Outlook for Energy Market in Asia (India and ASEAN)

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1 9 June, 2017 Smart Community Summit 2017 Outlook for Energy Market in Asia (India and ASEAN) Shigeru SUEHIRO Energy Data and Modelling Center (EDMC) The Institute of Energy Economics, Japan (IEEJ) 1

2 Energy Market Shifts towards Asia World s Primary Energy Demand Increase of Primary Energy Demand 20,000 15,000 10,000 5,000 0 Mtoe projection Increment in Intl. Bunker Africa Middle East Europe M & S. America N. America Other Asia-Pacific ASEAN India China ,500 60% Global energy demand increases by 1.4 times and 60% of the growth comes from Asia. Asia is the final destination for around three quarters of oil, gas and coal traded inter-regionally. China, India and ASEAN rank top 3 for the largest demand growth. 2

3 Shifting from the East to the South within Asia GDP and Population Growth Increase of Primary Energy Demand 8% 6% 4% 2% 2,000 1,500 1,000 0% -2% 500 East Asia ASEAN India GDP Population *East Asia: Japan, China, Korea and Taiwan 0 East Asia ASEAN India The center of the socio-economy will shift from the northeastern part of Asia (Japan, China, Korea and Taiwan) to the southeast part (ASEAN) and the southern part (India). Energy demand in the East Asia slows, whereas it accelerates in ASEAN and India. 3

4 Brunei Singapore Malaysia Thailand Indonesia India Viet Nam Philippines Cambodia Lao PDR Myanmar Still Low Level in Energy Consumption 10 toe/person Commercial Energy Consumption per Capita (Excl. Traditional Biomass Use) World Average (2040) 0 Consumption levels vary in Southeast and South Asia. Energy supply and demand structures are various. Energy consumption per capita in many countries are lower than the world average even in

5 Life without Modern Energy Myanmar India Indonesia Vietnam 5

6 Air Pollution is Serious in the Urban Area Jakarta, Indonesia New Delhi, India Dong Nai, Vietnam 6

7 Coal Dependence Increases unlike Global Trend World s Primary Energy Demand Primary Energy Demand in India and ASEAN Share Share Non-fossil fuel 19% 22% Non-fossil fuel 26% 21% Natural gas 21% 25% Natural gas 13% 15% Oil 31% 29% Oil 28% 29% Coal 29% 24% Coal 33% 35% Mtoe Mtoe 0 2,000 4,000 6, ,200 Global energy mix shifts towards gas, which becomes the second important fuel with surpassing coal. Renewables and nuclear also increase rapidly. In India and ASEAN, on the other hand, coal grows rapidly resulting in further dependence. 7

8 Indonesia Laos Myanmar Vietnam Malaysia Cambodia India Thailand Philippines Singapore Decreasing Energy Self-Sufficiency Energy Self-Sufficiency in India and ASEAN 200% % 0% Energy imports increase because domestic production expansion fail to compensate demand growth. Fuel net-import bills amount to $800 billion in 2040, comparing with $150 billion today. 8

9 Needs for Finance to Induce Energy Investment Required Energy Investment Value for ASEAN (cumulative up to 2040) Average Annual Investment Value Energy Saving; 220 Oil & Gas Production; bil. USD/yr Power Transmission ; bil. $ Power Generation; 570 Transport & Refinery; Required Investment Private Investment Past Investment Scale 5 years average (WB) Cumulative energy-related investments amount to $2.3 trillion by Most of them are for energy supply fuel and electricity divided almost equally. A big challenge is how to finance $90 billion needed annually. 9

10 Energy Situation with Many Challenges Smart Community Distributed Energy System Energy Efficiency Clean Energy Energy Cost Optimization Thank you for your kind attention. 10