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12 September 2018
Energy Transition in Asia and the Pacific
EGNRET 51 Meeting
Dr. Fabian Kreuzer
Economic Affairs Officer, Energy Division,Economic and Social Commission for Asia and the Pacific
12 September 2018
12 September 2018
Anatomy of SDG7 – a transition to sustainable energy
The three targets of SDG7 are interlinked and should be thought of jointly
• Target 7.1. “By 2030, ensure universal access to affordable, reliable and
modern energy services.” Two components:
- access to electricity;
- access to clean cooking fuels.
• Target 7.2. “By 2030, increase substantially the share of renewable
energy in the global energy mix”.
• Target 7.3. “By 2030, double the global rate of improvement in energy
efficiency”, measured by energy intensity - ratio of total primary energy
supply to GDP.
Renewable Energy
Energy Access
Energy Efficiency
12 September 2018
Regional progress in electrification continued to 92.7%
2012-2016 Results: Electrification
325 million people (7.3%) remained without electricity access in Asia and Pacific
India 62%
Bangladesh 12%
Myanmar 7%
Population without access to electricity 2016 (%)
Democratic People'sRepublic of KoreaPhilippines
Cambodia
Pacific
Papua New Guinea
Indonesia
Afghanistan
2012
90.0% +2.7% (2016)
Rate of electrification
Rural Areas yet lag behind at 86.9%
12 September 2018
2012-2016 Results: Clean cooking
1.96 billion people (almost 50%) remain without access to clean cooking in Asia-Pacific
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
0
25
50
75
100
Share of population with access to
clean cooking, 2016 (%)Annualized change in share of
population, 2012-2016 (%)
Average regional share of
population with access to clean
cooking, 2016
51.2%
2012
+3.6% (2016)
Access to clean cooking
Regional progress in access to clean cooking continued to 54.8%
12 September 2018
Outlook on access
A significant gap between the SDG targets and the ‘current policy’ trajectory remains: 63 million people without electricity an 1.6 billion people without clean cooking fuels
• Reaching current policy scenario for electrification will require $0.3 billion to $1.7 billion annually
• An additional investment between $1 billion and $4.5 billion per year is required to close the gap of 1.3% - 63 million people
• 1.6 billion people will still be using traditional biofuel for cooking in 2030
Ac
ce
ss
to
ele
ctr
icit
yA
cc
es
s t
o C
lea
n
Co
ok
ing
12 September 2018
Pro-Poor Public Private Partnerships (5P model) for off-grid electrification
The 5P project aims to leverage the strengths of governments, private sector, and the development interests of communities
Market Segmentation for 5P
• Combines elements of entrepreneurship and social change through high-level community engagement
• Joint ownership, shared profits and responsiveness to local needs
• Must be supported by an enabling policy framework, financing mechanisms and understanding of local context
12 September 2018
2012-2014 Results: Renewable energy
Modern renewable energy consumption is rising and diversifying but demand growth outstrips achievements and leave the overall share low
0%
10%
20%
30%
40%
0
20
40
60
80
100
120
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180
1990
1991
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2012
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Exa
joul
es
Total Final Energy Consumption (EJ)
Renewable Energy Consumption (EJ)
• Modern renewables reached a share of 6.8% in 2014 on a promising upward trend
• The share of renewable energy (incl. traditional and modern) has decreased
Modern Renewable Energy Consumption
12 September 2018
Outlook on renewable energy
Current policies will bring the share of modern renewable energy to 14% - falling short of a projected 22% for the SDG scenario (and way behind the NDC scenario)
Growth in the share of modern renewables:
Three different pathways to 2030
-
5
10
15
20
25
30
35
2014 2016 2018 2020 2022 2024 2026 2028 2030
Shar
e o
f R
E in
TFE
C (
%)
NDC scenario SDG scenario CP scenario Historical
SDG scenario 22%
2014 share 6.8%
Current policy scenario 14%
NDC scenario 35%
Gap = 8% approx.
• Better policies building on the strength of both, energy efficiency and renewable energy can play an important role
Gap = 12% approx.
12 September 2018
Renewable energy investment needs
SDG pathway to 2030 (22% share of RE) would require an annual investment of $305 billion
Annual incremental investment in renewable energy for different
scenarios and shares
7% share 14% share 22% share 35% share
12 September 2018
0
1
2
3
4
5
6
7
Europe Latin Americaand Caribbean
North America Asia and thePacific
Africa
Energy Intensity of Global Regions 2015
Meg
a Jo
ule
s p
er 2
01
1 P
PP
$
2012-2015 Results: Energy efficiency
Energy intensity has fallen but Asia and the Pacific remains among the highest global regions
• Energy intensity improved by 11.8% over between 2012-2015 for Asia and
the Pacific
12 September 2018
Outlook for energy intensity improvements
Energy efficiency progress is headed in the right direction but an accelerated effort at regional and national level is required to close the gap
Energy intensity under current policies is close to the target
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
0.00
1.00
2.00
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5.00
6.00
7.00
8.00
9.00
10.00
TP
ES
(M
toe)
and G
DP
(U
SD
bill
ion)
Energ
y in
tensity (
MJ/$
)
GDP Energy Intensity-CPS Energy Intensity-SDG TPES
• SDG scenario: 2.5 MJ/$
• Current policy scenario: 4.0 MJ/$
Gap - 1.5 MJ/$
12 September 2018
1. Institutionalizing energy transition
2. Prioritizing technology and sectoral scoping
3. Financing the energy transition
4. Developing and implementing a regulatory framework
5. Leveraging regional cooperation
Recommendations to enable the energy transition
Concerted efforts at the national level and coordination at the regional level are needed to drive forward the energy transition
12 September 2018
Policy options to enable the energy transition
Concerted efforts at the national level and coordination at the regional level are needed to drive forward the energy transition
Thank you!
Dr. Fabian Kreuzer
Economic Affairs Officer
Energy Division
12 September 2018
Jacob’s 2.5 Kw wind turbine USA, circa 1940
12 September 2018
Appendix 1: Access to electricity technology options
Decision-making process for the selection of technology for access to
electricity
12 September 2018
• Germany’s EEG (2000 – present)
Feed-in tariffs for RE technologies
Build scale in market, trigger learning curve cost decline
Industry invested in product, process and organisational innovation
• Reverse auctions – India, Australia, China, South Africa, Dubai, Mexico, Peru etc.
Increased competition
Price discovery
Promotes broader based innovation through output specification
• Australia’s Clean Energy Bill (2012-14)
Cap and trade emissions trading scheme
Stimulates innovation in lowering emissions from energy sector through market signals
Taps into competition among market players
Appendix 2: Useful case studies
12 September 2018
1. Electric vehicles become mainstream and prompt a shift from petroleum to clean electricity (EE, RE)
2. Solar becomes the lowest cost of all power sources at any scale, offsets fossil fuel and opens up rural electrification (RE, EE, EA)
3. HVDC large scale cross-border grid interconnections link national grids and bring renewable resources to load centers (RE, EE)
4. Energy storage becomes low cost and solves the variability problem of cheap renewables (RE, EE, EA)
5. Global commitment to reach the goals of the Paris Agreement will see more finance and policy support to clean energy - pushing SDG7 targets over the line (RE, EE).
Appendix 3: Five reasons for optimism on SDG7
Key: RE – renewable energy; EE – energy efficiency; EA – energy access
12 September 2018
Appendix 4: Key Features of Cross-border Energy Infrastructure
Oil Pipeline Gas Pipeline Powerline
Connects oilfield to port or refinery, sometimes cross-border
Connects gas field to LNG facility or to a gas grid, sometimes cross-border
Connects power station to loads in adjacent country, or interconnects two national grids
High upfront cost, high sovereign risk, long lifespan asset
High upfront cost, high sovereign risk, long lifespan asset
High upfront cost, high sovereign risk, long lifespan asset
Operational issues relatively simple
Operational issues relatively simple, sometimes two way flow of gas
Operational issues more complex, regulatory harmonization, two way flow of power
Little net impact on sustainable or low carbon energy. Part of a global oil supply system.
Increased availability of gas can displace coal powered generation and transport fuels offering lower emissions. Fugitive emissions need close management.
Can help access renewable resources across borders – hydro, solar, onshore/offshore wind -and allow high penetration of variable renewables by pooling larger areas
Technology well defined Technology well defined Technology evolving, more emphasis on HVDC
Energy medium storable -bunker
Energy medium storable –underground, linepack and LNG
Energy medium generally non storable –instantaneous balancing of supply and demand