Asia-Pacific Energy and Environment Industry

Outlook, 2019

PA69-14

April 2019

Global Energy & Environment Research Team at Frost & Sullivan

Digitalization Set to Shake Up the Energy and Building Segments

as Key Participants Strive to Stay Competitive

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13 PA69-14

Energy Market Forecast Frost & Sullivan projects a X% increment in upstream capital expenditure (CAPEX) in 2019, with some

concerns with regard to supply shock, due to years of curtailed investment in finding new oil reserves.

Exploration and Production (E&P) CAPEX, Global, 2009–2020

E&P Expenditure

Brent Crude Oil Price

Bre

nt

Cru

de O

il P

ric

e (

$/b

bl)

E&

P E

xp

en

dit

ure

($ B

illi

on

)

Year

Note: All figures are rounded. The base year is 2018. Source: Frost & Sullivan Pre

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14 PA69-14

Energy Market Forecast (continued) Key solar markets will be India and Australia; SEA is expected to be the hotspot for AMI meters.

2018

2019

An

nu

al

Ins

tall

ed

Ca

pa

cit

y (

GW

)

ANZ

India

South Korea

Southeast Asia

Japan

Nu

mb

er

of

Mete

rs

Note: All figures are rounded. The base year is 2018. Source: Frost & Sullivan

Solar Power Market: Annual Installed Capacity,

APAC, 2018 and 2019

Residential AMI Meter Market: Unit Shipment

Forecast, APAC (Except China) and ANZ,

2018–2020

Year Pre

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16 PA69-14

China Revenue

$XB

China Growth Rate

X%

APAC

(Revenue and Growth

Rate)

$X B

X%

ASEAN-6

(Revenue and Growth

Rate)

$X B X%

China and India

(Revenue and Growth Rate)

Buildings Market Forecasts LED adoption in public street lighting will be the key focus; India and China will be the fastest-growing AC

markets in 2019.

$X B

X%

$X B

X%

ASEAN-6 Revenue

$X B

ASEAN-6 Growth Rate

X%

India Revenue

$X B

India Growth Rate

X%

APAC

(Revenue and Growth

Rate)

$X B

X%

ASEAN-6

(Revenue and Growth

Rate)

$X B

X%

China and India

(Revenue and Growth

Rate)

LED Market, 2019

$X B

X%

$XB

X%

2019 Total Air Conditioning Market Digital Elevator

Maintenance Market, 2019

Note: All figures are rounded. The base year is 2018. Source: Frost & Sullivan Image Source: Flaticon.com Pre

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18 PA69-14

Water Market Forecasts CAPEX of APAC water utility will expand by X% in 2019; key focus areas will be urban water management

that adapts to extreme weathers.

Vietnam

Thailand

Singapore

The Philippines

Malaysia

Indonesia

2018 Key: 2019

SouthKorea

Japan

East Asia ANZ SEA China and India

New Zealand

Australia

India

China

Key Focus Areas,

2019

• Distribution pipe

• Drainage system

• Reservoirs

• Plant expansion

2019 at a Glance

$X B in CAPEX

X% Growth

Key Focus Countries, 2019

China

India

Australia

Indonesia

The Philippines

All figures in $B

Image Source: Flaticon.com Note: All figures are rounded. The base year is 2018. Source: Frost & Sullivan

Water Utility Market: CAPEX, APAC, 2018 and 2019

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20 PA69-14

Research Scope and Market Segmentation

Energy and Environment Industry:

Segments, APAC, 2018

2019 (forecast beyond 2019

provided for select markets)

Forecast

Period

2018–2019 Study

Period

2018 Base Year

APAC: Australia, China, India,

Indonesia, Japan, South Korea,

Malaysia, the Philippines,

Singapore, Thailand, Vietnam, and

New Zealand

Geographic

Scope

US Dollar ($) unless otherwise

indicated

Monetary

Unit

Oil and

Gas (O&G)

Power

Generation

Grids Distributed

Energy

Energy

Storage

Buildings

and Water

Image Source: Flaticon

Source: Frost & Sullivan Pre

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22 PA69-14

Climate Change and Sustainability Small businesses and innovative and disruptive technologies are driving the sustainability market.

East Asia ANZ SEA China and India

• Japan Climate Initiative (JCI), in late 2018, involved more than 300 Japanese companies, local governments, research institutions, and non-governmental organizations (NGOs). The main goal was to accelerate the shift toward decarbonized and climate-

resilient societies.

• Japan needs an estimated

$X billion to just protect its infrastructure from rising sea levels.

• South Korea’s Emission Trading System (ETS) is expected to integrate well with COP24 discussions, enabling it to use international market mechanisms to

partially fulfill its Intended Nationally Determined Contributions (INDCs).

• Australia’s participation in the Coal conference organized by the United States at COP24 did not go unnoticed. This implies that Australia is still looking to develop its coal resources.

• The industrial side is looking to invest more in climate change mitigation and adaptation. The Investor Group on Climate Change (IGCC) represents investors worth approximately $X trillion in Australia and New Zealand, with some focus on low-carbon financing and climate change adaptation. Climate change start-

ups are expected to see increasing investments in 2019.

• The United Kingdom will be investing approximately $X million in SEA via the Low Carbon Energy Programme, starting from 2019.

• Singapore is leading the way in terms of climate change and sustainability, with multiple start-

ups providing disruptive technologies, such as Blockchain, IoT, and AI in sustainability technologies. It is also set to implement a carbon tax of $X/t CO2 from 2019.

• Climate change resilience is a priority for Malaysia, Indonesia, and the Philippines, with 2019 expected investment in these countries being $X million, $X million and $X million, respectively.

• China met its 2020 climate targets

3 years ahead of schedule, and

plans to bolster its climate change

mitigation initiatives in 2019, by

enabling more green financing in

the area of energy, buildings, and

climate change adaptation and

resilience.

• India is also tackling climate change on multiple fronts. It is expected to spend approximately

$X billion in 2019 on reducing greenhouse gases (GHGs) from agriculture. It is also looking to meet its RE targets via public and private financing. The country is also seeing a lot of investments in

sustainability start-ups.

The recent COP24 in Katowice ended on a positive note, with countries almost finalizing the Paris Agreement Rulebook. COP24 noted the importance of the Intergovernmental Panel on Climate Change (IPCC) SR1.5(the United States, Saudi Arabia, Russia, and Kuwait had opposed its welcoming). Although the green financing aspect of the rulebook has not been finalized, countries are seeing its importance in the climate-vulnerable APAC. Climate change mitigation and sustainability are expected to see increasing importance in 2019, with start-ups and disruptive technologies seeing more market success.

Source: United Nations; IPCC; Asian Development Bank (ADB); World Wildlife Fund (WWF); Frost & Sullivan Pre

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23 PA69-14

Dimensions of Climate Change and Sustainability The APAC climate change and sustainability scenario is quite dynamic, with efforts in multiple dimensions.

Rethink: Redesigning systems can help achieve

sustainable growth. China is a frontrunner in the

circular economy shift across the world. It will be

releasing its 14th Five Year Plan in 2019, and is

concentrating on this aspect by integrating climate

change and sustainability into its economic growth.

Renew: This refers to using RE in the system,

as well as renewing the environment. Vietnam’s

RE capacity is expected to grow X% in 2019, and

its government is creating an investment-friendly

environment for this.

Recover: Energy and materials need to be

recovered from the system when

unusable. Besides waste incineration in

countries such as Japan and South

Korea, processes such as pyrolysis and

organic decomposition of plastics are

gaining importance across APAC.

Reduce: This refers to minimizing resource

use in the system. India is using a multi-

pronged approach to energy efficiency, using

methods such as demand-side management,

energy labeling, building codes, and

market/digital transformation. Smart

appliances and LED lights are gaining

traction in the country.

Recycle: This refers to using by-products

and waste from the system. Singapore

is publishing a Zero Waste Master Plan in

2019, with the aim to reduce waste going

to its only landfill. This is expected to

create growth opportunities in the sector

in the latter half of the year.

Repair: Revitalizing broken systems can

avoid the climate cost of new products.

Malaysia is using an integrated approach to

urban water management by centralizing

water utilities in some regions. This will allow

it to improve water quality and reduce non-

revenue water (NRW) and water consumption

per capita.

Refurbish: This involves upcycling old and waste

products into new and usable products. Thailand

is looking at using its available sugarcane waste

(bagasse) and converting it into bioethanol for fuel

use. Start-ups across APAC are looking into

upcycling waste plastics into new, higher-value

products.

Reuse: This involves keeping materials and energy

from exiting the system. Anything-as-a-Service

(XaaS) and ‘sharing’ business models are being

used to good effect in Australia and New Zealand,

and are expected to see more use across APAC in

2019.

8Rs of Sustainability

and Climate

Change

Source: Ellen McArthur Foundation; Frost & Sullivan Pre

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69 PA69-14

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No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan. Pre

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71 PA69-14

Abbreviations and Acronyms Used

AC Air Conditioner/Air Conditioning

AI Artificial Intelligence

AMI Advanced Metering Infrastructure

ANZ Australia and New Zealand

APAC Asia-Pacific

ASEAN Association of South East Asian Nations

bbl Barrel

BESS Battery Energy Storage System

BIM Building Information Modelling

bpd Barrels per day

CAPEX Capital Expenditure

CEA Central Electricity Authority

CIF Cost, Insurance, and Freight

CNOOC China National Offshore Oil Corporation

Source: Frost & Sullivan Pre

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72 PA69-14

Abbreviations and Acronyms Used (continued)

Source: Frost & Sullivan

DER Distributed Energy Resources

DERMS Distributed Energy Resource Management System

E&P Exploration and Production

EPC Engineering, Procurement, and Construction

ESS Energy Storage System

ETS Emission Trading Scheme

EV Electric Vehicle

FEED Front-end Engineering Design

FIT Feed-in Tariff

FM Facility Management

FSRU Floating Storage Regasification Unit

GHG Greenhouse Gas

GW Gigawatt Pre

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73 PA69-14

Abbreviations and Acronyms Used (continued)

Source: Frost & Sullivan

HMI Human Machine Interface

HVAC Heating, Ventilation, and Air Conditioning

ICT Information and Communication Technology

IDD Indonesia Deepwater Development

IFM Integrated Facility Management

ICT Information and Communications Technology

IGCC Investor Group on Climate Change

IoT Internet of Things

ISO International Organization for Standardization

JCI Japan Climate Initiative

KEPCO Korea Electric Power Corporation

LED Light Emitting Diode

LNG Liquefied Natural Gas

LPG Liquefied Petroleum Gas Pre

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74 PA69-14

Abbreviations and Acronyms Used (continued)

Source: Frost & Sullivan

M&A Merger and Acquisition

MAAS Microgrid-as-a-Service

MEA Metropolitan Electricity Authority

MTPA Metric Tons per Annum

MW Megawatt

NGO Non-governmental Organization

NRW Non-revenue Water

O&G Oil and Gas

OPEC Organization of the Petroleum-exporting Countries

PBR Performance-based Regulation

PLN Perusahaan Listrik Negara

PPP Public-Private Partnership

PPS Prefabricated Pumping Station

PV Photovoltaic Pre

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75 PA69-14

Abbreviations and Acronyms Used (continued)

Source: Frost & Sullivan

RUPTL Rencana Usaha Penyediaan Tenaga Listrik

RAC Room Air Conditioning

RE Renewable Energy

SaaS Software-as-a-Service

SEA Southeast Asia

SME Small and Medium-sized Enterprise

UPS Uninterruptible Power Supply

VPP Virtual Power Plant

VRLA Valve-regulated Sealed Lead Acid

XaaS Anything-as-a-Service

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