Improving Energy Access with Clean Energy in ASEAN...Energy-related challenges driving renewable energy growth in ASEAN • Installation of sufficient additional power generation capacity

Improving Energy Access with Clean Energy in ASEAN

SERIS INDUSTRY DAY: PV Quality and Asset Management, Singapore 14 August 2017

Sustainable Development

Sustainable energy: Energy solutions that address development issues related to economic growth, environment and social equity simultaneously

Challenges:• Social• Economic• Environmental

Key input foreconomic growth

Economic

SocialEnvironmental

Poverty alleviationand gender

Impacts of energyproduction and use

Energy for Sustainable Development

Sustainable Energy for All initiative (SE4All)Underpinning Objectives




Energy Challenges

SocialEconomic Environmental

Sustainable Energy Through Market Transformation

Energy Access Energy Efficiency Renewable Energy

CROSS-CUTTING ISSUES: Gender, Climate Resilience, Energy Security, Disaster Risk Reduction and Recovery



Energy Situation & Forecast in ASEANSoutheast Asia is a rapidly developing region. By 2025, it is expected that:

• Population will increase to 715 million by 2025• Economic growth is expected to grow on an

average of 5% annually• Rapid industrialization and urbanization of the

ASEAN countries• Strong growth of 4% in energy demand annually

until 2025• Electricity demand will double during the period

2014-2025 • Installed energy generation capacity to increase

to 428 GW by 2025• Fossil fuels will to continue to dominate the fuel

mix, with coal and natural gas the main contributors.

• 16% increase in Population

• 68% increase in GDP

• 49% increase in TPES • 62% increase in CO2 Emissions • 35% increase in air pollution cost

• Currently, the renewable energy share in the region is around 9%

• Current efforts are only on track to reach 17% renewable energy by 2025.

• ASEAN countries agreed to a collective renewable energy target of 23% (of Total Primary Energy Supply) by 2025.

Energy-related challenges driving renewable energy growth in ASEAN

• Installation of sufficient additional power generation capacity• 160 million of ASEAN people still do not have access to electricity today.• High grid electricity prices, at 0.18 USD/kWh or more in some markets.• Strong reliance on fossil sources, such as natural gas, coal and oil• ASEAN region is among those with the strongest growth in CO2 emissions

in the last decade• Vulnerable to most harmful effects of climate change• Challenges in providing sufficient energy services, improving industrial

productivity and reducing poverty, and adapting to global warming.

ASEAN is increasingly turning to renewable energy.

Energy Situation in ASEAN



Source: IRENA & ACE (2016), Renewable Energy Outlook for ASEAN: a Remap Analysis, International Renewable Energy Association (IRENA), Dubai and ASEAN Centre for Energy (ACE), Jakarta.

Renewable Energy Applications in ASEANBusiness-As-

UsualReference

Case ASEAN Goal

Installed Power Generation Capacity, GW 195 387 422Renewable Energy-based 50.9 123.9 180.2- Solar PV 1.6 12.8 54.7Total Power Generation, TWh 856 1656 1674Renewable Energy-based 173.3 453.8 580.3- Solar PV 1.6 18.6 80.7Total Direct Uses of RE, Mtoe 217 284 267Renewable Energy-based 93.6 88.6 85.3- Solar Thermal (Buildings) 0 0.2 4- Solar Thermal (Industry) 0 0.1 3.2Renewable Energy Share, %Power Generation 20 27 35Buildings 1 3 19Industry 14 16 20Transport 3 8 9CO2 Emissions from Energy, Mtons/year 1359 2194 1996

42.7% of total capacity

30.4% total RE-based capacity

34.7% of power generation

13.9% total RE-based power

31.9% total direct uses


Source: Dobrott, N., “Turning Wheels: ASEAN offers some of the most promising renewable energy markets”, Southeast Asia Infrastructure, Vol. 4, No.3, Dec 2016 – Jan 2017, pp. 32-34.

Solar Energy Applications in ASEAN

Approach: Assist governments to implement combinations of public instruments that systematically target these barriers and investment risks to cost-effectively achieve risk-return profiles that attract investment in sustainable energy at scale.

Objective: To create the investment conditions in which developing countries can access large quantities of low-cost financing for sustainable energy.

Market transformation for sustainable energy: Measures (individual or combination) to improve an investment’s risk-return profile:

• Reducing risk – lower financing costs• Transferring risk – lower financing costs• Compensating for risk – addressing any residual risk

Enabling Market Transformation


Cornerstone Instrument

EE Building Code

Policy Derisking(Reducing Risk)

Examples:

Energy Efficient Buildings - Example Instrument Package

Financial Derisking(Transferring Risk)

Examples: Examples:

EnforcementStandards/labels

Loan guaranteesPublic loans

Rebates

Direct Incentives(Compensating Risk)

Technical skills

UNDP’s Approach to Market TransformationUNDP seeks to support governments to put together public instrument packages that:

(i) Address the non-financial barriers that block demand for investment (ii) Create attractive risk/return profiles by reducing, transferring or compensating for risk


In implementing a market transformation, UNDP:

Supports sector-, and technology-specific sustainable energy projects and programs at the national and sub-national levels

Engage in advocacy campaigns, policy dialogue, knowledge sharing and coordination efforts at global, regional and national levels

Engage in partnerships with stakeholders from public, private and civil society sectors and international organizations that leverage UNDP’s contributions and extensive country presence.

Enabling Market Transformation


Partnerships in Energy Market Transformation Initiatives

Governments (National and Local)

Global Funds – Global Environment Facility, Green Climate Fund, Montreal Protocol

Multi-lateral Banks and Regional Development Banks

Energy Organizations (e.g., IEA, IRENA, REN21, WRI, OECD)

Regional Associations (e.g., ASEAN, APEC, SAARC)

UN Agencies and other International Aid & Development Organizations

Private Sector (e.g., multinational companies, large domestic companies, SMEs, industry associations and business intermediaries, state-owned enterprises)


Partnerships in Energy Market Transformation * Global & Regional *


UNDP: A Successful GEF Agency

Long standing Business Model optimally aligned in serving the GEF family of funds and UNDP Country Offices.

High quality project design and quality assurance support at national, regional and global level

Comparative advantage: Ability to catalyze environmental finance to achieve multiple development benefits, embedding the environmental projects into the sustainable development agenda

Investment in technical expertise, systems and standards: – Project designs by each Technical Team based on proper

logical framework analysis– Technical training – learning budget– Pipeline management– Solid Results-based Management system– Culture of accountability, results focused


33.082.6

313.9

25.2

Ongoing UNDP-GEF CCM Projects in ASEAN (since 2011), US$ million

Energy Efficiency Renewable Energy

Combined EE & RE Sustainable Transport

29.7

59.0

42.0

Pipeline UNDP-GEF CCM Projects in ASEAN (2015 - 2017), US$ million

Energy Efficiency Renewable Energy Combined EE & RE

Partnerships with the private sector: The private sector is viewed no longer as a source of funding, but as an equal partner in development.

Private sector entities can support initiatives that facilitate increased access to local sources of financing for EE & RE projects

♦ Financial intermediaries like micro credit lenders or ESCOs, in terms of capacity building, start-up cost, outreach and marketing cost and other technical assistance, and risk-sharing instruments

• Multinational companies & large domestic companies

• Small-to-medium enterprises• Industry associations and

business intermediaries• State-owned enterprises

Private Sector Involvement in EE & RE Initiatives


Support initiatives that facilitate productive and social uses of RE. Electricity services for home lighting and public services. RE applications that provide income generation and essential social services.

Support initiatives that improve the quality and efficiency of public services Power Generation & Distribution Water Supply and Distribution Waste Management

Examples of Modalities of Partnerships Barrier Removal - to the creation, entry or transformation of markets Capacity Building Non-grant Financing - concessional and contingent finance, loans and guarantees Progressive Partnerships - long-term projects, information sharing Service Provision – e.g., water supply, waste collection and disposal

Private Sector Involvement in EE & RE Initiatives


Mainstreaming access to energy services in poverty reduction and rural development programs, and improving access to modern fuels.

Removal of major barriers to the cost-effective development and application of EE and/or RE technologies Improving access to modern and energy efficient appliances, equipment and systems Increased financing for sustainable development of decentralized energy systems Capacity building and technical assistance in establishing appropriate legal and regulatory

frameworks, and implementation of national and local programs on EE and RE technology applications.

Promotion of EE& RE technologies that could support rural development & rural electrification

Reduction of fossil fuel consumption through lesser consumption (EE) and substitution of RE resources thereby reducing GHG emissions

Examples of EE & RE Projects Implemented in Partnership with the Private Sector


Manuel L. Soriano, Senior Technical AdvisorEnergy, Infrastructure, Transport & Technology

UNDP-Global Environment FinanceBureau of Planning and Programme Support

UNDP Bangkok Regional Hub, Bangkok, [email protected]

Tel: +66-2-3049100 Ext 2720

Thank You

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Improving Energy Access with Clean Energy in ASEAN...Energy-related challenges driving renewable energy growth in ASEAN • Installation of sufficient additional power generation capacity