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SUMMARY RECOMMENDATIONS
CONTEXT
Indonesia and Australia co-hosted a Forum of regional
business leaders numbering some 90 including officials.
The Forum conducted its deliberations under four working
groups, namely, Energy and Environment, Energy End Use
Efficiency, Energy Infrastructure and Access to Energy
Services in Remote Locations.
Key findings and recommendations from each of the
working groups are attached.
KEY RECOMMENDATIONS
The key recommendations of the Forum are summarised
below.
The Business Forum recommends that Ministers and Governments:
1) Energy Policy reform
Implement energy sector policy reforms that increase
competition in the relevant markets, noting that effective
competition can deliver cost reductions for industry
and consumers.
Governments of the region should take action to progress
towards the development of competitive, appropriately
regulated energy markets, regardless of whether ownership
of facilities is private or public, provided there is
competitive neutrality.
Experiences from established competitive markets should
be drawn upon, including the example of inter regional
competition.
Only with competitive markets will the huge capital
flows, that the private sector can provide, be attracted
and deployed efficiently.
National markets should provide for cross-border trading
to create a greater regional market.
2) Business risk
Governments should provide the policy and regulatory
frameworks that will attract private sector investment
in sustainable energy development on terms that are
compatible with the other requirements for energy sector
reform, including environmental protection, as well
as:
v Equitable sharing of risk between host country and
investor, such that risk rests with the parties best
able to manage that risk;
v Encourage private sector investment through increased
market competition; and
v Promote good corporate governance and responsible
business practices between government and business to
manage risk.
3) Subsidies
Governments need to create an economic environment,
which promotes growth. Removal of subsidies can help
create this environment.
Transparent cost reflective pricing is essential for
efficient markets.
Governments need to unbundle commercial and social
objectives and functions. The private sector should
perform a commercial role and compete fairly so market
forces can optimise the efficiency of energy use.
The Government (Public Sector) should be responsible
for social welfare. Subsidies are appropriate but should
be targeted, transparent and reach those for whom they
are intended. Hidden subsidies should be removed because
they cost more and seriously distort the market.
Governments should remove untargeted and hidden forms
of subsidies, and in doing so, will open up market opportunities
for the private sector.
There is a need to publicise information about subsidies,
including who they are intended to benefit, to the community.
This is an important part of the process of opening
up the market.
Where subsidies are used, for example, to deliver
social obligations or to stimulate research and development,
emergent technologies and the like, they should be transparent
and constrained to specific purposes and limited time
frames.
4) Government assistance
We propose that governments provide assistance towards
the initial capital outlays for remote area renewable
energy projects, and then allow market mechanisms to
cover ongoing operation and maintenance costs. The nature
and quantum of such assistance can be determined for
each project through a transparent and open bidding
system.
Encourage governments to collect and generate solar,
rainfall and wind reliable resource data, to make resource
assessments publicly available, in order to assist private
investors in making decisions on renewable energy projects.
5) International cooperation
Propose, where appropriate, that enhanced international
cooperation be undertaken and promoted to share experiences
on how best to facilitate the development and market
entry of energy efficient end use technologies, particularly
through already established forums such as the APEC
Energy Working Group (EWG).
This includes the active dissemination of information
between the business, education and government sectors,
which will strengthen institutional arrangements.
Enhanced international cooperation is strongly encouraged,
with a real emphasis on cooperation at the regional
level.
Bilateral cooperation in business-to-business joint
ventures can offer significant 'win-win' economic and
social potential in stable competitive markets.
Training and education at all levels is critical to
maximize technology transfer and the development of
management and operational staff.
Consideration could be given to a regional centre
for renewable energy technology development, bearing
in mind current institutional arrangements.
6) End Use Efficiency
Acknowledge the considerable scope for economic increases
in energy efficiency in both developed and developing
countries and the contribution that this could make
in achieving sustainable development objectives.
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