ASEAN Regional Cooperation for Sustainable Energy

1. ASEAN Regional Cooperation for Sustainable Energy Eric Kemp-Benedict Asia Centre Director, Stockholm Environment Institute HDFF & The Asia Forum HDFF & Chairman’s Circle Queen’s Park Hotel, Bangkok 25 March 2014

2. The Story in Brief

3. Energy for Development • Providing a clean, affordable, reliable supply of energy to poor households for lighting, cooking and heating is a prerequisite to successfully fight poverty and improve human well-being • Challenge 1: Allocation of energy supplies • Basic energy access is difficult to sustain unless incomes rise • Income generation requires energy for productive uses • Challenge 2: The environment • Energy-related greenhouse gas emissions are about 75% of the global total • Hydropower and bioenergy could appropriate significant shares of available land and water resources • Energy production and use results in dangerous pollutant emissions Nilsson et al. 2012

4. Energy in a Low-carbon Future • ASEAN has abundant renewable resources (hydropower, wind, geothermal, biomass) • But renewables have three problems • They are not uniform (like petroleum) • They are costly to transport • They are typically intermittent • All three can be addressed through a large electricity grid • Also, can transition from carbon-intensive to low-carbon by switching sources Result: Most low-carbon scenarios feature heavy use of electricity

5. Large Electricity Grids • For a low-carbon green economy, scenario exercises suggest: must electrify transport, households, industrial production • To do this, must have a very large grid to balance out intermittency • The grid may be larger than ASEAN alone • Cannot be bilateral electricity exchanges, as currently practiced

6. More Details

7. Inaction on Climate http://www.climateactiontracker.org/

8. Source: IPCC

9. Approximate income (PPP$/yr ) at year of peaking Sources: World Development Indicators Databank (World Bank, April 2012); Incomes in 2005 PPP US$

10. Development will be Different • If we address climate change globally: • Consumption in high-income countries, and tourism, could fall • Demand for mitigation and adaptation technologies should rise • Value of fossil fuels could go up or down (or both) • Value of renewable energy sources should rise • Electricity is likely to be given new uses, especially for transport • There will be economy-wide changes that require coordination • If we do not: • Impacts on agriculture, coastal zones, and islands will become increasingly severe • Intense rain events and extreme heat are likely to be more frequent • Costs of climate impacts will rise (along with demand for adaptation technology) • In either case, development will be different

11. Electricity Generation

12. Electricity Generation A low-carbon transition

13. Electricity Generation Energy highway A low-carbon transition

14. Electricity Generation But relying on an extended network is a challenge for SIDS A low-carbon transition

15. Energy Return on Energy Invested EROI values Hammerschlag 2006; Goldemberg 2007; Murphy and Hall 2010 Civilizational minimum: Hall et al. 2009

16. Energy Return on Energy Invested EROI values Hammerschlag 2006; Goldemberg 2007; Murphy and Hall 2010 Civilizational minimum: Hall et al. 2009

17. Energy Return on Energy Invested EROI values Hammerschlag 2006; Goldemberg 2007; Murphy and Hall 2010 Civilizational minimum: Hall et al. 2009

18. Energy Return on Energy Invested EROI values Hammerschlag 2006; Goldemberg 2007; Murphy and Hall 2010 Civilizational minimum: Hall et al. 2009

19. Energy Return on Energy Invested EROI values Hammerschlag 2006; Goldemberg 2007; Murphy and Hall 2010 Civilizational minimum: Hall et al. 2009

20. Energy Return on Energy Invested Fossil EROI declines over time Renewable EROI can increase EROI values Hammerschlag 2006; Goldemberg 2007; Murphy and Hall 2010 Civilizational minimum: Hall et al. 2009

21. Slides from the Expert Group Meeting in Urumqi, China Asian Energy Highway

26. Building Green • It is much more cost-effective in the long run to build a green infrastructure from the start than to postpone it until later (Ha-Duong et al. 2007, den Elzen et al. 2010) • However, green infrastructure can be more costly in the short run • The technologies are not sufficiently developed to benefit from learning-by-doing (the “cost curve”) • It is not the most cost-effective when combined with existing technologies (lock-in) • Classic problem of positive externalities • Private investment will require incentives • Suggests a role for public finance

27. Infrastructure Impacts Positive Negative Dams: displacement; downstream ecosystem impacts (esp. fish); flooding Thermal: land, air, water pollution; visual impact; heat; habitat fragmentation Wind: visual impact, noise, interfere with birds Distribution: visual impact, land for right-of-way • Dams: predictable water supply; irrigation; fish (in reservoir); flood control • Thermal*: construction, operation, and feedstock jobs; roads; markets • Wind: independence and/or local revenue • Distribution**: roads, construction and maintenance jobs *Burning coal, oil, natural gas, and biomass for electricity ** Power lines and pipelines

28. Distribution, Access, and Equity • If power lines and pipelines pass through populations who do not get the benefits, it can create resentment • If those populations also lack basic services then it is common to see distribution infrastructure tapped, often by local entrepreneurs who sell the stolen energy at inflated prices

29. Summary • A low-carbon future most likely means an electrified future • But renewable electricity is heterogeneous and intermittent • A large connected electricity grid can potentially solve this problem • But to work, it must go beyond bilateral agreements