Opening remarks at Regional Preparatory Meeting for the Second Asian and Pacific Energy Forum
Delivered at Regional Preparatory Meeting for the Second Asian and Pacific Energy Forum in Bangkok, Thailand
Ladies and Gentlemen,
Welcome to this Regional Preparatory Meeting for the Second Asian and Pacific Energy Forum. Asia-Pacific’s energy transition is already underway - albeit at a slow pace - given the growing demand pressures and the need for a corresponding energy supply mix to respond to environmental and economic dynamics, and to the power of technological advancements and innovation. Your forum is critical to get the diagnostics right and shape the region’s approach for the future. This will help lay the groundwork for the Second Ministerial Meeting of the Asian and Pacific Energy Forum.
Asia’s energy scene and dynamics are fast changing. Barring several hydrocarbon-rich economies, our region is largely dependent on fuel imports, which has implications for energy security and our planet. The negative economic, environmental and social externalities of our consumption of coal, gas and oil are evident in the region’s high greenhouse gas emissions. These hit 25 billion tons in 2014, impacting both people and planet.
Indeed, we need to drive the energy transition more aggressively by addressing a few key challenges.
First, we need to manage effectively Asia-Pacific’s energy demand which is expected to rise by 48 per cent1 by mid-century to cater for the region’s rapid urbanization, industrialization and economic growth. It will be crucial to draw on forecasts that can tell us where exactly and in which sectors demand will increase, to fin the appropriate policy responses.
Second, achieving national energy security is required to protect economies in the region from supply disruptions, price fluctuations and market instability while reducing vulnerabilities from dependence on imported energy. Our citizens and businesses can only thrive if they have an uninterrupted, affordable and reliable supply of energy.
Third, energy access needs to be provided to over 420 million people across the region without electricity. The challenges and economics of reaching the last-mile need to be better understood to enable efficient approaches to electrification that duly consider local contexts. More research and more granular data are required to better understand the added challenge of providing clean fuels and technology to the 2.1 billion people who still rely on traditional biomass for cooking and heating.
Fourth, enhancing energy conservation and efficiency holds potential to promote sustainable development, through increased productivity and emissions reductions in the region. While energy intensity in the Asia-Pacific region is much higher than that of developed countries, it is being steadily reduced. For example, while the average energy intensity in China was 50 percent higher than that of the OECD countries in 2015, it had improved by 5.6 percent annually, a notable increase on the annual average of 3.1 percent over the previous decade. There are numerous examples of the successful implementation of energy efficiency measures in the region, but these need to be adapted to differing national contexts to allow wider replication. To support these efforts, it is necessary to quantify, internalize, and promote the manifold benefits of energy efficiency.
Finally, while significant renewable energy capacity has been installed in recent years, its share in the regional energy mix has stagnated and remains low. SDG7 not only calls for a substantial increase of the share of renewables, but it sees this to be critical to enhancing energy access, especially in rural areas. Currently, the region consumes about a quarter of the world’s oil, 45 per cent of its coal and 10 per cent of its gas.2 Boosting energy security calls for rebalancing the energy mix and improving the connectivity of cross border energy infrastructure to ensure competitive, stable and reliable access to diverse primary energy sources. Diversification of the energy mix with enhanced reliance on the use of low-carbon energy resources has potential to enhance energy security, reduce environmental impacts, especially air pollution, and meet global commitments pertaining to climate change.
Addressing energy challenges is an integral part of the implementation of the 2030 Agenda for Sustainable Development, including SDG7, on ensuring access to affordable, reliable, sustainable, and modern energy for all. Moreover, energy is an enabler for 125 of 169 SDGs or more than two thirds of SDG targets recognizing the interlinkages in the energy sector.
The Asia-Pacific region currently lacks a single overarching institutional mechanism for energy cooperation. As the global community seeks to fulfill its sustainable development pledge, a cooperative framework would generate trust among the countries, create new opportunities for regional energy planning, regional energy infrastructure development, as well as cooperation on technology, policy, finance and standards. Achieving SDG7 in the Asia-Pacific requires a clear vision by member States on energy transition and a commitment to leverage regional cooperation in pursuit of common goals. UN membership endorsement for this intergovernmental energy platform and cooperation framework for sustainable development in the region is timely.
Success of the energy transition in the Asia-Pacific depends on how countries capitalize and leverage energy connectivity, particularly the interconnection of power grids and gas pipelines across borders to facilitate energy trade that offers numerous benefits, including greater energy access and affordability, as well as enhancing market access for low-carbon energy.
However, transboundary energy trade requires political commitment and coordination between countries, increased investment in infrastructure, stronger institutions accompanied by the removal of institutional barriers, and the harmonization of standards and regulations. Moreover, developing clean energy corridors necessitates an assessment of the availability and potential for renewable energy power generation and transmission. Energy networks are capital-intensive, with large sunk costs, presenting major challenges in financing and maintenance, especially when subject to different legal and regulatory regimes. Starting now, our long-term approach must be directed towards creating physical energy networks, increasing institutional connectivity and, most importantly, building trust between countries.
Ongoing successful energy connectivity initiatives at the subregional level are encouraging, but they need to be replicated widely and implemented faster. Setting up a regional mechanism could add momentum to the energy transition by streamlining contracts and regulations, increasing the availability of financing, reducing risk and accelerating project implementation. Not least, such a mechanism could promote the development of established norms and mutual trust among countries. Developing a regional roadmap for cross-border electricity connectivity could be an important step in that direction.
The Second Asian and Pacific Energy Forum will be a unique opportunity to initiate the development of both an intergovernmental energy cooperation framework for sustainable development; and a regional roadmap for cross-border electricity connectivity. This would also send an important signal for the region’s commitment and leadership to the High-Level Political Forum on Sustainable Development, which will include SDG7 as one of its thematic areas in 2018.
I firmly believe that the Asia Pacific Energy Forum could be instrumental and serve as a stepping-stone for regional energy transition. Your leadership and ownership is critical to shape this regional platform to service your demands.
1World Energy Council, World Energy Scenarios, https://www.worldenergy.org/wp-content/uploads/2013/09/World-Energy-Scenarios_Composing-energy-futures-to-2050_Full-report.pdf