NTS Bulletin November 2015

Energy Sustainability in Southeast Asia: Towards the Achievement of the Sustainable Development Goals

 By Centre for Non-Traditional Security (NTS) Studies

1. Rajaratnam School of International Studies (RSIS) Singapore

In Southeast Asia, primary energy demand is projected to increase from 554.8 Mtoe in 2010 to 1,110.2 Mtoe in 2035. Oil will continue to dominate the energy mix with coal share growing at the fastest annual rate of 4.8%. Increasing energy demand, continuing reliance on oil, and expanding coal usage require regional efforts to ensure the access to affordable and reliable energy while further developing sustainable and modern energy. Energy is central to development as it provides the engine for growth and drives industry, transport, power, residential, commercial and other sectors. The Sustainable Development Goals (SDGs) acknowledge the critical role of energy in human development as a means for poverty reduction, social progress, equity, enhanced resilience, economic growth and environmental sustainability. This emphasis is reflected in Goal 7: Ensure Access to Affordable, Reliable, Sustainable and Modern Energy. It sets five energy-related targets by 2030 including energy efficiency, clean energy research and technology, and energy infrastructure and technology upgrade.

Energy Security Landscape in Southeast Asia

The status of energy security in Southeast Asia differs across countries. Energy access as reflected in the rate of electrification stood at 96 per cent in Indonesia, 88 per cent in the Philippines, 76 per cent in Brunei Darussalam, 70 per cent in Lao PDR, 52 per cent in Myanmar, and 31 per cent in Cambodia in 2012. In the same year, 140 million people in the region live without electricity. To increase the electrification rate, infrastructure developments in Cambodia and Myanmar are highly needed. In Indonesia, coal-fired power plants will make the most contributions to new electricity generation capacity followed by geothermal power plants, combined-cycle gas-powered plants, and hydropower plants. As coal usage poses environmental concerns, it is important that clean coal technologies are deployed.  Between 1990 and 2012, energy efficiency measured in terms of energy intensity has shown some improvements with the figures moving down from positive to negative scales. Energy efficiency, which essentially reduces energy demand, has indeed become part of the overarching energy policies in many Southeast Asian countries. Further efforts including technology research, technology transfer, and the incorporation of energy-efficient technologies in energy-consuming sectors are needed to intensify energy efficiency measures. The share of renewable energy in the primary energy supply also varies. In 2012, the Philippines registered the highest share of renewable energy at 23.5 per cent, with Indonesia, Viet Nam, Myanmar, Singapore, Thailand and Malaysia trailing behind at 8.3 per cent, 7.1 per cent, 4.4 per cent, 2.4 per cent, 1.9 per cent and 1.1 per cent respectively. Large hydropower has ranked Lao PDR, Myanmar, Viet Nam, and Cambodia among the top countries having the highest share of renewable energy in electricity generation. Renewable energy is a potential area for greater energy security. High capital costs, unreliability, and grid connection challenges however are often cited as the reasons for a relatively slow progress in renewable energy development. Further technology research and cooperation, coupled with the right policies and initiatives, would enable countries in the region to rise above the challenges and increase the share of renewable energy in their primary energy supply. Furthermore, nuclear energy remains an option in Vietnam, Indonesia, and Malaysia as part of their efforts towards securing the necessary energy to develop.

Reducing Dependence on Oil for Greater Energy Security

The emphasis on energy efficiency and diversification is key to greater energy security as continued dependence on oil would only make the region more susceptible to stagnating or declining oil production and fluctuating oil prices. While ensuring adequate energy supply is critical, measures to ensure that energy pricing is affordable for the population and profitable for power companies are equally important. While most efforts are done at national level, regional cooperation in areas such as technology research, sharing of best practices, infrastructure connectivity and standard harmonisation could help countries to achieve greater energy security and get closer to the energy-related targets of the SDGs by 2030.

Recommended Readings

• The ASEAN Centre for Energy, 2015, The 4^th energy outlook, Kuala Lumpur.
• Asian Development Bank, 2015, Sustainable energy for all ­– Tracking progress in Asia and the Pacific: A summary report, Manila.      
• International Energy Agency (IEA) and the World Bank, 2015, Sustainable energy for all 2015 – Progress toward sustainable energy, Washington DC.

Asian Development Bank, 2013, Energy outlook for Asia and the Pacific, Manila.