Keynote address at the 2019 ASEAN Energy Business Forum

Excellency Mr. Sontirat Sontijirawong, Minister of Energy, Thailand
Excellencies,
Distinguished Business Representatives,
Ladies and gentlemen,

It is my pleasure to participate in the Minister-CEO Dialogue of the 37th ASEAN Ministers on Energy Meeting under the theme “Renewable Energy Innovation to Support Energy Transition and SDG7”.

The ASEAN region is the fastest-growing subregion in Asia and the Pacific. Over the past decade, it has seen an annual average GDP growth rate of over 5.2 per cent. This rapid economic expansion has translated into a significant increase in energy demand.

ASEAN’s primary energy supply has nearly tripled since 1990, with coal and natural gas gaining increasingly large shares within the energy mix. Fossil fuel dominates the energy mix in higher income ASEAN members, while members with lower income have higher shares of renewables.

Under the current policy settings, ASEAN is not on track to achieve all the targets of the Sustainable Development Goal 7 (SDG7) to ensure access to affordable, reliable, sustainable and modern energy for all. Access to electricity will reach 98 per cent by 2030. Access to clean cooking fuel was 60 per cent in 2017, but some ASEAN members recorded as low as 5 per cent.

A concerted effort is required to achieve universal energy access on both electricity and clean cooking fuels by 2030.

Ladies and gentlemen,

Renewable energy occupies a special place in the energy transition. It is central to delivery of both SDG7 and the Paris Agreement. In the off-grid electricity markets, low-cost renewables can bring reliable and affordable locally generated power to populations that lie beyond the reach of modern grids.

However, the current share of modern renewable energy in ASEAN’s final energy consumption is very low – about 10 per cent. Much more needs to be done to lift this share to ASEAN target of 23 per cent by 2025, and even more to achieve SDG7 goals and to align the subregion’s emissions trajectory with the Paris Agreement.

For example, the UNESCAP analysis shows that in Asia-Pacific region, the share of renewable energy would need to increase to 35 per cent to achieve the targets of the Paris Agreement. A successful energy transition to an increased renewable energy scenario will require mobilizing a significant amount of investment – the bulk of which will need to come from the private sector.

At the regional level, the 2030 investment gap in renewable energy compared to 2014 levels is estimated to be US$200 billion in the SDG scenario, and US$385 billion in Nationally determined contributions (NDCs) scenario. Even to implement the current policy scenario, an investment gap of US$103 billion exists.

To put the energy transition on track in the region, significant efforts to attract private investment must be mobilized.

There are distinct roles for governments and the private sector to make the renewable energy transition a success. The private sector needs to turn its investment focus from conventional, high carbon energy systems to renewable energy-based systems.

To allow it to make this switch, governments will need to create an enabling policy environment that provides certainty, reduces risk and eliminates barriers.

The UNESCAP has been playing an important role in supporting policymakers to create an enabling investment environment with an aim to accelerate SDG7 and NDCs achievement.

First, we are assisting governments to align their energy plans with their national development strategies and the Paris Agreement on climate change. This will assist government to develop more ambitious and cohesive plans for greater renewable energy use, improved energy efficiency and bringing the benefits of modern energy to all segments of society.

Second, we are strengthening regional energy cooperation by facilitating regional dialogues to support the planning of major energy infrastructure such as interconnected power grids and large-scale renewable energy-based power plants, including financing through modalities such as public-private partnerships.

Ladies and gentlemen,

ASEAN has offered a role model for the Asia-Pacific region in energy connectivity by developing the ASEAN Power Grid. There are opportunities for ASEAN to work with other regions to demonstrate the benefits of subregional interconnection and encourage other subregions to replicate its success and advance the implementation of SDG7.

I commend this effort of the ASEAN member States. I am confident that today’s Dialogue will inspire you to take additional policy measures in bringing transformation for our people and planet.

The UNESCAP stands ready to support such regional dialogues.

I am looking forward to joining forces with member States and business leaders, and all other stakeholders, to further connect this Forum with the UNESCAP’s bi-annual Asia-Pacific Business Forum.

Our synergy and common purpose can be a basis for a transformative change in Asia and the Pacific. I count on your forward-looking and ambitious leadership.

Thank you for your attention. I wish you a very successful meeting.