Demand for energy in Southeast Asia is set to rise a staggering 80 per cent by 2040, driven by a population boom, economic expansion and increasing urbanisation, predicts the International Energy Agency (IEA) in a report released earlier this month (Oct).
At the same time, governments of the ten-country Asean (Association of Southeast Asian Nations) bloc need to provide access to the 120 million people in the region still lacking round-the-clock electricity while capping carbon emissions that will worsen climate change.
The answer to this daunting challenge lies in generating more electricity from clean, renewable sources, said energy experts at an industry event on Monday.
Even as cheap coal remains the dominant source of energy in the region – it will account for 49 per cent of total energy generation by 2035, up from 31 per cent today – renewables such as hydropower, solar, wind, tidal and even nuclear energy can also be harnessed on a large scale affordably, they said.
Asean ministers hope to raise the share of renewables in the region to 23 per cent by 2025, said Datuk Loo Took Gee, secretary general of Malaysia’s Ministry of Energy, Green Technology and Water. This is up from 15 per cent today, mainly from hydropower and geothermal power.
Tang Kin Fei, president and CEO of Sembcorp Industries, a Singapore-based conglomerate that specialises in the power, water, marine and urban development sectors, said that to achieve this capacity, governments need to build high-quality power infrastructure and provide reliable sources of renewable energy in a sustainable way.
“You must not only produce power, you also need to make sure the power is produced in an environmentally friendly, sustainable manner,” Tang said.
Tang, Loo and other panelists were discussing the new dynamics of energy in Asia at Singapore International Energy Week (SIEW), held at Marina Bay Sands from Monday to Friday. Organised by Singapore government agency Energy Market Authority, the theme of the eighth SIEW is “Global Energy Transitions”.
Fighting climate change
Balancing energy for development with its impact on climate change is a real global challenge, said Kyle Peters, senior vice president of operations with The World Bank.
The multi-lateral lender has been helping developing countries shift from coal power to affordable alternatives, with the aim of achieving universal power access by 2030, under the “Sustainable Energy for All” joint initiative with the United Nations
At the same time, there is a need to double the amount of renewable energy in the global mix from its current share of 18 per cent to 36 per cent, and to work towards greater energy efficiency improvements, Peters said, adding that US$1 trillion of investment annually is required to deliver fully on that goal.
Some 80 developing countries have committed to financing these targets.
Among them is China, which is responsible for about 30 per cent of global emissions and is trying to reduce the use of coal to produce electricity. Wang Min, executive vice president of State Grid Corporation of China, the country’s largest utility, said coal use in China dipped last year - the first time since economic reforms began in 1978 that coal use has fallen.
Wang said this will continue to decline as China invests billions of dollars into renewable energy such as wind, solar and hydropower. Last year, the country invested a record US$83.3 billion in the sector, up 39 per cent from 2013, making it the world’s largest investor in renewables.
“Development based on the conventional mode of energy production can no longer sustain itself,” he said. “The pollution in China has become severe. The use of coal has to decline.”
Reinforcing energy security
Renewable energy can also play a significant role in helping the region address its energy security issue by ensuring a steady, sustainable stream of power, the experts said.
An important case study is Laos. The landlocked nation, which is seeking clean, cheap electricity for its population of about 6.8 million people, has been investing in hydropower since 1970, said Viraphonh Viravong, the country’s vice minister of energy and mines.
Its first hydroelectric dam – the Nam Ngum Dam on the Nam Ngum River – was completed in 1971 at a cost of US$28 million with the help of the World Bank and the United Nations.
Since then, the country has been steadily adding hydropower. From adding 10 megawatts (MW) per year from 1970 to 2000, Virapong estimated that Laos will be adding an average of 1,000 MW per year from 2020 to 2030.
More than 70 dams are either under construction or have been approved, and two-thirds of the additional power will be exported to neighbouring Thailand, Cambodia, Myanmar and Vietnam, he said.
“Hydropower has played a very important role in our country’s development, and only by cooperation can Laos now export two-third of our capacity,” Virapong said. “Without this cooperation, we will never be able to do that, and now we can bring a clean, fairly uncomplicated supply of electricity to the region.”
He said that Laos can help the region address its energy security issue, and hopes to sell hydropower to countries even further south such as Malaysia and Singapore.
Doing away with fuel subsidies
Southeast Asia currently stands out as one of the most active regions in the world in phasing out or reducing fossil fuel subsidies, but much remains to be done.
These subsidies, which amounted to US$36 billion in 2014 in Southeast Asia, often fail to deliver affordable energy to the poorest, encourage wasteful energy use, burden public budgets and deter much-needed investment in efficient technologies, the IEA said in its October report.
Recent reforms in Indonesia, Malaysia, Thailand and Myanmar have been primarily driven by high prices during the global financial crisis in 2008 and increasing reliance on imports, which have made such subsidies burdensome for governments.
Datuk Loo said that the plan of the Malaysian government is to continue reducing subsidies – a programme it started in 2007 – while ensuring that the coal technology that the country uses is clean and efficient as coal will remain its biggest source of power.
“We adopted clean coal technology for our last few power plants, and we are seeking cleaner ways of generating electricity from coal,” she said. “If Asean does not embark on new technologies, we will be left behind.”
Faith Birol, executive director of IEA, said that energy has to be at the centre of negotiations in Paris in December, when political leaders are expected to ink a global deal that aims to cut greenhouse gas emissions.
Over the last few months, more than 150 countries – including all ten countries of Asean – have submitted their intended emission reduction plans, as part of the global effort to avert dangerous climate change. Birol said he is s optimistic that some sort of deal will be agreed that will see a shift towards renewables worldwide.
“The good news is political momentum is very strong,” Birol said. “There is no government, no energy company in the world which will not be affected by the climate change policy that will be put in place in the next few years to come.”