The future of energy in Southeast Asia - Microsoft · IEA’s Southeast Asia Energy Outlook: Much...

IEA 2019. All rights reserved.

The future of energy in Southeast Asia

37th ASEAN Ministers of Energy Meeting

Bangkok, 4 September 2019

Dr. Fatih Birol, Executive Director


2018 – A remarkable year in energy

Global energy demand grew by 2.3% in 2018, the fastest pace this decade, driven by a robust global

economy, unseasonable weather, and moderate energy prices

Annual change in global primary energy demand, 2011-18

100

200

300

400

2011 2012 2013 2014 2015 2016 2017 2018

Mtoe

Coal

Oil

Gas

Nuclear

Renewables


US leads the way in global oil supply growth

US expansion of oil supply in the next five years makes up 70% of global supply growth. Other notable

gains occur in Brazil, Iraq, Norway, the UAE and Guyana

Change in total oil supply 2018-24

-2

-1

0

1

2

3

4

5 mb/d

Brazil

Iraq

Norway

UAE

Guyana

US


LNG is spurring a second natural gas revolution

LNG from the United States, Australia, Qatar & elsewhere is expanding gas supply, underpinning the

shift towards a more flexible, resilient & interconnected global gas market

2018 765 bcm

2025 1000 bcm

2000 525 bcm

Share of LNG in global long-distance trade

LNG

26%

Pipeline

LNG

45% Pipeline

LNG

51% Pipeline


Mt

Global coal demand grew again in 2017 and 2018

After several years of decline, global coal demand returned to growth in 2017 and 2018;

Change in coal demand, 2014-18

-300

-200

-100

0

100

200

2018 2017 2014 2015 2016

Southeast Asia

World

Southeast Asia’s coal demand has been on an upward trend for decades


Southeast Asia – An emerging heavyweight in global energy

• Southeast Asia is home to almost one in ten people, and is the 4th largest economy in

the world, meaning it is increasingly driving global energy trends

• Energy demand has grown by 80% since 2000, at a rate far exceeding the global

average, underpinning its rapid development but also posing challenges

• Energy consumption subsidies in Southeast Asia bounced back in 2018 to $47 billion,

encouraging wasteful consumption and slowing down the pace of efficiency gains

• The region is becoming ever-more dependent on imported energy, raising energy

security challenges and pushing up import bills

• Driven by rapid technology developments and policy goals, the region now has an

opportunity to re-shape its energy future, which the IEA is ready to support


IEA’s Southeast Asia Energy Outlook: Preview to ASEAN Ministers

Rising incomes and population mean that Southeast Asia adds the equivalent of another Japan to

global energy demand to 2040

Increase in energy demand to 2040 by region

0

250

500

750

1 000

Latin America Southeast Asia Middle East Africa China India

Mtoe


IEA’s Southeast Asia Energy Outlook: A gradual diversification in power

Power capacity additions of 450 GW are needed to 2040, equivalent to the power systems of Germany,

France and the UK combined, as electricity grows at twice the rate of overall energy demand

Southeast Asia’s average annual net capacity additions by type

2000-2018

Renewables

Gas

Coal

0 2 4 6 8 10 GW

Solar PV Wind Hydro Other Renewables

Gas

Coal Annual

additions

2019-2040


IEA’s Southeast Asia Energy Outlook: Much more investment is needed

Energy investment in 2018 vs. required annual average investment, 2019-40

Annual energy investment in Southeast Asia in the period to 2040 needs to almost double compared

with current levels, with particular emphasis needed on investment in the power sector

20 40 60 80 100 120

StatedPolicies

2018

USD (2018) billion

Energy Efficiency

Fuel Supply

Power Sector

2019-40 annual additions

Power sector

Power sector


IEA’s Southeast Asia Energy Outlook: The import bill skyrockets

Southeast Asia faces an energy import bill of over $300 billion/year by 2040 as oil imports surge; the

region also becomes a net importer of both natural gas and coal

-300

-200

-100

0

100

2000 2005 2010 2015 2020 2025 2030 2035 2040

Billio

n d

ollars

(2018)

Coal

Gas

Oil


2019 ASEAN Ministerial Mandates to IEA: Multilateral power trade

• Following a call by ASEAN Member States in 2018, the IEA has undertaken extensive

analysis on ASEAN power system integration and the links with renewables scale-up

• IEA’s Feasibility Study for Multilateral Power Trade sets out the policy/regulatory options

that ASEAN can pursue to enhance power trade

• The upside of greater power trade is large – allowing countries to take advantage of

low-cost generation sources, seasonality in supply, and access to renewable energy

• IEA analysis shows that ASEAN greater trade will reduce power costs and improve the

security of electricity systems while allowing for more renewables in the mix

• But institutional coordination, better data-sharing, & common grid codes are

required as building blocks for greater power trade


2019 ASEAN Ministerial Mandates to IEA: Cooling efficiency

Share of final electricity demand growth to 2040 in ASEAN

Cooling 35%

Lighting and appliances 21%

Other buildings 11%

Industry 26%

Other 7%

Today,

just 15% of ASEAN households have air conditioners versus 91% in Japan and 90% in the US;

Cooling demand could be cut by 50% if the IEA’s recommended policies are implemented


Key messages for Southeast Asia

• Increasing energy investment is a priority, particularly in the power sector, requiring clear

policy and best-practice investment conditions

• With growing energy security concerns, more focus is needed on investment in domestic

energy infrastructure & resources, and improvements to energy efficiency

• With rapidly falling costs and abundant resources, renewable energy has a bright future,

but will need strong and consistent policy commitments

• Power system integration will provide multiple benefits for the region. The immediate

priority is to establish the necessary building blocks for greater trade

• Building on the successful delivery of the two 2019 ASEAN Ministerial Mandates to the

IEA, we look forward to continuing to assist the region to tackle its energy policy challenges

The future of energy in Southeast Asia - Microsoft · IEA’s Southeast Asia Energy Outlook: Much...

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