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Book: Development of ASEAN Energy Sector


Development of ASEAN Energy Sector: Power Network Interconnection, Natural Gas Infrastructure, and Promotion of Renewable Energy and Energy Efficiency

Beni Suryadi, editor

©2013 ASEAN Centre for Energy
ISBN: 978-979-8978-29-6





Executive Summary:

Economic growth in the ASEAN region was very impressive prior to the economic crisis in 1997. After more than a decade, the region is again becoming a centre of growth. In 2010, total Gross Domestic Product (GDP) at current prices was 1,858,683 million USD and GDP per capita at current prices on average was 3,106 USD during the same period. The region’s economy experienced a modest GDP growing at only 1.3% in 2009, but again enjoyed tremendous growth to reach 7.1% in 2010.

Rapid economic growth coupled with increase in population inevitably creates the challenge of meeting regional energy demand, not to mention the effort to rein in Greenhouse Gas (GHG) emissions. Prompted by the need for security in energy that is affordable, reliable and environmentally sound, ASEAN has emphasized regional cooperation in the field of energy as one of its priority areas of action in the 21st century.

The political will to pursue this direction was clearly expressed by the ASEAN Heads of Government in their 1997 Summit Declaration entitled ASEAN Vision 2020 which sought “to establish interconnecting arrangements for electricity, natural gas and water within ASEAN through the ASEAN Power Grid and the Trans-ASEAN Gas Pipeline and promote cooperation in energy efficiency and conservation, as well as development of new and renewable energy resources”.

With further development, the ASEAN Vision 2020 was transformed into a series of medium-term plans of action, of which ASEAN has adopted the third series of implementation plans, as prescribed in the ASEAN Economic Community Blueprint 2015, entitled ASEAN Plan of Action for Energy Cooperation (APAEC) 2010-2015.

APAEC 2010-2015 serves as the blueprint for ASEAN cooperation in the field of energy for the period 2010-2015 under the theme “Bringing Policies to Actions: Towards a Cleaner, more Efficient and Sustainable ASEAN Energy Community”. The plan covers the energy component of the ASEAN Economic Community Blueprint 2015 signed by ASEAN Leaders on 20 November 2007, which directs ASEAN towards achieving a specific objective of the APAEC 2010-2015, which is to enhance energy security and sustainability for the ASEAN region including concerns for health, safety and the environment through accelerated implementation of action plans, including, but not limited to: 1) ASEAN Power Grid, 2) Trans-ASEAN Gas Pipeline, 3) Coal and Clean Coal Technology, 4) Renewable Energy, 5) Energy Efficiency and Conservation, 6) Regional Energy Policy and Planning, and 7) Civilian Nuclear Energy.

Among the programmes above, there are currently three areas highlighted as top priorities for ASEAN, which are the two flagships programmes of ASEAN interconnection, namely the ASEAN Power Grid (APG) and the Trans-ASEAN Gas Pipeline (TAGP), and the development of Renewable Energy and Energy Efficiency in the region.

To realize the APG project, the ASEAN Member States (AMS) need a vast source of fund. To that, the Heads of ASEAN Power Utilities/Authorities (HAPUA) Council, as the implementing energy body for the APG, is committed to accelerate the implementation of the APG in support of the Master Plan on ASEAN Connectivity (MPAC). The goal of the HAPUA programme is to realize the APG by 2015, by alleviating the barriers to cross-border aspects, such as legal questions, technical standards and financial institutions. The APG is envisioned to serve towards ensuring regional energy security while promoting efficient use and sharing of energy resources. Under the ASEAN Interconnection Master Plan Study (AIMS) II, as of September 2012, the APG would be completed upon operation of all 16 identified cross-border interconnections and their specific links.

After more than 10 years since the first TAGP initiation, several cross-border pipelines have been constructed and some others are in planning. Currently there are 11 cross-border gas pipelines in operation with a total gas pipeline length of 3,019 km. The 12th cross-border gas pipeline, a new 150 km pipeline connection from Myanmar to Thailand, will be in operation in 2013. Although only about 45% (3,169 km) of total TAGP pipeline connections will be in operation by 2015, these pipelines have formed the TAGP backbones in the eastern part of ASEAN. In 2015, it will be possible to transmit gas from Myanmar to Viet Nam or even to Indonesia. It will also be possible for Singapore to export gas from its Liquefied Natural Gas (LNG) terminal to Thailand through the existing gas pipeline connection.

Under the TAGP Master Plan 2008 updated study, the base case analysis points to a widening gap between gas supply and demand in the ASEAN region, particularly from around 2017 onwards. Gas consumption is forecast to peak at around 17.5 billion standard cubic feet per day (BSCFD) around 2020 and then decline slowly as a result of production constraints.

And as for the use of energy, particularly oil which is still dominant in the regions’ fuel supply mix, efforts being undertaken to use energy efficiently and effectively through the Energy Efficiency and Conservation (EE&C) programmes will reduce the growth of energy consumption in the region. Previously ASEAN had not set a regional target for energy intensity reduction. Some of the AMS however have set a target to reduce energy intensity as part of the Asia Pacific Energy Cooperation (APEC) target. Under the APAEC 2010-2015, AMS have agreed to pursue a regional target of at least 8% reduction in energy intensity by 2015 based on the 2005 level. Through various working programmes of EE&C, such as the ASEAN Energy Manager Accreditation Scheme (AEMAS), ASEAN Energy Award, Energy Labeling, etc, and in reviewing the region’s energy situation, during the 30th ASEAN Ministers on Energy Meeting (AMEM) which was held on 12 September 2012 in Phnom Penh, Cambodia, the Ministers were pleased to note that as a result of measures to improve energy efficiency applied at both regional and national levels, ASEAN’s energy intensity was reduced by 4.97% between 2005 and 2009. This demonstrates that the region is on the right track towards achieving the target set in the ASEAN Plan of Action for Energy Cooperation (APAEC) 2010-2015 to reduce regional energy intensity by at least 8% from 2005 level by 2015.

In addition, development of Renewable Energy (RE) resources will further reduce the share of oil in the supply mix.  To address the issue of a limited global reserve of fossil fuels and unstable energy prices, ASEAN Member States have been following a deliberate policy of diversifying and efficiently using energy sources. ASEAN emphasizes strategies to further strengthen RE development, such as bio-fuels as well as to promote open trade, facilitation and cooperation in the renewable energy industry. Within the period of 2004-2009, ASEAN has met its 10% target to increase the installed renewable energy-based capacities for power generation. However, new technologies are very much at the experimental stage. RE resources such as geothermal, solar and wind energy are still capital intensive and not as affordable as conventional energy. ASEAN needs much more technology transfer and meaningful partnerships to make these energy sources viable for its increasing requirements. Nevertheless, ASEAN recognizes that renewable energies are crucially needed to increase the diversity of energy supply and to reduce the environmental impact of energy use in the region. In the APAEC 2010-2015, ASEAN set a collective target of 15% for regional RE in total installed power capacity by 2015.

Download full version (1.8 Mb): Dev. ASEAN Energy Sector_ACE_BeniSuryadi_Feb2013

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