Ace presentation gbf korea 26 oct 2011_final

THE GREEN BUSINESS FORUM 2011

The Korea Energy Management Corporation (KEMCO)

26 October 2011, Seoul, Korea

THE 3RD

ASEAN ENERGY OUTLOOK

ACE at the Glance

The ASEAN Centre for Energy (ACE) was established on January 1, 1999 as an Inter-Governmental Organization, guided by a Governing Council composed of SOE Leaders of the ASEAN Member Countries.

ACE as a technical catalyst for economic growth and development of ASEAN by initiating, coordinating, facilitating and disseminating all energy activities to the region and the rest of the world.

Follow the Blueprint for ASEAN cooperation in the field of energy: The ASEAN Plan of Action for Energy Cooperation (APAEC) 2010-2015, theme: “Bringing Policies to Actions: Towards a Cleaner, more Efficient and Sustainable ASEAN Energy Community”.

2 ©ACE, October 2011

Mid 2011, the ASEAN Centre for Energy released The 3rd ASEAN Energy Outlook

A joint output by ASEAN Centre for Energy (ACE), the Institute of Energy Economics, Japan (IEEJ), and National ESSPA Teams.

Developed an energy demand and supply outlook model for the ASEAN region up to 2030.

The 3rd ASEAN Energy Outlook




ASEAN is one of the fastest growing economic regions

in the world and has a fast growing energy demand

driven by economic and demographic growth.

Economy and Demography

• Total land area : 4.34 million square kilometers or 3.3% world’s land area

• Total population : 566 million or around 8.6% of the total world population, grew by 1.4% per annum from 1995 to 2007

• Total GDP : 866 billion USD (constant 2000 value), grown at an annual average rate of 4.3% from 1995 to 2007

• GDP per capita varied widely among the member states from 343 to 29,185 USD in 2007



Projection Scenarios

• Used the historical correlation of final energy consumption and economic activity from 1980 to 2007.

• The GDP growth as well as the energy supply would be based on current targets by each government as well.

• In view of the use of regression analysis, the trends of future consumption follow historical trends.

Business-as-Usual (BAU) Scenario or the

Base Case Scenario

• It is assumed that the energy efficiency saving goals of the governments of all the member states of ASEAN is met.

• The scenario also includes use of alternative fuels and technologies such as nuclear technology, renewable energy and biofuels.

Alternative Policy Scenario (APS)

Primary Energy Consumption from 1990 to 2030 (BaU Scenario)


6

Total primary energy consumption increased from 252 MOTE in 1990, 339 MTOE in 1995 to 511 MTOE in 2007 or 3.6% per annum. Under BaU, it will growth 4.5% per year from 2007 to reach 1,414 MTOE in 2030. Coal will have the fastest annual growth as demand increases in power generation, but oil will remain as the major source of energy.

©ACE, October 2011

Primary Energy Consumption from 1990 to 2030 (APS)



In the APS, the growth of primary energy consumption will be at a slower 3.6% per annum to reach only 1152 MTOE in 2030, 18.5% lower than in the BAU scenario. This is the result of imposing EE&C action plans and saving targets of the member countries. Primary energy intensity will decrease by 29.7% to 408 TOE/million USD.

Final Energy Consumption from 1990 to 2030 (BaU Scenario)



Increased at an annual rate of 3.8% from 186 MTOE in 1990, to 241 MTOE in 1995, and to 375 MTOE in 2007. Under BaU Scenario, Final Energy Consumption in ASEAN will grow at an average annual rate of 4.4% from 375 MTOE to 1,018 MTOE in the period 2007-2030. The transport sector consumption will grow the fastest during the period with annual growth rate projected at 5.6% driven by the increasing per capita income.

Final Energy Consumption from 1990 to 2030 (APS)



In the APS, final energy consumption will grow at a lower annual rate at 3.6% to 843 MTOE in 2030. This lower growth is a result of implementing the EE&C programs in all sectors, excluding use as non-energy. Compared to the BaU, the energy savings potential of the transport sector will be around 22.4%, while for the Industries and other sectors will be 19.3% and 14.5%. Overall, the average total energy saving in final consumption will be around 17.2%.

CO2 Emission from 1990 to 2030 (BaU Scenario vs APS)



Total CO2 emission in the APS will be about 679 million tons of Carbon equivalent (Mt-C), 24% lower than the BaU scenario (895 Mt-C). CO2 emission per unit of GDP will also increase at the average annual rate of 0.5% from 283 t-C/million USD in 2007 to 317 t-C/million USD in 2030 in the BaU. In the APS, on the other hand, CO2 intensity will decrease by 0.7% per year to 240 t-C/million USD.

• ASEAN will continue to be heavily dependent on fossil fuels especially oil in the future.

• The rapid growth of electricity demand will also be a driving force in increasing use of fossil fuels especially coal.

• One of the most effective ways of meeting future demand is improving energy efficiency as shown by the APS results. In this regard, ASEAN might to revisit their energy efficiency programs to optimize the benefits that could be derived from them.

• Another sustainable way to meet increasing demand is to accelerate the development of clean energy such as renewable and alternative energy.

• ASEAN needs to improve the energy investment climate so that it will become more conducive to investors.

• ASEAN should also continue to strengthen regional cooperation especially in sharing best practices in energy development and utilization including energy efficiency.



RAISED CONCERNS TO THE ENERGY SECURITY OF ASEAN

& GLOBAL ENVIRONMENTAL STABILITY

FINDING AND POLICY IMPLICATIONS

As member countries continue to pursue their economic goals, primary energy consumption and CO2 emission in ASEAN will increase almost three folds in the BaU scenario – there will be increasing pressure on energy security and global environmental stability.

If current energy production levels in the region do not increase - the region will have to source out this additional demand from outside the region.

Appropriate energy efficiency and conservation programs, low-carbon technologies and increased shares of non-fossil fuels in power generation - would be needed to reduce carbon intensity and enhance energy security.



CO2 Emissions by Fuel, Emissions per Head & Sector, and Carbon Intensity of Energy


1973 and 2007 Fuel Shares of CO2 Emissions**

*World includes international aviation and international marine bunkers.

**Calculated using IEA’s Energy Balance Tables and the Revised 1996 IPCC Guidelines.

CO2 emissions are from fuel combustion only.

*** Other includes industrial waste and non-renewable municipal waste.

Key World Energy Statistics , IEA 2009.

CO2 Emissions by Fuel


Global Energy Related CO2 Emissions 2005


Carbon Intensity of Energy of Selected Countries 2003-2007

*World includes international aviation and international marine bunkers.

Energy demand growth itself does not necessarily lead to an increase in emissions.

Countries with substantial hydro or nuclear resources: Brazil & France have low carbon intensities.

Countries which use a lot of coal: China & Australia show high intensities.

[Source: IEA Key World Energy Statistic 2009 (data 2007)]

Carbon Intensity of Energy


Mitigation Potential for A Specific Period of Time


Mitigation Potential for A Specific Period of Time


NATIONALLY

APPROPRIATE

MITIGATION

ACTIONS

(NAMAs)

The Need of

Integrated National

Processes

THE GREEN BUSINESS

FORUM 2011

The Korea Energy Management Corporation

(KEMCO) 26 October 2011, Seoul, Korea

Dr. Hardiv H. Situmeang Kyoto, 2 July 2011

Decision 1/CP.16

Outcome of the work of the Ad Hoc Working Group on Long-

term Cooperative Action under the Convention

Paragraph 48

Agrees that developing countries Parties will

take NAMAs in the context of sustainable

development, supported and enabled by

technology, financing and capacity building,

aimed at achieving a deviation in emissions

relative to “business as usual” emissions in 2020.

NAMAs by DEVELOPING COUNTRY PARTIES

[Its Categories – Cancun, Mexico]

Category Remarks

1. Domestically

Supported

NAMAs

(Unsupported or Self-supporting): Autonomous mitigation actions undertaken by developing country Parties on their own to achieve certain emission reduction level without international (outside) support under the UNFCCC framework as domestically supported mitigation actions. The emission reduction achieved would be accounted for the associated developing country Party, and the MRV should be done domestically. Associated required financing comes from domestic financial sources.

2. Internationally

Supported

NAMAs

Mitigation actions by developing country Parties supported directly by developed country Parties as internationally supported mitigation actions under the UNFCCC framework. The generated emission reductions cannot be used to offset emissions by developed country Parties in meeting their GHG emission reduction commitments. It would be accounted for the associated developing country Party, and the MRV should be done internationally in accordance with guidelines to be developed under the Convention.

T0

Tn

2020

[Tahun]

Multi Sectoral Business as Usual Baseline

(Aggregated)

[G

HG

E

missio

ns]

Future Path of

GHG Emissions

T1

Unilateral /

Domestically

Supported

NAMAs

Internationally

Supported

NAMAs

Cre

dite

d N

AM

As

NAMAs Categories of Developing Country Parties

T0

Tn

2020

[Tahun]

National Business as Usual Baseline

(Multi Sectoral - Aggregated)

[G

HG

E

missio

ns]

Future Path of

GHG Emissions

T1

26 %

41 %

Unilateral /

Domestically

Supported

NAMAs

Internationally

Supported

NAMAs

National integrated processes in meeting the national emission reduction

target based on cost effectiveness and its implementability level.

Cre

dite

d N

AM

As

To establish National Business as Usual Baseline which is

a multi sectoral business as usual baseline (aggregated),

and follows by establishment of aggregated mitigation

actions,

To establish NAMAs through National Integrated Processes

to be put under 2 (two) NAMAs categories:

Domestically supported NAMAs to achieve the national

emission reduction target which is 26% below the

national business as usual baseline, and

Internationally supported NAMAs to achieve the national

emission reduction target up to 41%, increase from 26%

below the National Business as Usual Baseline under the

UNFCCC framework, and

To propose from the remaining aggregated mitigation

actions which are not selected under the above NAMAs

categories to be put further under credited NAMAs.

3 RELATED KEY ISSUES THAT SHOULD BE

SOLVED IN WIDE SPECTRUM BASIS

Future Path of GHG National Emissions Reduction

(Multi Sectoral Mitigation Actions)

National Business as Usual Baseline

(Multi Sectoral - Aggregated)

Aggregated Mitigation

Actions (Selected from

Potential Mitigation

Actions of Each Sectors

GH

G E

missio

ns

Past Trend and Current State of GHG Emissions

Future Path of GHG Emissions

[T i m e] T0 T1 Tn

Sector # 1

Sector # 2

Sector # 3

Sector # 4

Sector # --

Sector # n

National integrated processes in meeting the national emission reduction

target based on cost effectiveness and its implementability level.

Article 3.4 of the Convention

The Parties have a right to, and should, promote sustainable development. Policies and measures to protect the climate system against human-induced change should be appropriate for the specific conditions of each Party and should be integrated with national development programmes, taking into account that economic development is essential for adopting measures to address climate change.

Integrate Climate Change Program into

National Development Plan

(Programmes)

Meeting the National Emission Reduction Target as

a Contribution to Global Coherent Mitigation Effort

Poverty

Eradication

Economic and

Social

Development

Job

Creation

NAMAs

4 PILLARS

Please see: the UNFCCC Convention, Article 4, Paragraph 7.

Some possible screening criteria can be used to rank the implementability

level of proposed potential mitigation action options of each sector besides

its cost effectiveness modified from the UNFCCC Resource Guide Module 4,

and take into consideration the above four pillars such as:

• Consistency with national development goal,

• Consistency with national environmental goals,

• Data availability and quality,

• Political and social feasibility,

• Replicability, e.g. adaptability to different geographical, socio-economic-

cultural, legal, and regulatory settings, and

• Macro-economic considerations, such as: the impact on GDP; the number

of jobs created or lost; effects on inflation or interest rates; the

implications for long-term development: sustainable economic growth &

social development, and poverty eradication; foreign exchange and trade,

etc.

Screening criteria should be consistent with the overall framing of proposed

potential mitigation scenarios from each sector which is important and

useful when using bottom-up methodologies in which a wide range of

technologies, national policies and existing legal and regulatory frameworks.

The calculation of abatement cost for each potential mitigation action is

considered as very important. The magnitude of its abatement cost and the

agreed criteria will determine the priority level of each mitigation actions in

its associated sectoral scope and its priority level in the national scale.

SOME POSSIBLE SCREENING CRITERIA

Proposed Potential Mitigation Actions

Priority List

Cost

Effectiveness

Implementability

Level

Potential Mitigation Actions

POWER SECTOR TRANSPORT SECTOR

INDUSTRIAL SECTOR

Drive the energy system toward

low carbon energy sources, low-

carbon and carbon-free energy

technologies, greater efficiency

in energy production and

distribution and in energy use.

Integrated

Modeling

Aggregated

Business-as-

Usual

Baseline

Aggregated

Business-as-

Usual

Baseline

Aggregated

Business-as-

Usual

Baseline

Potential

Mitigation

Actions

Potential

Mitigation

Actions

Potential

Mitigation

Actions

Aggregated

Business-as-

Usual

Baseline

INDUSTRIAL SECTOR

Integrated

Modeling

Power

Sector

Industrial

Sector

Transport

Sector

Objectives,

Strategies, and

Approaches.

Integrated Modeling of Energy Sector

GHG

Emissions

Reduction

Scenarios

• Macroeconomic and Energy Parameters

• Data Base Development

• Development of Business as Usual Baseline

• Sectoral Analysis

• Integrating the associated emission reduction scenarios

• Energy supply to meet useful energy demand

• Broader energy mix to alleviate sustainable challenges

• Etc.

National

BAU Baseline /

Aggregated BAU

Baseline

Energy

Sector

Land Based

Sector

Other

Targeted Sector

Power

Sector

Industry

Sector

Transport

Sector

REDD+

Other

Activity

Cement

Pulp & Paper

Iron & Steel

In

te

rc

on

ne

cte

d

an

d iso

late

d

pow

er system

s

By m

od

es a

nd

su

b-n

atio

na

l

leve

ls

Su

b-n

atio

na

l

leve

ls

3rd

Layer

2nd

Layer

1st

Layer

Required Processes to

Establish National BAU

Baseline / Aggregated

BAU Baseline

(Bottom-up Approach)

Textile

In

du

stry

S

ub

-se

cto

rs

Establishment of Aggregated Business as Usual Baseline of Each

Sector

Propose Required Policies, Measures and Instruments

Establishment of NAMAs and National Long-Term CO2 Emission

Reduction Paths

Establishment of National Business as Usual Baseline and

Aggregated Mitigation Actions

Establishment of Potential Mitigation Actions of Each Sector

Calculate Carbon Budget for Each Sector

Thank You

www.aseanenergy.org

http://www.aseanenergy.org/

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