ASEAN's quest for power: AT WHAT PRICE?

Region's choice of fossil or renewable energy will affect climate-change fight
By David Fogarty, Assistant Foreign Editor, The Straits Times, 26 May 2015

TO MOST of its South-east Asian neighbours, Singapore's electricity grid is the stuff of dreams. Reliable power to every home and abundant supply to industries that keep the economy growing and provide plenty of jobs. Blackouts on any scale are almost unheard of.

Not so in many other parts of the region. One in five of Southeast Asia's 600 million people does not have access to electricity. Chronic power shortages and blackouts blight some of the region's most populous nations, stifling economic growth.

That is a politically toxic problem for regional leaders who are struggling to meet the needs of investors, business and populations clamouring for better lives.

South-east Asia needs power, and lots of it, very quickly. But in the rush to build new power stations, it faces a stark choice, one that the United Nations, green groups and energy analysts say risks long-term consequences for the region and the planet.

This is the choice of technology to generate the vast amount of electricity the region needs. Large-scale coal-fired power stations and big hydro dams are still favoured because they are seen as the incumbent technologies.

But the UN and others say a huge roll-out of coal power could lock in decades of rising carbon dioxide pollution - CO2 is the main greenhouse gas blamed for climate change - while huge hydro dams, such as those planned for the Mekong river basin, disrupt farming and fishing and risk wiping out many species.

To meet soaring electricity demand, South-east Asia is fast becoming one of the world's top growth centres for energy.

"Over the next two decades, 65 per cent of the (global) growth in energy consumption is going to come from South-east Asia," Ms Christiana Figueres, head of the UN Climate Change Secretariat, told The Straits Times in a recent interview.

The Paris-based International Energy Agency (IEA) says power generation is set to nearly triple in South-east Asia between 2011 and 2035, with fossil fuels providing most of the energy. It says if current energy policies remain, the region's carbon emissions will double to 2.3 billion tonnes, making it among the world's top greenhouse-gas emitters.

What the region decides on energy policy now will set the tone for the global fight against climate change, Ms Figueres said.

Those policies will be central to UN climate talks at the end of this year in Paris when a new pact to limit global warming is expected to be agreed. But the effectiveness of the agreement will be determined by the strength of national commitments to cut carbon emissions. And emissions in the region are likely to soar, with devastating impact.

Ms Athena Ballesteros, Director, Finance Centre, of the Washington-based World Resources Institute, told The Straits Times that investments in coal-fired power stations do not make sense when you add up the long-term environmental and health costs.

The UN says South-east Asia is among the world's most vulnerable to the impacts of climate change, such as more extreme storms and droughts.

And, says the Asian Development Bank, Asia's megacities are among its biggest carbon emitters. "Asian cities already consume 80 per cent of the region's energy and create 75 per cent of its carbon emissions. Asian cities are poised to contribute more than half the rise in global greenhouse-gas emissions over the next 20 years if no action is taken," it said in a statement on May 6.

That means energy investments to feed megacities need careful planning. But that can be a tough message for a leader like Indonesian President Joko Widodo, who faces an urgent mission to, literally, deliver power to the people. Mr Joko has announced a 35,000MW power plant programme - more than half of which will be coal fired - by 2019.

"There's a kind of electricity crisis. Investors have been forced to wait for a long time to get access to electricity before building hotels or industrial estates. When can we develop industry if we lack electricity?" he said at the programme's launch in Yogyakarta earlier this month, The Jakarta Post reported. He said only 16 per cent of Indonesians had secure access to electricity.

Indonesia, which has abundant coal reserves, also has abundant renewable energy resources. It has plenty of geothermal energy that has attracted significant investment. However, while the government is rolling out policies that promote wind and solar, industry experts say, these are not yet at large-scale.

Coal remains king for power generation and, based on current plans, it will account for almost 60 per cent of the increase in the region's power supply to 2040, Dr Fatih Birol, the IEA's Chief Economist and Director of Global Energy Economics, told The Straits Times in an e-mail interview.

Two things, though, could change this. Dr Birol and Ms Ballesteros pointed to the huge potential of renewable energy, particularly in remote areas not connected to the grid - this boosted domestic energy security. They also pointed to big power savings from energy efficiency, such as low-energy lighting and buildings.

Ms Ballesteros said these benefits needed much greater prominence in policy discussions. She also said there were plenty of investors waiting for the right policies.

Secondly, there is growing resistance to construction of big coal-fired stations by residents fearing water and air pollution and loss of farmlands.

Protests by farmers in Central Java have blocked construction of the US$4 billion (S$5.4 billion), 2,000MW Batang coal plant, Indonesia's largest power station. Similarly, hundreds of residents from a town in western Myanmar said this month they were opposed to a US$2.5 billion South Korean coal-fired power plant, citing environmental concerns.

"Local communities don't want to have the same fate as people already affected by coal power plants," said Mr Arif Fiyanto, Greenpeace climate and energy campaigner in Jakarta. "President Jokowi should lead an energy revolution in Indonesia," he said, adding: "Indonesia has abundant renewable energy resources. Coal is destroying our environment, economy and people."

Powering up South-east Asia

- South-east Asia faces immense financial, environmental and health challenges in ramping up electricity generation. About 130 million people in the region do not have access to electricity, of whom 60 million are in Indonesia. About half of Myanmar's population have no access to electricity; for Cambodia, it is about 60 per cent; for the Philippines, it is about a third.

- Annual demand is growing. For example, electricity demand growth in Indonesia is increasing 9.4 per cent a year, according to state utility Perusahaan Listrik Negara, placing strains on the grid.

- About US$1.7 trillion (S$2.3 trillion) of cumulative investment in energy-supply infrastructure to 2035 is required in South-east Asia, with almost 60 per cent of the total in the power sector, the International Energy Agency (IEA) said.

- Investment in renewable energy, such as hydropower, geothermal, wind and solar, will grow, but unless there is a major shift towards green energy policies, coal will attract the bulk of the investment, the IEA said, with coal's share growing to nearly half of all power generation in the region by 2035 from less than a third in 2011.

- The IEA said South-east Asia's coal-fired capacity will double between 2011 and 2020, reaching 80 gigawatts (GW), and double again between 2020 and 2035, rising to 160GW, with implications for the environment, as coal is polluting.

- Underscoring the pollution threat, there are 140 coal-fired power stations planned or under construction in Indonesia at present, according to Greenpeace.