Booming Asia-Pacific Power Consumption
Noeleen Heyzer, Straits Times 30 Apr 08;
MUCH has been said about Asia's surging demand for energy, fuelled by spectacular economic growth and an expanding middle class. Indeed, the total consumption of energy in the Asia-Pacific increased by 70 per cent between 1992 and 2005.
Yet, consumption per person is still relatively low: 749kg of oil equivalent (kgoe) in 2005, compared with the global average of 1,071kgoe. As living standards rise, per capita consumption will grow.
If we look away from Asia's booming cities and the burgeoning ranks of its middle class, we will see that 1.7 billion people in the region still rely on traditional bio-mass fuels such as wood and animal dung to cook and to keep warm.
Nearly one billion people in Asia, the 'bottom billion', still have no access to electricity. Most of them are the rural poor.
Asia has the highest death tolls from indoor air pollution caused by burning bio-mass and solid fuel - nearly 1.3 million a year in India, China and South-east Asia alone.
Meeting the most basic needs for modern energy supply is a prerequisite to lift more people out of poverty and to achieve the other Millennium Development Goals, such as reducing child mortality.
Energy demand in the Asia-Pacific is projected to grow on average by 2.75 per cent a year from now to 2030, with the region accounting for half of global demand by 2030.
Much of that - more than 80 per cent - will be for fossil fuels such as oil and coal, making the region vulnerable to not only volatile energy prices, but also carbon emissions from the burning of such fuels.
Meeting this enormous demand is already a challenge for governments. Many countries in the region are now trying to enhance energy security by doing more of the same - building more power plants and pipelines, diversifying oil supply sources, expanding strategic storage, etc. But these are short-term solutions and will not shield energy-importing countries from price volatility as demand outstrips supply.
As a new study by the United Nations Economic and Social Commission for Asia and the Pacific - Energy Security and Sustainable Development in Asia and the Pacific - points out, one problem is that we are too dependent on fossil fuels. To improve long-term energy security and sustain economic growth and development, we need a new approach to energy consumption - more efficiency and more renewable energy.
Our study estimates that by improving energy efficiency - using less energy to perform the same tasks - global energy demand could be reduced by 12 per cent by 2030, saving US$766 billion (S$1 trillion) in building new energy infrastructure.
Another way to look at it is that for every US$1 invested in improving energy efficiency, we can save more than US$2 in infrastructure investment.
Renewable energy currently accounts for only 9 per cent of energy production in the Asia-Pacific. Yet the region is well-endowed with renewable energy resources. It has 40 per cent of the world's total hydroelectric potential, and about 35 per cent of solar and geothermal energy potential. It also has substantial potential for generating bio-mass and wind energy.
Energy security is not just about reducing vulnerabilities to volatile energy prices; it is also about ensuring access to affordable energy for the poor. Countries of the region need to ensure that energy supplies are available, sufficient, affordable and sustainable.
The way ahead should be to use innovative financing and greater regional and subregional cooperation to develop energy infrastructure that promotes equitable economic and social development without compromising the environment.
Now is the time to move beyond independent energy policies to interdependent policies for the benefit of all. Although some regional and subregional energy initiatives are either in place or being contemplated, it may be useful to converge these in an inclusive package - an Asia-Pacific sustainable energy security framework that could include a trans-Asian energy system, along with other forms of South-South cooperation.
Traditional forms of financing would be insufficient to meet infrastructure needs, particularly for those countries where many people lack access to modern energy services.
Countries in the region will therefore need to be more innovative and look to national and international financial markets.
They should be able to take advantage of environmental financing such as the Clean Development Mechanism, though larger-scale financing would need to come from other arrangements, including a regional 'special purpose vehicle' for energy infrastructure development.
The Asia-Pacific is rich in energy resources and experience. There are many opportunities for countries to work together to enhance regional trade, safeguard against market volatility and cooperate in ways that enhance their energy security and enable access for the poor.
Governments need to look at the long-term energy security issue now before it becomes too late.
The writer is United Nations Under-Secretary-General and executive secretary of the Economic and Social Commission for Asia and the Pacific.
