Meeting future energy demand in the Association of Southeast Asian Nations (ASEAN) is a high priority in the region. With current indigenous fossil fuel resources incompatible with climate and sustainable development goals, and the COVID-19 pandemic causing fuel price volatility and economic uncertainty, the region can now seize the moment to put renewable energy sources at the forefront of its energy planning and growth agenda.
That was the focus of a joint-webinar hosted by the International Renewable Energy Agency (IRENA) and the ASEAN Centre for Energy (ACE). With IRENA’s recent Global Renewables Outlook (GRO) report and Power Generation Cost 2019 report framing the discussion, the virtual event entitied ‘Accelerating the Southeast Asian Energy Transformation’ brought together more than 160 participants from across the ASEAN region and further afield, to identify ways to catalyse the energy transition in Southeast Asia.
Under IRENA’s GRO, Southeast Asia’s economy could by grow an additional 2.9 per cent above current plans and policies by 2050. The Agency’s ‘Transforming Energy Scenario’ is a model that aligns the global energy system with the goals of the Paris Agreement. GRO 2020 shows that Southeast Asia could meet about 41% of all of its energy needs from renewable energy by 2030 and create an additional 6.7 million green jobs by 2050. Participants learned that as a result of dramatic cost reductions, replacing the world’s costliest 500 gigawatts of coal fired power in favour of renewables next year would yield annual savings of up to USD 23 billion per year.
In opening remarks, Gauri Singh, Deputy Director-General of IRENA emphasised that the region stands at a crossroads in terms of its energy future, highlighting that sustainable and affordable energy can be the cornerstone of growth and the pursuit of climate and sustainable development goals for ASEAN countries. Ms Singh pointed to the importance of renewed political will and the adoption of strong policy frameworks to drive the region’s sustainable energy progress.
Dr. Nuki Agya Utama, Executive Director of ACE stressed the region’s commitment to fulfing the Paris Agreement as well as achieving regional goals, including the ASEAN Plan for Action and associated regional energy cooperation frameworks. “We are progressing towards our 23 per cent aspirations renewables target,” he said, adding: “but our current path will leave us 5 per cent short by 2025. With renewables’ costs falling, they can greatly support our economic, climate and sustainable development goals.”
Building new solar is cheaper than building new coal in all countries of the region, noted Ken O’Flaherty, UK COP 26 Regional Ambassador for Asia Pacific and South Asia, highlighting that new coal plants make bad business sense, risk stranded assets, and are incompatible with the Paris agreement. Acknolwedging the need for parties to convene and strengthen cooperation, he said: “Together we can ensure that every country across Southeast Asia has the ability to unlock their renewable energy potential, and pursue clean alternatives to coal power. Under the UK’s Presidency of COP26, in partnership with Italy, our energy transition campaign aims to accelerate the global transition from coal to clean energy. We are working closely with countries, development banks, investors and civil society. We look forward to working closely on COP26 and our energy transition campaign with our key regional partners, including ASEAN institutions, ACE, IRENA, IEA, NDC Partnership and ADB.”
With a view to establishing outcomes, participants heard interventions from high level participants of Indonesia, Viet Nam, Singapore, the Asian Photovoltaic Industry Association and ACE, as well as from UNESCAP, with whom IRENA recently signed a Memorandum of Understanding, and the Global Wind Energy Council, which is a member of IRENA’s Coalition for Action.
Liming Qiao, Asia Director of the Global Wind Energy Council, finds the region’s wind energy potential to be promising, with the market growing at a compound annual growth rate (CAGR) of 40.6% in the last decade —largely driven by the cost reductions and government policies. Sharing other speakers’ view on the importance of policy certainty, she said: “While many countries can have ambitious long-term renewables targets, the right policy frameworks and clarity of those are still missing which hinders the industry progress for the lack of stability. This is a critical roadblock that needs to be resolved for more and larger-scale renewables development in ASEAN.”
In closing, Dr Nuki Aguya Utama, said that growth based on clean sources is one of the region’s highest priorities, and that cooperation is the key. “Regional energy cooperation is crucial to accelerating renewables deployment, with an uneven endowment of renewables potentials across the region. ASEAN will play a role in implementing mitigation measures.”
Accelerating private sector investment in large-scale Renewable Energy
Following its 2020 edition, the Economic Policy Dialogue series (EPD) is back with six new sessions that will run until June 2023. Organized by the United Nations Development Programme (UNDP) and the World Bank Group in Tunisia through TERI Trust Fund, these monthly meetings aim to bring together relevant key stakeholders to create a space for constructive, inclusive, and transparent debate, allowing to collectively address the challenges of economic and social reforms facing the country.
The six EPD sessions are organized to foster dialogue on structural reforms and collectively identify practical and operational solutions to facilitate the implementation of reforms needed to address economic and social challenges as well as economic and development priorities.
The first session will be held on Thursday, 24 November 2022, and will focus on “Accelerating private sector investment in large-scale renewable energy.” Through a frank and direct debate, this dialogue session will aim to propose solutions to accelerate the realization of large-scale renewable energy projects, find ways to overcome the identified barriers and propose innovative mechanisms for a win-win partnership to regain investor confidence and catalyze the development of these projects. Accelerating the implementation of these projects is the only way to reduce the energy deficit and contribute to achieving energy transition objectives: energy security, economic competitiveness, social equity, and climate action.
Tunisia’s interests in the energy transition are evident given the country’s increasing energy demand (1.5% per year) and the worsening of the energy deficit. All the while, the country remains, despite the adoption of several forward-looking laws, far from the objectives it had set itself – namely, 30% of renewable energy in the energy mix in 2030.
At the end of each session, proposed in a participatory format, recommendations will be formulated to initiate and fuel reflection on possible national socio-economic reforms. These reforms aim to improve access to regional development, youth employability, and economic and financial inclusion within the Sustainable Development Goals (SDGs) framework.
World Bank Group Announces International Low-Carbon Hydrogen Partnership
Today, on Energy Day at COP27, the World Bank Group announced the creation of the Hydrogen for Development Partnership (H4D), a new global initiative to boost the deployment of low-carbon hydrogen in developing countries.
H4D will help catalyze significant financing for hydrogen investments in the next few years, both from public and private sources. The partnership will foster capacity building and regulatory solutions, business models, and technologies toward the roll out of low-carbon hydrogen in developing countries. Through H4D, developing countries will gain further access to concessional financing and technical assistance to scale up hydrogen projects.
“Low-carbon hydrogen can have a significant role in countries seeking to accelerate their clean energy transition,” said David Malpass, President of the World Bank Group. “Our new hydrogen partnership will enable developing countries to prepare low-carbon hydrogen projects and boost energy security and resilience for their people while lowering emissions.”
Low-carbon hydrogen offers a solution to decarbonize heavy industries that produce more than 25 percent of global CO2 emissions, for which there is presently no viable alternative to fossil fuels. Low-cost, low-carbon hydrogen fuel can become a viable replacement for diesel in transportation. Hydrogen also has the potential to provide long-term energy storage options and bolster the reliability of renewable energies with variable outputs, like solar photovoltaics and wind.
For low- and middle-income countries, low-carbon hydrogen has the potential to generate export revenues, creating a value-added export sector that generates jobs for skilled labor and helps promote food security, since hydrogen can be used to produce ammonia, a key component of fertilizers. It can also generate energy capacity to meet local needs, including decarbonizing in-country manufacturing and smelting sectors, and provide energy access to remote populations.
The main activities of the H4D partnership, to be hosted in the Energy Sector Management Assistance Program (ESMAP) of the World Bank, will include:
- Convening international cooperation to increase the knowledge base in low-carbon hydrogen technologies for developing countries.
- Building capacities by following a global public goods approach.
- Understanding requirements from emerging markets and the private sector for the deployment of low-carbon hydrogen and its derivatives.
- Creating opportunities to inform innovation and for new technologies to gain visibility.
- Generating policy dialogue on enabling the deployment of low-carbon hydrogen across countries.
- Fostering collaboration with private sector partners for clean hydrogen projects.
EU leaders accuse US natural gas producers of profiteering
European leaders are unhappy with natural gas prices. Some leaders are insisting that the EU impose a price cap on all natural gas imports, regardless of origin, – notes Oilprice.com.
France’s president Emmanuel Macron accused the United States of a “double standard” because of the difference between the price at which liquefied natural gas produced in the U.S. sells in Europe and the price at which natural gas sells within the U.S.
“The North American economy is making choices for the sake of attractiveness, which I respect, but they create a double standard,” Macron said, also adding that “they allow state aid going to up to 80% on some sectors while it’s banned here – you get a double standard.”
He wasn’t alone among European national leaders in being unhappy about gas prices. In fact, as many as 15 leaders were unhappy, and they insisted that the EU imposes a price cap on all natural gas imports, regardless of origin.
Now, the U.S. is striking back at the accusations.
“What’s happening is the companies that hold those long-term contracts with US LNG producers, they’re marking that up and earning that margin in the European market,” Brian Crabtree, an assistant secretary at the Department of Energy, – told the Financial Times. “It’s not the US LNG company, it’s basically European-headquartered international oil companies and traders.”
Indeed, producers of liquefied natural gas do not invariably sell their product directly to the consumer, in the face of a country in Europe, for instance, They work with commodity majors such as Vitol and Trafigura, or the supermajors, including BP and Shell.
This is not to say that LNG producers are not benefiting from the much stronger demand for LNG from Europe. And this is exactly the reason they have been benefiting, in the form of higher profits: demand has surged, and when demand surges, prices follow, especially if supply is not growing as fast as demand.
In other words, Europe seems to want businesses to not act as businesses and take every opportunity to make a profit, which is what businesses are all about.
Be that as it may, a Ministry of Energy analyst, told the FT that the U.S. was committed to helping Europe get enough gas “at a price that is affordable to the continent.” It’s hardly a surprise he did not go into detail on how this affordable price would be achieved.
…This is a free market, isn’t it?
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