TODAY’S STUDY: THE HUGE NEW ENERGY POTENTIAL OF SOUTHEAST ASIA

energy [r]evolution; A Sustainable ASEAN Energy Outlook

October 2013 (Greenpeace and the Global Wind Energy Council)

Executive Summary

The expert consensus is that a fundamental shift in the way we consume and generate energy must begin immediately and be well underway within the next ten years in order to avert the worst impacts of climate change.

The scale of the challenge requires a complete transformation of the way we produce, consume and distribute energy, while maintaining economic growth. The five key principles behind this Energy [R]evolution will be to:

• Implement renewable solutions, especially through decentralised energy systems and grid expansions

• Respect the natural limits of the environment

• Phase out dirty, unsustainable energy sources

• Create greater equity in the use of resources

• Decouple economic growth from the consumption of fossil fuels

Decentralised energy systems, where power and heat are produced close to the point of final use, reduce grid loads and energy losses in distribution. Global investments in ‘climate infrastructure’ such as smart interactive grids and transmission grids to transport large quantities of offshore wind and concentrated solar power are essential. Building up clusters of renewable micro grids, especially for people living in remote areas, will be a central tool in providing sustainable electricity to the almost two billion people around the world who currently do not have access to electricity.

click to enlarge

the energy [r]evolution – key results

Renewable energy sources accounted for 26.7% of the ASEAN region’s primary energy demand in 2010. The main sources are bio energy and geothermal followed by hydro. Biomass is almost exclusively “traditional biomass” used for cooking.

Renewables contributed about 14% for electricity generation. About 73% of the primary energy supply today still comes from fossil fuels.

The Energy [R]evolution scenario describes development pathways to a sustainable energy supply, achieving the urgently needed CO2 reduction target and a fossil fuel phase-out. The results of the Energy [R]evolution scenario which will be achieved through the following measures:

• Curbing energy demand:The energy demand of the 10 ASEAN countries is projected by combining population development, GDP growth and energy intensity. Under the Reference scenario, total final energy demand increases by 115% from the current 14,819 PJ/a to 31,875 PJ/a in 2050. In the Energy [R]evolution scenario, final energy demand increases at a much lower rate by 23% compared to current consumption and it is expected to reach 18,190 PJ/a by 2050.

click to enlarge

• Controlling power demand: Under the Energy [R]evolution scenario, due to economic growth, increasing living standards and electrification of the transport sector, electricity demand is exptected to increase in both the industry sector, in the residential and service sectors as well as in the the transport sector. Total electricity demand will rise from 605 TWh/a to 2,275 TWh/a by the year 2050. Compared to the Reference scenario, efficiency measures in the industry, residential and service sectors avoid the generation of about 1,080 TWh/a. This reduction can be achieved in particular by introducing highly efficient electronic devices using the best available technology in all demand sectors.

• Reducing energy demand for heating and cooling: Efficiency gains in the building sector are even larger. Under the Energy [R]evolution scenario, demand for heating and climatization is expected to increase until 2030 and remains rather constant afterwards. Compared to the Reference scenario, consumption equivalent to 3,374 PJ/a is avoided through efficiency gains by 2050. As a result of energy-related renovation of the existing stock of residential buildings, the introduction of low energy standards and ‘passive climatisation’ for new buildings, as well as highly efficient air conditioning systems, enjoyment of the same comfort and energy services will be accompanied by a much lower future energy demand.

• Electricity generation: The development of the electricity supply sector is charaterised by a dynamically growing renewable energy market and an increasing share of renewable electricity. This will compensate for the abstinence of nuclear power production in the Energy [R]evolution scenario and reduce the number of fossil fuel-fired power plants required for grid stabilisation. By 2050, 92% of the electricity produced in the ASEAN region will come from renewable energy sources. ‘New’ renewables – mainly wind, geothermal energy and PV – will contribute 70% to the total electricity generation. Already by 2020 the share of renewable electricity production will be 29% and 60% by 2030. The installed capacity of renewables will reach 427 GW in 2030 and 1,184 GW by 2050.

• Future costs of electricity generation: The introduction of renewable technologies under the Energy [R]evolution scenario increase the future costs of electricity generation compared to the Reference scenario until 2020. This difference will be less than 0.8 US$ct/kWh up to 2020, however. Because of high prices for conventional fuels and the lower CO2 intensity of electricity generation, from 2030 on electricity generation costs will become economically favourable under the Energy [R]evolution scenario and by 2050 costs will be 7.5 US$ct/kWh below those in the Reference version.

click to enlarge

• The future electricity bill: Under the Reference scenario, the unchecked growth in demand, an increase in fossil fuel prices and the cost of CO2 emissions result in total electricity supply costs rising from today’s US$ 96 billion per year to more than US$ 555 billion in 2050, compared to US$ 327 billion in the E[R] scenario. The Energy [R]evolution scenario not only complies with the ASEAN region’s CO2 reduction targets, but also helps to stabilise energy costs and relieve the economic pressure on society. Increasing energy efficiency and shifting energy supply to renewables lead to long term costs for electricity supply that are more than 41% lower than in the Reference scenario.

• Future investment in power generation: It would require US$ 2,752 billion in investment for the Energy [R]evolution scenario to become reality - including investments for replacement after the economic lifetime of the plants - approximately US$ 67.1 billion per year or US$ 1,470 billion more than in the Reference scenario (US$ 1,282 billion). Under the Reference version, the levels of investment in conventional power plants add up to almost 59% while approximately 41% would be invested in renewable energy until 2050. Under the Energy [R]evolution scenario, however, the ASEAN region would shift almost 90% of the entire investment towards renewables. Until 2030, the fossil fuel share of power sector investment would be focused mainly on gas power plants.

• Fuel costs savings: Because renewable energy has no fuel costs, the fuel cost savings in the Energy [R]evolution scenario reach a total of US$ 2,698 billion up to 2050, or US$ 69.2 billion per year. Total fuel cost savings therefore would cover almost twice the additional investmentss compared to the Reference scenario. These renewable energy sources would then go on to produce electricity without any further fuel costs beyond 2050, while the costs for coal and gas will continue to be a burden on national economies.

• Energy supply for heating and cooling: Today, renewables meet 47% of the ASEAN region’s energy demand for heating and cooling, the main contribution coming from the use of biomass. Dedicated support instruments are required toensure a dynamic development in particular for renewable cooling technologies (e.g. solar cooling) and renewable process heat production. In the Energy [R]evolution scenario, renewables provide 52% of the ASEAN region’s total heat demand in 2030 and 78% in 2050. Energy efficiency measures help to reduce the currently growing energy demand for heating and cooling by 28 % in 2050 (relative to the reference scenario), in spite of improving living standards and economic growth. In the industry sector solar collectors, geothermal energy (incl. heat pumps) as well as electricity and hydrogen from renewable sources are increasingly substituting for fossil fuel-fired systems. A shift from coal and oil to natural gas in the remaining conventional applications leads to a further reduction of CO2 emissions.

click to enlarge

• Curbing energy demand: The energy demand of the 10 ASEAN countries is projected by combining population development, GDP growth and energy intensity. Under the Reference scenario, total final energy demand increases by 115% from the current 14,819 PJ/a to 31,875 PJ/a in 2050. In the Energy [R]evolution scenario, final energy demand increases at a much lower rate by 23% compared to current consumption and it is expected to reach 18,190 PJ/a by 2050.

• Controlling power demand: Under the Energy [R]evolution scenario, due to economic growth, increasing living standards and electrification of the transport sector, electricity demand is exptected to increase in both the industry sector, in the residential and service sectors as well as in the the transport sector. Total electricity demand will rise from 605 TWh/a to 2,275 TWh/a by the year 2050. Compared to the Reference scenario, efficiency measures in the industry, residential and service sectors avoid the generation of about 1,080 TWh/a. This reduction can be achieved in particular by introducing highly efficient electronic devices using the best available technology in all demand sectors.

• Reducing energy demand for heating and cooling: Efficiency gains in the building sector are even larger. Under the Energy [R]evolution scenario, demand for heating and climatization is expected to increase until 2030 and remains rather constant afterwards. Compared to the Reference scenario, consumption equivalent to 3,374 PJ/a is avoided through efficiency gains by 2050. As a result of energy-related renovation of the existing stock of residential buildings, the introduction of low energy standards and ‘passive climatisation’ for new buildings, as well as highly efficient air conditioning systems, enjoyment of the same comfort and energy services will be accompanied by a much lower future energy demand.

•Electricity generation: The development of the electricity supply sector is charaterised by a dynamically growing renewable energy market and an increasing share of renewable electricity. This will compensate for the abstinence of nuclear power production in the Energy [R]evolution scenario and reduce the number of fossil fuel-fired power plants required for grid stabilisation. By 2050, 92% of the electricity produced in the ASEAN region will come from renewable energy sources. ‘New’ renewables – mainly wind, geothermal energy and PV – will contribute 70% to the total electricity generation. Already by 2020 the share of renewable electricity production will be 29% and 60% by 2030. The installed capacity of renewables will reach 427 GW in 2030 and 1,184 GW by 2050.

click to enlarge

• Future costs of electricity generation: The introduction of renewable technologies under the Energy [R]evolution scenario increase the future costs of electricity generation compared to the Reference scenario until 2020. This difference will be less than 0.8 US$ct/kWh up to 2020, however. Because of high prices for conventional fuels and the lower CO2 intensity of electricity generation, from 2030 on electricity generation costs will become economically favourable under the Energy [R]evolution scenario and by 2050 costs will be 7.5 US$ct/kWh below those in the Reference version.

• The future electricity bill: Under the Reference scenario, the unchecked growth in demand, an increase in fossil fuel prices and the cost of CO2 emissions result in total electricity supply costs rising from today’s US$ 96 billion per year to more than US$ 555 billion in 2050, compared to US$ 327 billion in the E[R] scenario. The Energy [R]evolution scenario not only complies with the ASEAN region’s CO2 reduction targets, but also helps to stabilise energy costs and relieve the economic pressure on society. Increasing energy efficiency and shifting energy supply to renewables lead to long term costs for electricity supply that are more than 41% lower than in the Reference scenario.

• Future investment in power generation: It would require US$ 2,752 billion in investment for the Energy [R]evolution scenario to become reality - including investments for replacement after the economic lifetime of the plants - approximately US$ 67.1 billion per year or US$ 1,470 billion more than in the Reference scenario (US$ 1,282 billion). Under the Reference version, the levels of investment in conventional power plants add up to almost 59% while approximately 41% would be invested in renewable energy until 2050. Under the Energy [R]evolution scenario, however, the ASEAN region would shift almost 90% of the entire investment towards renewables. Until 2030, the fossil fuel share of power sector investment would be focused mainly on gas power plants.

• Fuel costs savings: Because renewable energy has no fuel costs, the fuel cost savings in the Energy [R]evolution scenario reach a total of US$ 2,698 billion up to 2050, or US$ 69.2 billion per year. Total fuel cost savings therefore would cover almost twice the additional investmentss compared to the Reference scenario. These renewable energy sources would then go on to produce electricity without any further fuel costs beyond 2050, while the costs for coal and gas will continue to be a burden on national economies.

click to enlarge

•Energy supply for heating and cooling: Today, renewables meet 47% of the ASEAN region’s energy demand for heating and cooling, the main contribution coming from the use of biomass. Dedicated support instruments are required toensure a dynamic development in particular for renewable cooling technologies (e.g. solar cooling) and renewable process heat production. In the Energy [R]evolution scenario, renewables provide 52% of the ASEAN region’s total heat demand in 2030 and 78% in 2050. Energy efficiency measures help to reduce the currently growing energy demand for heating and cooling by 28 % in 2050 (relative to the reference scenario), in spite of improving living standards and economic growth. In the industry sector solar collectors, geothermal energy (incl. heat pumps) as well as electricity and hydrogen from renewable sources are increasingly substituting for fossil fuel-fired systems. A shift from coal and oil to natural gas in the remaining conventional applications leads to a further reduction of CO2 emissions.

• Future investments in the heating and cooling sector: Renewable heating technologies are extremely variable, from low tech biomass stoves and unglazed solar collectors to very sophisticated enhanced geothermal systems and solar cooling systems.Thus it can only roughly be calculated, that the Energy [R]evolution scenario in total requires around US$ 1,258 billion to be invested in renewable heating technologies until 2050 (including investments for replacement after the economic lifetime of the plants) - approximately US$ 31 billion per year.

• Future employment in the energy sector: Energy sector jobs in the ASEAN region are higher in the Energy [R]evolution scenario at every stage in the projection. In 2010, 1.1 million people were employed in the energy sector. Due to strong growth in the renewable energy sector, jobs in the Energy [R]evolution scenario increase by 238 thousand (21%) to 1.4 million in 2015, while jobs in the Reference Scenario fall slightly in the same period. After 2015, jobs in both scenarios fall, reflecting the fact that labour intensity is reduced as prosperity in the region grows, although losses in the Energy [R]evolution scenario are somewhat compensated for by strong growth in renewable energy. In 2020, there are nearly 1.3 million jobs in the Energy [R]evolution scenario, and 1 million in the Reference scenario. In 2030, there are approximately 1.1 million jobs in the Energy [R]evolution scenarios, and 0.9 million jobs in the Reference scenario.

click to enlarge

• Transport: Due to population increase, GDP growth and higher living standards, energy demand from the transport sector is expected to increase in the Energy [R]evolution scenario by 13% to 4,411 PJ/a in 2050, 480 PJ/a higher than today’s levels (3,891 PJ/a). However, in 2050 efficiency measures and mode shifts will save 55% compared to the Reference scenario (9,788 PJ/a). Highly efficient propulsion technology with hybrid, plug-in hybrid and battery-electric power trains will bring large efficiency gains. By 2030, electricity will provide 10% of the transport sector’s total energy demand in the Energy [R]evolution, while in 2050 the share will be 27%.

• Primary energy consumption: Under the Energy [R]evolution scenario, primary energy demand will increase by 22% from today’s 23,227 PJ/a to 28,302 PJ/a. Compared to the Reference scenario, overall primary energy demand will be reduced by 43% in 2050 under the Energy [R]evolution scenario (REF: 49,621 PJ in 2050).

• Development of CO2 emissions: Whilst the ASEAN region’s emissions of CO2 will increase by 144% between 2010 and 2050 under the Reference scenario, under the Energy [R]evolution scenario they will decrease from 1,164 million tonnes in 2010 to 296 million tonnes in 2050. Annual per capita emissions will drop from 2.0 tonne to 0.4 tonne. In spite of the abstinence of nuclear power production and increasing energy demand, CO2 emissions will decrease in the electricity sector. In the long run efficiency gains and the increased use of renewable in vehicles will reduce emissions also in the transport sector. With a share of 39% of CO2, the industry sector will be the largest sources of emissions in 2050. By 2050, the ASEAN region’s CO2 emissions are 26% below 1990 levels.

click to enlarge

To make the Energy [R]evolution real and to avoid dangerous climate change, Greenpeace, and GWEC demand that the following policies and actions are implemented in the energy sector:

1. Phase out all subsidies for fossil fuel consumption and production because these subsidies often benefit more affluent segments of society rather than the poor. It will help create a level-playing field where renewable energy technologies can compete with other energy carriers. It is also important to take into account all of the external benefits and costs of all energy technologies so that the so- called “cheapness” of coal will be exposed and the supposed “expensiveness” of RE debunked.

2. Ensure that renewable energy incentives do not shift a disproportionate share of the additional financial cost to the poorest households. Impacts can be minimized by adopting policy support to national development objectives.

3. To help advance electrification and socio-economic objectives, off-grid applications of renewable energy must be prioritized. 4. Guarantee priority access to the grid for renewable power generators

5. Renewable energy policies that are predictable and consistent with emerging but common energy policy frameworks in the region should be harmonized. Such measure sends a strong signal to potential investors about the stability of the support system. The effectiveness of fostering market uptake depends more on design and implementation rather than on specific type of incentive. On the other hand, a feed-in tariff policy in the ASEAN region countries will help boost the renewable energy sector in countries that warrant the financial and technological support from developed countries.

6. Design complementing renewable energy and climate change policies to derive maximum benefit from climate change financing options. These complementary renewable energy and climate policies can be the main vehicles for ASEAN countries NAMAs or nationally appropriate mitigation actions as part of our region’s commitment to reduce greenhouse gas. And because renewable energy policies contribute to carbon dioxide emissions reductions that, although voluntary, are measurable, reportable and verifiable, this will provide an additional impetus to the on-going international climate negotiations.

7. Implement efficiency standards for all energy consuming appliances, buildings and vehicles.

Tweet