Improving Energy Access with Clean Energy in ASEAN
SERIS INDUSTRY DAY: PV Quality and Asset Management, Singapore 14 August 2017
Sustainable Development
Sustainable energy: Energy solutions that address development issues related to economic growth, environment and social equity simultaneously
Challenges:• Social• Economic• Environmental
Key input foreconomic growth
Economic
SocialEnvironmental
Poverty alleviationand gender
Impacts of energyproduction and use
Energy for Sustainable Development
Sustainable Energy for All initiative (SE4All)Underpinning Objectives
Energy for Sustainable Development
Sustainable Development
Energy for Sustainable Development
Energy Challenges
SocialEconomic Environmental
Sustainable Energy Through Market Transformation
Energy Access Energy Efficiency Renewable Energy
CROSS-CUTTING ISSUES: Gender, Climate Resilience, Energy Security, Disaster Risk Reduction and Recovery
Sustainable Development
Sustainable Development
Energy Situation & Forecast in ASEANSoutheast Asia is a rapidly developing region. By 2025, it is expected that:
• Population will increase to 715 million by 2025• Economic growth is expected to grow on an
average of 5% annually• Rapid industrialization and urbanization of the
ASEAN countries• Strong growth of 4% in energy demand annually
until 2025• Electricity demand will double during the period
2014-2025 • Installed energy generation capacity to increase
to 428 GW by 2025• Fossil fuels will to continue to dominate the fuel
mix, with coal and natural gas the main contributors.
• 16% increase in Population
• 68% increase in GDP
• 49% increase in TPES • 62% increase in CO2 Emissions • 35% increase in air pollution cost
• Currently, the renewable energy share in the region is around 9%
• Current efforts are only on track to reach 17% renewable energy by 2025.
• ASEAN countries agreed to a collective renewable energy target of 23% (of Total Primary Energy Supply) by 2025.
Energy-related challenges driving renewable energy growth in ASEAN
• Installation of sufficient additional power generation capacity• 160 million of ASEAN people still do not have access to electricity today.• High grid electricity prices, at 0.18 USD/kWh or more in some markets.• Strong reliance on fossil sources, such as natural gas, coal and oil• ASEAN region is among those with the strongest growth in CO2 emissions
in the last decade• Vulnerable to most harmful effects of climate change• Challenges in providing sufficient energy services, improving industrial
productivity and reducing poverty, and adapting to global warming.
ASEAN is increasingly turning to renewable energy.
Energy Situation in ASEAN
Sustainable Development
Sustainable Development
Source: IRENA & ACE (2016), Renewable Energy Outlook for ASEAN: a Remap Analysis, International Renewable Energy Association (IRENA), Dubai and ASEAN Centre for Energy (ACE), Jakarta.
Renewable Energy Applications in ASEANBusiness-As-
UsualReference
Case ASEAN Goal
Installed Power Generation Capacity, GW 195 387 422Renewable Energy-based 50.9 123.9 180.2- Solar PV 1.6 12.8 54.7Total Power Generation, TWh 856 1656 1674Renewable Energy-based 173.3 453.8 580.3- Solar PV 1.6 18.6 80.7Total Direct Uses of RE, Mtoe 217 284 267Renewable Energy-based 93.6 88.6 85.3- Solar Thermal (Buildings) 0 0.2 4- Solar Thermal (Industry) 0 0.1 3.2Renewable Energy Share, %Power Generation 20 27 35Buildings 1 3 19Industry 14 16 20Transport 3 8 9CO2 Emissions from Energy, Mtons/year 1359 2194 1996
42.7% of total capacity
30.4% total RE-based capacity
34.7% of power generation
13.9% total RE-based power
31.9% total direct uses
Sustainable Development
Source: Dobrott, N., “Turning Wheels: ASEAN offers some of the most promising renewable energy markets”, Southeast Asia Infrastructure, Vol. 4, No.3, Dec 2016 – Jan 2017, pp. 32-34.
Solar Energy Applications in ASEAN
Approach: Assist governments to implement combinations of public instruments that systematically target these barriers and investment risks to cost-effectively achieve risk-return profiles that attract investment in sustainable energy at scale.
Objective: To create the investment conditions in which developing countries can access large quantities of low-cost financing for sustainable energy.
Market transformation for sustainable energy: Measures (individual or combination) to improve an investment’s risk-return profile:
• Reducing risk – lower financing costs• Transferring risk – lower financing costs• Compensating for risk – addressing any residual risk
Enabling Market Transformation
Sustainable Development
Cornerstone Instrument
EE Building Code
Policy Derisking(Reducing Risk)
Examples:
Energy Efficient Buildings - Example Instrument Package
Financial Derisking(Transferring Risk)
Examples: Examples:
EnforcementStandards/labels
Loan guaranteesPublic loans
Rebates
Direct Incentives(Compensating Risk)
Technical skills
UNDP’s Approach to Market TransformationUNDP seeks to support governments to put together public instrument packages that:
(i) Address the non-financial barriers that block demand for investment (ii) Create attractive risk/return profiles by reducing, transferring or compensating for risk
Sustainable Development
In implementing a market transformation, UNDP:
Supports sector-, and technology-specific sustainable energy projects and programs at the national and sub-national levels
Engage in advocacy campaigns, policy dialogue, knowledge sharing and coordination efforts at global, regional and national levels
Engage in partnerships with stakeholders from public, private and civil society sectors and international organizations that leverage UNDP’s contributions and extensive country presence.
Enabling Market Transformation
Sustainable Development
Partnerships in Energy Market Transformation Initiatives
Governments (National and Local)
Global Funds – Global Environment Facility, Green Climate Fund, Montreal Protocol
Multi-lateral Banks and Regional Development Banks
Energy Organizations (e.g., IEA, IRENA, REN21, WRI, OECD)
Regional Associations (e.g., ASEAN, APEC, SAARC)
UN Agencies and other International Aid & Development Organizations
Private Sector (e.g., multinational companies, large domestic companies, SMEs, industry associations and business intermediaries, state-owned enterprises)
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Partnerships in Energy Market Transformation * Global & Regional *
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UNDP: A Successful GEF Agency
Long standing Business Model optimally aligned in serving the GEF family of funds and UNDP Country Offices.
High quality project design and quality assurance support at national, regional and global level
Comparative advantage: Ability to catalyze environmental finance to achieve multiple development benefits, embedding the environmental projects into the sustainable development agenda
Investment in technical expertise, systems and standards: – Project designs by each Technical Team based on proper
logical framework analysis– Technical training – learning budget– Pipeline management– Solid Results-based Management system– Culture of accountability, results focused
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33.082.6
313.9
25.2
Ongoing UNDP-GEF CCM Projects in ASEAN (since 2011), US$ million
Energy Efficiency Renewable Energy
Combined EE & RE Sustainable Transport
29.7
59.0
42.0
Pipeline UNDP-GEF CCM Projects in ASEAN (2015 - 2017), US$ million
Energy Efficiency Renewable Energy Combined EE & RE
Partnerships with the private sector: The private sector is viewed no longer as a source of funding, but as an equal partner in development.
Private sector entities can support initiatives that facilitate increased access to local sources of financing for EE & RE projects
♦ Financial intermediaries like micro credit lenders or ESCOs, in terms of capacity building, start-up cost, outreach and marketing cost and other technical assistance, and risk-sharing instruments
• Multinational companies & large domestic companies
• Small-to-medium enterprises• Industry associations and
business intermediaries• State-owned enterprises
Private Sector Involvement in EE & RE Initiatives
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Support initiatives that facilitate productive and social uses of RE. Electricity services for home lighting and public services. RE applications that provide income generation and essential social services.
Support initiatives that improve the quality and efficiency of public services Power Generation & Distribution Water Supply and Distribution Waste Management
Examples of Modalities of Partnerships Barrier Removal - to the creation, entry or transformation of markets Capacity Building Non-grant Financing - concessional and contingent finance, loans and guarantees Progressive Partnerships - long-term projects, information sharing Service Provision – e.g., water supply, waste collection and disposal
Private Sector Involvement in EE & RE Initiatives
Sustainable Development
Mainstreaming access to energy services in poverty reduction and rural development programs, and improving access to modern fuels.
Removal of major barriers to the cost-effective development and application of EE and/or RE technologies Improving access to modern and energy efficient appliances, equipment and systems Increased financing for sustainable development of decentralized energy systems Capacity building and technical assistance in establishing appropriate legal and regulatory
frameworks, and implementation of national and local programs on EE and RE technology applications.
Promotion of EE& RE technologies that could support rural development & rural electrification
Reduction of fossil fuel consumption through lesser consumption (EE) and substitution of RE resources thereby reducing GHG emissions
Examples of EE & RE Projects Implemented in Partnership with the Private Sector
Sustainable Development
Manuel L. Soriano, Senior Technical AdvisorEnergy, Infrastructure, Transport & Technology
UNDP-Global Environment FinanceBureau of Planning and Programme Support
UNDP Bangkok Regional Hub, Bangkok, [email protected]
Tel: +66-2-3049100 Ext 2720
Thank You