12 September 2018

Energy Transition in Asia and the Pacific

EGNRET 51 Meeting

Dr. Fabian Kreuzer

Economic Affairs Officer, Energy Division,Economic and Social Commission for Asia and the Pacific

12 September 2018

12 September 2018

Anatomy of SDG7 – a transition to sustainable energy

The three targets of SDG7 are interlinked and should be thought of jointly

• Target 7.1. “By 2030, ensure universal access to affordable, reliable and

modern energy services.” Two components:

- access to electricity;

- access to clean cooking fuels.

• Target 7.2. “By 2030, increase substantially the share of renewable

energy in the global energy mix”.

• Target 7.3. “By 2030, double the global rate of improvement in energy

efficiency”, measured by energy intensity - ratio of total primary energy

supply to GDP.

Renewable Energy

Energy Access

Energy Efficiency

12 September 2018

Regional progress in electrification continued to 92.7%

2012-2016 Results: Electrification

325 million people (7.3%) remained without electricity access in Asia and Pacific

India 62%

Bangladesh 12%

Myanmar 7%

Population without access to electricity 2016 (%)

Democratic People'sRepublic of KoreaPhilippines

Cambodia

Pacific

Papua New Guinea

Indonesia

Afghanistan

2012

90.0% +2.7% (2016)

Rate of electrification

Rural Areas yet lag behind at 86.9%

12 September 2018

2012-2016 Results: Clean cooking

1.96 billion people (almost 50%) remain without access to clean cooking in Asia-Pacific

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

0

25

50

75

100

Share of population with access to

clean cooking, 2016 (%)Annualized change in share of

population, 2012-2016 (%)

Average regional share of

population with access to clean

cooking, 2016

51.2%

2012

+3.6% (2016)

Access to clean cooking

Regional progress in access to clean cooking continued to 54.8%

12 September 2018

Outlook on access

A significant gap between the SDG targets and the ‘current policy’ trajectory remains: 63 million people without electricity an 1.6 billion people without clean cooking fuels

• Reaching current policy scenario for electrification will require $0.3 billion to $1.7 billion annually

• An additional investment between $1 billion and $4.5 billion per year is required to close the gap of 1.3% - 63 million people

• 1.6 billion people will still be using traditional biofuel for cooking in 2030

Ac

ce

ss

to

ele

ctr

icit

yA

cc

es

s t

o C

lea

n

Co

ok

ing

12 September 2018

Pro-Poor Public Private Partnerships (5P model) for off-grid electrification

The 5P project aims to leverage the strengths of governments, private sector, and the development interests of communities

Market Segmentation for 5P

• Combines elements of entrepreneurship and social change through high-level community engagement

• Joint ownership, shared profits and responsiveness to local needs

• Must be supported by an enabling policy framework, financing mechanisms and understanding of local context

12 September 2018

2012-2014 Results: Renewable energy

Modern renewable energy consumption is rising and diversifying but demand growth outstrips achievements and leave the overall share low

0%

10%

20%

30%

40%

0

20

40

60

80

100

120

140

160

180

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Exa

joul

es

Total Final Energy Consumption (EJ)

Renewable Energy Consumption (EJ)

• Modern renewables reached a share of 6.8% in 2014 on a promising upward trend

• The share of renewable energy (incl. traditional and modern) has decreased

Modern Renewable Energy Consumption

12 September 2018

Outlook on renewable energy

Current policies will bring the share of modern renewable energy to 14% - falling short of a projected 22% for the SDG scenario (and way behind the NDC scenario)

Growth in the share of modern renewables:

Three different pathways to 2030

-

5

10

15

20

25

30

35

2014 2016 2018 2020 2022 2024 2026 2028 2030

Shar

e o

f R

E in

TFE

C (

%)

NDC scenario SDG scenario CP scenario Historical

SDG scenario 22%

2014 share 6.8%

Current policy scenario 14%

NDC scenario 35%

Gap = 8% approx.

• Better policies building on the strength of both, energy efficiency and renewable energy can play an important role

Gap = 12% approx.

12 September 2018

Renewable energy investment needs

SDG pathway to 2030 (22% share of RE) would require an annual investment of $305 billion

Annual incremental investment in renewable energy for different

scenarios and shares

7% share 14% share 22% share 35% share

12 September 2018

0

1

2

3

4

5

6

7

Europe Latin Americaand Caribbean

North America Asia and thePacific

Africa

Energy Intensity of Global Regions 2015

Meg

a Jo

ule

s p

er 2

01

1 P

PP

$

2012-2015 Results: Energy efficiency

Energy intensity has fallen but Asia and the Pacific remains among the highest global regions

• Energy intensity improved by 11.8% over between 2012-2015 for Asia and

the Pacific

12 September 2018

Outlook for energy intensity improvements

Energy efficiency progress is headed in the right direction but an accelerated effort at regional and national level is required to close the gap

Energy intensity under current policies is close to the target

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

TP

ES

(M

toe)

and G

DP

(U

SD

bill

ion)

Energ

y in

tensity (

MJ/$

)

GDP Energy Intensity-CPS Energy Intensity-SDG TPES

• SDG scenario: 2.5 MJ/$

• Current policy scenario: 4.0 MJ/$

Gap - 1.5 MJ/$

12 September 2018

1. Institutionalizing energy transition

2. Prioritizing technology and sectoral scoping

3. Financing the energy transition

4. Developing and implementing a regulatory framework

5. Leveraging regional cooperation

Recommendations to enable the energy transition

Concerted efforts at the national level and coordination at the regional level are needed to drive forward the energy transition

12 September 2018

Policy options to enable the energy transition

Concerted efforts at the national level and coordination at the regional level are needed to drive forward the energy transition

Thank you!

Dr. Fabian Kreuzer

Economic Affairs Officer

Energy Division

12 September 2018

Jacob’s 2.5 Kw wind turbine USA, circa 1940

12 September 2018

Appendix 1: Access to electricity technology options

Decision-making process for the selection of technology for access to

electricity

12 September 2018

• Germany’s EEG (2000 – present)

Feed-in tariffs for RE technologies

Build scale in market, trigger learning curve cost decline

Industry invested in product, process and organisational innovation

• Reverse auctions – India, Australia, China, South Africa, Dubai, Mexico, Peru etc.

Increased competition

Price discovery

Promotes broader based innovation through output specification

• Australia’s Clean Energy Bill (2012-14)

Cap and trade emissions trading scheme

Stimulates innovation in lowering emissions from energy sector through market signals

Taps into competition among market players

Appendix 2: Useful case studies

12 September 2018

1. Electric vehicles become mainstream and prompt a shift from petroleum to clean electricity (EE, RE)

2. Solar becomes the lowest cost of all power sources at any scale, offsets fossil fuel and opens up rural electrification (RE, EE, EA)

3. HVDC large scale cross-border grid interconnections link national grids and bring renewable resources to load centers (RE, EE)

4. Energy storage becomes low cost and solves the variability problem of cheap renewables (RE, EE, EA)

5. Global commitment to reach the goals of the Paris Agreement will see more finance and policy support to clean energy - pushing SDG7 targets over the line (RE, EE).

Appendix 3: Five reasons for optimism on SDG7

Key: RE – renewable energy; EE – energy efficiency; EA – energy access

12 September 2018

Appendix 4: Key Features of Cross-border Energy Infrastructure

Oil Pipeline Gas Pipeline Powerline

Connects oilfield to port or refinery, sometimes cross-border

Connects gas field to LNG facility or to a gas grid, sometimes cross-border

Connects power station to loads in adjacent country, or interconnects two national grids

High upfront cost, high sovereign risk, long lifespan asset

High upfront cost, high sovereign risk, long lifespan asset

High upfront cost, high sovereign risk, long lifespan asset

Operational issues relatively simple

Operational issues relatively simple, sometimes two way flow of gas

Operational issues more complex, regulatory harmonization, two way flow of power

Little net impact on sustainable or low carbon energy. Part of a global oil supply system.

Increased availability of gas can displace coal powered generation and transport fuels offering lower emissions. Fugitive emissions need close management.

Can help access renewable resources across borders – hydro, solar, onshore/offshore wind -and allow high penetration of variable renewables by pooling larger areas

Technology well defined Technology well defined Technology evolving, more emphasis on HVDC

Energy medium storable -bunker

Energy medium storable –underground, linepack and LNG

Energy medium generally non storable –instantaneous balancing of supply and demand