Will ASEAN realise its 2015 renewable energy goals?
- Jul 7, 2018 12:34 am GMT
Energy consumption and economy in the ASEAN region have been growing in tandem over the last two decades. The region’s economic growth had a consequential increase in primary energy consumption which was registered at 3.6% per annum from 1995 to 2007. From the 3rd ASEAN Energy Outlook (ACE, 2011), it’s forecasted that with the assumed GDP growth rate of 5.2% per annum from 2007 to 2030, final energy consumption in ASEAN will grow at an average annual rate of 4.4% from 375 MTOE to 1,018 MTOE in the Business-as-Usual (BAU) scenario during the same period, or 3.6% on average per year to reach 843 MTOE in 2030 in the Alternative Policy Scenario (APS) which analyzed the impact of the energy saving goals and action plans for renewable energy from each of ASEAN Member States.
Oil production in ASEAN is far from insignificant; ASEAN is not entirely free from the impact of the rising oil prices. Some of its member countries are particularly vulnerable to disturbances in energy supply since they are highly dependent on oil imports (Singapore, Thailand and the Philippines are the most oil dependent ASEAN economies). The threat is further magnified by the fact that ASEAN is one of the fastest growing regions in the world, which requires increasing energy supplies to fuel its rapid pace of economic expansion. This condition needs serious attention from policy makers in the region. How to best meet this demand poses a range of policy challenges for the region’s governments not only at the individual but also at the regional level (Symon, 2004).
Energy resources in ASEAN member states as a whole are rich in various number and forms ranging from the oil reserved, natural gas, and coal to the large potential in renewable energy; particularly wind, hydro, and geothermal but unevenly distributed. For instance, Indonesia, Malaysia and Brunei export crude oil, but the others have to import oil products and/or crude oil. Renewables such as hydro-electricity and solar energy while abundant are seriously under developed due to a lack of technology and funding. Indonesia is the biggest country for traditional energy reserved having oil deposit approximately at 10 BBL, natural gas 169.5 TCF, and coal 38,000 MMT. Indonesia has also enormous resources of geothermal potential. In term of hydro potential, Lao PDR is largest for hydro power accounting for 26,500 MW and is believed to be “the Battery for ASEAN” since it can supply the hydro-electricity to some neighbor countries. However, some countries like Brunei and Singapore have limited energy resources. Neverthless, due to their economic performance both of them are considered advanced in comparison to the other members.
To address this situation and unstable energy prices, ASEAN Member States have been following a deliberate policy of diversifying and efficiently using energy resources. ASEAN emphasizes strategies to further strengthen renewable energy development, such as bio-fuels, as well as to promote open trade, facilitation and cooperation in the renewable energy industry. Aggressive efforts have been undertaken by looking at alternative energy in the long term as an incremental supply to replace a part of the oil as the primary source of energy supply.
The region wants to accelerate its evelopment of clean energy by encouraging the use of fuels from biomass, enhancing renewable energy to replace oil consumption in the final sector, increasing renewable energy and attain a more balanced mix in electricity generation. It wants to utilizing alternative fuels such as CNG in the transportation sector and formulate policies to promote the utilization of renewables, alternative fuels and nuclear energy.
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. Renewable resources such as geo-thermal, 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. But, ASEAN recognize 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.
As such, under the current ASEAN’s energy plan, ASEAN Plan of Action for Energy Cooperation 2010-2015, Program Area No.5 Renewable Energy has been developed with more strategic goals for renewable energy, including achieving a collective target of 15% for regional renewable energy in the total power installed capacity by 2015. It is also envisaged that by end of the Plan period, clear policies and responsive plans and program for RE development are addressed to enhance commercialization, investment, market and trade potentials of RE technologies.
Now, renewable energy is the priority for development for ASEAN member states. With abundant renewable energy resources as one region, they are currently implementing a vision of renewable energy into progressive actions by engaging more renewable activities and enhancing greater regional collaboration. They are also working to identify areas where clean and renewable energy can emerge and deploy to mitigate the adverse impact of the climate change as well. At the national level, each country has tried to come up with its own renewable energy policy. Expecting by 2015, 15% target is achieved.
But to what partners should the countries look for here?
For the region where Small and Medium Enterprises or SMEs account for over 90% of all enterprises in every Member State and employ more than half the workforce in most Member States (APEC Policy Support Unit in June 2010 published a report entitled SME Market Access and Internationalization: Medium-term KPIs for the SMEWG Strategic Plan), SMEs is the answer. (Although there’s a never ending debate about the definition of SMEs in various countries)
In general, every country in the Southeast Asian region has already provided specific policies for the development of renewable energy as part of their current energy mix for the matter of energy security. They set up the target share of renewable energy in exact coming years.
This includes accelerating the development of clean energy such as renewable and alternative energy by encouraging the use of fuels from biomass, enhancing renewable energy to replace oil consumption in the final sector, increasing renewable energy and attain a more balanced mix in electricity generation, utilizing alternative fuels such as CNG in the transportation sector and formulating policies to promote the utilization of renewables, alternative fuels and nuclear energy are some activities that can conducted more aggressive.
Now, renewable energy is the priority for development for ASEAN member states. With abundant renewable energy resources as one region, they are currently bringing up renewable energy vision into progressive actions by engaging more renewable activities and enhancing greater regional collaboration. They are also working to identify areas where clean and renewable energy can emerge and deploy to mitigate the adverse impact of the climate change as well. At the national level, each country has tried to come up with its own renewable energy policy. For example, Thailand is currently pushing the renewable energy as a national agenda supported by the master plan so called “Alternative Energy Development Plan (2008-2022)” by setting up the goal to increase a share of alternative energy mixed to be 20% of the country final energy demand in the year 2022. Philippines has come up with Philippine Energy Plan 2007-2014 emphasizing on self-sufficiency to strive for energy independence and intensifying use of renewable energy resources and alternative fuels for a cleaner environment. For Malaysia, the Government announced the launching of the Small Renewable Energy Power Programme (SREP). The programme is among the steps being taken by the Government to encourage and intensify the utilisation of Renewable Energy in power generation. This is designed to be in line with the Government’s decision to intensify the development of Renewable Energy as the fifth fuel resource under the country’s Fuel Diversification Policy, as stipulated in the objectives of the Third Outline Perspective Plan for 2001-2010 (OPP3) and the Eight Malaysia Plan.
But we can see, many renewable energy projects in ASEAN countries are still dominated by the pilot projects funded by the Government or from Donor Countries or International Organizations. If they continue to rely on this condition, the target of 15% in 2015 would be difficult to achieve.
SMEs are the backbone of the ASEAN economies. They account for more than 96 per cent of all enterprises and for between 50 and 95 per cent of employment in many AMSs. In addition, the contribution of SMEs to GDP is generally significant, about 30-53 per cent, and the contribution of SMEs to exports is between 19-31 per cent. They are also the largest source of domestic employment across all economic sectors and in both rural and urban areas.
A strong, dynamic and efficient SME sector will ensure the sustainable, inclusive and broad-based economic and social development. Thus, the encouragement and promotion of competitive and innovative SMEs is necessary in contributing to greater economic growth and social development towards more inclusive and broad-based integration of the ASEAN region.
Taking the goals of economic integration in ASEAN which towards ASEAN Economic Community in 2015, SMEs could serve as main contributor. If ASEAN want to say they successfully achieved the target 15% in 2015, each portion of the State should provide a greater role to what has been the backbone of the economy is their country, namely SMEs.
Image Credit: rudall30/Shutterstock
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