Southeast Asia’s growing energy consumption is leading to the region’s increasing reliance on oil imports, imposing high financial costs and external vulnerability on the region’s economies, according to the most recent World Energy Outlook report released by the International Energy Agency. Serious actions should be taken by countries in the region to improve energy efficiency, IEA noted.
“Southeast Asia is, along with China and India, shifting the center of gravity of the global energy system to Asia,” IEA Executive Director Maria van der Hoeven said at the launch of the World Energy Outlook Special Report, Southeast Asia Energy Outlook.
According to the report, despite the region’s current low per-capita energy use, Southeast Asia’s energy demand will increase by more than 80% in the period to 2035, a rise equivalent to current demand in Japan. By 2035, the region is projected to become the world’s fourth-largest oil importer after China, India, and the European Union, with its oil imports reaching more than 5 million b/d and its annual spending on oil imports rising to $240 billion, accounting for 4% of its GDP. Its oil dependency will also be doubled to 75% of demand.
Southeast Asia’s surplus of natural gas and coal exports will also reduce as production is increasingly diverted to domestic markets, the report said. Its net gas exports decline by more than three quarters to 14 billion cu m in 2035.
Power sector is fundamental to the energy outlook for Southeast Asia, the report emphasized. “The rising share of coal in power generation underscores the urgent need to deploy more efficient coal-fired power plants,” Van der Hoeven said. Currently, due to the almost exclusive use of subcritical technologies, the average efficiency of these facilities is very low, at just 34%.
An Efficient ASEAN Scenario in the report shows that, simply by adopting energy efficiency measures, projected energy demand will decline by almost 15% in 2035, net oil imports would fall by around 700,000 b/d, and regional GDP would rise by about 2% in 2035.
IEA also highlighted that developing policies to attract investment is vital for enhancing energy security, affordability and sustainability in Southeast Asia. In the period to 2035, around $1.7 trillion of investment in energy-supply infrastructure is required.
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