Energy consumption and economy in the ASEAN region have been growing in
tandem over the last two decades. The region’s economic growth had a
consequential increase in primary energy consumption which was registered at
3.6% per annum from 1995 to 2007.
From the 3rd ASEAN Energy Outlook
(ACE, 2011), it’s forecasted that with the assumed GDP growth rate of 5.2% per
annum from 2007 to 2030, final energy consumption in ASEAN will grow at an
average annual rate of 4.4% from 375 MTOE to 1,018 MTOE in the
Business-as-Usual (BAU) scenario during the same period, or 3.6% on average per
year to reach 843 MTOE in 2030 in the Alternative Policy Scenario (APS) which
analyzed the impact of the energy saving goals and action plans for renewable
energy from each of ASEAN Member States.
Oil production in ASEAN is far
from insignificant; ASEAN is not entirely free from the impact of the rising
oil prices. Some of its member countries are particularly vulnerable to
disturbances in energy supply since they are highly dependent on oil imports
(Singapore, Thailand and the Philippines are the most oil dependent ASEAN
economies). The threat is further magnified by the fact that ASEAN is one of
the fastest growing regions in the world, which requires increasing energy supplies
to fuel its rapid pace of economic expansion. This condition needs serious
attention from policy makers in the region. How to best meet this demand poses
a range of policy challenges for the region's governments not only at the
individual but also at the regional level (Symon, 2004).
Energy resources in ASEAN member
states as a whole are rich in various number and forms ranging from the oil
reserved, natural gas, and coal to the large potential in renewable energy;
particularly wind, hydro, and geothermal but unevenly distributed. For
instance, Indonesia, Malaysia and Brunei export crude oil, but the others have
to import oil products and/or crude oil. Renewables such as hydro-electricity
and solar energy while abundant are seriously under developed due to a lack of
technology and funding. Indonesia is the biggest country for traditional energy
reserved having oil deposit approximately at 10 BBL, natural gas 169.5 TCF, and
coal 38,000 MMT. Indonesia has also enormous resources of geothermal potential.
In term of hydro potential, Lao PDR is largest for hydro power accounting for
26,500 MW and is believed to be “the Battery for ASEAN” since it can supply the
hydro-electricity to some neighbor countries. However, some countries like
Brunei and Singapore have limited energy resources. Neverthless, due to their
economic performance both of them are considered advanced in comparison to the
other members.
To address this situation and
unstable energy prices, ASEAN Member States have been following a deliberate policy
of diversifying and efficiently using energy resources. ASEAN emphasizes
strategies to further strengthen renewable energy development, such as
bio-fuels, as well as to promote open trade, facilitation and cooperation in
the renewable energy industry. Aggressive efforts have been undertaken by
looking at alternative energy in the long term as an incremental supply to
replace a part of the oil as the primary source of energy supply.
The region wants to accelerate
its evelopment of clean energy by encouraging the use of fuels from biomass,
enhancing renewable energy to replace oil consumption in the final sector,
increasing renewable energy and attain a more balanced mix in electricity
generation. It wants to utilizing alternative fuels such as CNG in the
transportation sector and formulate policies to promote the utilization of
renewables, alternative fuels and nuclear energy.
Within the period of 2004-2009,
ASEAN has met its 10% target to increase the installed Renewable-Energy-based
capacities for power generation. However, new technologies are very much at the
experimental stage. Renewable resources such as geo-thermal, solar and wind
energy are still capital intensive and not as affordable as conventional
energy. ASEAN needs much more technology transfer and meaningful partnerships
to make these energy sources viable for its increasing requirements. But, ASEAN
recognize that renewable energies are crucially needed to increase the
diversity of energy supply and to reduce the environmental impact of energy use
in the region.
As such, under the current
ASEAN’s energy plan, ASEAN Plan of Action for Energy Cooperation 2010-2015,
Program Area No.5 Renewable Energy has been developed with more strategic goals
for renewable energy, including achieving a collective target of 15% for
regional renewable energy in the total power installed capacity by 2015. It is
also envisaged that by end of the Plan period, clear policies and responsive
plans and program for RE development are addressed to enhance commercialization,
investment, market and trade potentials of RE technologies.
Now, renewable energy is the
priority for development for ASEAN member states. With abundant renewable
energy resources as one region, they are currently implementing a vision of
renewable energy into progressive actions by engaging more renewable activities
and enhancing greater regional collaboration. They are also working to identify
areas where clean and renewable energy can emerge and deploy to mitigate the
adverse impact of the climate change as well. At the national level, each
country has tried to come up with its own renewable energy policy. Expecting by
2015, 15% target is achieved.
But to what partners should the
countries look for here?
For the region where Small and
Medium Enterprises or SMEs account for over 90% of all enterprises in every
Member State and employ more than half the workforce in most Member States
(APEC Policy Support Unit in June 2010 published a report entitled SME Market
Access and Internationalization: Medium-term KPIs for the SMEWG Strategic
Plan), SMEs is the answer. (Although there’s a never ending debate about the
definition of SMEs in various countries)
In general, every country in the
Southeast Asian region has already provided specific policies for the
development of renewable energy as part of their current energy mix for the
matter of energy security. They set up the target share of renewable energy in
exact coming years.
This includes accelerating the
development of clean energy such as renewable and alternative energy by
encouraging the use of fuels from biomass, enhancing renewable energy to
replace oil consumption in the final sector, increasing renewable energy and
attain a more balanced mix in electricity generation, utilizing alternative
fuels such as CNG in the transportation sector and formulating policies to
promote the utilization of renewables, alternative fuels and nuclear energy are
some activities that can conducted more aggressive.
Now, renewable energy is the
priority for development for ASEAN member states. With abundant renewable
energy resources as one region, they are currently bringing up renewable energy
vision into progressive actions by engaging more renewable activities and
enhancing greater regional collaboration. They are also working to identify
areas where clean and renewable energy can emerge and deploy to mitigate the
adverse impact of the climate change as well. At the national level, each
country has tried to come up with its own renewable energy policy.
For example, Thailand is
currently pushing the renewable energy as a national agenda supported by the
master plan so called “Alternative Energy Development Plan (2008-2022)” by
setting up the goal to increase a share of alternative energy mixed to be 20%
of the country final energy demand in the year 2022.
Philippines has come up with
Philippine Energy Plan 2007-2014 emphasizing on self-sufficiency to strive for
energy independence and intensifying use of renewable energy resources and
alternative fuels for a cleaner environment.
For Malaysia, the Government
announced the launching of the Small Renewable Energy Power Programme (SREP).
The programme is among the steps being taken by the Government to encourage and
intensify the utilisation of Renewable Energy in power generation. This is
designed to be in line with the Government’s decision to intensify the
development of Renewable Energy as the fifth fuel resource under the country’s
Fuel Diversification Policy, as stipulated in the objectives of the Third
Outline Perspective Plan for 2001-2010 (OPP3) and the Eight Malaysia Plan.
But we can see, many renewable
energy projects in ASEAN countries are still dominated by the pilot projects
funded by the Government or from Donor Countries or International
Organizations. If they continue to rely on this condition, the target of 15% in
2015 would be difficult to achieve.
SMEs are the backbone of the
ASEAN economies. They account for more than 96 per cent of all enterprises and
for between 50 and 95 per cent of employment in many AMSs. In addition, the
contribution of SMEs to GDP is generally significant, about 30-53 per cent, and
the contribution of SMEs to exports is between 19-31 per cent. They are also
the largest source of domestic employment across all economic sectors and in
both rural and urban areas.
A strong, dynamic and efficient
SME sector will ensure the sustainable, inclusive and broad-based economic and
social development. Thus, the encouragement and promotion of competitive and
innovative SMEs is necessary in contributing to greater economic growth and
social development towards more inclusive and broad-based integration of the
ASEAN region.
Taking the goals of economic
integration in ASEAN which towards ASEAN Economic Community in 2015, SMEs could
serve as main contributor. If ASEAN want to say they successfully achieved the
target 15% in 2015, each portion of the State should provide a greater role to
what has been the backbone of the economy is their country, namely SMEs.
Beni Suryadi
Business & Investment Opportunities
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