Wednesday, April 3, 2013

ASEAN’s Role in Sustainable Energy for All

Melissa Low is an Energy Analyst for the Energy Studies Institute at the National University of Singapore, she joined the Energy Studies Institute in September 2010. Before joining ESI, Melissa was part of a 12-member youth delegation to the United Nations Framework Convention on Climate Change (UNFCCC) Conference of Parties (COP) 15 talks in Copenhagen in December of 2009 and worked for local Not-for-Profit Organization ECO Singapore to raise awareness about climate change and environmental stewardship in Singapore. Outside of ESI, Melissa currently serves as Singapore Coordinator to a Not-for-Profit organization called Global Sunrise, working to bring renewable energy to communities and schools in Sierra Leone.
Melissa holds a B. Soc. Science (2nd Upper Honors) in Geography and minor in Urban Studies from the National University of Singapore. She is currently pursuing an M.Sc. in Environmental Management with the School of Design and Environment at the National University of Singapore.

 
ASEAN’s primary energy requirement is projected to triple between 2005 and 2030, having already more than doubled between 1990 and 2007, with an annual growth rate of 4% (double the world’s average). Therefore, meeting the region’s energy needs – with unprecedented increases in coal use, oil and gas imports and greenhouse gas emissions – will prove to be a challenge. One of three regions in Asia with energy resources beside oil-rich Middle-East and the emerging energy-filled Central Asia, ASEAN countries produce and consume its own energy resources while marketing and processing energy sources for major economies like China, Japan and South Korea and possess a strategic waterway that 80% of the energy to East Asia passes. There is considerable coal and gas in the region, but more will need to be imported. Though resource endowments vary significantly from country to country in this unique region, large potentials for renewable energy sources remain untapped.
In order to meet the initiative’s three objectives, private sector and national commitments are called upon to ensure universal access to energy, reducing global energy intensity and increasing renewable energy use, cooperation is necessary to institute the policy framework and implementation modalities for the early realization of interconnection infrastructures for the provision of modern energy services in the most efficient and reliable manner.
Energy is at the forefront of the global agenda – increasingly being acknowledged that the provision of sufficient energy is having an increased impact on food security, health, education, transport, communications, water and sanitation, as highlighted most recently at the Fifth World Future Energy Summit in Abu Dhabi from 15 – 17 January 2012.
A critical enabler, secure access to modern sources of energy underpins human well-being and sustained economic development. 1.5 billion still live without access to electricity, 95% of which come from developing Asia and Sub-Saharan Africa.
The International Energy Agency estimates that $35-40 billion of capital will be required on average per year to achieve universal access to modern energy services to meet basic needs by 2030. Billions of dollars in grants will be needed to cover capital investment and capacity building in least developed countries, where national energy investments are likely to focus on overcoming infrastructure backlogs and meeting suppressed demand in productive sectors.
Southeast Asia is one of three regions in Asia with energy resources beside oil-rich Middle-East and the emerging energy-filled Central Asia. ASEAN countries produce and consume its own energy resources while marketing and processing energy sources for major economies like China, Japan and South Korea and possesses a strategic waterway that 80% of the energy to East Asia passes.
Home to 567 million people in 10 Member States, total population in ASEAN without electricity is a startling 160.3 million, according to IEA’s 2008 estimates. Rural electrification rates range widely throughout the ASEAN region, from 10% in Myanmar to 100% in Singapore.
ASEAN recognizes the critical role of an efficient, reliable and resilient electricity infrastructure for stimulating regional economic growth and development and to improve access to affordable energy to eradicate energy poverty. In recent years, decision makers in most Southeast Asian countries have, through policy implementation, fostered development of renewable energy technologies in a more concerted manner. Chief among the driving forces are the rising dependency on fossil fuel imports and the environmental impacts of its use, including potential effects of climate change. Both private sector and national commitments play a big role in ensuring universal access to energy, reducing global energy intensity and increasing renewable energy use in ASEAN. To effectively engage the private sector, a system of financial and non-financial incentives must be in place to ensure appropriate conditions to exploit renewables potential.
ASEAN’s effort towards ensuring sustainable energy for all is multifaceted. Operationalized at different scales, it is clear that some countries have succeeded in their rural electrification efforts and deploying resources towards meeting their renewable energy targets while others have fallen behind. More broadly, ASEAN has agreed to reduce regional energy intensity by at least 8% by 2015 from 2005 levels and to have 15% of total installed power capacity from renewable energy sources by 2015. ASEAN Energy Ministers have further agreed to consider higher commitments beyond 2015 in reference to other international and regional commitments[1].
Attention needs to be focused on renewable energy potential for the off-grid electrification in rural and remote areas of Southeast Asia.
Private sector
Several ASEAN countries have introduced price support systems for renewable energy, or are about to do so. Renewable electricity feed-in-tariffs (FITs) have been introduced in Thailand, Indonesia, Malaysia and the Philippines. Other financial incentives include tax exemptions for certain renewable energy technologies in Malaysia, the Philippines and Indonesia, capital cost grants in Thailand and R&D incentives in Singapore. Non-financial support mechanisms such as standard power purchase agreements (PPAs), preferential arrangements for small generators and information support are available in Malaysia, Indonesia and Thailand, to various degrees of success.
National commitment
Thailand’s remarkable success in delivering electricity access through its 1974 National Plan for Accelerated Rural Electrification Program in just 20 years is a factor of government effort in maximizing potential benefits while minimizing project cost, integrating rural electrification into a broader national development strategy, and giving consideration to the social and political requirements of less stable areas.  Similarly, the achievements of the Philippines rural electrification program, having succeeded in bringing electricity to 4.5 million households in 30 years, has been impressive.
Regional effort
The ASEAN Vision 2020, operationalized by the ASEAN Plan of Action for Energy Cooperation envisions interconnecting arrangements in the field of energy and utilities for electricity, natural gas and water as well as mechanisms for sustainable development to ensure the protection of the region’s environment, the sustainability of its natural resources, and the high quality of life of its peoples.
A successful showing here by ASEAN in achieving this vision is essential to cope with the increasing energy demand woes and in providing greater stability and security of energy supply in the ASEAN region.
However, barriers exist in aligning ASEAN with global universal electricity access goals. These include incompatible goals, the lack of recognition of energy poverty in the APAEC, and renewable energy potentials of ASEAN countries.
·       Reduce non-economic barriers – administrative hurdles, grid access issues, persistent fossil fuel subsidies, lack of info and training – hinder deployment of renewables
·       Remove distortionary subsidies for fossil fuel consumption and production
·       Ensure RE incentives do not shift a disproportionate share of the additional financial burden to the poorest households
·       Decide RE policies that are predictable and consistent with the overall energy policy framework
·       Encourage off-grid applications of RE to advance electrification and socio-economic development objectives
·       Promote sustainable production of biofuels – sustainability criteria ad certification schemes
·       Establish platforms to exchange experience in developing and implementing RE policy, to reduce barriers to deployment
·       Design RE policies to complement CC policies to derive maximum benefit from climate change financing options
ASEAN is in the midst of implementing its third plan of action, all of which pursue sustainable energy development based primarily on individual sectoral plans of action and roadmaps, including, but not limited to, the ASEAN Power Grid, Trans-ASEAN Gas Pipeline, Coal and Clean Coal Technology, Energy Efficiency and Conservation, Renewable Energy and Regional Energy Policy and Planning. These goals mask the need to address energy poverty in rural Southeast Asia. While energy is crucial to the transformation of ASEAN into a stable, secure, resilient and integrated economic community, the early realization of interconnection infrastructures in ASEAN must not overlook the need to ensure universal access to energy and environmental degradation related to energy production and consumption.
Second, to achieve sustainable energy for all in ASEAN, the region’s energy poverty situation needs to be defined and actions enhanced. ASEAN’s primary energy requirement is projected to triple between 2005 and 2030 with an annual growth rate of 4%, double that of the world’s average. Meeting the region’s energy needs – with unprecedented increases in coal use, oil and gas imports and greenhouse gas emissions – will prove to be a challenge. Thus, for ASEAN, in demonstrating that high economic growth comes with a high need of energy supply, ensuring a secure supply is an overriding concern. Energy poverty eradication takes a backseat.
Third, ASEAN countries are diverse in terms of their renewables potentials when calculated on a per-capita or per-GDP basis. Furthermore, the level of achieved deployment influences the realizable potential over a specific time period. ASEAN countries currently have lower deployment, thus lower potential.
Since ASEAN’s inception in 1967, Member States have struggled to cooperate and integrate as one community with issues on the table as wide-ranging as political security, economic integration and socio-cultural enhancement. fundamental principles of ASEAN Member States’ relations with one another such as mutual respect for independence, sovereignty, equality, territorial integrity and national identity of all nations further inhibits countries from interfering with one another’s domestic policies.
There is also growing competition in the region for natural gas as demand accelerates. Malaysia, Indonesia, and Brunei currently export LNG, with Papua New Guinea soon to become another regional LNG exporter in the near term. Recently, it was reported that Malaysia will bring in its first LNG imports in 2013. This means the world's No. 2 LNG exporter is likely to ship less LNG to top buyers in Asia. 
The challenge for ASEAN then is to meet demand while preventing irreversible damage to the environment, and where possible, to use low-GHG emitting sources of energy to produce affordable and reliable electricity. Many ASEAN countries have recently adopted policies setting specific targets for renewable energy utilization, while some like Vietnam and Malaysia have opened its doors to other options, namely; nuclear power.
Finally, it is important to realize that universal access to energy is not incompatible with addressing climate change. Through the adoption of clean technologies and energy efficiency, countries can expand access to all while at the same time moving decisively towards a low carbon and climate resilient future. The IEA’s World Energy Outlook 2011 expects that universal access by 2030 would only increase global electricity generation by 2.5% while carbon dioxide emissions only by 0.7%, both figures being trivial in relation to concerns about energy security and climate change. The reward for this would be significant contribution to socio-economic development, and avoiding the premature death of 1.5 million people per year.
Furthermore, Asia is home to the largest community of the urban poor. Emerging barriers to energy access in urban poor communities in developing countries include the high cost of service, illegal status of slum dwellers, lack of education and awareness, lack of trust between communities and service providers and the lack of infrastructure. The sustainability and replicability of energy access initiatives should also be considered, with focus on willingness of stakeholders to continue projects, ensure enabling policy environments and establishment of financial and institutional mechanisms to ensure continued service provision to poor communities.
Country
Carbon & Energy Reduction Targets
Renewable Energy Targets
Renewable Energy sources
Rural Electrification Plan
ASEAN-wide
Reducing regional energy intensity by at least 8% by 2015 (2005 levles), 15% of total installed power capacity from RE sources by 2015 and agrred to consider higher commitments beyond 2015 in reference to other international and regional commitments[2]

Brunei
Energy intensity reduction by 25% by 2030 (2005 base year)[3]
No national targets, but following through with ASEAN regional target means an additional 50MW of RE[4]
Solar, wind, hydro, biomass, geothermal
Brunei Darussalam electrification rate is at 99.7%
Cambodia
Not available
Renewable Energy Strategy
Biomass, biogas, biofuel, wind, solar, hydro (large scale and mini)
By 2020, all villages to have electricity, by 2030, 70% of all rural households should be electrified
Remaining 30% of rural households will be targeted through the Renewable Energy Development Program[5]
Indonesia
26% (19% from energy sector, 7% forestry and land-use) reduction of 2005 levels by 2020, and up to 41% (15% from energy sector, 26% from forestry and land-use) if international assistance offered
6.5GW of new RE capacity to increase RE mix from 7% to 15% by 2025[6], national goal of meeting 15% of country’s electricity needs with RE by 2025 including 9,500MW geothermal, 500MW small hydro, 330MW off grid mini hydro, 80MW solar, 810 MW biomass, 255 MW Wind
Geothermal, biomass slated for most growth, hydro, wind, solar, distributed generation
90% electrification target by 2020, significantly above the current electrification rate of 65% -- meeting this challenge will require an average of 1.3 million new electricity connections each year; 2005-2025 specifically states that RE technologies should be used to meet rural electrification goals (otherwise, expensive diesel generators)
Lao PDR
Not available


Rural Electrification Program (APL) – extends electrification to 42,000 rural households through connection to grid of ElectricitĂ© du Laos (EdL), phase 2 will further provide electrification to 10,000 households through off-grid technologies[7], with a total of 150,000 households to be electrified by 2020 Laotian Gov committed to electrify 70% of households by 2010, 80% by 2015 and 90% by 2020,[8] decentralized solutions necessary (e.g. Sunlabob)[9]
Malaysia
Conditional voluntary target of 40% reduction of greenhouse gas intensity below 2005 levels by 2020
2,000MW by 2020 (unconfirmed)
8th Malaysia Plan (2001-2005) RE declared as fifth fuel, implied 5% renewable energy in energy mix
9th Malaysia Plan (2006-2010) Target RE capacity to be connected to the power utility grid: 300MW in Peninsular Malaysia, 50MW in Sabah and targeted power generation mix: 56% NG, 35% coal, 6% hydro, 0.2% oil, 1.8% RE (currently: 70% NG, 22% coal, 2% oil, 6% hydro)[10]
SMART Targets:
Electricity Capacity Mix: 975MW or 6% of total peak electricity demand by 2015; 2,065MW or 11% by 2020; 3,484TWh/year or 14% by 2030 of total electricity generated
Electricity (Energy) Mix: RE in mix to reach 5.3 TWh/year or 5% by 2015; 11.2 TWh/year or 9% by 2020; 16.5 TWh/year or 11% by 2030 of total electricity generated[11]

Palm oil biomass wastes (usually EFB and PKS) and palm oil mill effluents;
Mini-hydro;
Solar power;
Solid waste and land-fill gas;
Wind energy* and geothermal*;
Wastes and gases from agro-based* and farming industries

Myanmar
Five Year Plan (2001-2005) planned for 2,000MW in total RE capacity to be built
15-20% of electricity from RE by 2020[12]
Solar, micro-hydro,  wind, biomass

Philippines
Not available


Since 1960, Gov of Philippines announced total electrification of the county as a national policy objective. By 1998, 1,607 municipalities, 24,871 barangays, a total of 4.5 million rural households were connected and had electrification coverage, with an average rural coverage rate of 60%. *help of Rural Electric Cooperatives (non-stock, non-profit membership cooperation) – careful of corrupting influences, leadership and discipline must be ar core if not breakdown
Singapore
16% below BAU by 2020



Thailand
Aims to cut greenhouse gas emissions in the energy sector by up to 30% from now to 2020, or 77 million tons per year, National Energy Conservation Program (ENVON), Subsidy for Renewable Energy SPPs
15 Year Renewable Energy Development Plan 2008-2022: 20% RE share of final energy demand by 2022[13]
Solar, biomass, wind, hydro, geothermal, hydrogen and bio-hydrogenated systems
The Provincial Electricity Authority (PEA) in Thailand set up the 25 year (later compressed into 15 years by overlapping of 5-year plans) National Plan for Accelerated Rural Electrification program in 1974, and divided it into 5-year plans in line with the 5-year National Economic and Social Development Plans (NESDP), each with specific targets for increasing electricity access in rural areas
Vietnam
National Strategic Program on Energy Saving and Effective Use: Saving 3-5% of total energy consumption from 2006-2010, and 5-8% in 2011-2015, new Law on Energy Conservation and Efficiency[14]
3% of energy from RE by 2015, 5% by 2020
Micro-hydro, wind, biomass, solar PV, biogas, geothermal (prefeasibility stage)
Renewable Energy Action Plan (REAP, 2001), Master Plan of Power Development 2001-2010: 2 phase 10 year program including phase 1 of adding 25-50MW of RE capacity and providing access to more than 35,000 households



[1] ASEAN Council on Petroleum (2012) Joint Ministerial Statement of the 29th ASEAN Ministers of Energy Meeting (AMEM)
[2] ASEAN Council on Petroleum (2012) Joint Ministerial Statement of the 29th ASEAN Ministers of Energy Meeting (AMEM)
[6] US Department of Commerce (2010) Renewable Energy Market Assessment Report: Indonesia
[10] Malek,B.A. (2010) Renewable Energy Policy & Action Plan, Kementarian Tenaga, Tecknologi Kijau Dan Air
[11] Kementerian Tenaga, Teknologi Hijau Dan Air (KeTTHA) (2009) National Renewable Energy Policy & Action Plan
[13] REEEP Policy Database (2010) Thailand
[14]US AID (2007) Vietnam County Report: From Ideas to Action: Clean Energy Solutions for Asia to Address Climate Change

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