to support the UN Secretary-General Ban Ki-moon and to commit toUN backed accords, although an emphasis is made on the difference betweenemissions targets for developed and developing countries. According to PresidentLee Myung-bak106, the 2020 target to reduce GHG emissions to 4% below 2005

will be implemented regardless of a Copenhagen agreement. President LeeMyung-bak said the target was in the wider national interest and hoped it willtrigger further international efforts towards emissions reductions.107 Koreanefforts are strategic; the government is pushing to ready the economy for futurecarbon trade tariffs and to acquire early market leads in green energy, productsand services. There is also a desire to reduce reliance on imported fuels andbecome more energy secure.

SoutH KorEA





Energy mix (as % of total installed capacity) 109Hydro (15%), Thermal (68%), Coal(29%), Oil (12%), Gas (28%), Nuclear(17%)


Electricity demand growth rate (Mar 2009)111 3.3%

Price of electricity per kWH (US cents, 200 7)112 1.44

CO2 intensity of coal-red elect. generation 113 ND

CO2 intensity of elect. generation 114 ND



The electricity market in Taiwan ruled by a single state-owned integrated utility(Taipower), eight IPPs, and captive power plants. The privatization of theenergy market, originally planned in 2001, has been postponed several times116.Taipower’s monopoly status technically ended in 1994. In that year independentpower producers (IPPs) were allowed to provide up to 20% of Taiwan’selectricity117. However, Taipower retains a monopoly on electricity transmissionand distribution in Taiwan. As a result IPPs are required to sign power purchaseagreements with Taipower. After joining the WTO in 2001-2002, foreign rmswere permitted 100% ownership of generation companies. Under the frameworkenvisioned Taipower’s generation assets would be split between several rms.According to the Taiwanese Ministry of Economic Affairs’ Bureau of Energy theplanned privatization of Taipower is the result of rapidly rising power demand inTaiwan, and Taipower’s inability to build sufcient capacity118.

A total of 98% of energy supply in Taiwan is dependent on imported fuel. Energysecurity is of signicant economic and political concern to the government119. Inorder to reduce Taiwan’s dependence on foreign energy sources, the Ministry ofEconomic Affairs’ Bureau of Energy has actively been promoting energy researchand investments in renewables since the 1990’s. Currently, Taiwan has only2,278 MW of renewable energy generation assets, or 5.8% of installed capacity.

Steps taken so far have included:

•

August 2008: The government aims to grow the solar power industry to$16 billion by 2012 by introducing a renewable energy law120.

• December 2008: Taiwan to make Taipei its rst low-carbon city, with localgovernment hoping to reduce emissions by 20 percent by 2020121.

• April 2009: Taiwan will invest 45 billion New Taiwan dollars (US$1.3 billion)to expand and upgrade the Island’s solar and wind energy industries andhelp reduce the use of fuel;

• June 2009: The Legislative Yuan (the parliamentary chamber) passed arenewable energy act aimed at promoting the use of renewable energy.The aim was to increase Taiwan’s renewable energy generation capacityby 6,500 MW to 10,000 MW within 20 years122123. The share of renewableenergy in the electricity system could reach 8% by 2025. The new lawauthorizes the government to enhance incentives for the developmentof renewable energy via a variety of methods, including the acquisitionmechanism, incentives for demonstration projects, and the loosening ofregulatory restrictions.

• July 2009: The Executive Yuan (the executive branch of the government)approved a proposal consisting of 16 measures to transform Taiwan intoa “low carbon” country by 2020. A Sustainable Energy Policy was denedwith a goal of improving energy efciency by more than 2% per annum;to reduce emissions to 2008 levels between 2016 and 2020 and to 2000levels by 2025. The aim is to achieve 15 MT of abatement in 2012 and 20MT of abatement in 2020124.

• August 2009: Taiwan’s government announced that it will invest T$45billion (US$1.4 billion) in the island’s domestic renewable energy sectorin an attempt to help the sector grow nearly eight-fold by 2015 therebyincreasing industry production value to T$1.158 trillion in 2015 comparedto T$160.3 billion in mid-2009125.

In Taiwan renewable energy development receives strong government backing.Strong investment opportunities exist as a result of these incentives.

Nuclear power is an important source of electricity in Taiwan, which has sixreactors. The rst was built in 1972. There are a further two advanced reactorsunder construction now. Figures suggest that nuclear provides around 25% ofbase-load power and 17% of the overall 238 billion kWh generated in 2008.The three nuclear plants comprise four General Electric boiling water reactorsand two Westinghouse pressurized water reactors. Construction of the rst unitbegan in 1972. All reactors are operated by the utility Taipower and are expectedto be in operation for 40 years.126

ree Eves:

For Taiwan, the issue of climate change is an issue of sovereignty. Though itis not a member of the United Nations, and has not Taiwan had hoped to beincluded as an independent state at the Copenhagen round. Inclusion in climatechange discussions would enhance the recognition of the island’s independentstatus in the international community. Taiwan, not being a member of the UnitedNations, is party neither to the United Nations Framework Convention on ClimateChange (UNFCCC) nor to the Kyoto Protocol. The wording of the UNFCCC excludesTaiwanese participation, although it allowed Switzerland, to formally accede tothe convention. Earlier this year, at the World Health Assembly, Taiwan took partas an observer under the name of ‘Chinese Taipei’. That marked the rst time in38 years that it had participated in a meeting hosted by a U.N. agency. It seems,however, that, in Copenhagen, only its civic groups and non-governmentalorganizations represented it.

Taiwan has said that while not required to, it will follow the guidelines set out bythe Copenhagen Accord, although EPA Minister Stephen Shen has noted that thiswould require carbon emissions to be cut by 80-90 per cent. This would needthe Greenhouse Gas Reduction Act to be passed, which has been stalled since2006.127

tAIWAn




Total installed generation capacity (31-10-09)128 +/- 29,000 MW

Energy mix (as % of total installed capacity)Coal 19%, Hydro 6%, Natural gas 74%,Other 2%


Electricity demand growth rate (2008-2013)130 16.1%

Price of electricity per kWH (USD cents)131 7

CO2 intensity of coal-red elect. generation132 927 g CO2/kWH


CO2 emissions (from all sources, 2008)134 253 million metric tonnes


The most signicant development in the regulation of Thailand’s energy sectoris the passage of the Energy Industry Act in December 2007 that endorsedthe establishment of the Energy Regulatory Commission (ERC). The ERC wasappointed in February 2008. ERC works within the policy framework establishedby the National Energy Policy Council (NEPC), chaired by the Prime Minister 135.A key instrument available to the ERC in fullling its mandate is the PowerDevelopment Fund. The Fund is to be used as a channel for implementing thesubsidy arrangements for, i.e. the promotion of renewable and environmentallyfriendly energy.

In Thailand, efforts have been made to diversify away from the use of oil and naturalgas for power generation by, among others, increasing the use of indigenousrenewable energy resources and using fuel energy-efcient technologies forpower generation so as to enhance the security of national power supply as wellas to reduce environmental impact136. Steps undertaken include:

• May 2001, the government initiated the “pricing subsidy” in the formof energy payment adder for electricity generated by renewable energyfor a period of ve years at a maximum rate of 0.36 baht/kWh, under acompetitive bidding.

• In mid-2002, the government, via the two power distribution utilities i.e.the Provincial Electricity Authority (PEA) and the Metropolitan ElectricityAuthority (MEA), announced power purchase from VSPPs with capacitysupply to the grid <1 MW.

• 4 September 2006, the government, via the National Energy PolicyCouncil (NEPC), approved the increase of capacity purchase from VSPPsfrom ≤1 MW to ≤10 MW each.

• In 2007 the Ministry of Energy set a target to purchase power from SPPsusing renewable energy, totaling 530 MW “Fixed Adder” (230 MW) “AdderBidding” (300 MW)

• The Thai government targets to have a total installed renewable generationcapacity of 3,276 MW by 2011137, equivalent to an increase of 59%. ThePower Development Plan aims to have renewable energy providing about10% of the installed capacity by 2022,

• expected to total more than 51,000 Megawatts. The drive to a cleanenergy future has strong political backing.

Wind speeds in Thailand are lower than in Europe, on average, but slow motionwind turbines are being considered. Thailand’s geographic conditions seem mostappropriate for the development of biomass energy. In 2009 Thailand generatesabout 1,700 MW from biomass fuel. The Ministry of Energy (MoE) expects that atotal of 3,700 MW could be generated using biomass. Tropical weather conditionsin Thailand and economic rationale favour biogas generation138.

Thailand has had an operating research reactor since 1977 however Thailand’snuclear power program has undergone a revival due to a forecasted growth inelectricity demand of 7% p.a. for the next twenty years. Capacity requirementsin 2016 are expected to reach 48 GWe139. In June 2007 the Energy Ministerannounced plans to build two nuclear power plants including one US$6bn 4,000MWe nuclear power plant to be operational in 2020. The Thai government hasbudgeted funds to 2011 for preparatory work. The International Atomic EnergyAgency will cooperate with the Thai government to build the nuclear powerplant140. Construction will commence in 2015 and is estimated to take 13 yearsto complete construction of the nuclear reactors.

ree Eves:

Thailand issued its rst national communication on Climate Change in 2000 fromthe International Environmental Affairs Division of the Ofce of EnvironmentalPolicy and Planning (OEPP) at the Ministry of Science, Technology and Environment.There have been no subsequent communications.

In January 2008 the Ofce of Natural Resources and Environmental Policy andPlanning, a division of the Ministry of Natural Resources and Environment releasedthe Strategic Plan on Climate Change 2008-12.

There have been no ofcial government emissions reduction target statementsbut the ONREPP has been actively developing mitigation and adaptation strategiesand ensuring the implementation of CDM across various sectors. By May 2009 theDNA-CDM had apparently approved 66 CDM projects with a total abatement ofover 4 MTOE/year. These are mostly small biogas projects. Civil Society has beenactive on the climate change issue in Thailand.141 The Department of AlternativeEnergy Development and Efciency is promoting private investment in R & D ofrenewable energy sources through tariff promotion, as well as a greater emphasison conservation and efciency.142

tHAILAnd




INVESTORS CONCLUSION




International discussions around the impact of the Copenhagen Accordwill continue in the weeks after the Copenhagen climate conference inDecember 2009. Although there were no legally binding agreements onemissions reductions, the developing nations in Asia nally have found avoice in the debate.

Not only is a global treaty that includes mandatory targets for limitingthe growth in GHG emissions in emerging markets unworkable at thisstage, it seems that the concept of comprehensive national emissiontrading schemes in which countries force companies to pay for their GHGemissions is currently, and within the short to medium term, unrealistic.Electricity is crucial for economic development and it is not feasible forgovernments to punish emerging markets utilities for their existinggeneration capacities.

On the other hand, unexpected measures could be triggered by thecurrent climate change talks. Recently more detailed discussions onthe abolition of energy subsidies, which in many countries set wrongincentives and hinder the effectiveness of energy efciency measures,have taken place. The abolition of subsidized electricity prices would havea signicant effect on the power utility sector.

We would therefore recommend investors to closely follow the directionof climate change policies and their interplay with energy policies at anational, and even state level, to be able to judge how power utilities willbe affected.




There is a chapter on Environmental Protection and Social Responsibility in the company’s annual report as well as the sameinformation on its website. There is no information on how the management of environmental and social issues is organized.Stakeholders are not mentioned. Some information about philanthropic activities, for example after the Sichuan earthquake, but not ina systematic and structured way

Environmental management Score: 1

No absolute emissions data. Vague comments on its environmental management system, which is not certied. One statement aboutpast climate change management, but no current information.

Climate change management Score: 0

One statement on what they have done in the past, but no further information and no emissions data. “We have strived to reduceconsumption of coal and emission of greenhouse gas via various measures such as closing-down of small thermal power generationunits with high energy consumption, developing large scale and high efciency environmental friendly generation units, enhancingoperation management and technical upgrades.”

Health & Safety management Score: 0Safety is said to be a key objective but there is no information on actual safety management.

Corporate governance Score: 7

Separation of Chairman & CEO: no, percentage of independent board members: 43%, percentage of independent audit committeemembers: 100%, percentage of independent remuneration committee members: 100%, percentage of independent nominationcommittee members: the same as remuneration committee, disclosure of executive and board remuneration: yes.

Controversies Gravity: Low

No controversies directly related to China Power Int Dev, but a lot of issues surround its parent company, China Power Investment:For example, CPI was ned by the Ministry of Environmental Protection for emitting excessive amounts of sulphur dioxide in 2007. CPIis active in Burma, building dams and working with the local ministry of electric power. In 2007 CPI was called the world’s 5th largestpolluter by Think-tank Center for Global Development.

Community investment

No community investments disclosed.

Note 1: ED stands for environmental damage

mpany Name (country)China Power International Dev. Ltd. (Hong Kong)

/ ISIN: 2 380.HK / HK2380027329

ket Cap US$ 1,297m

nership structure China Power Investment Group Ltd (56.05%), others (43.95%)

mpany type IPP

iness Modelengaged in developing, constructing, owning, operating andmanaging power plants in People’s Republic of China. Plans to investin transmission and distribution of electricity as well

an Utilities Environment and Social Rating 33%

porate Governance Rating 58%

P disclosure No response

G Summary

na Power International has started to disclose some environmental information. Apparently there have been some improvements

ulphur dioxide, nitrogen oxide and carbon dioxide emissions, but overall information disclosure still leaves a lot of room forrovement. Coal consumption rate was relative high compared to other Chinese utilities in our universe.

neration type 2009 (MW) 2009 (%)

110 1%

l 8,946 81%

mass 0 0%

0 0%

ro 1,988 18%

lear 0 0%

ewable 0 0%

al 11,045 100%

neration Mix Plans Disclosed

750MW of additional hydro projects until end 2010, another 250MWhydro until end of 2011. 2’400MW of additional coal capacity planneduntil end of 2010. Potential of further asset injection from the parentcompany

2 emissions (tonnes) 34,035,697 ED1 cost (m USD) 1,833

2 intensity (tonnes/ m USD rev.) 24,360 ED impact on 2008 revenue 131%

2 damage cost (m USD) 1,880 ED impact on 2008 EBITDA 1646%

erational efciency metrics

008, net coal consumption rate of China Power was 334.38 grams/kWh, representing a decrease of 9.03 grams/kWh comparedlast year. Net/gross generation in 2008: 93.2% Net coal consumption varied between 373 g/kWh for the Shentou I Power Plant

315 g/kWh for the Pingwei Power Plant II (see AR08 p.24)

er and waste treatment

s 2009 Interim report CPI states that waste water treatment and emission of pollutants met the requirements of relevant policiesthe emission of various pollutants was in compliance with national environment protection standards.

rall CSR reporting & management Score: 1

APPEndIx: COMPANYPROFILES




mpany Name (country)China Resources Power Holdings Co. Ltd. (Hong Kong)

/ ISIN: 2 0836.HK / HK0836012952

ket Cap US$ 8,860m

nership structure China Resources National Corporation owns 64.75%, free oat (35.2%)

mpany type IPP

siness Model

Independent power producer, which invests, develops, operates and managespower plants in China. The Company is engaged in two operating divisions:sales of electricity (inclusive of supply of heat that is generated by thermal powerplants) and coal mining.

porting 0




G Summary

na Resources Power discloses virtually no information on environmental and CSR issues. Its generation mix is highly dependent on and its coal consumption rate is the highest among the Chinese utilities we looked at. On top of this, the company was involved in

mber of controversies.


s 473 3%

al 14,810 94%

mass 0 0%

0 0%

dro 158 1%

clear 0 0%

newable 315 2%

al 15,755 100%

neration Mix Plans Disclosed plan to expand to 21GW by end of 2010 with 6% from alternative energy

2 emissions (tonnes) 99,639,200.00 ED1 cost (m USD) 5,828

2 intensity (tonnes/ m USD rev.) 28,845 ED impact on 2008 revenue 169%

2 damage cost (m USD) 3,479 ED impact on 2008 EBITDA 719%


net generation coal consumption rate of the operational power plants increased slightly from 2007’s 338.9g/kWh to 340.5g/kWh in8 mainly attributable to the acquisition of 200MW class generation units of Jinzhou Power Plant and Shenhai Thermal Power Plants.

clear trend in the ratio of net / gross generation: In 2007 it was 93.75% / 93.6% for consolidated/all plants, in 2008 93.34% / 93.33%,1 2009 is was 93.45% for all its plants.

ter and waste treatment

mention of water and waste treatment

erall CSR reporting & management Score: 0

company states that it is committed to environmentally friendly operations and a satisfying work place, but no further informationn.


Little mention of environmental issues. State that all the power plants which were constructed and managed by CR Power haveinstalled ue gas desulphurisation (“FGD”) facilities, but it is not obvious how many of the plants they constructed themselves and whatare the plans for plants constructed by somebody else. For the power plants under construction, they started the installation of de-nitration facilities, which is more than the environmental protection requirements set by the PRC Government.


no mention. No emissions data

Health & Safety management Score: 0

No mention of Health & Safety management


Separation of Chairman & CEO: yes, percentage of independent board members: 36%, percentage of independent audit committee

members: 100%, percentage of independent remuneration committee members: 67%, percentage of independent nominationcommittee members: 67%, disclosure of executive and board remuneration: yes.

Controversies Gravity: High

sightseeing trips from the California-based company Control Components Inc. China Resources Power Holdings was added to alist of six Chinese entities (Jiangsu Nuclear Power Corp, Guohua Electric Power, China Petroleum Materials and Equipment Corp,PetroChina, Dongfang Electric Corporation and China National Offshore Oil Corporation) allegedly involved in the corruption scandal,according to documents released by the US Department of Justice. According to a recent Greenpeace report, CRP is the most carbon dioxide intensive Chinese power producer with 816.5 g CO2/kWh.In July 2008, the Chinese Ministry of Environmental Protection has stated that China Resources Power Holdings, Guizhou JinyuanGroup and Shanxi International Electricity Group energy projects are not eligible for environmental impact assessments because theyfailed to add the required sulphur-eliminating facilities prior to the end of 2007. Its parent company is involved in further controversialissues.







mpany Name (country) GCL-Poly Energy Holdings Limited (Hong Kong)

/ ISIN: 2 3800.HK / KYG3774X1088

ket Cap US$ 3,458m

nership structure

Zhu (Gong Shan) (CEO & chairman) owns 40.97%. Poly lomited (HK)also substantial owner. Incorporated in the Cayman Islands. GCLSilicon unsuccessfully tried to do an IPO in 2008. GCL Poly and GCLSilicon have the same founder.

mpany Type IPP

siness Model

Foreign-owned independent cogeneration plant operator in thePeople’s Republic of China, engaged in the development, investment,management and operation of cogeneration and power plants, andtrading of coal in the People’s Republic of China. In June 2009, itacquired GCL Silicon and thus became China’s largest polysiliconproducer and a leading player in the country’s solar industry. Alsoacquired interest in a coal mining project from its chairman.



P disclosure no request by CDP

G Summary

closure on ESG issues by GCL Poly is almost completely missing and inadequate. The company is trying to position itself as ading clean energy company after its acquisition of its parent company’s polysilicon business that delivers raw material to the solarustry. Polysilicon production is very energy intensive and uses highly toxic and dangerous, Therefore we would expect the companyocus more on environmental and H&S management.


s 360 41.1%

al 444 51%

mass 72 8%

0 0%

dro 0 0%

clear 0 0%

newable 0 0%

al 876 100%

neration Mix Plans Disclosed none

2 emissions (tonnes) 4,059,523.00 ED1 cost (m USD) 231

2 intensity (tonnes/ m USD rev.) 7,578.00 ED impact on 2008 revenue 43%

2 damage cost (m USD) 142.00 ED impact on 2008 EBITDA 239%


disclosed


mention of water and waste treatment.


There is a section on Corporate Citizenship on the GCL-Poly Energy website, but there is almost no CSR related information to befound. No useful information such as data, information on environmental management system, CSR management etc.


All GCL-Poly Energy plants have installed the CEMS (Continuous Emissions Monitoring System) which is required by the PRCGovernment. Most of GCL´s cogeneration plants use circulating uidized bed (CFB) boilers, thus substantially lowering emissionof sulfur dioxide. Desulphurization equipment has been installed for the few pulverized coal boilers. There is no information onenvironmental management inspite of the fact that the polysilicon production has a very high toxicity (TCS gas).


In its 2 (small) biomass / coal power plants in Baoying and Lianyungang they successfully improved the efciency of their directcombustion boilers and feeding systems, resulting in the reduction of raw coal consumption by 200,000 ton a year. This led to adecrease in emissions of carbon dioxide by approximately 400,000 ton. No CO2 emission data, no further mention of climate change.


All power plants have adopted various internal safety policies. The company’s polysilicon facilities comply with all applicablegovernmental regulations and internal environmental health and safety (EHS) standards. GCL-Poly sponsored a number of training anddevelopment programmes for its employees in 2008.


Separation of Chairman & CEO: yes, percentage of independent board members: 33%, percentage of independent audit committeemembers: 100%, percentage of independent remuneration committee members: 100%, percentage of independent nominationcommittee members: -, disclosure of executive and board remuneration: partly


No news coverage on controversial issues


GCL-Poly has made several donations. Chairman Zhu made a contribution to Nanjing University, it is not known whether this was in hisown name or not. These are philantropic investments.





mpany Name (country) Hongkong Electric Holdings Limited (Hong Kong)

/ ISIN: 2 0006.HK / HK0006000050

ket Cap US$ 11,569m

nership structure Cheung Kong Infrastructure (38.7%), other (61.3%)

mpany type Electricity generation, transmission & distribution

siness ModelInternational business is mainly focused on transmission &distribution, but the company also has interests in generation assets.Vertically integrated in HK



P disclosure yes

G Summary

gkong Electric’s disclosure on ESG issues is relatively extensive and far above sector average. The company scores as an ESGder. They publish emissions and safety data. CO2 emissions intensity for its HK operations is signicantly higher than the one of its

mpetitor CLP. There is room for improvement on disclosure for non-HK facilities.


s 1,745.10 30%

al 3,955.56 68%

mass - 0%

- 0%

dro - 0%

clear - 0%

newable 116.34 2%

al 5817 100%

neration Mix Plans Disclosed 100MW offshore wind farm planned





rmal Efciency 2008: 35.8%, annual load factor: 53.9 %


mma Power Station awarded Wastewi$e and Energywi$e Labels in recognition of efforts to reduce waste, save energy and promoteer use of renewable energy.


re is a section on environmental issues on the company’s website. Little data is available, though. There is also a chapter in the ARhe latest environmental developments and on some community investment activities. The company also publishes an annual Socialnvironmental Report.


Report CO2 emissions and climate change activities only on HK operation, not internationally. Reporting is extensive. HK Electrichas been carrying out energy audits for its customers free of charge in order to promote energy efciency. HK Eletric established aloan fund to provide interest-subsidized loans to their customers to implement energy saving initiatives. Quarterly emissions data forthe Lamma Power Station are available. The Lamma Power Station is ISO 14´001 certied. Claim that most of the y ash is used inconstruction. There are no targets and no group wide information. In HK the operations are certied according to OHSAS18001. Thereis data on the company’s safety performance (injury frequency and severity) which is available only for very few Asian utilities. The datashows little clear trends but varies widely from year to year. They set some environmental targets, most of which are part of their usualoperations, though, such as the implementation of its emissions reduction facilities at the Lamma Power Station which is needed tomeet regulatory standards.


Report CO2 emissions and climate change activities only on HK operation, not internationally. Reporting is extensive. Some activitiestop support energy efciency with customers: for example, starting from 2009, HK Electric has been carrying out energy audits for thecustomers free of charge in order to promote energy efciency. Further, they established a loan fund of HK$12.5 million per annumover a ve-year period (total HK$ 62.5 million) to provide interest-subsidized loans to their customers to implement energy savinginitiatives identied in the energy audits.CO2 emissions intensity is with 0.75 kg CO2 / kWh signicantly higher than CLP at 0.54 kg CO2 / kWh for its HK operations. Noemissions reduction target set. CO2 emissions for its HK operations are published in the Environmental Report. They show a slightlydecreasing trend. They state that they recognise their responsibility to contribute to global efforts to reduce Greenhouse Gas (GHG)emissions by switching to low carbon fuel, promoting energy efciency and applying renewable energy.They also do environmental education campaigns, which promote private energy saving activities. Are in the process of installingemission reduction equipment at the Lamma power station. The last of the FGD and low nitrogen oxide burner works is expected to becompleted in the second quarter of 2010 by which time over 95% of the electricity generated at the Lamma power station will be eithergenerated by gas or by coal red units tted with FGD’s and low nitrogen oxide burners.


HKE has established a clear H&S policy and an H&S Board. HKE follows international standards and has received externalcertication. There is data on the company’s safety performance (injury frequency and severity) which is available only for very few Asian utilities.


Separation of Chairman & CEO: yes, percentage of independent board members: 19%, percentage of independent audit committeemembers: 75%, percentage of independent remuneration committee members: 67%, percentage of independent nomination committeemembers: ND, disclosure of executive and board remuneration: yes. 2 of the independent directors have been with the company since1985. One executive director is 77, all non-execs are 67+ years old.


Criticised in the past couple of years for air pollution in HK


Various community and educational programmes all related to the eld of energy, e.g. ‘Energy Efciency Education Kit for SecondarySchools’, providing learning and teaching resources on topics of energy efciency for students and teachers in Hong Kong. These arestrategic investments.





mpany Name (country) Datang International Power Generational Co Ltd. (China)

/ ISIN: 2 0991.HK / CNE1000002Z3

ket Cap US$ 12,070m

nership structure

Beijing Energy Inv. Holding (11.41%), China Datang GroupCorporation (33.61%), Hebei Constr. Investment Company (11.07%),Tianjin Jinneng Investment Company (10.29%), other holders ofdomestic share (5.48%), Holders of H shares (28.15%).

mpany type IPP

siness Model

Datang Power is engaged in the development and operation ofpower plants, the sale of electricity and thermal power, and the repairand maintenance of power equipment and power-related technicalservices in the PRC.




G Summary

mpared to others in the sector, reporting on ESG issues is relatively extensive, including concrete data on emissions. In otherects disclosure is insufcient, though. For example, the company does not give a split of its generation capacity for example.ang is a member of the UN Global Compact.

neration type 2009 H1 (%)

sReporting on fuel mix breakdown is confusing as the company reportsonly outdated (2006) or ambiguous data, that is fuel breakdownper unit installed and total installed capacity instead of attributablecapacity. Main fuel source is coal with probably around 90% ofattributable capacity. There are some very small wind power plantsand the remaining capacity is hydro plants.

al

mass

dro

clear

newable

al 27790.2 MW


The Fujian Ningde Nuclear Power Station, which is owned by Datang,Guangdong Nuclear Power Investment Company Limited and FujianCoal Industrial (Group) Corporation, commenced construction inFebruary 2008

2 emissions (tonnes) 120,510,729.00 ED1 cost (m USD) 5,296.00


2 damage cost (m USD) 4,207.00 ED impact on 2008 EBITDA 353%


coal consumption declined from 332.47 to 326.8 g/KWh from H1 08 to H1 09. For 2008, unit coal consumption was approximately.46 g/kWh, a decrease of approximately 4.87 g/kWh over the previous year, the consolidated electricity consumption rate of power

nts was 6.01%. For 600MW and 300MW units Datang´s consumption is below the national average.

Water and waste treatment

Datang places emphasis on recycling water resources, and treatment of industrial waste water. Datang publishes water and wastetreatment data. Datang focused on strengthening the management of water saving in coal-red power plants and proactively promotedthe application of new technologies. As at the end of 2008, eight air-cooling generating units and ten seawater-cooling generating unitscommenced operation, thereby leading to a decrease of 37.8% in water consumption per unit of power generated. Ten plants realised“zero drainage” of industrial waste water.

Overall CSR reporting & management Score: 1

Publish a separate 2008 sustainability report. Some parts contain concrete data, for example on emissions, but mostly written as amarketing brochure. State that they abide by the 10 principles of the UN Global Compact. Global Compact seems to have ‘veried’ thereport. Some emissions data is also included in investor presentations.


Datang has nuclear generation assets. GHG emissions data is available. Datang is investing in renewable energy generation assets.

Company follows national policy on environmental management. Datang was the rst Chinese IPP to have all units equipped with uegas desulphurization units. The company claims that their emissions of smoke dust, SO2, NOx and waste water are lower than thenational average. First power plant with DeNOx facilities in China. All emissions show decreasing trends. Most succesful have been thereductions in SO2 emissions which have declined to 1.16 g/kWh in 2008 from 6.6 g/kWh in 2004. 65.7% of coal ash was used in 2008.


no mention of climate change. No CO2 emissions data. Share of renewable & clean energy in its portfolio has increased rapidly in 2008


Datang strives to provide employees with better working and living conditions. Some information on staff development and training. Noinformation on safety policies in place or days without injuries.


Separation of Chairman & CEO: yes, percentage of independent board members: 33%, percentage of independent audit committeemembers: 33%, percentage of independent remuneration committee members: 60%, percentage of independent nomination committeemembers: ND, disclosure of executive and board remuneration: yes.

Controversies Gravity: Medium

Datang Power was one of the companies involved in a corruption scandal for accepting bribes from US listed Control Components(CCI). Criticised heavily for environmental impacts of planned hydro projects in the Mekong Delta. As most other Chinese IPPs usingcoal red power plants the company has been under criticism in the past for high pollution levels from their plants


Datang donates to poverty stricken areas and in the event of natural disasters. Datang supports different schools. Investments arephilanthropic.





mpany Name (country)Huadian Power International Corp. Ltd. (China)

/ ISIN: 2 1071.HK / CNE1000003D8

ket Cap US$ 4,373m

nership structure

China Huadian Hong Kong owns 6% of H-shares and 64.51% of A-shares, Shandong International Trust & Investment Corporationowns 17.45% of A-shares. China Huadian Corp owns altogether50.60% of the company, Shandong International Trust Corporation13.3%

mpany type IPP

siness ModelConstruction and operation of power plants and businesses related topower generation. Owns interests in coal mines.




G Summary

re is very little disclosure of environmental and CSR related information and the company scores as an ESG laggard. Its coalsumption rate is relatively low. Huadian is involved in controversial projects such as the Ludila hydropower project, for which thestry of Environment has suspended approval.

neration type H1 2009 (MW) 2009 (%)

s 918.40 4%

al 19,377.61 94%

mass - 0%

- 0%

dro 168.72 1%

clear - 0%

newable 92.28 0%

al 20,557.00 100%

neration Mix Plans Disclosed1283 MW hydro, 545 MW wind, 3800 MW of coal capacity underconstruction

2 emissions (tonnes) 96,957,485.00 ED1 cost (m USD)

5,250.002 intensity (tonnes/ m USD rev.) 22,021.00 ED impact on 2008 revenue 119%



grid power sold: 46.57 million MWh, average utilization of coal-red generating units: 2,320 hours, coal consumption: 326.21 gWh, unit fuel cost for power generation RMB 216.13/MWh. Over 90% of its installed capacity is composed of units of 300MW orve.


mention of water or waste treatment


CSR information on the company’s website. Very sparse environmental information in the AR. No indication of how environmentalCSR issues are handled within the company


Environmental information is quite sparse. According to the emission reduction data approved by State environmental protectionauthorities, the Group’s average emission of sulphur dioxide achieved a year-on-year decrease of 0.69 g/KWh. Unfortunately thecompany does not disclose absolute SO2 emissions, even though it knows the data. As at the end of 2008, generating units with atotal capacity of 19,145MW, representing about 90% of the coal-red generating units controlled by the Group, were equipped withdesulphurisation facilities. There is no further information on environmental management

Climate change management Score: 0No mention of climate change. Coal consumption rate for its coal red power plants is relatively low (probably due to the fact that mostunits are large)


Huadian states that production took place without incident at different sites, but fails to mention health and safety management. Noemissions data

Corporate governance Score: 6Separation of Chairman & CEO: yes, percentage of independent board members: 33%, percentage of independent audit committeemembers: 60%, percentage of independent remuneration committee members: 60%, percentage of independent nomination committeemembers: ND, disclosure of executive and board remuneration: partly.


June 2009, the Ministry of Environmental Protection suspended approval for two hydropower station projects on the Yangtze River overconcerns that they would cause the irreversible loss of aquatic diversity. Allegations of serious environmental pollution in the past. In2007, China Huadian Corporation was put on a blacklist and was to be banned from launching new projects until it had cleaned up itsexisting facilities in a name and shame approach by the State Environmental Protection Administration.







mpany Name (country) Huaneng Power International, Inc. (China)

/ ISIN: 2 0902.HK / CNE1000006Z4

ket Cap US$ 11,846m

nership structure

Huaneng International Power Development Corporation owns 42.0%of the company (56% of A shares), China Huaneng Group owns 8.8%of the company (11.7% of A-sahres and 0.7% of H-shares). SOE ChinaHuaneng Group owns a controlling stake in HIPDC.

mpany type IPP

siness Model

Investment, planning, operation and management of power plants.Largest Chinese IPP by capacity. HPI’s parent company, HuanengGroup, is the largest central-government-administered state owned IPPwith more than 70GW controlled capacity. Bought the Tuas generationfacilities in Singapore that have a local market share of around 25%



P disclosure yes, answered 2008 & 2009 CDP but details are not publicly available

G Summary

re is very little disclosure of environmental and CSR related information. The company scores as an ESG laggard. Huaneng Powerrnational is involved in controversial projects such as the Longkaikou hydropower project, for which the Ministry of Environment haspended approval.


s ND ND

al ND ND

mass ND ND

ND ND

dro ND ND

clear ND ND

newable ND ND

al 39,159 100%

neration Mix Plans Disclosed No Disclosure

2 emissions (tonnes) 183,597,411.00 ED1 cost (m USD)

10,028.002 intensity (tonnes/ m USD rev.) 18,513.00 ED impact on 2008 revenue 101%


erational efciency metricsrage coal consumption rate for power sold (2008): 325.94 g / MWh, internal usage rate: 5.38%.


ry power plant has waste water treatment facilities for treating waste water coming out from the operating units before it goes intoriver or sea


nformation on CSR management. Outdated information available on the website.


In 2008, 86.2% of the coal-red generating units were equipped with desulphurization facilities. The company claims that it will havecompleted the installation of desulphurization equipment for all of its facilities be the end of 2009. There is little further information onenvironmental issues. Reportedly “responsible persons” have been assigned to ensure environmental protection at a plant level.


No mention of climate change. No emissions data


No mention of health & safety management


Separation of Chairman & CEO: yes, percentage of independent board members: 33%, percentage of independent audit committeemembers: 100%, percentage of independent remuneration committee members: 57%, percentage of independent nomination

committee members: 57%, disclosure of executive and board remuneration: yes


In June 2009, the Ministry of Environmental Protection has suspended approval for two hydropower station projects on the YangtzeRiver over concerns that they would cause the irreversible loss of aquatic diversity, and have negative impacts on communities. TheLudila hydropower project by Huadian Power, and the Longkaikou project by Huaneng Power were allegedly constructed illegallybefore reviewing potential environmental impacts. But environmental groups including Friends of Nature and the Chengdu UrbanRivers Association have questioned whether construction has really stopped on the dams. Also, in 2009, Huaneng Power has been accused of deviating from the original construct ion design of one of its biggest coal-redplants in Inner Mongolia, using water rather than air to cool generators although the supply is under threat in the area.In 2007, Huaneng’s parent company China Huaneng Group was named the world´s largest carbon polluter, which is a consequenceof it being the largest Chinese power producer by capacity installed. The parent company has also frequently been criticized by thecentral government for not meeting environmental standards.







mpany Name (country) GVK Power and Infrastructure Ltd. ( India)

/ ISIN: 2 GVKP.BO / INE251H01024

ket Cap US$ 1,547m

nership structurePromoters (60.94%), foreign institutional investors (17.85%), banks,FI, mutual funds ( 8.24%),others (12.97%)

mpany type IPP

siness Model

focus on power generation assets (gas, hydro and thermal), roads,airports, coal mines and oil and gas. Business organized into Energy,Transportation and Urban Infrastructure. Power is expected to bearound 70% of FY10 EBITDA



P disclosure Not requested to disclose

G Summary

K Power does not disclose any environmental information, which is inadequate for a power and infrastructure company and makesmpossible to assess its environmental performance. Its distribution mix is relatively favourable with 100% of gas powered generation

acity and signicant hydro expansion planned.


s 901.00 100%

al - 0%

mass - 0%

- 0%

dro - 0%

clear - 0%

newable - 0%

al 901.00 100%

neration Mix Plans Disclosed 700MW hydro, 540MW coal in 2010

2 emissions (tonnes) 466’331 ED1 cost (m USD) 24

2 intensity (tonnes/ m USD rev.) 3’983 ED impact on 2008 revenue 21%

2 damage cost (m USD) 16 ED impact on 2008 EBITDA 40%


nformation.Natural gas projects were idle for a some time due to non-availability of natural gas, but run on high plant-load factorsw


mention of water or waste treatment


CSR related information available at all. GVK states that it has a socially responsible vision, however it provides no information thatports this vision. Has a foundation.

vironmental management Score: 0

mention of Environmental management & climate change management


No mention and no emissions data disclosed




Separation of Chairman & CEO: no, percentage of independent board members: 50%, percentage of independent audit committeemembers: 100%, percentage of independent remuneration committee members: 100%, percentage of independent nominationcommittee members: ND, disclosure of executive and board remuneration: partly


No controversial news coverage to our knowledge


GVK makes community investments through the GVK Foundation. Investments are focused on the poor, rural communities living nearits plants. The Foundation builds primary schools and community halls and provides drinking water. These investments are strategic.


http://www.hpi.com.cn/ReportFile/2009.SEPTEMBER.2912542116735775449.pdf

http://www.hpi.com.cn/ReportFile/2009.SEPTEMBER.2912542116735775449.pdf




mpany Name (country) KSK Energy Ventures (India)

/ ISIN: 2 KSKE.BO / INE143H01015

ket Cap US$ 1,591m

nership structureKSK Energy Ltd. (55.25%), LB India Holdings Mauritius (8.41%), LBMauritius (20%), Other (6.35%), Free oat (9.99%)

mpany type IPP

siness ModelPower project development company (power development, operation,maintenance)



P disclosure Not requested to disclose by CDP

G Summary

ay, KSK Energy Ventures has an environmentally relatively favourable generation mix with 40% gas, but t his will change for these, once its capacity expansion comes through. Clear laggard with regards to international CSR and environmental management.

neration type 2009 (MW) 2009 (%) 2010 (MW)

s 57.60 40% 57.60

al 86.40 60% 804.40

mass - 0% -

- 0% -

dro - 0% -

clear - 0% -

newable - 0% -

al 144. 00 100% 862. 00

neration Mix Plans Disclosedunder construction: 718MW of coal (540 of which are lignite), underadvanced development: 1800MW of coal and 130 hydro. 5400MW ofcoal planned & 945MW of hydro. Interest in Lignite mining

2 emissions (tonnes) 548,185.00 ED1 cost (m USD) 31







reporting on any CSR issues. Laggard in terms of international CSR and environmental management


emissions data, no information on environmental management or climate change

mate change management Score: 0

nformation at all on climate change. No emisisons data given




Separation of Chairman & CEO: yes, percentage of independent board members: 40%, percentage of independent audit committeemembers: 100%, percentage of independent remuneration committee members: 100%, percentage of independent nominationcommittee members: ND, disclosure of executive and board remuneration: partly


Some local resistance against its Kameng region hydro project, not large-scale.


KSK has nanced the construction of two temples, a marriage hall, water tanks for a remote community and a medical camp. Theseinvestment are philanthropic.





mpany Name (country) Lanco Infratec (India)

/ ISIN: 2 LAIN.BO / INE785C01030

ket Cap US$ 2,765m

nership structure

73.6% in the hands of the promoter group: Prince Stone Investments,Ltd. Owns 45.1%, Lanco Group, Ltd. 13.25%, LCL Foundation4.41%, Rao (Bhaskara G) 2.37%, Rajagopal (L) 2.28%, Rao(Madhusudan L) 2.27%, Sridhar (L) 2.27%

mpany type IPP

siness Model

Integrated infrastructure company with focus on construction, power,roads and property development. According to recent estimates,power assets are about 45% of company value. Also active in powertrading



P disclosure No request to disclose by CDP

G Summary

atively clean IPP in the Indian context due to its high reliance on gas for power generation. Mix will become less favourable in there, when its large expansion in coal red capacity comes on-stream. Clear laggard with regards to internal CSR and environmental

nagement.

neration type 08-’09 (MW) 08-’09 (%) Plans (MW) Consider (MW)s 488.00 95% 368.00 -

al - 0% 6,775.00 -

mass - 0% - -

- 0% - -

dro 10.00 2% 705.00 -

clear - 0% - -

newable 13.00 3% - 250.00

al 5 11 .0 0 1 00 % 7, 48 0. 00 2 50 .0 0

neration Mix Plans Disclosedplans 6775MW of coal, 705MW of hydro and 368MW of gas. 3,913MW are alreadyunder construction. Later will also consider 250MW of wind






mention of Water & Waste treatment


UN Global Compact member. Lanco publishes an annual CSR report that is focused on community investments. Lanco has a CSRmanagement team. But no info on company international CSR activities or management


No information on energy savings in annual report. Only information on environmental and OHSAS certication available. Informationon initiatives at its construction activities and emission data is missing. (Lanco’s agship Kondapalli power plant has ISO 14001:2004certication for Environmental Management, . Lanco’s Aban power plant has ISO 14001:2004 certications.)


Brief mention of climate change in Lanco’s CSR report. No emissions data.


No mention of Health & Safety management, yet Lanco invests in community health programs.Lanco’s agship Kondapalli power planthas OHSAS 18001:2007 for Occupational Health & Safety, and OHSAS 9001:2000 for Quality Management Systems. Lanco’s Abanpower plant hasOHSAS 18001:1999 certications.


Separation of Chairman & CEO: yes, percentage of independent board members: 50%, percentage of independent audit committeemembers: 75%, percentage of independent remuneration committee members: 100%, percentage of independent nominationcommittee members: ND, disclosure of executive and board remuneration: partly.


Lanco Amarkantak Thermal Power Station was criticised for an incident with the World Bank which referred to its coal projects as“clean”. Lanco Infratech is mentioned in a report by International Rivers as being interested in dam projects that destroy the livelihoodsof local people in the Himalayas, but no details are given. Overall modest criticism.


Strong philanthropic activities via the LIGHT foundation. Report of these activites can be found in the annual CSR report.





mpany Name (country) Neyveli Lignite Corporation Limited (India)

/ ISIN: 2 NELG.BO / INE589A01014

ket Cap US$ 5,149m

nership structureCentral government (93.56%), institutional investors (4.39%), non-institutional investors (2.05%) holding company KSK Energy Limited owns55.24%, which in turn is owned by AIM listed KSK Power Venture

mpany type Generation

siness Model lignite mining and power generation



P disclosure No Response

G Summary

m an environmental point of view Neyveli Lignite has a very unfavourable generation mix with a 100% lignite coal. It is not expectedmprove signicantly by its expansion plans. It also runs one of the oldest power plants in the whole country. Its (publicly available)ronmental management is grossly inadequate for such a high impact company.


s - 0%

al (ligtnite) 2,490.00 100%

mass - 0%

- 0%

dro - 0%

clear - 0%

newable - 0%

al 2,490.00 100%


plans another 750MW of lignite coal capacity linked to its mining activities,plus another 3000+MW in planning, partly as JVs. Overall expansionplans are >15`000MW, all lignite or coal with only 2GW hydro and 200MWwind further down on the priority list. In Sept 09, more commitment torenewable was made, plans to commence production of electricity by wind(50MW in an initial stage) by Oct 2010.





disclosure. Ageing machinery is a serious risk. Partly plants are very old, and therefore not only inefcient, but will also have to beaced at some time soon. Risk of disruption in operations when old machinery fails.




y some information on community programs with little relevance to environmental efforts. Neyveli provides no information on how CSRddressed within the company.


Neyveli Lignite has a very unfavourable generation mix (100% lignite coal). Its power plants are old. Some information on restorationof abandoned mine land, afforestation and greening activities around its mines. Its (publicly available) environmental managementis inadequate for such a high impact company. No GHG emissions data or targets. Environmental management is a must for a highimpact activity such as open cast mining. It is telling that NLC has carried out a study on trees’ tolerance to air pollution for part of itsremediation efforts and that the company itself mentions resistance to costs associated with environmental laws.


Considering delaying the shut-down of its oldest TPS – I generation plant, which is at the end of its life as it has been running for over40yrs already. From environmental and climate change point of view, fast replacement by an efcient new plant would be the preferableoption. No emissions data, targets etc.




Separation of Chairman & CEO: yes, percentage of independent board members: 40%, percentage of independent audit committeemembers: 100%, percentage of independent remuneration committee members: 100%, percentage of independent nominationcommittee members: ND, disclosure of executive and board remuneration: partly


Some local resistance against its Kameng region hydro project. In the past, there were serious issues around labor conditions forcontract workers. In April 2008, 13,000 contract laborers at the NLC have staged a demonstration to demand the regularization ofservices as well as housing, medical and transportation provisions and bonuses. Protests of the labour unions against potentialdisinvestment plans by the central government.


Neyveli actively provides welfare services to the community of Neyveli township, most noteworthy would be Neyveli’s contribution tothe education of handicapped children. These investments philantropic.





mpany Name (country) NTPC Limited (India)

/ ISIN: 2 NTPC.BO / INE733E01010

ket Cap US$ 36,594m

nership structureGovernment of India (89.5%), FII (3%), domestic institutions & public(7.5%)

mpany type Power generation, transmission & distribution

siness Model




G Summary

bsolute and relative terms, NTPC is a large polluter. Although expansion plans will tilt the capacity mix a little more towardsewables, it will continue to be heavily dominated by coal. NTPC has implemented a couple of very positive CSR initiatives, but given

igh impact we would expect the company to be even more proactive. It scores as a follower in our ESG scoring. NTPC is involvednumber of controversies that is not surprising for a company of its size.


s 5,515.92 18%

al 25,128.08 82%

mass - 0%

- 0%

dro - 0%

clear - 0%

newable - 0%

al 30,644.00 100%

neration Mix Plans Disclosedunder construction: 11´510MW of coal, 1´920MW of hydro, in addition4´000MW with JVs. 1´000MW of renewables (ex large hydro) in itsbusiness plan





erational efciency metrics: show plant load factor and availability factor of coal based power plants over a 10yr history. Availabilityt its highest value at 92.47%. PLF is relatively high, even though slightly lower than 07/08 at 91.14%. It is signicantly higher than

Indian average of 77.22%. But one has to consider that high PLF might also be related to better fuel availability for a company ofsize and political power of NTPC. Claim that energy conservation parameters like specic oil consumption and auxiliary powersumption have also shown considerable improvement over the years, but do not show any proof. Note that too high PLF is notrable as time for operation and maintenance is important for efcient operation.


Provision of advanced treatment facilities in its Liquid Waste Treatment Plants (LWTP), installation of recycling systems for ash pond efuent called AshWater Recirculation System (AWRS) and installation/ operation of closed cycle condenser cooling water systems with higher Cycle of Concentration(COC) are some of the measures implemented in most stations. Ash Utilization is one of the key concerns at NTPC. NTPC has a strong water andwaste treatment program.


Some good environmental and CSR information on company website and in AR. 3 level approach to CSR: 1) compliance, 2) philanthropy and imagebuilding, 3) innovations & key business strategies. Global Compact member. Some proactive efforts related to resettlement: NTPC has formulatedspecic guidelines for the welfare of Project Affected Persons (PAP’s). It has also undertaken community development activities in and around theprojects. Rehabilitation Action Plans are implemented in most of the projects. Some projects of NTPC were already fully or substantially developed bythe time the 1993 R&R Policy was implemented. The company did a re-assessment of the activities in the older projects and carried out a ‘retrot’ R&Roperation to bridge the gaps wherever they had occurred. NTPC has formulated an “Initial Community Development” (ICD) policy to take up communitydevelopment activities in greeneld/expansion projects. Strong commitment to education.


NTPC has decided to set aside 1% of its distributable prot for research and development including 0.5% for research activities related to ‘clean coal’and climate change initiatives. An Efciency Management System (EMS) has been implemented at all stations to focus on periodic performanceevaluation, analysis and development of action plans for performance restoration. All NTPC power stations have been certied for ISO 14001 & OHSAS18001. According to the company environmental parameters are monitored, but no data on emissions is provided.


No emissions data available. NTPC has decided to set aside 1% of its distributable prot for research and development including 0.5% for researchactivities related to ‘clean coal’ and climate change initiatives.

A fossil fuel red power plant using Super Critical Technology has been approved by UNFCCC for CDM credits.The Center for Power Efciency and Environmental Protection (CenPEEP), set up with technical assistance of USAID/USDOE, has a mandate toreduce GHG emissions per unit of electricity generated by improving the overall performance of coal-red power plants. Various state-of-the-arttechnologies and practices for improvement in efciency and maintenance have been demonstrated in local conditions and disseminated to powerstations through hands-on-training, guidelines and workshops.

An Efciency Management System (EMS) has been implemented at all stations to focus on periodic performance evaluation, analysis and developmentof action plans for performance restoration.International cooperation for climate change has expanded with signing of an agreement between Ministry of Power, NTPC Ltd. and Japan International

Agency for Cooperation (JICA) to undertake a ‘Study on enhancing Efciency of Operating Thermal Power Plants in NTPC-India’.The new NTPC Energy Technology Research Alliance (NETRA) is envisioned as a state of- the-art centre for research, technology developmentand scientic services in the domain of electric power. NETRA has led 12 patent applications for various activities like assessment of high voltagetransformers, y ash based utensil cleaning powder, CO2 capturing Zeolites from ue gas; etc


The company states that it has internal checks to prevent complicity in human rights abuses.


Separation of Chairman & CEO: no, percentage of independent board members: 50%, percentage of independent audit committee members: 80%,percentage of independent remuneration committee members: ND, percentage of independent nomination committee members: ND, disclosure ofexecutive and board remuneration: partly, comments: directors are appointed by the government of India.


Think-tank Center for Global Development issued its list of the world’s worst polluting companies, with China’s state-run Huaneng Power Internationalranking at number one. The list, which is compiled on the basis of factors including carbon emissions, energy generated, intensity, and usage of fossil,hydro, nuclear and other renewable sources puts India’s NTPC third. NTPC is mentioned by NGO International Rivers as being involved in planningdams in the Himalayas that destroy the livelihood of the local population.In January 2008, three people were killed and others injured when police opened re on hundreds of local people protesting outside NTPC´s plant in thestate of Bihar, India. The protesters were demanding electricity supplies from NTPC following acute power shortages in the state. The state governmentaccused India’s UPA-ruled government of discriminating against non-UPA ruled states in the electricity crisis.In June 2007, NTPC has opposed an Environment Ministry’s proposal about early disposal of y ash and lesser storage time. The Environment Ministrysuggested a time line for the clearing of existing y ash. Fly ash is a signicant water, air, and soil pollutant.


Extensive community development programs around its operating stations. NTPC has formulated specic guidelines for the welfare of Project AffectedPersons (PAP’s). It has also undertaken community development activities in and around various projects. NTPC has formulated an “Initial CommunityDevelopment” (ICD) policy to take up community development activities in greeneld/expansion projects. NTPC’s community investments are strategic.





mpany Name (country)Power Grid Corporation of India (India)

/ ISIN: 2 PGRD.BO / INE752E01010

ket Cap US$ 9,421m

nership structure Government of India (86.36%), other (13.64%)

mpany type Transmission

siness Model

Monopoly over the inter-state and inter-regional transmission of poweracross the country. Plus t elecom, connectivity, consultancy, andleasing. transmission network of around 71,500 circuit km. Powergridhas been assigned the job of execution of rural electrication in 68districts covering 87,300 Villages at an estimated cost of about Rs.9,400 Crore. It has established the infrastructure for electrication ofover 22,002 villages in India.




G Summary

company seems to have a solid operational track record. Focusing purely on transmission, Power Grid´s environmental impact isomatically a lot lower than the one of power generating utilities. The company´s is involvement in Burma may be an issue for someponsible investors.

nsmission asset 2009

nsmission lines (ckt km) 71600

mber of sub-stations 122



2 intensity (tonnes/ m USD rev.) 184.00 ED impact on 2008 revenue 1%



d operational track record, maintaining its transmission availability at more than 99%, which is on par with international utilities.sistently outperforms the efciency targets the government sets in MoUs. Has been in the highest bracket, i.e. excellent, of theernment’s public service rating for a couple of years. Data for system losses is missing




me CSR information on the company website and in AR. Certied to Social Accountability Standard SA 8000:2001.


grated management system: ISO 9001:2000 for quality, ISO 14001:2004 for environment management. Development of powers has a huge impact on forests, recently forest involvement which was about 6% in 1998 has been brought down to 2%. Power Gridsistently outperforms the efciency targets the government sets in MoUs. Current principles guiding environmental managementin line with government regulation. Power Grid mentions that it is investing in R&D on Super Grid comprising 1200kV UHVAC,ch would be more energy efcient.


R&D on Super Grid comprising 1200kV UHVAC, which would be more energy efcient. No ref erence to climate change. No emissionsdata.


OHSAS 18000:1999 for health and safety management. Environment & Social Policy Statementwas revised in 2005. It’s based on the basic principles Avoidance, Minimization and Mitigation.Gives information on employee training and development.


Separation of Chairman & CEO: no, percentage of independent board members: 50%, percentage of independent audit committeemembers: 67%, percentage of independent remuneration committee members: ND, percentage of independent nomination committeemembers: ND, disclosure of executive and board remuneration: no, ownership structure: The Indian government owns 86.36%,comment: 2 out of 12 are government sent directors.


Signicant involvement in Burma: In July 2008 the Export-Import Bank of India signed a line of credit agreement with Myanmar ForeignTrade Bank and the Power Grid Corporation of India Ltd. was to undertake the construction of three transmission projects in Myanmar.In February 2009, Power Grid and state-run Transmission Corporation were criticized for allegedly attempting to erect pylons oncommunity property, without compensating the land owners.


POWERGRID organizes regular health camp and blood donation camp in collaboration with leading medical institutes for free medicalcheck-up of villagers and also provide free medicines. Apart from this women organization of POWERGRID also organizes variouswelfare camp for the welfare of communities by providing vocational training and distribution of articles like swing machines, cycles etc.





mpany Name (country) Reliance Infrastructure Ltd (India)

/ ISIN: 2 RLIN.BO / INE036A01016

ket Cap US$ 4,963m

nership structureReliance ADA (37.45%), institutional public (44.68%), non-institut ional public(17.11%), other (0.46%)

mpany type Integrated (generation, transmission, distribution, trading)

siness Model

formerly Reliance Energy Limited. The engineering, procurement,construction (EPC) segment does value-added services in construction,erection and commissioning. Other operations include development,operation and maintenance of toll roads, metro rail transit system and realestate projects, including special economic zone.




G Summary

ance Infrastructure has done some efforts in environmental and h6S management and scores in the mid-range of the sector. It reportsemissions data and has reduced SOx emissions signicantly by installing ue gas desulphurization systems. On the negative side, the

mpany does not address climate change as an issue and has high losses in its distribution system.


s 433.32 46%

al 499.26 53%

mass - 0%

- 0%

dro - 0%

clear - 0%

newable 9.42 1%

al 942.00 100%

neration Mix Plans Disclosed100MW gas or naphtha expansion planned at Goa facility, most otherexpansion in distribution segment and growth in EPC business

2 emissions (tonnes) 6036127 ED1 cost (m USD) 10282

2 intensity (tonnes/ m USD rev.) 19123 ED impact on 2008 revenue 103%



&C losses for distribution companies: 20.59% at BRPL, 24.02% BYPL, SOx absorption: more than 90%


mention of water and waste management


me CSR info on the websites, but no targets, quantitative data etc.


Reliance has an environmental board committee. Information on environmental management is available on the company website.Yearly publication of CO2 emissions. Flue Gas De-sulphurisation seems to have been introduced in 2008/09. No/little mention ofclimate change.


no mention of cliate change. Both the Flue Gas De-sulphurisation units were in service throughout the year with SOx absorption morethan 90% as stipulated. Flue Gas De-sulphurisation seems to have been introduced in 2008/09 as SOx levels dropped from 29.4 theyear before to 3.92. Further detailed emissions data on p38/39 of AR. There is no reportable accident in more than 17.5 million manhours


Reliance Infrastructure formulated a health and safety policy to conrm its commitment to H&S. No reportable accident in more than17.5 million man hours.


History of Corporate Governance problems due to controlling family diagreement (the two Ambani brothers) Separation of Chairman &CEO: no, percentage of independent board members: 50%, percentage of independent audit committee members: 100%, percentageof independent remuneration committee members: 100%, percentage of independent nomination committee members: 100%,disclosure of executive and board remuneration: yes.


Only some general criticism on planned hydro projects in India that displace people and destroy local livelihoods.


Reliance Infrastructure Ltd. has formulated policies for social development. These policies have resulted in both strategic andphilantropic investments in its direct community.





mpany Name (country) Reliance Power Ltd (India)

/ ISIN: 2 RPOL.BO / INE614G01033

ket Cap US$ 7,379m

nership structureReliance ADA Group (47.68%), AAA Project Ventures Pvt. Ltd. (42. 23%),other institutional investors(5.58%), other non-institutional investors (9.64%)

mpany type IPP

siness Model development, construction and operation of power projects




G Summary

ance Power does not yet have any operational power capacity, which makes it difcult to assess its performance in managing

ronmental and social issues. The company claims to have a pro-active Rehabilitation and Resettlement policy in place, but there isa petition pending with the High Court amongst others because of claims of no proper public involvement processes.

neration type FY 2012 (MW)

s -

al 2,160.00

mass -

-

dro -

clear -

newable -

al 2,160.00


no capacity operational, yet. If projects are executed accordingto plan: by FY12 2160MW of domestic coal (100%), by FY2014 4200MW (36%) gas and 7440MW (64%) coal, by FY20183300MW, (10%) hydro, 10280MW (32%) gas, 18580 MW (58%)coal


2 intensity (tonnes/ m USD rev.) 0 ED impact on 2008 revenue 0

2 damage cost (m USD) 0 ED impact on 2008 EBITDA 0

erational efciency metricsmetrics available, generation assets or not yet in operration.




ance Power does not yet have any operational power capacity, which makes it difcult to assess its performance in managingronmental and social issues. Reliance Power is committed to adopting Rehabilitation & Resettlement (R&R) policies which goond the norms set out by the Government and to ensure that they meet the development needs of the local community. Claims to

ow a participatory development-oriented approach that strengthens the bond with the local communities.


Applying for CDM credits for part of their projects including Sasan and Krishnapatnam Ultra Mega Power Projects (UMPPs) as theprojects will employ supercritical coal technology. Also its hydroelectric power projects under implementation and the gas basedgeneration projects will apply for CDM credits. No emissions data available yet.


Applying for CDM credits for part of their projects including Sasan and Krishnapatnam Ultra Mega Power Projects (UMPPs) as theprojects will employ supercritical coal technology. Also its hydroelectric power projects under implementation and the gas basedgeneration projects will apply for CDM credits. Some sources criticise the eligibility of coal-red power plants for CDM credits. Noemissions data


Safe power generation is one of Reliance power’s missions

Corporate governance Score: 9Separation of Chairman & CEO: yes, percentage of independent board members: 50%, percentage of independent audit committeemembers: 75%, percentage of independent remuneration committee members: 67%, percentage of independent nomination committeemembers: 67%, disclosure of executive and board remuneration: ND.


Large-scale development of hydro power in Arunachal Pradesh has been heavily critizised for destroying the livelihoods of local people.Some sources criticise the eligibility of coal-red power plants for CDM credits. A petition with the High Court is still pending that ask thecourt to withdraw the Environmental Impact Assessment of Reliance Power´s 1000MW Siyom Hydro Electric Project.


A compensation package for project affected families is being developed with inputs from various key stakeholders, including seniordistrict ofcials, representatives of local communities and credible outside agencies such as The Energy Research Institute (TERI).





mpany Name (country) Tata Power (India)

/ ISIN: 2 TTPW.BO / INE245A01013

ket Cap US$ 6,695m

nership structureTata Group companies (33.12%), Life insurance corp. Of India(11.71%), others (55.17%)


siness Model

power generation, transmission (1200km) and distribution (800´000customers). Power trading. Strategic interest in Indoneisan coalassets. development & manufacturing of tanks/weapons in its StrategicElectronics Division working for the Indian defence sector.



P disclosure Yes, but not public

G Summary

a Power performs relatively well in our ESG scoring. Tata Power has a clear strategy on how to deal with climate change andatives to reduce emissions of SO2 and NOx. The company has signicantly lowered its losses in its Delhi distribution system. Itns to publish its second sustainability report in 2009. But there is signicant room for improvement: Disclosure on GHG emissionsld be appreciated. And in spite of its new super-critical coal project’s application for CDM credits, its generation mix will becomee CO2 intensive with its signicant investment into coal red generation.


s 167.10 6%

al 1,169.70 42%

mass - 0%

am (Industrial) 83.55 3%

724.10 26%

dro 445.60 16%

clear - 0%

newable 167.10 6%

al 2,785.00 100%

neration Mix Plans Disclosed4866MW coal, 30MW wind and 111MW of waste gas underconstruction





nsmission: 1200 km, distribution: 800,000 customers, generation availability wind: 94-99%, AT & C losses (FY 09): 15.2%,nsmission grid availability: 99.31%. Generation availabilities and plant load factors for the thermal power plants. For its North Delhiribution subsidiary owned jointly with the Delhi government, the AT & C losses have been reduced from 18.5% at the end of FY084% at the time of takeover of the business in July 2002) to around 15.2% at the end of FY09, against the regulatory target of

35% at the end of FY09 and 17% at the end of FY11. This has been achieved by measures like energy audits, replacement of olders with theft-proof electronic meters, automated meter reading, metering of previously unmetered consumers who were earlierrged a at rate, aggressive enforcement and recovery and awareness drives. Transmission grid availability in Mumbai was 99.31%against MERC norm of 98%. Powerlinks Transmission Limited, a joint venture with Power Grid Corp of India, that delivers electricitym Bhutan, has 99.73% average availability


Tata Power has invested in streamlining water use


Published a sustainability report in 2003 according to GRI guidelines, plan to publish another one in 2009. Tata Power also publishesits Corporate Sustainability Policy, its environmental and health & safety policies. Tata Power has creat ed a Sustainability Council(SC) under the leadership of Mr.Agrawala, Executive Director (ED) of Business Development and Strategy. The whole Tata Group hasdenitely worked well on their image: In BT´s 2008 survey of corporate leaders in sustainable development, Tata Group ranked by farrst with 31% vs Reliance with 13% at the second place


Addresses the issue of climate change in its AR and on the web and has dened a strategy on how to deal with it. Tata Power hasinvested heavily in pollution control equipment. Tata Power: “will strive to go beyond simple compliance and excel in its environmental

performance. Initiatives for voluntary reduction in SO2, SPM, NOx and CO2 emissions are a part of ongoing strategy”. This includesthe application of super-critical coal technology, further exploring renewables opportunity, working towards energy efciency in plantsand ofces, awareness raising on energy savings in schools. Unfortunately no underlying data is provided. Some of its wind projectsare CDM registered. No emissions data yet. No environmental management system in place.


Addresses the issue in its AR and on the web and has a clear strategy on how to deal with climate change. This includes theapplication of super-critical coal technology, further exploring renewables opportunity, working towards energy efciency in plants andofces, awareness raising on energy savings in schools. Some of its wind projects are CDM registered and they are applying for thenew super-critical coal project as well. Publicly available data on CO2 emissions would be appreciated. Apparently Tata Power hascommissioned Ernst & Young to measure their carbon footprint.


Tata Power has a Health & Safety Policy, but certication of the workplace safety system is missing.


Separation of Chairman & CEO: yes, percentage of independent board members: 50%, percentage of independent audit committeemembers: 67%, percentage of independent remuneration committee members: 33%, percentage of independent nomination committeemembers: ND, disclosure of executive and board remuneration: yes.


Critisism against the World Bank and Tata Power for promoting Tata´s 4000MW super-critical coal project as ‘clean’. Also, opponents tothe project at a local village claim that it will be detrimental to the local environment and affect the livelihoods of about 20,000 villagers.


Through Tata’s Corporate Sustainabiliy Initiatives program many strategic investments have been made in health care, education,clean water and accessibility.





mpany Name (country) Torrent Power (India)

/ ISIN: 2 TOPO.BO / INE813H01021

ket Cap US$ 3,083m

nership structureTorrent Private Limited (52.78%) , Life Insurance Corp. of India(9.56%), Gujarat State Investments (9.92%), Reliance Capital Trustee(3.07%), public (24.67%)


siness Modelgeneration, transmission and distribution. T&D business serves 1.97million customers in the cities of Ahmedabad, Gandhinagar and Surat




G Summary

gards in our assessment. Its generation capacity is dominated by coal. On the positive side, its T&D losses are among the lowest incountry at only 7.5% for the districts that they own for some time.


s 100.00 20%

al 400.00 80%

mass - 0%

- 0%

dro - 0%

clear - 0%

newable - 0%

al 500.00 100%

neration Mix Plans Disclosed1147.5 MW under implementation, advanced class CCPP based onLNG (eligible for CDM carbon credits). Another 6.875GW in earlyplanning stages: 2GW of coal, 4.875GW of gas





mber of T&D customers: 1.97 million, T&D losses: 7.51% (low compared to national average). Torrent Power Limited has one of theest T&D losses in the count ry. Took over the Bhiwandi Distribution Franchise in Dec 2006. Here T&D losses are still signicantlyher. PAF and PLF of its 2 generation plants were 93.85% and 91.55%




mprehensive information on Torrent’s CSR program available on its webpage. However its CSR program is mainly f ocused onmmunity investments. Apparently very efcient in disaster management, such as during oods or an earth quake


Environmental initiatives include: installation of 90 m. tall chimneys for better dispersion of ue gases, use of very high efciencyelectrostatic precipitators to remove y ash from gases emitted from chimneys, regular monitoring of pollutants like Sulfur Oxides,Nitrogen Oxides and Stack Pollution Monitoring in ue gases. But no systematic information on environmental performance.


no mention


No mention of Health & safety management


Separation of Chairman & CEO: no, percentage of independent board members: 64%, percentage of independent audit committee

members: 100%, percentage of independent remuneration committee members: ND, percentage of independent nomination committeemembers: ND, disclosure of executive and board remuneration: partly, comment: 1 director by Gov of Gujarat.


None found


Torrent made several philantropic investments through ‘Sparsh’, its CSR Initiative, it paid for the construction of a public garden inGujarat, donated money in the aftermath earthquakes, helped in the construction of a hospital. These investments were not strategic.





mpany Name (country) Korea Electric Power Corporation (South-Korea)

/ ISIN: 2 015760.KS / KR7015760002

ket Cap US$ 17,639m

nership structureKorea Finance Corporation (29.96%), Ministry of Strategy and Finance(21.12%), foreigners (23.79%), others (25.14%)

mpany type Power generation, transmission and distribution

siness Model

State-owned power monopoly in Korea that owns, together with itsgeneration subsidiaries, approximately 87.6% of the total electricitygenerating capacity in Korea (as of end 2008) and 100% oftransmission/distribution. The company spun off its power generationdivision into 6 afliates (Genco) in 2001. Korea Hydro & NuclearPower Co., Ltd. is the wholly owned nuclear and hydroelectric powergeneration subsidiary. KEPCO also wholly own its ve non- nucleargeneration subsidiaries, Korea South-East Power Co., Ltd, KoreaMidland Power Co., Ltd., Korea Western Power Co., Ltd., KoreaSouthern Power Co., Ltd., and Korea East-West Power Co., Ltd. The

Company operates three segments: transmission and distribution,power generation and other.



P disclosure Yes

G Summary

co scores as a leader in environmental issues among the sector, but there are still some open questions regarding their ESGormance. The company reports very detailed on their CO2 emissions. They have a voluntary target to cut the 2000 emissionnsity of 0.424 kgCO2/kWh by 30%. But as of 2008, the gure has risen to 0.459 kgCO2/kWh, so it is not clear they will achieve theiret in spite of a planned increase in nuclear and renewables capacities. Whilst they have been doing relatively detailed sustainability

orting until 2007, it is not clear if they still follow up with the activities described there. There is more environmental information onlevel of its generation companies, but here quality varies widely. The company has some involvement in Burma, which may be ablem for some responsible investors. Corporate Governance is lacking in transparency.


s 13,097.60 20%

al 24,230.56 37%

mass - 0%

4,584.16 7%

dro 4,453.18 6.80%

clear 18,991.52 29%

newable 65.49 0.10%

al 65,488.00 100%

neration Mix Plans Disclosed6800MW of nuclear power, 2270 MW gas, 805MW hydro, 2853 coal(probably only part of the whole expansion plans)





D losses: 4.01%, distribution automation ratio: 63.5%, CO2 emission intensity: 459 ton-CO2e/GWh


KEPCO has installed comprehensive waste water treatment systems in its plants.


KEPCO provided detailed sustainability reports following GRI guidelines between 2005-2007. In 2005, KEPCO introduced a sustainability managementframework that focuses on 4 key areas; economy, environment, society and human resources. The company publishes very detailed information on theirCO2 emissions. Have minimized the emission of harmful substances by installing desulphurization facilities and comprehensive waste-water treatmentsystems in its power stations. Relatively detailed information on environmental management at the level of its generation companies. But quality varies,with some of the Genco´s quite proactive and providing updated data, whilst others seem to have updated the pages in 2004 or 2005 and not since


Kepco produces 27% of Korea´s CO2 emissions. Climate change related targets: Kepco plans to increase the number of nuclear power plants fromthe current 20 to 28 in 2020 and the portion of power generated from renewable energy sources to 9.96% in 2020. KEPCO plans to bring down theaverage emission per unit generated to: 0.296 kgCO2/kWh in 2020 (from 0.424 kgCO2/kWh in 2009). In 2005, KEPCO and the GENCOs establishedthe Climate Change Commission to formulate comprehensive measures against climate change. The consultative body focuses on climate change andrenewable energy development, which comprises the Climate Change Convention Working Committee and the Renewable Energy Working Committee.


Kepco produces 27% of Korea´s CO2 emissions. At the Copenhagen climate conference it will be decided whether Korea will become an Annex Icountry.CO2 emission intensity: 459 ton-CO2e/GWh. 5% increase in CO2 emissions vs last year with 4.85 increase in electricity generation.Climate change related targets: Kepco plans to increase the number of nuclear power plants from the current 20 to 28 in 2020 and the portion of powergenerated from renewable energy sources from 1.26% in 2000 to 9.96% in 2020. Voluntary target: the 2000 emission unit of 0.424 kgCO2/kWh will bebrought down to 0.296 0.424 kgCO2/kWh in 2020, cutting the gure by 30%. They are planning a carbon emissions reduction through the expansion ofrenewable and nuclear energy plants. The amount of power generated from renewable energy sources is expected to go up from 3,196 GWh in 2000 to47,637 GWh in 2020 while electricity generated from nuclear energy is to increase from 108,964 GWh in 2000 to 249,847 GWh in 2020.KEPCO operates a high efciency equipment support system for customers to increase energy efciency and is developing IT-based demand-sidemanagement technologies including remote management of building heating/cooling load.It is are establishing one of the world´s rst Smart Grid verication complex on Cheju Island for completion in 2013In 2005, KEPCO and the GENCOs established the Climate Change Commission (Chairman: Executive Vice President, seven members: themanagement of generation companies and the President of Korea Electric Power Research Institution, Secretary General: Vice President of theTechnology and Policy and Planning Department) at the Power Group level to formulate comprehensive and joint measures against climate change.The consultative body focuses on climate change and renewable energy development, which comprises the Climate Change Convention WorkingCommittee and the Renewable Energy Working Committee. The Committees meet at least once every quarter.Very detailed CO2 emissions data. Measures to improve energy efciency: have distributed high-efciency equipment and LED lighting devices toconsumers while improving transmission and distribution loss rate, implementing an energy portal system for more comprehensive energy management,running an odd-even car restriction system and promoting the BMW (“bicycle, metro and walking) Movement.


No mention of Health & safety management


Separation of Chairman & CEO: no, percentage of independent board members: ND, percentage of independent audit committee members: 0%,percentage of independent remuneration committee members: ND, percentage of independent nomination committee members: ND, disclosure ofexecutive and board remuneration: no


In 2008 there were accusations of corruption at Kepco. Some involvement in Burma: They performed a Power System Development Study in thecountry. Its partly owned subsidiary KOGAS entered into a gas eld development project in the A1/A3 Block of Myanmar’s northwestern sea inNovember 2001, which is it exploring with a JV now.In mid 2009, concerns were raised about the environmental performance of KEPCOs coal red power plant in Naga City in the Philippines. For exampleNGO EcoWaste Coalition is opposing a planned coal ash dump site, which would manage coal combustion waste from the coal power plant in thePhilippines, as the NGO is worried about potential toxic releases and possible health and environmental problems.


KEPCO Social Service Teams perform philantropic social work. Through Mecenat KEPCO invests in art projects. KEPCO commits itself to social serviceactivities, which are now referred to as “The Third Management”.





mpany Name (country) MMC Corporation Berhad (Malaysia)

/ ISIN: 2 MMCB.KL / MYL2194OO008

ket Cap US$ 2,099m

nership structure

Seaport Terminal Johore (51.76%), Permodalan Nasional Berhad(PNB) / Amanah SahamBumiputera (ASB) 21.52%, Employees Provident Fund Board 7.58%,other (19.14%)

mpany type IPP

siness Model

investment holding, construction, mining and mineral exploration.Four segments: transport and logistics, energy and utilities,engineering and construction, and others. Key businesses include thePort of Tanjung Pelepas (Malaysia’s largest container terminal), JohorPort (Malaysia’s leading multi-purpose port), Malakoff (Malaysia’slargest independent power producer + water provider) and GasMalaysia (Peninsular Malaysia’s sole supplier of natural gas to thenon-power sector). MMC has interests in IJM, one of Malaysia’spremier construction companies, and Zelan Construction, a specialistcontractor for power plants. More than 1/3 of 2008 prot before taxcame from Malakoff, other large contributions by Gas Malaysia andthe Johor Port




G Summary

closure on ESG issues is insufcient and the company scores among the laggards in our assessment


s 1,356.91 53%

al 1,203.29 47%

mass - 0%

- 0%

dro - 0%

clear - 0%

newable - 0%

al 2,560.20 100%

neration Mix Plans Disclosed no disclosure





mention of operational metrics. Malakoff claims to be an efcient operator, but no proof/data is given


C operates water desalination and purication plants. However, there is no mention of what is done to the water used during thewer generation process.


Some info on the website on their education and corporate giving programs. Disclosure on ESG issues is insufcient.


MMC presents itself as an environmentally conscious company, however there is no publicly disclosed information on this. No climatechange management activities.


no emissions data. No reporting and no management system in place.


No mention of Health & Safety management.


Separation of Chairman & CEO: yes, percentage of independent board members: 33%, percentage of independent audit committeemembers: 100%, percentage of independent remuneration committee members: 33%, percentage of independent nominationcommittee members: 67%, disclosure of executive and board remuneration: partly, comment: CEO and executives join all but one auditcommittee meeting. Legal dispute with Tenaga Nasional Berhad on meter ing.


Involvement in Burma via its power plant engineering subsidiary that has built 2 small hydropower plants in Burma. The projects arecompleted.


Under the New Straits Times’ School Sponsorship Programme MMC aims to promote the study of English. Other investments arephilantropic in nature and can be seen as part of MMC’s marketing campaign.





mpany Name (country) Sarawak Energy Berhad (Malaysia)

/ ISIN: 2 SARA.KL / MYL2356OO003

ket Cap US$ 1,232m

nership structureState Financial Secretary, Sarawak (64.65%), employees provident fund(3.71%), Cimsec nominees (3.55%), Multi-purpose holdigs Berhad (2.99%),other (25.1%)


siness ModelThe Company’s principal activities are as the electric power utility ofSarawak and as an Independent Power Producer (IPP). Also steelfabrication and galvanising, engineering and other related support services.



P disclosure Yes

G Summary

closure on ESG issues is insufcient and the company scores among the laggards in our assessment. Sarawak Energy has answeredCDP questionnaire, where the company discloses its CO2 emissions but give relatively little further information. Sarawak Energy isect to very strong criticism on its hydro expansion plans on Borneo.


s 546.10 43%

al 482.60 38%

mass - 0%

152.40 12%

dro 88.90 7%

clear - 0%

newable - 0%

al 1,270.00 100%


Have a target of installed capacity of 6,000MW by 2015 and 10,000 MWby 2020. Have commenced the construction of the 944 MW Murum HydroElectric Power project. They state in the 2008 AR, that the construction ofLimbang hydro dam (195MW) Trusan and Lawas hydro dam (300 MW),Baleh (1400 MW), Metjawah (300 MW) and others will follow suit.


2 intensity (tonnes/ m USD rev.) 11075 ED impact on 2008 revenue 61%



mention of operational metrics.


mention of water and waste management.


rse information on community activities available in Annual Report 2008.


e information given


The only Malaysian electric utility and one of the few Asian utilities to have answered CDP9, already answered the 2008 questionnaire.Emissions data given for 2007: 3`944`381 t CO2 emissions vs 3,537,286 metric tons CO2 in 2005. We would appreciate it, if for the2007 data, there was also disclosure on energy generated to be able to compare CO2 intensity. Registering their rst CDM projectbased on CC gas turbines. State that they undertake the following activities to reduce CO2 emissions / increase energy efciency, butno further concrete information is given:(i) Conversion of Open Cycle to Combined Cycle Power Plant.(ii) Implementing biomass power generation.(iii) Rehabilitation of mini hydro stations and construction of new ones.(iv) Efciency Improvement for Power Plants.(v) Proposal for Rural Stand-alone Renewable Hybrid Systems.(vi) Incorporate Energy Efciency for New Ofce Buildings.(vii) Study the possibility of adopting carbon capture and sequestration technologies.(viii) Study the possibility of utilizing power plant CO2 emissions for algae cultivation to produce biofuel in future.(ix) Adopting fuel cell technologies as cleaner way to generate electricity and efcient use of gas fuelHave one CDM project, where they converted two existing open-cycle gas generating sets in the Bintulu Power Station to one block

of combined-cycle power generating plant with a total capacity 330 MW of which 110 MW is new generation. In the 2008 annualreport they state that this project is eligible for CDM because it generates electricity without polluting the environment with greenhousegases, which is not quite correct as it just generates less emissions.


No mention of Health & Safety management.


Separation of Chairman & CEO: yes, percentage of independent board members: 50%, percentage of independent audit committeemembers: 67%, percentage of independent remuneration committee members: 67%, percentage of independent nominationcommittee members: some as remuneration committee, disclosure of executive and board remuneration: partly.


heavily criticised for the development of hydro dams: In January 2009, the Malaysian government has given it’s approval for SarawakEnergy and Tenaga Nasional to take over the operation of the controversial Bakun hydroelectricity project and develop the proposed700 kilometre undersea transmission cable link from eastern Sarawak state on Borneo island to Peninsular Malaysia. The state-owned company Sarawak Hydro is expected to complete construction and commissioning of the dam in 2010. Environmentalists havecontinued to oppose the project due to the dam’s ooding of “an area the size of Singapore”, the forced relocation of 10,000 people,associated environmental impacts, and concerns about the earthquake-prone nature of the undersea cable’s route. Apparently, Sarawak Energy has a second highly controversial dam project under planning, i.e. the 220MW Tutoh dam, which mightpartly ood the UNESCO World Heritage-status of Mulu National Park in Sarawak. Opponents, including NGO Bruno Manser Group,have also stated that it will force the relocation of local indigenous groups and affect the native bat population.Sarawk Energy has plans for 11 further hydro plants on Borneo, despite the fact that Bakun dam alone has the capacity to producesignicantly more power that consumed today in Sarawak. The hydropower projects scheduled for the 2008 to 2020 period by

Sarawak Energy have a power generation capacity of 7000 MW. Sarawak’s energy consumption amounted to 1120 MW in 2005 andis expected to rise to 1550 MW by the year 2010. While the Sarawak government rushes to set up energy-intensive industries, excessproduction is planned for export to West Malaysia, Brunei and Kalimantan.In contrast to mainland Malaysia, apparently in Borneo, Environmental Impact Assessments do not include the need for publicconsultation. In Sarawak, power, industrial and palm oil projects have frequently been criticised to be harmful to the environment,intransparent and not respecting the rights of indigenous people.


Sarawak has organized sports events and launched an English development program, in addition to ongoing community supportprojects of a philantropic nature.


Note 2: Have also commenced the construction of the 944 MW Murum Hydro Electric Power project. They state in the 2008 AR, thatthe construction of Limbang hydro dam (195MW) Trusan and Lawas hydro dam (300 MW), Baleh (1400 MW), Metjawah (300 MW)and others will follow.




mpany Name (country) Tanjong Public Limited Company (Malaysia)

/ ISIN: 2 TJPL.KL / GB0008722323

ket Cap US$ 1,924m

nership structureUsaha Tegas Sdn Berhad (30.9%), Ultimate Corporation Sdn Berhad(7.53%), Marlestone Investment Limited (4.0%), others (5.57%), free oat(56%)

mpany type Power generation

siness Modelinvestment holding company, engaged in power generation, gaming,leisure and property investment. Power generation contributes around80% to operating prot



P disclosure No disclosure

G Summary

jong Public´s generation mix is relatively favourable with respect to CO2 emissions as it is based to 100% on natural gas. But itslosure on ESG issues is insufcient and the company scores among the laggards in our assessment.


s 3,951.00 100%

al - 0%

mass - 0%

- 0%

dro - 0%

clear - 0%

newable - 0%

al 3,951.00 100%


Currently 100% gas (1490 MW in Malaysia, 1365 MW in Egypt, 200MW of ownership of combined power and desalination project in AbuDhabi, 375 MW in Egypt, 248+198+36 MW Combined Cycle Gas Turbine(CCGT) in Bangladesh, 36 MW in Pakistan) - busy integrating currentacquisitions. No information about longer term plans.

2 emissions (tonnes) 4,562,723.00 ED1 cost (m USD) 199.002 intensity (tonnes/ m USD rev.) 5,424.00 ED impact on 2008 revenue 24%



ghted average availability at 92.8% in 2009 vs 88.4% in 2008


jong owns and operates a water desalination plant, but doesn’t refer to its treatment of waste and water.


y information on the usual community programs. No mention of CSR in leisure, power and gaming operations


The Group’s power plants in Malaysia, Egypt, the UAE and Bangladesh are ISO 14001 Environmental Management Systemscertied. They benchmark themselves against current international best practices. Claim that they roll out re drills, rst aid training,cardiopulmonary resuscitation training, safety and health talks as well as plant evacuation exercises at various properties and that theyensured that equipment and building safety systems were functioning properly and were well maintained. the Group’s power plants inMalaysia, Egypt, the UAE and Bangladesh are ISO 14001 Environmental Management Systems certied


No information available. No emissions data


The Group’s power plants in Malaysia, Egypt, Abu Dhabi and Bangladesh continue t o maintain their OHSAS 18001 OccupationalHealth and Safety Management System. Committed to implementing stringent Occupational Safety and Health (“OSH”) practices. Theybenchmark themselves againstcurrent international best practices. Claim that they roll out re drills, rst aid training, cardiopulmonary resuscitation training, safetyand health talks as well as plant evacuation exercises at various properties and that they ensured that equipment and building safetysystems were functioning properly and were well maintained.


Comment: has won awards for good IR and CG, e.g. Finance Asia 2006 No 4 in “Best Corporate Governance”, AsiaMoney 2008No1 “Best IR in Malaysia” etc. Separation of Chairman & CEO: yes, percentage of independent board members: 60%, percentageof independent audit committee members: 67%, percentage of independent remuneration committee members: 67%, percentageof independent nomination committee members: 67%. Disclosure of executive and board remuneration: partly, ownership structure:Usaha Tegas Sdn Berhad owns/controls 30.9%, Ultimate Corporation Sdn Berhad owns 7.53%, Marlestone Investment Limited 4.0%, 6others <1%.


Gaming business potential exclusion criteria. Otherwise nothing found


Some strategic investments in the form of educational scholarship at all leves of schooling. However most of the communityinvestments are philantropic.





mpany Name (country) Tenaga Nasional Berhad (Malaysia)

/ ISIN: 2 TENA.KL / MYL5347OO009

ket Cap US$ 10,605m

nership structureKhazanah Nasional Berhad (37.8%), Employees provident fund board(13.66%), Amanah Raya Nominees (Tempatan) SDN BHD (9.97%), other s(38.57%)


siness Model

In addition to electricity generation, TNB manages and operates theNational Grid, a transmission network that is also interconnected toThailand and Singapore. The Company’s subsidiaries principal activitiesinclude operation of power plant and generation of electricity; investmentholding; purchase and supply of fuel and coal for power generation;Generation and supply of various energy sources and provision of relatedtechnical services, and research and development, consultancy and otherservices

an Utilities Environment and Social Rating 15%porate Governance Rating 67%


G Summary

company’s disclosure on ESG issues is insufcient and it scores among the laggards in our assessment. System losses in its T&Dems are in the middle of the sector in Asia.


s 5373.9 45%

al 4060.28 34%

mass 0 0%

477.68 4%

dro 2030.14 17%

clear 0 0%

newable 0 0%

al 11,942.00 100%

neration Mix Plans Disclosed(current gures are installed capacity, no data on attributable capacity). NOdata on expansion plans given





em losses at 18.07% in 08 (vs 17.57& in 2007 and 18.81% in 2006)




me information on CSR activities and environmental management on the company’s website and in its annual report. Proud of pastevements on rural electrication especially in remote islands. Focus is on community programs and philanthropy.


Some general information on environmental management, e.g. one plant ISO 14`001 certied, other plants are now implementing ISO14´001 based EMS. It’s disappointing that, as Malaysia’s largest power producer, the company does not at all address issues such asSO2 emissions, or use of its waste ash in coal red plants


no information. No data on emissions


Company wide H&S management system. The H&S management is now being brought to the OHS 18´000 standard.



members: 100%, percentage of independent remuneration committee members: 60%, percentage of independent nominationcommittee members: same are remuneration committee, disclosure of executive and board remuneration: partial


Controversies: highhigh: repeated criticism for planned coal-red power plants: In 2009, Malaysian companies Jimah Energy Ventures and TenagaNasional have been criticized for the proposed Jimah coal-red power plant to be located in Port Dickson in Malaysia’s state ofSelangor. The NGO Malaysian Nature Society, local residents and tourism developers claimed that the plant would have ecologicaleffects by disturbing marine ecosystems and causing declines in sh populations, add to climate change and pose health risks byemitting pollutants, and affect the eco-tourism potential of the area. Jimah Energy Ventures stated that approval was obtained from theDepartment of Environment in January 2005. Also, in 2009, locals on Sabah have objected to Tenaga Nasional Bhd’s (TNB) proposedcoal-red power plant, which allegedly cont radicts the objectives of The National Green Technology Policy. They are concerned aboutpotential pollution they believe would be caused by the plant.In Jan 2009, The Malaysian government has given it’s approval for Sarawak Energy and Tenaga Nasional to take over the operationof the controversial Bakun hydroelectricity project and develop the proposed 700 kilometer undersea transmission cable link fromeastern Sarawak state on Borneo island to Peninsular Malaysia. The state-owned company Sarawak Hidro is expected to completeconstruction and commissioning of the dam in 2010. Environmentalists have continued to oppose the project due to the dam’s oodingof “an area the size of Singapore”, the forced relocation of 10,000 people, associated environmental impacts, and concerns about theearthquake-prone nature of the submarine cable’s route.


Tenaga invests heavily in education. The Tenaga Nasional Foundation offered around 900 loans to univeristy students. This investmentis strategic.





mpany Name (country) YTL Power International Berhad (Malaysia)

/ ISIN: 2 YTLP.KL / MYL6742OO000

ket Cap US$ 4,312m

nership structureYTL Corporation Berhad (50.99%), Employees Provident Fund Board(11.39%), other (37.62%)


siness Modelinvestment holding company. The Company is organized into t hree mainbusiness segments: investment holding, power generation, and sales ofwater and disposal of waste water



P disclosure No request for disclosure by CDP

G Summary

Power International´s ESG performance scores in the mid-range when compared to the sector. Its parent company publishes anual sustainability report. There is detailed emissions data on some of the company’s plants, but is shows little improvement. Itsuisition of Power Seraya in Singapore has changed its generation mix towards fuel oil, even though the company prefers using its gasd plants in Singapore.


s 2,164.05 45%

al 384.72 8%

mass - 0%

2,260.23 47%

dro - 0%

clear - 0%

newable - 0%

al 4,809.00 100%

neration Mix Plans Disclosed none disclosed, would probably be through acquisition




The main activity for YTL Power International is selling water and disposing of waste water. There is a signicant external cost forer abstraction which makes up 96% of the total direct environmental cost of YTL Power here.


mention of operational metrics.


’s water and waste management program is one of the most comprehensive of all Asian utilities. PowerSeraya has developed andemented two projects, namely a rainwater recovery system and a modied drainage system with wastewater being reused for cooling

poses. Its desalination plant has also reduced YTL’s reliance on Singapore’s freshwater resources. Power Seraya has used GRIorting Guidelines.


Corp. publishes a annual sustainability report. Due to its broad business portfolio, it is difcult to keep track of the power division’sormance and it is unclear if CSR aspects are addressed systematically. However, YTL seems serious about CSR reporting.


Emissions data: yes, NOx, SO2 and PM for its Jawa plant. But little improvement in performance. Malaysian plants follow nationaland World Bank emission limits. Jawa plant is ISO 14`001 certied and has received a Green Rating by the Indonesian Ministry ofEnvironment under its Environmental Rating Programme. Active efforts to improve operating efciency in its Jawa power plant. Reuseof y ash at 76% in 2006, from 2006 onwards use of more than 98% at its Jawa power plant. Malaysian plants follow national and WorldBank emission limits. Jawa plant is ISO 14`001 certied and has received a Green Rating by the Indonesian Ministry of Environmentunder its Environmental Rating Programme


YTL is quite explicit they recognize climate change as a clear risk and want to take measures to prevent it. work on raising awarenesson climate change nationally. Acquired a carbon credit c onsultancy in 2008. Actively pursuing to improve operating efciency in ist Jawapower plant. Detailed GHG emissions reporting for some parts of its business, e.g. the Wessex Water utility in the UK. Report someemissions data - NOx, SO2 and PM for its Jawa plant. But little improvements shown to date.


YTL invests in its human capital and ensures a work-life balance through its Vibrancy Committee. However it does not report on healthand safety management.


Comment: Won awards for good IR and CG, e.g. Finance Asia 2006 No 4 in “Best Corporate Governance”, AsiaMoney 2008 No1 “BestIR in Malaysia” etc. Separation of Chairman & CEO: yes, percentage of independent board members: 60%, percentage of independentaudit committee members: 67%, percentage of independent remuneration committee members: 67%Percentage of independent nomination committee members: 67%, disclosure of executive and board remuneration: partial.


No controversies found


YTL supports arts and culture in Malaysia and contributes to promote education. Scholarships are given to talented students to pursuehigher education at the Swiss German University located inTangerang in Indonesia.





mpany Name (country) Aboitiz Power Corporation (Philippines)

/ ISIN: 2 AP.PS / PHY0005M1090

ket Cap US$ 1,343m

nership structure Aboitiz Equity Ventures (76%), other (24%)


siness Model Mostly generation with 35% of operating income from distribution




G Summary

itiz Power has a very high share of renewables in its generation portf olio, and therefore a relatively low carbon footprint. Regarding itsrnal ESG performance, the company scored quite low, but one has to consider that it is the smallest company in our universe.


s - 0%

al 75.84 6%

mass - 0%

151.68 12%

dro 328.64 26%

clear - 0%

newable (geothermal) 707.84 56%

al 1,264.00 100%

neration Mix Plans Disclosed42.5 MW hydro, 64 MW coal, further expansion plans in coal redplants

2 emissions (tonnes) 389,605.00 ED1 cost (m USD) 232 intensity (tonnes/ m USD rev.) 1,481.00 ED impact on 2008 revenue 9%2 damage cost (m USD) 14.00 ED impact on 2008 EBITDA 35%

The carbon intensity seems high for a company with such a large proportion of power coming from renewables. Trucosts data includesme additional fossil fuel capacity at the Group Subsidiary level - absolute ownership of this additional capacity is unclear wihtout further

agement with the company


rage system loss (2 largest systems): 8.7%, average net capacity factor Hydro (H1 09): 35%




me reporting and CSR information in shareholder presentation. AP publishes a ve page sustainability report together with its AR, butis mostly focused on philanthropy and the Aboitiz foundation.


emissions data. Very little information on environmental management which is disappointing as the company runs old diesel plants andvolved in building a new coal plant.


no CDP answer, no efciency data for plants, no targets, no info at all. CDM credits for new hydro plant, stress that the new alternativeenergies law should be positive for their business


No information on Health & Safety management.


Comment: AsiaMoney 2009 awards as best managed mid-cap in the Philippines, mention code of ethics. Separation of Chairman &CEO: yes, percentage of independent board members: 22%, percentage of independent audit committee members: 33%, percentage ofindependent remuneration committee members: 33%, percentage of independent nomination committee members: 33%, disclosure ofexecutive and board remuneration: partly, ownership structure: 76% owned by Aboitiz Equity Ventures.


In 2008, Aboitiz Equity Ventures faced opposition against the construction of a new hydro facility, the Tudaya hydro power plant whichallegedly threatens the land of an indigenous tribe. Yet, it is claimed that each time the group expresses complaints, the militaryconducts operations, causing fear. According to the opponents, the plant threatens land and water biodiversity.


AP and its subsidiaries donated to or implemented projects ranging from education-related assistance, community infrastructur e,livelihood opportunities, rural electrication, to environmental projects for the communities within the areas where the different APbusinesses operate.





mpany Name (country) Energy Development Corporation (Philippines)

/ ISIN: 2 EDC.PS / PHY2292S1043

ket Cap US$ 1,831m

nership structureRed Vulcan Holdings Corporation (60.25%), PCD Nominee Corporation(36.25%)

mpany type Generation

siness Model

Energy Development (EDC) Corporation, formerly PNOC EnergyDevelopment Corporation, is engaged in the exploration, developmentand operation of geothermal energy. It is also involved in geothermaldrilling and consultancy services. Bought a majority share in a hydroplant by its parent company in 2008



P disclosure No request from CDP

G Summary

ong the universe of Asian electric utilities, EDC has the highest share of renewables in its portfolio and consequently the lowest carbonprint among the power generating companies. Its expansion plans also focus on renewable energy only. Regarding its internal ESGormance, the company scores in the mid-range of the sector.


s - 0%

al - 0%

mass - 0%

- 0%

dro 112.50 9%

clear - 0%

newable (geothermal) 1,198.50 91%

al 1,311.00 100%

neration Mix Plans Disclosed 300MW geothermal, 84MW wind





mention of operational metrics




R information on its websites focuses on its philanthropic and community activities. But there is a detailed report on HS&E in its 2008most of it is descriptive in nature. Have a board c ommittee on CSR to oversee its community activities.


Emissions data: yes, on boron content in water at its project sites and on H2S emissions compared to the legal standard. Not clear ifthere is a systematic environmental management, but the company is aware of its environmental impact and strives to keep pollutionlevels low. EDC is aware of its relatively low carbon footprint and plans to offset it by planting trees at its plant sites.


Knows its relatively low carbon footprint and plans to offset it with tree planting at its plant sites


Reports H&S data. EDC has programs to improve employee health and keep absence rates low. EDC trained 329 health workers from23 local clinics.



members: 60%, percentage of independent remuneration committee members: 33%, percentage of independent nomination committeemembers: same as remuneration committee, disclosure of executive and board remuneration: no.


In 2008, Green Alert activists campaigned against EDC´s proposal to tap additional geothermal power inside Mt Kanlaon NaturalPark´s buffer zone in the Philippines. Environmentalists say the project would further deplete the forest cover, cause damage tobiodiversity, and aggravate a watershed crisis.


EDC’s CSR community programs rests on four pillars of Health Promotion, Educational Support, Livelihood Development andEnvironmental Enhancement. Some investments are strategic, most are philanthropic.





mpany Name (country) Manila Electric (Philippines)

/ ISIN: 2 MER.PS / PHY5764J1483

ket Cap US$ 4,985m

nership structureLopez Group (13.4%), San Miguel Corp (27.0%), Pilipino TelephoneCorp (20.0%), PLDT Benecial Trust Fund (10%), other (70.4%)

mpany type Distribution

siness Modelmainly electricity distribution to 4.6m customers (+real estate andservices)



P disclosure No request to disclose by CDP

G Summary

a pure distribution company, Manila Electric´s environmental impact is comparatively low. Distribution losses have improvedicantly, coming from more than 20% down to 9.5%. They are still above the cap of 8.5% which will come into force in 2010. The

mpany discloses some selected information on its ESG activities and scores in the mid-range of the sector.

tribution assets 2009

a covered 9369

f country’s gross domestic product 49%






rruption Frequency Rate (the average number of times a customer is without power in a year, which also takes into account bothed and pre-arranged interruptions by Meralco) has constantly improved over the years: 6.8 in 2008 vs >30 in the 90s. Cumulativerruption Time now at 5.77, also its lowest number. current system loss level of 9.28% is one of our best operating results in 2008the lowest we have attained thus far in this performance area since 1981. In 1986, after Meralco was returned to the Lopez family,em loss was at a very high level of 21.01%. System loss has been their priority since that time, due to its nancial impact to thetomers and the Company. It was in 2008 when we were able to achieve for the rst time a level below the 9.5% cap that was set in9 under the Republic Act 7832. the new cap set by the Energy Regulatory Commission (ERC) starting January 2010 will be 8.5%.tomer satisfaction varies among the years, at 7.3 in 2008 at an slightly above average level. High customer per employee ration of


er preservation campaigns and waste management programs are underway. Meralco has training projects on solid wastenagement for partner communities. In October 2004, Meralco signed a memorandum of agreement with Bantay Kalikasan inport of the latter’s “Bantay Baterya” project. The project’s objective is to create a sustained public awareness on the health andronmental hazards posed by the indiscriminate disposal and handling of junk batteries.


R website focuses mainly on community programs, corporate giving etc., some slightly more business relevant activities such asme electrication projects. CSR activities seen as a tool to help support Meralco’s public image.


Some internal environmental initiatives such as air pollution control of its own vehicles. Meralco is commited to climate change andencouraging efcient use of electricity, e.g. participation in the earth hour. On renewable energies: Meralco supports the RenewableEnergy Act of 2008, which was signed into law on December 16, 2008. As of end 2008, 17.8% of its energy supply mix came fromrenewable energy sources such as hydro, geothermal, and wind. 51.1% of electricity comes from natural gas.


Apparently some commitment on climate change and encouraging efcient use of electricity, e.g. participation in the earth hour. Butno meaningful initiatives published. On renewable energies: states that they support the Renewable Energy Act of 2008, which wassigned into law on December 16, 2008, and signed in April 2009 a Contract for the Supply of Electricity with Montalban Methane PowerCorporation (MMPC), which would enable us to source renewable energy from MMPC. MMPC has a 8.19MW renewable power plantin Rodriguez, Rizal (which does not sound very meaningful). As of end 2008, 17.8% of its energy supply mix came from renewableenergy sources such as hydro, geothermal, and wind. 51.1% of electricity comes from natural gas. No emissions data


Meralco recognizes the importance of health & safety management. It has an ongoing commitment to installing safety and environmentprotection programs aimed at protecting employees, contractors, and the public. Good H&S management


Separation of Chairman & CEO: yes, percentage of independent board members: 27%, percentage of independent audit committeemembers: 60%, percentage of independent remuneration committee members: 33%, percentage of independent nomination committeemembers: same as remuneration committee, disclosure of executive and board remuneration: no


In 2008, Green Alert activists campaigned against the EDC´s proposal to tap additional geothermal power inside Mt Kanlaon NaturalPark´s buffer zone in the Philippines. Environmentalists say the project would further deplete the forest cover, cause losses tobiodiversity, and bring on a watershed crisis.


Meralco invests heavily in social projects. These include Christmas gift-giving activities for children, corporate-wide outreach projects,and relief operations.





mpany Name (country) Electricity Generating Public Company (Thailand)

/ ISIN: 2 EGCO.BK / TH0465010005

ket Cap US$ 1,236m

nership structureElectricity Generation Authority of Thailand (25.41%), OneEnergy Thailand(22.42%), Free oat (52.17%)

mpany type IPP

siness Model

EGCO Engineering and Service Company Limited is EGCO’s whollyowned subsidiary, which provides operation, maintenance, engineering andconstruction services to power plants, petrochemical plants, oil reneriesand other industries. EGCO holds an indirect 70% stake in Egcom TaraCompany Limited (ET), which operates in water business. EGCO alsoinvests in Eastern Water Resource Development and Management PublicCompany Limited (East Water)



P disclosure no response

G Summary

CO ranks among the leader within the sector in our assessment. It reports on emissions and some of the metrics (water use, NOx andx emissions) have decreased since 2006. the company has an H&S management committee, does H&S training and reports on safetyormance. There is signicant room for improvement in addressing climate change.


s 2,862.30 71%

al 832.30 21%

mass 20.30 0.50%

40.60 1%

dro - 0%

clear - 0%

newable 284.20 7%

al 4,060.00 100%

neration Mix Plans Disclosed not disclosed





t rate (kJ/kWh) for REGCO (2008): 9107, KEGCO (2008): 9311, EGCO Cogen (2008): 9204, Rol-Et Green (2008): 18564. No cleartive trends visible


a on water use is available for all subsidiaries owned for more than 80% by EGCo. EGCO holds an indirect 70% stake in Egcom Tarampany Limited (ET) which operates in water business via ESCO.


orts on various metrics (water use, NOx and SOx emissions), and has achieved reductions since 2006. EGCo publishes an annualtainability report, has a CSR committee, and information on CSR is included in the Annual Report. Missing: targets & inclusion of non-ority owned subsidiaries.


Emissions, noise and water data available. Data for some of its facilities, i.e. the ones owned 80% and more, data on water, NOx andSOx emissions. NOx emissions have improved slightly from 2006 to 2008. all emissions below the legal thresholds. Also noise dataavailable


No mention of a climate change strategy.


H&S training, H&S management committee, some safety metrics (accumulated safety hours), REGCO and KEGCO have implementedthe Occupational Health and Safety Management System TIS 18001:1999 & OHSAS 18001. egco WON some awards, e.g. the 2008national safety award for the 9th consecutive year. Info on training hours.


Separation of Chairman & CEO: yes, percentage of independent board members: 29%, percentage of independent audit committeemembers: 100%, percentage of independent remuneration committee members: 60%, percentage of independent nominationcommittee members: same as remuneration committee, disclosure of executive and board remuneration: partly


EGCO has a holding in a 200 MW coal-red project, the Kamanga Power Plant. The local council unanimously voted against it inJune 2009 due to concerns about impacts on the environment and human health. The council is seeking to have its environmentalcompliance certicate cancelled. Criticism on involvement in large dam project in Laos. Involved in Sudan and listed as High Offenderin 2007.


The group supports, initiates and develops various projects that involve education, career, health and environmental care for a betterquality of life in communities where EGCo is active.





mpany Name (country) Glow Energy Public Company Limited (Thailand)

/ ISIN: 2 GLOW.BK / TH0834010009

ket Cap US$ 1,365m

nership structureGDF Suez Energy Thailand (44.11%), SUEZ-Tractebel Energy HoldingsCooperatieve U.A (25%), State Street Bank and Trust Company for London(3.8%), Nortrust Nominees Ltd (3.57%), other (23.52%)

mpany type IPP and cogeneration

siness Model

Glow Energy Public Company Limited is a Thailand-based companyengaged in the generation and distribution of electricity, steam andwater for industrial use. The Company operates an Independent PowerProducer (IPP) business and cogeneration facilities. Its core business isthe generation and supply of electricity to Electricity Generating Authorityof Thailand (EGAT) and the generation and supply of electricity and steam,

with claried and demineralised water as secondary products, to industrialcustomers. Steam was 12.5% of revenues in 08



P disclosure answered CDP, but within the answer of parent company GDF Suez

G Summary

company scores in the mid-range compared to the sector. It is owned to almost 70% by GDF Suez.


s 1,403.53 78%

al 298.82 17%

mass - 0%

- 0%

dro 108.66 6%

clear - 0%

newable - 0%

al 1,811.00 100%

neration Mix Plans Disclosed 115 MW cogen coal, 382 MW cogen gas, 660 MW IPP coal


2 intensity (tonnes/ m USD rev.) 5,145.00 ED impact on 2008 revenue 33%2 damage cost (m USD) 175.00 ED impact on 2008 EBITDA 158%


lanned outage at Cogen (H1 09): 4.81%, unplanned outage IPP (H1 09): 2.39%


w has a water quality management team. The management team focuses on wastewater treatment, seawater quality and marineogy.


rmation on Glow’s CSR program is available, in detail, on the company website. Similar information but with some general descriptionsnvironmental and H&S achievements in its AR.


No emissions data. Some CO2 emissions data provided by GDF Suez. However, there is no indication that climate changeconsiderations play a role for GDF in managing Glow Energy. Plants are ISO 14`001 certied. General information on technologiesemployed to minimize emissions is given. Website has some information on environmental management. ISO 14`001 certicationof its plants. General information on technologies employed to minimize emissions.


Some CO2 emissions data provided by GDF Suez, butthere is no indication that climate change considerations play a role for GDF inmanaging Glow Energy in Thailand.


Glow has a H&S management team. Glow established and follows a set of rules called ‘Corporate Health and Safety Policies andProcedures’. In 2008, Glow included safety targets as criteria determining the variable bonus of its employees. Training programs

are conducted to help employees and contractors. No data on injuries or certication. Website has some information on H&Smanagement.


Separation of Chairman & CEO: yes, percentage of independent board members: 25%, percentage of independent audit committeemembers: 100%, percentage of independent remuneration committee members: 33%, percentage of independent nominationcommittee members: same as remuneration, disclosure of executive and board remuneration: partly.


In October 2008, local residents and organisations staged protests at several locations in Bangkok to challenge the construction of fourpower plants in their regions. The protesters claimed that the coal- or gas-red plants, which would sell electricity to state-owned utilityEGAT, would cause air and water pollution to more than 2,000 farmers and affect the environment of agricultural areas. The plantswere: Bang Kla proposed by Gulf Electric and J-Power, Gheco-One proposed by Glow Energy and Hemaraj, Khao Hin Son proposedby CMS and Kaset Rungruang Peudphol, and Nongsang proposed by Gulf Electric and J-Power.


Glow is concerned about developing the quality of life of people in the communities where it conducts business. Glow lays a focus oneducational and cultural activities. These investments are strategic.





mpany Name (country) Ratchaburi Electricity Generating Hldg (Thailand)

/ ISIN: 2 RATC.BK / TH0637010008

ket Cap US$ 1,516m

nership structure

Electricity Generating Authority Of Thailand (EGAT) (45%), BanpuPublic Company (14.99%), Nortrust Nominees (5.19%), SocialSecurity Ofce (4.93%), State Street Bank and Trust (4.88%),Others(25.01)


siness Modelinvestment company engaged in holding power generatingbusinesses. Thailand`s largest IPP.



P disclosure Yes

G Summary

chaburi´s ESG performance scores in the midrange of the sector. They report on emissions data, seem to have comprehensiveS management in place and have specic policies addressing stakeholders.


s 3,651.48 84%

al - 0%

mass - 0%

1,529.60 16%

dro - 0%

clear - 0%

newable - 0%

al 4,347.00 100%


153.75 MW hydro plant in Laos under construction. Underdevelopment: 751 MW of lignite coal plant for which they also owna share in a lignite coal mine, and 247.5MW of hydro in Laos, and118MW of wind in Thailand





mention of operational efciency metrics


Company started a feasibility study for using plants in treating waste water. Ratchaburi aims to reduce waste water releasedthe Bang Pa canal, and aims to recycle more water. To reduce consumption of water from public resource Ratchaburi started theling Water Reuse Project. Ratchaburi has a water project called “Community’s Participation in Khlong Bang Pa’s Water Qualityrovement, and Pollution Reduction”. The project is aimed at creating awareness on water resource development.


Some efforts towards CSR management. Since 2007, have specic policy for each group of stakeholders including the ShareholdersPolicy, Employees Policy, and Social and Environment Policy. In 2009, the Company plans to prepare a policy on other stakeholdergroups: creditors and partners (including business partners, suppliers and subcontractors). Has answered the CDP since 2006, as oneof only a few Asian utilities.


Emissions data available in the frame of the Carbon Disclosure Project report (SO2, and NOx emissions).Have achieved some, though small, improvements in energy efciency.


One of the few Asian utilities to respond to CDP since 2006. The company is aware of their CO2 emissions. In the frame of the CarbonDisclosure Project they report plant specic data on SO2, and NOx emissions. Have achieved some, even though small, improvementsin energy efciency, but have reported the same achievements for the past 3 years already. These are:- Improved Gas Turbine performance with 0.4%. by changing high efcient compressor for 6 unit

- Improved 0.3% performance of 2 units of thermal plant by install on line performance optimizer software- Promoted to reduce electric power consumption 8% or 100 tones of CO2e from year 2005


Ratchaburi’s ‘Committee on Workplace Health and Safety’ runs a succesful H&S program. In November 2008, the Ratchaburi PowerPlant celebrated a new milestone as it achieved 2,500,000-hour-man safety with no accident. However it doesn’t have a internationalcertication.


Separation of Chairman & CEO: yes, percentage of independent board members: 33%, percentage of independent audit committeemembers: 100%, percentage of independent remuneration committee members: 0%, percentage of independent nomination committeemembers: ND, disclosure of executive and board remuneration: partly


Criticised for involvement in controversial dam construction in Laos


Ratchaburi’s “Love the Forest and the Community” project promotes human-forest harmonious living. Many tree planting initiatives.Ratchaburi feels strongly committed to the communities surrounding the Company’s premises and invests in those communities.Investments are strategic.





1 WBCSD, 2006, Powering a Sustainable Future, available at http://www.wbcsd.org/plugins/

DocSearch/details.asp?type=DocDet&ObjectId=MjEyMjc

2 World Nuclear Organisation, November 2009, Used Fuel Management

3 Source: China Market report, (2009), Analysis and Forecast of China Power Industry 2008-2009

4 Source: China Market report, (2009), Analysis and Forecast of China Power Industry 2008-2009

5 Source: China View (2009) , China raises price of electricity for non-residentia l use

6 Source: IEA (2009), CO2 Emissions from Fuel Combustion 2009 - Highlights


8 Note: China’s power sector is responsible for an estimated 26% of CO2 of total GHG emissions,

according to IEA.w

9 Source: BP Statistical Review of World Energy June 2009, BP research

10 Note: China’s power sector is responsible for an estimated 26% of CO2 of total GHG emissions,

according to IEA.

11 Source: DB Climate Change Advisors (2009), Global Climate Change Policy Tracker: An

Investor’s Assessment, Detailed Analysis of Targets by Region and Country

12 Source: China Daily, November 27th 2009

13 Source: Reuters 2009, China’s wind-power boom to outpace nuclear by 202014 Source: Renewable energy magazine. 2009-08-26, Spain no longer leading the way in PV solar

energy





17 Source: Widrow Wilson International Center for scholars, Northeast Asia on the Path to

Copenhagen , Jennifer Morgan

18 Source: Hong Kong Power Report Q3 2009, Business Monitor International, July 2009




22 Source:: CLP website tariff presentation, Hongkong Electric website tariff table




26 Source: Sustainability and carbon management (2009), Chinese Companies Turn to U.S.

Technology to Support GHG Reduction Goals

27 Source: Central Electricity Authority of India (2009), http://cea.nic.in/

28 Source: Central Electricity Authority of India (2009), http://cea.nic.in/


30 Source: World Coal Institute (2009) A comprehensive Overview of Coal www.worldcoal.org

31 Anil Kakodkar, Atomic Energy Commission, India, 2005


33 Source: IEA (2009), CO2 Emissions from Fuel Combustion 2009 - Highlights34 Source: BP Statistical Review of World Energy June 2009, BP research







38 Note: This assumes sites having wind power density greater than 250W/sq m at 50m hub-

height with 3% land availability in potential areas for setting up wind farms at 12ha/MW.

39 Source: World Nuclear Association (2008), Asia’s Nuclear Energy Growth

40 Source: India’s Energy Security, Chietigj Bajpaee

41 Source: Reuters (2009), India ties solar plans to global climate support

42 Source: Times of India (28 November 2009), Copenhagen conference: India, China plan joint

exit

43 Source:,Renewable Energy and Energy Efciency Partnership (2002), Policy DB Details:

Indonesia

44 Source: Advanced Research Institute, Virginia Polytechnic Inst & State University (September

SourcES15, 2009), Electricity in Indonesia Universal Coverage and Fuel issues


46 Source: Agence Française de Développement (2009) AFD pledges 230 million euros to

development at its 1 October 2009 Board of Directors Meeting

47 Source: Asia Times (2008), Joel Adriano, Power politics in the Philippines




51 Note: Presidential Decree No 30/2007, Law No 15/1985, Government Regulation No 26/2006,

and Ministerial Regulation No 002/2206



53 Note: Ministerial Decree No.1122.K/30/MEM/2002

54 Source: United States Department of Commerce (2006), Anasia Silviati, Indonesia: Renewable

Energy Market

55 Source:,Renewable Energy and Energy Efciency Partnership (2002), Policy DB Details:

Indonesia56 Source:,Renewable Energy and Energy Efciency Partnership (2002), Policy DB Details:

Indonesia

57 Source: The World Nuclear Association (August 2008), Asia’s Nuclear Energy Growth

58 Source: Reuters (2009), Indonesia rejects “world’s third-largest emitter” tag

59 Source: Reuters (2009) Indonesia CO2 pledge to help climate talks-greens

60 Source: Energy Information administration (September 2009), Country Analysis Briefs: Malaysia


62 Source: Reuters (2009), UPDATE 1-Malaysia’s Tenaga says power demand to grow in 2010

63 Source: The Energy Conservation Centre, Japan, Energy Prices




67 Source: Spire Research and Consulting, Malaysia’s Drive to build a Renewable Energy industry,

68 Source: 3nd Seminar on Harmonized Policy Instruments for the Promotion of Renewable Energy

and Energy Efciency in the ASEAN Member Countries, November 2005

69 Note: Malaysia’s Ministry of Energy, Green Technology and Water

70 Source: World Nuclear Association (August 2008), Asia’s Nuclear Energy Growth

71 Source: Ministry of Energy, Green Technology and Water Website , Oct 21st 2009

72 Source: Energy Information Administration website (2009), International Energy Statistics


74 Source: Business Monitor International (2009) Philippines Power Report Q4 2009

75 Source: WorldNews (2009), Meralco cuts power rates by P0.11 per kWh



78 Source: BP Statistical Review of World Energy June 2009, BP research79 Source: Global Energy Network Institute (GENI), McClatchy-Tribune Regional News - Euan Paulo

C. Anonuevo - The Manila Times (December 17, 2008), Renewable energy law comes into force

80 Source: Philippines department of energy (2009), Empowering the nation through renewable

energy

81 Source: Global Energy Network Institute (GENI), McClatchy-Tribune Regional News - Euan Paulo

C. Anonuevo - The Manila Times (December 17, 2008), Renewable energy law comes into force

82 Source: Merritt Partners (2008), VS Pérez,, Status of Renewable Energy Policy in the

Philippines,

83 Source: World Nuclear Association (August 2008), Asia’s Nuclear Energy Growth



86 Source: The Business Times (November 18, 2009), Ronnie Lim, Power to rise from the east with

new station

87 Source: Asian Power (October 7, 2009), Singapore 4th quarter electricity tariff up by 12.71%







91 Source: AsiaIsGreen.com (July 18, 2009), Singapore is Not Ready for Renewable Energy

92 Source: PRLog Free Press Release, (September 8, 2009), Financial Solutions: Singapore also

waiting on Copenhagen conference

93 Source: December 2, 2009, Singapore to reduce emissions growth by 16% below projected

2020 level, http://english.sina.com/world/2009/1202/290012.html ,

94 Source: http://asia.news.yahoo.com/cna/20091219/tap-886-copenhagen-accord-useful-

climate-231650b.html



97 Source: Business Monitor International (2009), South Korea Power Report Q4 2009

98 Source: Taiwan news,(2009) Taiwan’s electricity retail prices among world’s lowest: Taipower




102 Source: Jeong Hyeon-ji, Korea’s renewable energy market strives for growth, July 2008.


Investor’s Assessment, Detailed Analysis of Targets by Region and Country104 Source Global Solar Technology (October 8, 2009) Korea PV market expected to reach 200MW

by 2012.

105 Source: World Nuclear Assocication (August 2008), Asia’s Nuclear Energy Growth

106 Source: South Korea announces ambitious mid-term emissions targets (November 17, 2009)

107 Source: Associated Press (November 17th 2009), Jae-Soon Chang, South Korea sets

greenhouse gas reduction target

108 Source: Ministry of Economic Affairs’ Bureau of Energy website, Liberalization of Power Market

in Taiwan,


in Taiwan,


111 Source: World Nuclear Association (June 2009), Nuclear Power in Taiwan

112 Source: Taiwan news,(2009) Taiwan’s electricity retail prices among world’s lowest: Taipower



115 Source: BP Statistical Review of World Energy (June 2009), BP research


in Taiwan,

117 Source: Energy Information Administration (August 2005), Taiwan


in Taiwan

119 Source: Taiwan Institute of Economic Research (March 2008), New Strategic Initiative for

Taiwan’s Energy Supply under Global New Energy Circumstances

120 Source: Global Climate Change Regulation Policy Developments: July 2008 - February 2009

121 Source: Global Climate Change Regulation Policy Developments: July 2008 - February 2009122 Source: W.T.Tsai, Current status and development policies on renewable energy technology

research in Taiwan

123 Source: Council for Economic Planning and development



125 Source: Reuters (2009), Taiwan to invest $1.4 bln in renewable energy

126 Source: World Nuclear Association (June 2009), Nuclear Power in Taiwan

127 http://www.taipeitimes.com/News/taiwan/archives/2009/12/20/2003461408

128 Source: Thailand Energy Regulatory Developments 2009, http://74.125.153.132/

search?q=cache:CCRjz2o7tisJ:www.erc.or.th/Doc/thailand.pdf+Thailand+Energy+Regulatory+Dev

elopments+2009&cd=1&hl=en&ct=clnk


130 Source: Business Monitor International (2009), Thailand Power Report Q4 2009

131 Source: ERC (2009), Thailand Energy Regulatory Developments 2009




135 Source: ERC (2009), Thailand Energy Regulatory Developments 2009

136 Source: Energy Regulatory Commission of Thailand (November 11, 2009), Dr. Pallapa

Ruangrong, Thailand’s approach to promoting clean energy in the electrical sector

137 Source: Thailand’s Energy Conservation Program, Renewable Energy Development Program

2008-2011.

138 Source: Renewable Energy Industry Club Federation of Thai Industries, Chairman Phichai

Tinsuntisook, Looking into ‘Renewable Energy’ Businesses in Thailand as an Opportunity against

the Globalization Situation ,.

139 Source: World Nuclear Association (2009), Asia’s Nuclear Energy Growth

140 Source: The Irrawaddy (July 2007), IAEA to Cooperate with Thailand’s Nuclear Power Plan

141 Source: Thailand Greenhouse Gas Management Organisation www.tgo.or.th

142 Source: http://www.greenpeace.org/seasia/en/campaigns/climate-change/features/dawn-of-

energy-revolution




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