Regional Energy Cooperation and the Role of the Private Sector in Asia and the Pacific: Regional Cooperation

in Energy Security Issues

Weerawat Chantanakome, PhD Executive Director, ASEAN Centre for Energy Asia-Pacific Business Forum 2008 United Nations Conference Centre, Bangkok, Thailand, 27 April 2008

Introduction : Energy Security as Reason for ASEAN Energy Cooperation

2004

GLOBAL OIL CRISIS

ASEAN ENERGY COOPERATION

APAEC (1999-2004 and 2004-2009) Establishment of ACE (1999) Hanoi Plan of Action / MOU on TAGP ASEAN Vision 2020 (1999) ASEAN Program of Action on Energy Cooperation (19951999) ASEAN Energy Amendment (1995); AEMEC to AMEM Priority for ASEAN Power Grid, APSA and TAGP (1994) Thai-Indo Coal Coop. (1990) AEEMTRC creation (1988) Phil Indo Coal Coop. (1987 ASEAN Energy Cooperation Agreement (1986) ASEAN Petroleum Security Agreement (APSA, 1986) ASEAN Emergency Petroleum Sharing Scheme Supplementary to ASCOPEs (1983) 1st Meeting of HAPUA (1981) Indonesia & Malaysia assisted other ASEAN Countries on oil needs / 1st AEMEC (1980) ASCOPEs Emergency Petroleum sharing scheme (1977) ASCOPE creation (1976)

2004

1990

Gulf War (1990) Iran Iraq Tanker War (1981-1988)

E N E R G Y S E C U R I T Y

1990

1985

1985

1980

nd

1980

Oil Shock (1979)

1975
1st Oil Shock (1973)

1975

1970

ASEAN Establishment (1967)

1970

ASCOPE: ASEAN Council on Petroleum ; AEEMTRC: ASEAN-EU Energy Management Training and Research Centre; TAGP: Trans-ASEAN Gas Pipeline; AMEM: ASEAN Ministers on Energy Meeting

ASEAN Centre for Energy (ACE)

ASEAN HEADS OF ASEAN HEADS OF STATE/GOVERNMENT STATE/GOVERNMENT

OTHER MINISTERIAL MEETINGS

AMM

AMMST

ASEAN SG

AEM

AMEM

OTHER MINISTERIAL MEETINGS

ASC
LEGEND:

SOM

COST ASEAN CENTRE FOR ENERGY (ACE) SOME ASCOPE HAPUA

AEBF: ASEAN Energy Business Forum AEM: ASEAN Economic Ministers AFOC: ASEAN Forum on Coal AMEM: ASEAN Ministers of Energy Meeting AMM: ASEAN Ministerial Meeting AMMST: ASEAN Ministerial Meeting on Science & Technology ASC: ASEAN Standing Committee ASCOPE: ASEAN Council on Petroleum COST: Committee on Science & Technology EE&C SSN: Energy Efficiency and Conservation Subsectoral Network HAPUA: Heads of ASEAN Power Utilities/Authorities NRSE SSN: New & Renewable Sources of Energy Subsectoral Network SCNCER: Sub-Committee on Non-Conventional Energy Research S G: Secretary General SOM: Senior Officials Meeting SOME: Senior Officials Meeting on Energy REPP-SSN: Regional Energy Policy and Planning Sub Sector Network

SCNCER

NRSE SSN

EE & C SSN

NES SSN

AEBF

AFOC

REPPSSN

ASEAN SECRETARIAT

ASEAN Plan of Action for Energy Cooperation (APAEC) 2004-2009

Programs

A P A E

Approaches 1 narrow development gap greater private sector involvement and participation

1. Trans-ASEAN Gas Pipeline Trans-ASEAN Gas Pipeline 2. ASEAN Power Grid ASEAN Power Grid

2
3. Coal and CCT Coal and CCT

3 capacity building
4. Energy Efficiency & Energy Efficiency & Conservation

Develop and expand the energy mix and supply source

5. Renewable Energy Renewable Energy

6. Regional Energy Policy & Regional Energy Policy & Planning

Develop transparent legal, 5 regulatory and technical frameworks

7. Nuclear Energy Safety in APAEC 2009-2014

Regional Energy Cooperation and the Role of the Private Sector in Asia and the Pacific:

Regional Cooperation in Energy Security Issues

Increase in energy demand requires huge capital Has potential to strain governments and financial markets Guidance and direction to effectively mobilize resources are needed Concerted efforts and pursued collectively equates to more and solid chances to reduce risks of energy insecurity, economic vulnerability and ecological imbalance

Regional Energy Cooperation and the Role of the Private Sector in Asia and the Pacific:

Regional Cooperation in Energy Security Issues

COOPERATION what it is NOT
Does not intend to undermine individual countrys goals and strategies Does not advertently or inadvertently seek to beef up readiness and competitiveness at the expense of the other

COOPERATION is
continuum of distinct approaches and strategies by individual countries, deployed at varying levels of responsibilities, capacities and expectations yet bounded and binded by shared goals and aspirations in pursuing a common agenda Energy Security and Sustainable Development for All, Today and Beyond

Regional Energy Cooperation and the Role of the Private Sector in Asia and the Pacific:

Regional Cooperation in Energy Security Issues

New Sustainable Energy Paradigm Enhanced regional cooperation that is based on shared visions Strengthened collaboration; energy is both a national and regional security issue Eliminates any fear or perceived fear that cooperation undercuts national interest or that a build up of cooperation initiatives, mostly overlapping, already exists COOPERATION is EVOLUTIONARY as much as the needs are.

Regional Energy Cooperation and the Role of the Private Sector in Asia and the Pacific:

Regional Cooperation in Energy Security Issues

4 Major Areas to Reinforce Cooperation:

I. Energy Infrastructure/ Energy Trade ASEAN Power Grid, Trans-ASEAN Gas Pipeline, Trans-Asian Energy System (TAES) Oil Stockpiling Continued trust building to hasten energy trade

ASEAN Power Grid

(14 power grid interconnection projects)

ASEAN Power Grid (APG) to link the electricity grids in the region to
optimize the utilization of energy resources among the member countries.

The Rush to Consumer Market Economy (2nd APAEC 2004-2009)

Vertically Integrated
Brunei

Unbundled

Wholesale Competition

Full Customer Choice

Thailand Malaysia Cambodia

?
Singapore

Indonesia

Philippines

Lao PDR Myanmar Vietnam

21

10

The ASEAN Power Grid

The ASEAN Electricity Market to 2020

THAILAND MYANMAR VIETNAM PHILIPPINES Sabah BRUNEI Peninsular MALAYSIA Sarawak SINGAPORE CAMBODIA LAO PDR

Kalimantan

Sumatra

Batam

INDONESIA Java

11

Development of Gas Cross-Border Pipelines Infrastructure in ASEAN Member Countries (as of 2008)
MYANMAR LAOS
2nd Cross border gas pipeline Myanmar-Thailand, 1999 (470 km)

THAILAND

TOTAL BILATERAL CONNECTION Approx 2300 km

LNG

3rd Cross border gas pipeline Myanmar-Thailand, 2000 (340 km)

CAMBODIA VIETNAM

PHILIPPINES
5th Cross border gas pipeline West Natuna-Duyong, 2001 (100 km)

LNG

LNG

MALAYSIA 7th Cross border gas pipeline

Malaysia-Thailand JDA, 2005 (270 km)

BRUNEI DARUSSALAM 4th Cross border gas pipeline

West Natuna-Singapore, 2001 (660 km)

SINGAPORE
8th Cross border gas pipeline Singapore-Malaysia, 2006 (4km) 1st Cross border gas pipeline Singapore-Malaysia, 1991 (5 km)
LEGEND Cross-Border Pipeline Planned Cross-Border Gas Pipeline Interconnection

6th Cross border gas pipeline South Sumatra-Singapore, 2003 (470 km)

INDONESIA

7 New Likely TAGP Interconnections Existing Gas Pipeline Work in Progress/Planned Gas Pipeline

(8 cross border gas pipelines interconnection

projects) projects
12

Subregional/Regional Energy Cooperation in Asia: Trans Asian Energy System (TAES)

ASIA
EurAsEC

North East Asia

ECNEA GTI

ACD

Central

West & Asia

South Asia
SAARC ASEAN ASEAN +3

East Asia ASEAN+6

APEC

SPECA

BIMSTEC

SouthEast Asia
BIMSTEC - Bay of Bengal Initiative for MultiSectoral Technical and Economic Cooperation SPECA - UN Special Programme for Economies of Central Asia ECNEA - Energy Cooperation in North-East Asia

ACD Asia Cooperation Dialogue

APEC Asia Pacific Economic Cooperation

ASEAN - Association of Southeast Asian Nations SAARC - South Asian Association for Regional Cooperation

EurAsEC - Eurasian Economic Cooperation

GTI Greater Tumen Initiative

.....

Regional Energy Cooperation and the Role of the Private Sector in Asia and the Pacific:

Regional Cooperation in Energy Security Issues

4 Major Areas to Reinforce Cooperation:

II. Financial Mechanisms and Regulatory Frameworks to Attract Private Sector Investment decisions directed by clear, stable policies and rules Removal of barriers to trade and regulation to allow multinational firms to operate at the international level CDM regional cooperation assessing best practices and lessons learned to synergize initiatives and boost carbon markets both as a business investment opportunity and as a climate change arsenal

Regional Energy Cooperation and the Role of the Private Sector in Asia and the Pacific:

Regional Cooperation in Energy Security Issues

4 Major Areas to Reinforce Cooperation (cont.) III. Capacity Building Quantity and quality of the workforce involved in the energy sector begging immediate attention Shortage pushing the cost of production upwards Advent of civilian nuclear power exacerbates workforce concerns Abundance of skills mismatches and shortages in key professions (Asian Development Outlook 2008) Education departments or ministries and other educational institutions to get on board in energy planning IV. Information Sharing and Increased Dialogues
Information age makes access easier also let loose variety of dubious and low quality data Sustained cooperation to ensure accurate, reliable and updated information vital to policy and decision-making (IEA, APERC, etc) Outreach to different stakeholders to erase any misconception and misinformation and paves way for coalition building

Regional Energy Cooperation and the Role of the Private Sector in Asia and the Pacific:

Regional Cooperation in Energy Security Issues

Increasing Access to Energy and Targeting the Poor
Set clear national targets to provide minimum, if not modern energy service, to the poor under a specific time table and bringing to the regional arena as international commitments completes the virtuous cycle of new sustainable energy paradigm Equal rights to energy services and equal investments Increasing poors access to energy to be integrated in policy planning Specific and clear targets, mandated or otherwise, and other interventions including short-term subsidies to entice investors Private sector to propagate off-grid solutions or distributed energy systems, create research innovations on alternative fuels, and commercialize efficient technologies and best practices

It is time ASEAN countries woke up to the imperatives of ASEAN energy cooperation. The key security risk of ASEAN is. its Energy Security..

Thank You for Your Attention