Future perspectives for energy in Southeast Asia

Solar plant in Thailand

The development of Southeast Asia in the next 30 years will require a lot of energy. Yet, producing fossil fuels becomes challenging and clean renewable energy technologies are still in their infancy.  A Bloomberg report presents how Thailand, the Philippines and Indonesia manage these new issues to power up for the future.

This video is part of a series on the “Power of ASEAN” after another one on the energy in the less developed countries of ASEAN.

To fuel a average 6%+ economic growth Southeast Asia will need to boost its electricity production from an estimated 180 GW capacity to 460 GW in 2035. To do so it will need finances and proper regulations to ensure investment’s return… and resources: fossil fuels (coal, gas and oil) and hopefully, renewables, to limit pollution.

Development of solar energy in Thailand

Thailand is currently well supplied in energy, but 80% of the Thai energy is produced from fossil fuels. In an effort to make Thai energy greener, Thailand has set the objective of producing 25% of its energy from renewable sources by 2022.

In order to achieve this goal, a pilot solar pland has been built in Lopburi. But solar technology is still not cost-efficient compared to other energy sources, costing more to governments and/or customers. Some hope that solar energy technologies will reach efficiency in 5 to 10 years, helping to amortize set-up and maintenance costs.

Solar does however have other benefits. Being a pilot project, 25% of the Lopburi plant was funded by the Asian Development Bank, which is very involved in financing green projects for Southeast Asia, such as electric transport in the Philippines.

In addition to clean energy, it was also aimed at benefiting the local communities, fighting the locals resistance the project is assorted of a commitment to education in order foster a virtuous circle in the local economy.

Success with geothermal energy in the Philippines

The Philippines is currently the world second largest producer of geothermal energy after the US. And geothermal energy is clean! But it is technically difficult to build the large geothermal plants that would be required to cope with the energetic demand of the Philippines in the coming years.

In the 1990’s the Philippines’ economic growth was slowed down by a prolonged shortage of energy. Though the energetic bottleneck has been addressed, a surge in electricity demand in the coming years could weigh on future growth.

Being not rich in fossil fuels like some of its neighbors, the Philippines tries to prevent this potential shortage by producing domestic energy through the harnessing of its natural gas, hydro power and geothermal resources, thus limiting energy imports.

Thanks to geothermal energy, not only can the Philippines benefit from renewable energy, but also from its stability inn production and in cost, as the running costs of geothermal plants are rather stable and not exposed to the variations in the price of commodities.

Critical energetic situation in Indonesia

Though Indonesia should soon be the world’s largest producer of geothermal energy, it is also planning a development of energy from coal and natural gas. The economic growth of this large country will require consequent capacities and a solid network of distribution in the thousands of islands of the Indonesian archipelago.

With an oil consumption that increases by 10% per year, quickly depleting oil reserves and insufficient natural gas production, Indonesia now faces a difficult situation. After hacing a major oil exporter in the 1980’s, it now needs to import oil to satisfy a domestic consumption that vastly exceeds anticipations.

To try and tackle this energetic challenge, Indonesia is attempting to channel its energy mix from oil to gas, and it is looking in all directions to cope with perspective on its energetic future. Indonesia wants to use less oil, more coal and natural gas, and as much renewable energy as possible. The plan is to reach 10 to 15% of renewables in the Indonesian energy mix by 2025.

To boost fossil fuel production, Indonesia will need foreign companies to come explore and invest on top of local ones, even more so as the untapped reserves in deep water require advanced technologies. It is also looking inward to try and ease regulations, lower taxes and remove unnecessary bureaucratic red tape.

Video from Bloomberg initially aired in August 2014

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