Southeast Asia seen shifting to coal, higher dependence on oil imports – IEA

coal.jpeg

New Delhi – Southeast Asia’s energy landscape continues to change, as rising demand, lower domestic production and energy security concerns lead to a greater role for coal, a sharp rise in the region’s dependence on oil imports and the reversal of its role as a major gas supplier to international markets, the International Energy Agency has said.

As Southeast Asia flourishes, it is moving to the centre of the global energy stage,” IEA Executive Director FatihBirol said. “Countries in the region now have much in common with IEA members. We must all work together to build more secure and sustainable energy supplies and markets, as platforms for promoting economic development.”

The recently released World Energy Outlook Special Report on Southeast Asia said that the region’s energy demand will increase by 80% in the period to 2040, though the its per-capita energy use remains well below the global average. Despite policies aimed at scaling up the deployment of renewable resources, the share of fossil fuels in the region’s energy mix increases to around 80% by 2040, in stark contrast to the declining trend seen in many parts of the world, the report forecast.

Rising imports have sharpened the focus on the economic and security aspects of energy us, it said, addint that by 2040 the region’s net oil imports would more than double to 6.7 mb/d, a level equivalent to the current oil imports of China. Southeast Asia’s oil import bill will surge to more than $300 billion per year by 2040, compared with around $120 billion in 2014, with increases in spending in almost all countries in the region.

Indonesia supports a continued expansion of Southeast Asia’s gas and coal output, but production is increasingly consumed within the region. As domestic natural gas demand outpaces indigenous production, intra-regional and intra-country trade increases, and Southeast Asia turns into a net gas importer of around 10 bcm by 2040, compared with net exports of 54 bcm in 2013.

The power sector is expected to shape the energy outlook for Southeast Asia, as electricity demand will almost triple by 2040, an increase greater than the current power output of Japan. The sector will continue its shift towards coal due to its abundance and relative affordability. Although the average efficiency of Southeast Asia’s coal-fired power plant fleet will increase by 5 percentage points throughout the projection period, less-efficient subcritical technologies would account for 50% of the region’s coal power fleet in 2040, highlighting the need to accelerate the deployment of more efficient technologies in the region to reduce local pollution and slow the rise in CO2 emissions.

The region needs $2.5 trillion of investment in energy-supply infrastructure in the period to 2040, but for this to materialise there is a need to see more progress with reforms to domestic energy markets and the establishment of improved policy frameworks.”

The report noted that greater integration of the region’s energy markets could help catalyse development of energy resources, facilitate more efficient use of the region’s resources and enhance energy security. It also highlighted the significant progress achieved by the region in expanding energy access but urged increased action as 120 million people remain without access to electricity while almost 280 million lack clean cooking facilities. The report also called for more efforts to reduce subsidies to fossil fuels, noting that the region spent $36 billion on fossil-fuel subsidies in 2014 despite reforms in Indonesia, Malaysia, Thailand and Myanmar.

Leave a Reply

Your email address will not be published.