Toshiyuki Shirai Senior Energy Analyst, IEA October 27, Manila
Southeast Asia: the energy context n Southeast Asia is emerging as major global energy player Ø Strong economic & population growth, urbanisation & industrialisation Ø Demand increased by 60% since 2000, strong potential for further growth n A region with multiple energy challenges Ø 65 million lacking access to electricity, 250 million reliant on solid fuels for cooking Ø Dwindling position as a gas exporter, and a rising dependency on imported oil Ø Poor air quality, vulnerability to effects of climate change n Opportunities for a cleaner energy future Ø Paris Agreement ratified by all, increasing attention to renewables & efficiency Ø Fossil fuel subsidy reforms making progress
A shift in the global centre of gravity for energy Change in primary energy demand to 2040 in the New Policies Scenario (Mtoe) Share of global growth 2016-2040 United States -30 Latin America 320 Europe -280 Middle East Africa 485 Eurasia 485 135 China 790 India 420 1 005 Japan -50 Southeast Asia Eurasia Other Latin 3% 5% America Africa Middle East 13% 8% 13% 11% 26% Southeast Asia 21% India China Southeast Asia, India and China are the engine of future energy demand growth, together accounting for almost 60% of the global increase to 2040
Electricity leads demand growth Change in total final energy consumption in the New Policies Scenario, 2016-2040 Mtoe 100 80 60 40 20 0-20 Bioenergy Coal Gas Oil Electricity A growing middle class proves a formidable factor behind both the increase in electricity (in households) and oil (for transport)
The power mix becomes more diversified Power generation by fuel in the New Policies Scenario Coal Gas Oil Nuclear Renewables 2016 Change to 2040 Of which: Hydro Solar PV Wind Other 200 400 600 800 1 000 TWh Renewables account for the largest share of installed capacity in 2040, but coal plays a major role in the projected generation mix
The road to universal electricity access Access to electricity Access by type of connection, 2030 Philippines Thailand Viet Nam Indonesia 100% 80% 60% Off-grid 24% On-grid 43% Lao PDR Cambodia Myanmar 40% 20% Mini-grid 33% 2000 2016 2030 2040 All countries in the region achieve universal access to electricity by the early 2030s, deploying a range of technologies depending on circumstance
A growing need for imports Fossil fuel production and demand to 2040 in the New Policies Scenario 8 Oil (mb/d) 300 Gas (bcm) 500 Coal (Mtce) 6 4 2 250 200 150 100 50 400 300 200 100 2000 2016 2025 2040 2000 2016 2025 2040 2000 2016 2025 2040 Production Demand By 2040, Southeast Asia is a net importer of all fossil fuels, and the import bill exceeds $300 billion
Toward a more secure and sustainable path Primary energy demand in 2030 in the New Policies Scenario and the Sustainable Development Scenario NPS 892 Mtoe 7% 15% 23% 3% 20% 32% Coal Oil Gas Nuclear Hydro Bioenergy Other renewables SDS 781 Mtoe 16% 14% 10% 4% 33% 23% Efficiency and renewables play a significant role in the clean energy transition
Clean energy transition requires significant reallocation of investment Annual additional energy investment to 2030 in the Sustainable Development Scenario, relative to the New Policies Scenario End-use sector Fossil-fuel supply Power generation (fossil fuels) Power generation (non-fossil fuels) Biofuels - 10-5 5 10 15 Billion dollars (2016) Cumulative investment in the Sustainable Development Scenario moves away from fossil fuels towards renewables and efficiency
A sustainable pathway for Southeast Asia Key indicators for New Policies (NPS) and Sustainable Development (SDS) Scenarios Cumulative investment (Trillion dollars) Fossil fuel import bill (Billion dollars) Premature deaths from air pollution (Thousand people) 3 2 1 Efficiency investment Supply investment 400 300 200 100 600 400 200 NPS SDS NPS SDS NPS SDS With a small increase in overall investment, but a major reallocation of flows, Southeast Asia can achieve a more sustainable pathway with multiple benefits
Conclusions n Robust economic growth and fast-paced demographic change mean that Southeast Asia s role in global energy is set to expand n The region faces myriad energy challenges; it is crucial for policymakers to pursue a consistent strategy to meet them n Vast investment of around $ 3 trillion needed to meet growing demand, making private participation and co-operation with international organizations essential n Energy efficiency, subsidy reform and enhanced regional integration play vital roles n A more sustainable energy future is attainable by reorienting investments, bringing financial, climate and health benefits n With international engagement on energy more important than ever, the IEA stands ready to be a strong partner for the region
The report is available at: http://www.iea.org/southeastasia/
Mobilising efficiency investment in end-use sectors Average annual additional investment to 2030 in end-use sectors in the Sustainable Development Scenario, relative to the New Policies Scenario Share of final consumption covered by mandatory efficiency regulation Industry Energy-intensive industry Non energy-intensive industry 40% 30% Appliances Buildings Other residential 20% Transport Efficiency Fuel switch 10% 0 1 2 3 4 Billion dollars (2016) 0% World Southeast Asia Efficiency investment requires effective regulatory frameworks & incentives