ROLE OF RENEWABLES IN THE FUTURE ENERGY MIX POTENTIALS
OF THE SOUTHEAST ASIAN NATIONS (ASEAN-10)
Presented to the
40th IAEE International Conference
Marina Bay Sands Convention Center, Singapore
June 18 – 21, 2017
By
Emmanuel O. Falobi, CPEEL, University of Ibadan. Nigeria.
Prof. Adeola F. Adenikinju, CPEEL, University of Ibadan. Nigeria.
Dr. Olugbenga A. Falode, Dept. of Petroleum Engineering. Unibadan. Nigeria.
Falobi et al. – 40th IAEE International Conference
Marina Bay Sands, Singapore. June 18 – 21, 2017
Presentation Outline
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Overview
Methodology
Results and Discussions
Conclusions
Presentation Outline
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Overview
Methodology
Results and Discussions
Conclusions
Economic Outlook for the Emerging Asia (i.e. ASEAN-10, China & India)
Growth rates and trends vary across the region. . .with Infrastructure contributing to growth . . .
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Growth prospects expected to remain robust over the
medium term despite global economic uncertainty.
Real GDP in Emerging Asia keeps dropping step-wise
from 6.7% (2014)  6.4% (2017), & projected to
remain steady at 6.2% per year over 2017-21 period.
Economic Activity in ASEAN-10 countries is growing
moderately with average growth of 4.6% (2014) 
4.9% (2017) & projected at 5.1% per year over 201721 period.
China’s economy gradually slows down; whilst
Indian’s growth remains strong, exceeding 7% per year
In ASEAN-5 countries, Philippines & Viet Nam expected
to lead whilst Indonesia & Thailand should witness
growth
Decline growth expected in Malaysia in the near term
In CLM, expected continued high rates of growth with
>8% in Myanmar
Country
ASEAN-5 countries
Indonesia
Malaysia
Philippines
Thailand
Viet Nam
Brunei Darussalam and Singapore
Brunei Darussalam
Singapore
CLM
Cambodia
Lao PDR
Myanmar
Two large Economies in the Region
China
India
Average of ASEAN-10 countries
Average of Emerging Asia
2017-21 2011-13
2017 (average) (average)
2014
2015
2016
5.0
6.0
6.1
0.8
6.0
4.8
5.0
5.9
2.8
6.7
5.0
4.2
6.8
3.2
6.0
5.1
4.5
6.2
3.3
6.2
5.4
4.7
6.1
3.6
6.2
6.2
5.2
5.9
3.2
5.6
-2.3
2.9
-0.6
2.0
0.7
1.8
2.0
2.0
1.8
1.8
0.9
4.1
7.1
7.4
8.7
7.0
7.4
8.7
7.1
7.1
8.3
7.1
7.3
8.4
7.3
7.5
8.5
7.3
8.1
6.9
7.3
7.2
4.6
6.7
6.9
7.6
4.7
6.6
6.7
7.4
4.8
6.5
6.4
7.6
4.9
6.4
6.0
7.3
5.1
6.2
8.2
5.5
5.4
7.0
Source: IRENA – ACE, 2016
Energy Outlook for ASEAN-10, China and India
Southeast Asia (Asia Pacific) is witnessing rapid economic growth . . .
…Share of global demand growth stands at 65% - the largest in the world
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Global Energy Demand: share projected to rise to 47% by
2035 (BP, 2016)
Net Imports: Projected to increase by 80% (BP, 2016)
Energy Consumption: Rises by 54%., share of global energy
consumption will be 47% by 2035 (BP, 2016)
Energy Production: Grows by 46%., share of global energy
production will be 35% by 2035 (BP, 2016)
Population Growth: @ 5% CAGR p. a.  It is expected to
hit over 715 million by 2025 from about 615 m in 2014
(IRENA, 2016)
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Growth to fuel a 4% CAGR in energy demand to raise region’s
energy share to over 7.5% of world’s total.
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GDP Growth: 2014 – 2025  4% p. a.
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GDP per capita: $2,250 with high disparity within the region
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Coal & Lignite Reserves: 23bn tonnes (over 4.1% of world’s
coal reserves & 3.4% of World’s Natural Gas reserves)
Source: http://www.nationsonline.org/oneworld/map_of_southeast_asia.htm
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Area: 4,480,106km2
Energy Intensity: 0.435koe/USD05 (~ half of
world’s average)
Electricity Consumption: 1477KWh/cap  ~ half of world’s
average)
Sources: BP Energy Outlook (2016), ASEAN Center for Energy/IRENA (2016),
Enerdata, World Bank
ASEAN Key Macroeconomic Figures (2014)
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Population and GDP Growth in ASEAN Member States (2014 -25)
GDP growth at ~5% CAGR implies 4% annual growth in energy demand amounting to a rise of 50% over 2014 figures.
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ASEAN in the Global Economies (2015)
Energy Consumption & CO2 Emissions in the ASEAN-10
. . . Consequences of rapid economic growth using fossil fuels will result in environmental pollution
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Rapid economic growth and rising energy demands will lead to high GDP growth
(~70% increase), high consumption & fast growth in CO2 emissions in most States
IRENA projects an estimated 60% rise in CO2 emissions by 2025 under the Reference
Case (one of the fastest rates in the world!)
CO2 will be restrained to 47% with additional RE potentials to meet the RE Target
Air pollution associated with increase use of fossil fuel, health & environmental costs
could rise to an average of US$225 billion per year (IRENA – ACE, 2016)
ASEAN region produces about 2.2 Gt/yr energy-related CO2 – i.e. ~5% of all
global emissions (IRENA – ACE, 2016)
Energy efficiency can help to mitigate CO2 emissions in ASEAN member States
Rising imports of oil & gas will definitely contribute largely to CO2 & GHG emissions
in this region (IRENA – ACE, 2016)
ASEAN’S 23% Aspirational Renewable Energy Target by 2025
. . . fall-out of the ASEAN Plan of Action for Energy Cooperation at AMEM meeting Myanmar (October 2015)
Meeting growing energy demand in a sustainable fashion. . .
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Sets 23% share of its total primary energy supply
(TPES) to be supplied from Renewable Energy (RE)
sources by 2025
ASEAN Center for Energy Outlook (2015) 
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Base RE share of 9.4% in 2014
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Projects 10% on Business As Usual (BAU) scenario by 2025
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Projects 15.4% on Advanced Policy Scenario (APS)
IRENA’s Remap analysis – Reference case:
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APS (15.4%) + Country updates (1.5%) 16.9% ~ 17%
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~ 6% point short of the 23.2% target in 2025!
REmap Option focuses mainly on modern bioenergy,
Solar PV, Solar Thermal and Wind
Source: IRENA – ACE, 2016
REmap Options to close the 6% point “Gap”
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RE share needs to increase 2½ fold by 2025
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50% Solar PV
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20% Bio-Power (including biogas)
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12% Wind
Renewable Energy Share by Country (2014-2025)
Renewables share ranged from 4% - 59% under TPES . . .
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Large variations exist in the distribution
of RE use amongst the ASEAN countries –
ranging from 4% in Brunei Darussalam to
59% in Lao PDR.
Across the ASEAN, share of RE use by
Sector shows:
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Power sector (34%), has the largest share,
followed by
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Buildings (26%),
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Industry (23%) and
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Transport (9%) in that order.
Source: IRENA – ACE, 2016
Renewable Energy Share by Sector (2014-25)
Marked increase in RE shares in all sectors especially in the End-use Sectors . . .
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Highest share of RE is in the Power Sector
(34%). The largest increase in renewable
power is through Solar PV
Buildings (26%) has largest increase in RE
share in the end-use Sector – due to
substitution of traditional use of bioenergy
Industry Sector (23%) has large untapped
potential compared to the Reference Case
Transport (9%) records the largest growth
in RE use with respect to the Reference Case
Additional potential for renewable
deployment exists in all sectors.
Source: IRENA – ACE, 2016
Energy Demand in the ASEAN Region (2014 – 25)
. . . Increase Energy Demand in ASEAN-10 over the period (2014 – 25)
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Source: IRENA – ACE, 2016
Main Drivers for Renewable Revolution in ASEAN Region
Renewable Energy drives economic activity and generates employment . . .
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Region is well endowed with some of the
best RE resources in the world
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Renewable Energy is fast becoming costcompetitive nowadays due to:
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Has some of the best untapped hydropower
in the world (e.g. Myanmar & Lao PDR)
Strong Solar irradiance averaging over
1,500 – 2,000 kWh per sq. m. annually
Reduced costs of RE Technologies world-wide
Increasing costs from import price volatility
globally
Derived benefits in rural areas –
Medical health, Income distribution &
green job creation .
Source: IRENA analysis and forecasts based on IRENA (2015b, 2016a, 2016d)
Presentation Outline
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Overview
Methodology
Results and Discussions
Conclusions
Methodology
. . . GTAP – CGE Model Approach to examine the economy-wide & country-wide Policy
implications for implementing RE targets across ASEAN region
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Employs a recursive dynamic CGE model embedded in a GTAP framework
GTAP is a fully documented, publicly available global database & contains complete bilateral trade
information, transport and protection linkages amongst multi-regions within a nation as obtains in ASEAN-10
Using a GTAP-CGE approach for a multi-sector, multi-regional analysis of this nature has several
advantages, some of which are:
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Analysis of the impact of global policies – trade, environmental, policy shocks, etc.
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Incorporation of all economic interactions in an economy
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Ability to capture the interdependencies amongst economic sectors, economic agents and economic markets
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Provision of a laboratory for quantitative assessments of total effects (direct & indirect) of policy changes, and
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Ability to capture feedbacks amongst production block, income block, expenditure block and trade blocks.
The GTAP Data Base is built on the Social Accounting Matrix (SAM) which is a traditional double accounting
economic square matrix.
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SAM ensures data coherency and consistency
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SAM isolates economic effects of specific policy shocks
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SAM’s Accounts are grouped Endogenous (Injections) or Exogenous (Leakages)
Overview of a Typical ASEAN SAM
. . . a multi-country and inter-regional framework need to be constructed
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ASEAN-10 has no single or uniform SAM and benchmark
years varies from one member state to the other, hence a
multi-country SAM is desirable (see opposite Fig)
The multi-country SAM will consider the peculiarities of
each member State to arrive at a balanced individual
macroeconomic SAM
GTAP is to assist in calibrating the SAM of each nation to
the most recently referenced benchmarked year
The individual macroeconomic SAMs will now be combined
into a single macroeconomic SAM (Resosudarmo et al.,
2009)
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Involves conversion into single currency vide exchange rates &
trade flows and deducting same from the respective “Rest Of
the World” (ROW) accounts (Reinert & Roland-Holst, 1997)
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Factor-service flows & Capital flows including inter-institutional
transfers amongst member States could be added with relevant
deductions from their respective ROW accounts
In constructing this multi-country SAM, international (bilateral) trade provides the main inter-country link.
Source: Adapted from Nurdianto, 2010
Typical GTAP-E Production Structure
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Typical GTAP-E Production Structure
Standard GTAP model is amenable to
modifications to accommodate RE policy
analysis
Taheripour et al (2007) made the pioneering
effort to disaggregate bioenergy sectors from
the SAM on introducing RE (Liquid Biofuels) into
the GTAP Data Base.
Banse et al (2008) developed an implicit
approach to modeling bioenergy. Capital –
Energy substitution was introduced into an
extended version of the GTAP-E model
The non-coal element in GTAP-E’s CapitalEnergy composite was transformed into a multilevel nesting structure to model RE as an
intermediate input into the petroleum industry
Capital – Energy Composite of GTAP-E
Source: Burniaux & Truong, 2002
Presentation Outline
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Overview
Methodology
Results and Discussions
Conclusions
Bridging the 6-point Gap: RE Shares by Country
. . . differentiated approach adopted to expand renewables
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ASEAN-10 exhibit significant
variation in population, economy
and energy demand
REmap’s mixed approach covers
energy supply and demand
About 80% of the renewable
energy share is contributed by
Indonesia, Vietnam, Malaysia &
Thailand
Modern RE Share in TPES
2014
9.40%
Reference Case 2025
16.90%
Indonesia
1.70%
Vietnam
1.30%
Malaysia
1.00%
Thailand
1.00%
Philippines
0.40%
Myanmar
0.40%
Lao PDR
0.20%
Singapore
0.10%
Cambodia
0.10%
Bunei Darussalam
0.02%
REmap 2025
Source: IRENA REmap Analysis, 2016
23.20%
RE Investments Required to Meet the 23% Target
. . . 1% of ASEAN’s GDP is required to be invested annually into RE capacity
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1% of ASEAN’s GDP
investment annually
means:
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Average Annual total
Investment of US $ 27
billion equally split
between the Reference
Case and REmap Options
Source: IRENA – ACE Preliminary Release, 2016
RE Investments in Emerging Asia
. . . Investment in RE is on the increase
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Emerging Asia will be experiencing a significant growth in TPES, increasing from 4,406 mtoe (2013) to
6,998 mtoe (2040) – (IEA Policy Scenario, )
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Major Challenges arise – of achieving & balancing energy policy objectives in the region, includes:
Energy security, Sustainable development, Energy access, and Energy affordability
Rapid deployment of Solar power & Wind power expected in the region – (OECD, 2017, IEA Sources)
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China RE investment in 2015 was US $102.9bn (i.e. 36% of global RE Investments)
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India (2nd largest Investor) – invested US $10.2bn in 2015
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Thailand – the only other State to hit US $1bn in asset Finance for RE in 2015
ASEAN TPES is projected to rise significantly from 594 mtoe (2013) to 1,070 mtoe in 2040 (IEA Policy
Scenario, 2016)
In ASEAN – Large-scale Hydro followed by Solar PV constitute vast share of new installed RE capacity in
2015 (OECD, 2017)
In China & India – Wind was the major source of new installed RE capacity in 2015 (OECD, 2017)
Investment Potentials & Plans in some Selected ASEAN States
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Country
Potentials & Investment Plans
Thailand
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The undisputed Solar Energy leader in ASEAN (due to lower costs in solar-components & Subsidized energy tariffs)
Solar capacity projected to increase between 2,500 MW & 2,800 MW in 2015 (6 times higher than previous year)
Expects to increase its solar capacity to 6,000 MW by 2036 (accounting for 9% of total electricity generation to meet 3 million
households energy demand)
The Philippines
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Dependent on imports of coal, oil & gas for most of its energy needs
Growing energy needs incentivized government to consider RE alternatives such as Solar Power
The Philippine Solar Power Alliance wants government to quadruple size of its tariff from 500 MW to 2 GW
Considering investment of about US$4 billion in solar projects now
Viet Nam
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Rapid industrialization leading to growing demand for electricity with renewables (Hydro & Solar energy) as possible panacea
Has high annual solar irradiance of between 2,000 – 2,500 hours of sunlight (equivalent of 43.9 million tons of oil annually if fully
harnessed)
Committed US$36.12 million to construct 1st solar power plant in August 2015 with the potential to produce 28 million kWh/yr.
Another project in the pipeline will involve an investment of US$650 million by a South Korean firm to generate 300MW of
electricity.
Plans an installed Power capacity of 75,000 MW by 2020 (with RE making just 4.5%) to meet rising energy demands
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Witnessed increasing growth in the solar market
– Solar PV panels generating 67% of the RE production
Recently opened solar farm with capacity to produce 10,120MWh and generate RM 8 million a year
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Malaysia
Source: www.aseanbriefing.com/news/wp-content/uploads/2015/11/renewables.jpg
Roles of Renewables & RE Target Setting
… Widespread adoption of RE Targets now by China, India and 9 ASEAN Member States
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Fossil fuel continues to dominate the TPES in ASEAN’s energy mix in the 2014 – 2025 period
Emerging Asia is highly exposed to climate change risks hence
Concerted inter-regional reform is urgently required to mitigate climate change impacts and facilitate seamless
low-carbon economy in the region
China & India are at the forefront in setting RE Targets on large scales, for instance, according to OECD/SAEO
preliminary report, 2017:
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Effectiveness of Targets can be improved upon thru
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India government is set to increase its Solar capacity from 3GW to 100GW by 2022; thereby increasing overall RE
capacity to 175GW
ASEAN Energy Ministers met in 2015 & set an aspirational target to increase the share of renewables in TPES to 23% by
2025
Except Cambodia, all ASEAN Member States have implemented some RE Targets of varying degrees in terms of technology,
time horizon, measurement Unit & level of ambition
Well coordinated National Action Plans, and
Establishing a roadmap to 2025 for ASEAN Member States to achieve their aspirational target
Regulatory Support for RE Targets in China, Indonesia, Malaysia & The Philippines is enhancing the Investment
environment & strengthening commitments towards RE development.
Policy Commitment to RE Targets
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Need to backup the RE Aspirational Targets with dedicated policies for
implementation
Strong structural reform to open up the economy for private sector investment in
RE to mitigate investment risks & encourage fund mobilization thru private
partnership
Provide enabling institutional framework with well defined roles &
responsibilities, transparent & streamlined procedures so that RE investments
are more attractive
Exploit cross-cutting impact of RE on the Sustainable Development Goals
(SDGs)
Regional engagements and international cooperation on RE development should
be encouraged
Presentation Outline
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Overview
Methodology
Results and Discussions
Conclusions
Concluding Thoughts . . .
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Most ASEAN Member States adopted specific targets to implement RE capacities
IEA/IRENA projects large increase in energy consumption due to increasing population, sustained
economic growth &increasing access to electricity
Policy mechanisms are being put in place for the development of RE technologies in the region
Deployment of RE helps to decarbonize the energy mix globally providing clean and secure energy
supply – a key mitigating strategy
Deployment of RE leads to emission savings
With the right policy & regulatory framework in place, RE deployment will generate more jobs across
emerging Asia in general and the ASEAN region in particular
Fianally, encouraging regional cooperation & integration in focused policy areas of green growth &RE
as well as private sector deployment in the ASEAN 2016 – 2025 Plan of Action for energy cooperation
are very much desirable for promoting regional growth in RE Technologies across the region.
In Conclusion . . .
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Thank you all for your kind Attention
Backup Slides
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ASEAN Population in the Global Economy (2015)
1
1
Linkages between RE and SDGs
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RE Share in the ASEAN Region to 2030
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