Manila, 20 April 2010
Honourable Ms. Lorraine Hariton, Special Representative for Commercial and Business Affairs, US Department of State
Honourable Mr. Arthur Aguilar, Chairman, National Renewable Energy Board and President, National Transmission Corporation, Philippines Department of Energy,
Honourable Ms. Leocadia I. Zak, Director, US Trade and Development Agency
Distinguished Speakers and Participants
Ladies and Gentlemen,
It gives me great pleasure to address this ASEAN Clean Energy Trade, Technology and Investment Forum. At the outset, on behalf of the ASEAN Member States and H.E. Dr. Surin Pitsuwan, Secretary-General of ASEAN, I would like to express my sincere appreciation and gratitude to the US Trade and Development Agency (USTDA), and the US Department of State for organising this very important forum in cooperation with the ASEAN Secretariat. I also thank the Government of the Philippines for hosting this event.
Clean energy development has increasingly occupied a high priority in the making of energy policy in ASEAN. As fossil fuels remain the primary source for energy supply in the region, ASEAN is faced with the challenge of environmental degradation as a result of the hydrocarbon combustion and long-term challenges of availability. At the same time, the region is at risk from the impact of climate change as it faces mounting challenge in adapting and mitigating climate change impact.
Several studies show that ASEAN will be one of the regions that will be severely affected by climate change due to the region’s low lying geography and since 80% of the region’s population and much of the economic activity are within 100 kilometres of the coast. According to a recent ADB Study, the cost of lost agricultural production and other negative impact from climate change would be equivalent to as much as 6.7% of gross domestic product in major ASEAN Member States by the end of this Century, more than double the 2.6% loss estimated for the world as a whole.
ASEAN Energy Consumption and Cooperation
Energy demand is increasing around the world to meet the societal development needs and aspirations. This is even more significant in the ASEAN region due to its economic and demographic growth. For example, ASEAN’s primary energy requirement (in the Reference Scenario) is projected to triple between 2005 and 2030. Energy demand will reach 1,252 Million Tons of Oil Equivalent (MTOE) in 2030 from 474 MTOE in 2005, an increase by an average annual growth rate of 4%. This is higher than the world’s average growth rate of 1.8% in primary energy consumption through 2030.
As such, by 2030, it is predicted that a massive investment is required for energy infrastructure to meet the rising regional energy demand and improve energy access, while maintaining environmental sustainability and competitiveness in the context of sustainable development.
Concerted partnership for clean energy development is crucial to meet the upward trend in energy demand in ASEAN while preventing any irreversible damage to the environment. ASEAN, thus, has committed itself to work together in bringing policies to actions towards a cleaner, more efficient and sustainable ASEAN energy community.
A low carbon economy is therefore the way forward for building the ASEAN Economic Community (AEC) and in this regard, the ASEAN Plan of Action for Energy Cooperation (APAEC) 2010-2015 was adopted by the ASEAN Energy Ministers in 2009. This is an important guiding document that reflects the commitment of ASEAN towards this important goal.
Clean Energy Development towards ASEAN Energy Security
Let’s me now share with you some views on clean energy development and requirements to ensure energy security in ASEAN.
ASEAN Member States have been following a deliberate policy of diversifying and efficiently using energy sources. Aggressive efforts had been undertaken by ASEAN to look for alternative clean fuels such as bio-fuels, gas-to-liquids, coal-to-liquids and innovative clean energy sources including hydro, wind power, geothermal, and nuclear in the long term as incremental supply to replace a part of the oil demand and consumption.
However, new technologies such as hydrogen, clean coal technology, and carbon capture 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.
Under the APAEC (2010 – 2015), ASEAN has four programmes to work towards a cleaner and sustainable ASEAN energy community, namely renewable energy; clean coal technology; energy efficiency and conservation; and civilian 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. For 2010-2015, ASEAN recognise 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 ASEAN’s energy plan for 2010-2015, ASEAN Member States have set strategic goals for renewable energy, including achieving a collective target of 15% for regional renewable energy in the total power installed capacity by 2015.
Since 2005, coal is well-known in the ASEAN region as the fastest growing energy source due to its abundance and the increasing demand of fuel for electricity generation as well as use by the industrial sector. The energy plans of the ASEAN Member States indicate the rapid growth of coal utilisation for power generation which presents an opportunity to promote and increase cleaner coal use, technology and trade that could bring in mutual economic benefits towards regional energy security.
According to the Institute of Energy Economics, Japan (IEEJ) Asia/World Energy Outlook 2009, the world energy consumption will increase more than 50% by 2035 in the Reference Case projection. The world would likely depend upon fossil fuels heavily. The Fossil Fuel Ratio will continue to dominate the total consumption with the rate of 88.5% in 2007 and at approx 85.2% in 2035. For Coal Ratio, the relevant figures are 28.8% in 2007 and 26.6% in 2035. This trend is equally significant in the ASEAN region due to the potential growth of the region as the global economic engine shifts to Asia.
A collective action to strengthen cooperative partnerships in the promotion and utilisation of coal and clean coal technologies among the ASEAN Member States and with Dialogue Partners, International Community and the industry thus becomes important, especially in connection to the current global debate on the negative impacts of global warming and climate change.
Energy efficiency is considered as one of the most cost-effective ways of enhancing energy security and addressing climate change as well as promoting competitiveness in the ASEAN region. The strategic goals of ASEAN’s energy efficiency and conservation (EE&C) in the APAEC 2010-2015 includes pursuing the aspirational goal of reducing regional
energy intensity of at least 8% by 2015 based on 2005 level.
ASEAN has also been cooperating with its Dialogue Partners, such as China, Japan and Republic of Korea (ROK) under the ASEAN+3 energy framework. The cooperation covers the areas of energy security, oil market, oil stockpiling, natural gas and new and renewable energy, and energy efficiency and conservation. In particular, the ASEAN+3 Countries are pursuing closer cooperation in Clean Development Mechanism as well as on civilian nuclear energy. These two new activities are to help reduce greenhouse gas emissions and promote sustainable development through activity enhancing capacity building.
Under the East Asia Summit Dialogue, ASEAN, Australia, China, India, Japan, the ROK and New Zealand cooperate in the areas of improving energy efficiency, use of cleaner energy, including renewable and alternative sources of energy and promoting energy market integration. Notably, under the EAS Energy Market Integration work stream, the participating countries are working on possible removal of trade and investment barriers in energy sector. Cooperation is also encouraged with international financial institutions to provide ASEAN with support in terms of investment in energy efficiency and to develop effective tools for facilitating such investments.
Cooperation between ASEAN Member States and USTDA has been active too. USTDA is working with Cambodia, Indonesia, Lao PDR, Thailand, Viet Nam on energy related programmes especially in providing training, supporting studies, and business networking in the areas of civil nuclear power development, biodiesel, hydropower, and oil and gas. USTDA is also providing support to Indonesia, Malaysia, Philippines, Thailand, and Viet Nam the areas of disaster management, water treatment and ICT. I believe there is potential for cooperation between ASEAN and USTDA at the regional level too.
In concluding my remarks, I firmly believe that expanding international cooperation on cleaner and sustainable energy is necessary for the continued growth and development of the ASEAN economies. It is undeniable that enhanced collaboration and concerted partnership in Clean Energy Development is imperative and should take increased attention especially in the light of the episodes of energy price volatilities, current global financial slowdown and climate change impact.
There is a need to identify and address barriers to the development of clean energy especially technology-related, which is necessary to meet the rapidly growing need for high quality, affordable and low emission fuel in the ASEAN region. In this regard, this Forum provides a great opportunity for all stakeholders–government officials, the private sector representatives, investors and researchers of ASEAN–to interact and establish necessary networks and partnerships with the US as well as international organisations to develop clean energy initiatives and projects for the region.
I am delighted to note that the Forum’s agenda touches on all aspects necessary for the development of clean energy, including policy and regulatory issues, technology and financing. I hope that the Forum will yield fruitful outcomes for collaboration between ASEAN and the US in this important area. This will certainly buttress the growing ASEAN-US dialogue relations as I see this as a niche area with great potentials for cooperation between ASEAN and the US as envisaged at the first meeting of the ASEAN-US Leaders in Singapore last year.
I wish all participants a fruitful and successful meeting and networking.