ANALYSIS ON ENERGY SAVING POTENTIAL IN EAST ASIA REGION

Cecilya MalikERIA Working Group on Energy Saving Potential

BACKGROUND The Leaders of the 16 countries of the East Asia Summit (EAS)

signed the Cebu Declaration on East Asia Energy Security at the 2nd

EAS Meeting held in Singapore on 15 January 2007. As a respond, the East Asia Summit (EAS) Energy Cooperation Task

Force (ECTF) was established on 1 March 2007 focusing initially onthree areas for cooperation, (i) Energy Efficiency & Conservation; (ii)Energy Market Integration; and (iii) Bio-fuels for transport and forother purposes

As one of the co-chairs for the Energy Efficiency and Conservation(EE&C) Work Stream Japan proposed to undertake a study of theenergy savings and CO2 emission reduction potential in the EASregion.

In view of this, a Working Group Working Group for Analysis onEnergy Saving Potential in East Asia Region was created in 2007 aspart of the studies of the Economic Research Institute for ASEANand East Asia (ERIA).

ECONOMIC RESEARCH INSTITUTE FOR ASEAN AND EAST ASIA (ERIA)

RESEARCH PROGRAMS FOR THE HARMONIOUS INTEGRATION IN ASEAN AND EAST ASIA

WORKING GROUP FOR ANALYSIS ON ENERGY SAVING POTENTIAL IN EAST ASIA REGIONObjectives To estimate the energy savings potential in East

Asia region based on:◦ Projected energy demand in future◦ Individual energy efficiency and conservation targets and

action plans of East Asian countries To assess the energy saving potential of such

targets and effectiveness of action plans by using a computer model.

To identify areas where energy saving programs are more effective.

APPROACH

Summarize the energy saving targets and action plans of East Asian countries and estimate energy saving potential induced by the targets and plans

Apply scenario analysis Reference Scenario (RS): BAU case Alternative Policy Scenario (APS): Energy Efficiency and

Conservation Promotion case Estimate energy conservation potential as defined below:

Potential = RS – APS in terms of PES or FEC PES: Primary Energy Supply FEC: Final Energy Consumption

IEEJ energy outlook model or national models can be applied for the above analysis.

CURRENT SCENARIO APPROACH USING TWO ENERGY OUTLOOKS, BAU AND APS

Assumptions: GDP, Population, Oil priceExisting energy policy & plan

Energy consumption of BAU

Econometrics model

Energy saving target and action plans

Energy consumption of APS

Energy saving potential = BAU - APS

MODEL STRUCTUREEconomic Growth Targets

Industry

Power generation

Primary Energy

GDP, Crude oil price, Exchange rate,Population, Power generation outlook, thermal efficiencies, etc.Transport Other

Final Consumption

Oil Refinery

Coal Products

For APS, Primary energy intensity targets or detailed sectoral energy saving goals, thermal efficiences and use of biof-uels

MEMBERS AND TASKS OF THE WORKING GROUPMembers Consists of 16 members from each country, having appropriate

experience in the preparation of energy outlooks in their respective countries

Tasks The members are requested to do followings works:

◦ Choice of outlook model, IEEJ or national◦ Model assumptions

Macro economic assumptions Energy saving goals and action plans

◦ Make energy outlooks, BAU and APS, using a national model◦ Make a summary table◦ Discuss the action plans and useful efficiency indicators◦ Extract policy recommendation to ECTF

WG OUTCOMEShttp://www.eria.org/research/no6-1.html ERIA RESEARCH PROJECT 2007 No. 6-1: Analysis on

Energy Saving Potential in East Asia Regionhttp://www.eria.org/research/y2008-no8-1.html ERIA Research Project Report 2008 No. 8-1: Analysis on

Energy Saving Potential in East Asia Regionhttp://www.eria.org/research/y2009-no11.html ERIA RESEARCH PROJECT 2009 No. 11: Analysis on

Energy Saving Potentialhttp://www.eria.org/research/y2010-no21.html ERIA RESEARCH PROJECT 2010 No. 21: Analysis on

Energy Saving Potential in East Asia

ANALYSIS ON ENERGY SAVING POTENTIAL IN EAST ASIA REGION2010

REASSESSMENT OF ENERGY SAVING POTENTIAL

0.9

2.1

1.7

0.5

1.2

1.0

-0.4

1.61.8

1.7

0.8

1.4

1.0

0.5

0.9 0.8

0.04

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

AUS BRN KHM CHN IND INA JPN KOR LAO MAS MMR NZL PHI SIN THA VNM Total

Po

pu

latio

n G

row

th R

ate

(%

/ye

ar)

2.6

3.8

7.5 7.78.1

6.2

1.4

3.3

7.6

4.6

9.6

2.0

5.9

3.9 4.0

7.6

4.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

AUS BRN KHM CHN IND INA JPN KOR LAO MAS MMR NZL PHI SIN THA VNM Total

Rea

l GD

P G

row

th R

ate

(%/y

ear)

12

Macro Assumptions: Population and GDP (2000 constant price)

Population Economic Growth

REASSESSMENT OF ENERGY SAVING POTENTIAL CRUDE OIL PRICE VEHICLE OWNERSHIP

0

25

50

75

100

125

150

175

200

2000 2005 2010 2015 2020 2025 2030

US

$/b

arr

el

Nominal 2010 US$

Number of Road Vehicles(millions)

13

Country 2005 2030

Australia 13.5 21.6

China 31.6 206.2

India 15.4 112.7

Japan 74.2 78.3

Korea 10.8 19.2

New Zealand

3.0 4.2

REASSESSMENT OF ENERGY SAVING POTENTIAL

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

BAU APS

1990 2005 2030NON-ASEAN 1,019 1,690 4,426 3,772

ASEAN 111 252 908 756

MT

OE

5,334

4,528

1,130

1,943

-806 Mtoe,

14

TFEC TFEC by Sector

REASSESSMENT OF ENERGY SAVING POTENTIAL

2,146

8111,024

547

823

2,473

384

1,025

508

1,266

229

569

0

500

1,000

1,500

2,000

2,500

3,000

BA

U

AP

S

BA

U

AP

S

BA

U

AP

S

BA

U

AP

S

'05 '30 '05 '30 '05 '30 '05 '30

Industry Transport Others Non-Energy

Fin

al E

ne

rgy C

on

su

mp

tio

n b

y S

ecto

rs (

Mto

e)

APSBAU

-13.2%

-20.9%

-19.1%

-3.8%

15TFEC by Sector (East Asia) TFEC by Sector (ASEAN)

REASSESSMENT OF ENERGY SAVING POTENTIAL

492

1,331

857

1,872

129

545 546

1,586

1,155

1,549

455

1,368

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

BAU APS BAU APS BAU BAU APS

'05 '30 '05 '30 '05 '30 '05 '30

Coal Oil Gas Electricity etc

Fin

al E

ne

rgy C

on

su

mp

tio

n b

y E

ne

rgy (

Mto

e) -13.7%

-16.5%

-17.2%

-13.2%

16

TFEC by Energy (East Asia TFEC by Energy (ASEAN)

0

50

100

150

200

250

300

350

400

450

500

BAU APS BAU APS BAU APS BAU APS

'05 '30 '05 '30 '05 '30 '05 '30

Coal Oil Gas OtLers

Mil

lio

n T

on

s o

f O

il E

qu

iva

len

t

-21%

-17.2%

-12.5%

REASSESSMENT OF ENERGY SAVING POTENTIAL

3,421

1,629

8191,230

1,570

4,629

1,016

1,985

303

1,020

459

1,031

-500

500

1,500

2,500

3,500

4,500

5,500

BAU

APS

BAU

APS

BAU

APS

BAU

APS

'05 '30 '05 '30 '05 '30 '05 '30

Coal Oil Gas Others

Prim

ary E

nerg

y Dem

and (

Mtoe

)

APSBAU

-26.1%

-17.9%

-19.8% +19.2%

17

TPES

TPES by Fuel

0

100

200

300

400

500

600

BAU APS BAU APS BAU APS BAU APS

'05 '30 '05 '30 '05 '30 '05 '30

Coal Oil Gas Others

Mill

ion

Tons

of O

il Eq

uiva

lent

31.5%

-16.4%

-19.2%

-5.4%

East Asia

ASEAN

REASSESSMENT OF ENERGY SAVING POTENTIAL

BAU APS APS/BAU

2005/2030 BAU

2005/2030 APS

(toe/million US$)

(toe/million US$)

(toe/million US$) % % %

Australia 260 205 205 0.0 -21.2 -21.2Brunei Darussalam 397 321 255 -20.7 -19.2 -35.9Cambodia 228 245 215 -12.2 7.5 -5.6China 795 418 341 -18.4 -47.4 -57.1India 589 298 227 -23.8 -49.4 -61.4Indonesia 650 581 433 -25.5 -10.6 -33.4Japan 104 72 64 -11.3 -30.7 -38.5Korea 342 223 179 -19.6 -34.6 -47.5Lao PDR 193 412 388 -5.9 113.8 101.2Malaysia 558 346 301 -13.0 -38.0 -46.0Myanmar 439 171 159 -7.0 -61.0 -63.8New Zealand 247 183 164 -10.5 -25.8 -33.6Philippines 358 304 278 -8.6 -15.0 -22.3Singapore 241 152 148 -2.6 -37.0 -38.7Thailand 630 590 463 -21.5 -6.3 -26.5Viet Nam 609 560 523 -6.5 -8.1 -14.1Total 334 301 245 -18.6 -9.9 -26.7

2030 Variance2005

18

Energy Intensity by Country

REASSESSMENT OF ENERGY SAVING POTENTIAL

9051,334

2,539

6,812

5,106

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

BAU APS

1980 1990 2005 2030

CO

2 E

mis

sio

n (

Mt-

C)

-1706 Mt-C, -25.0%

0.85

0.75

0.53

0.62

0.79

0.72

0.92

0.85

0.85

0.80

0.67

0.74

0.64

0.52

0.62

0.54

0.71

0.94

0.63

0.71

0.61 0.6

3

0.57

0.53

0.48

0.56

0.37

0.38

0.58

0.46

0.84

0.84

0.80

0.78

0.75

0.62

0.72

0.79

0.73

0.69

0.47

0.44

0.97

0.67

0.63

0.38

0.49

0.43

0.40

0.74

0.72

0.0

0.2

0.4

0.6

0.8

1.0

1.2

BAU

APS

BAU

APS

BAU

APS

BAU

APS

BAU

APS

BAU

APS

BAU

APS

BAU

APS

BAU

APS

BAU

APS

BAU

APS

BAU

APS

BAU

APS

BAU

APS

BAU

APS

BAU

APS

BAU

APS

'05 '30 '05 '30 '05 '30 '05 '30 '05 '30 '05 '30 '05 '30 '05 '30 '05 '30 '05 '30 '05 '30 '05 '30 '05 '30 '05 '30 '05 '30 '05 '30 '05 '30

AUS BRN KHM CHN IND IDN JPN KOR LAO MYS MMR NZL PHL SGP THA VNM EAS

CO2 E

miss

ion pe

r Unit

of P

rimar

y Ene

rgy (

t C/to

e)

BAUAPS

19

CO2 Emission CO2 Emission / TPES

SUMMARY Key Findings

Sustained population and economic growth will lead to significant increases in energy demand and greenhouse gas emissions.

Due to significant increase of electricity demand and road transport fuel, advanced energy efficient and low emission technologies need to be widely deployed throughout the region.

The current energy efficiency goals and action plans reported by the EAS countries could lead to significant energy saving and reduction of CO2 emissions.

The diversification of the regional energy mix, which shifts from coal & oil to biomass & nuclear, will contribute to the improvement in the regional energy security as well as carbon intensity.

The industry and transport (especially road) sectors are challenging sectors in terms of improving energy efficiency and reducing CO2 emissions.

20

SUMMARY

Policy Implications Energy efficiency & conservation and renewable

energy policies Policymakers should set and continuously improve the energy

saving goals and action plans for each sub-sector. Policy mechanisms, which include incentives, should contribute

to promote the use of renewable energy and implementation of energy efficiency and conservation.

Policies to remove subsidies to fossil fuels also need to be formulated.

Shift from 1st generation sources of biofuels to 2nd and 3rd

generation sources need to be considered in order to avoid competition for land between food and energy production.

21

SUMMARY

Policy Implications Carbon emission mitigation

CCT along with CCS technology are key options for maintaining energy security and climate change mitigation through wiser use of coal.

Improved vehicle fuel economy and increased alternative fuel vehicles will slow oil demand growth and improve oil supply security of this region.

Carbon pricing and provision of subsidies for application of low emission technologies such as solar PV and low emission vehicles are measures to reduce CO2 emissions.

Enhancing reliable energy statistics More reliable energy statistics, especially end-use data, is

needed for a robust analysis of energy saving potential applying appropriate benchmarks.

22

2 SUB-WORKING GROUPS AND5 SATELLITE PROJECTS 2 sub-working groups

Energy efficiency design SWG Nuclear power study SWG

Satellite projects Energy conservation in Eastern-Asian steel industry by JFE-TRC Data collection on road transport activities in India and Thailand by JARI

and MRI Engineering network for advancement of energy productivity in East Asia by

NRI Research projects for improving “CO2 mitigation roadmap” in Indonesia by

MRI Clean coal technology by IEEJ

Purpose: The sub-groups and projects will feedback their research outcomes to this WG and this WG will apply the outcomes to improve energy saving potential through increasing accuracy of the energy outlooks both BAU and APS.

OTHER OUTCOMES

Pilot Study on Energy Consumption Survey in Residential Sector China and ASEAN 10 Countries

Snapshot Study on Energy Saving Potential in Specific Sectors applying the Technology Approach Cement sector Road transport sector Household sector Building sector

24

SNAPSHOT STUDY IN SPECIFIC SECTOR Objective:

Analyze energy saving potential in a specific sector applying a bottom-up approach or technology approach

Selected sectors: Cement sub-sector in Vietnam Road transport sector in Singapore Appliances in residential sector in Lao PDR Building sub-sector in Thailand

Outcome: The Bottom-up approach is useful to assess

appropriateness of current energy saving targets and action plans from EAS countries

25

Residential sector in Lao PDR

0

20

40

60

2030SNAPSHOT STUDY IN SPECIFIC SECTOR

CEMENT SECTOR IN VIETNAM ROAD TRANSPORT SECTOR IN SINGAPORE-ESP BY POLICY: 0MTOE IN 2030-ESP BY BOTTOM-UP: 2KTOE IN 2030-DIVERSIFICATION FROM ORDINARY CARS TO MORE EFFICIENT CARS TAKES TIME

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

2030

ESP by Bottom-up: 1.6 Mtoe

ESP by Policy: 4.3 Mtoe

Wet &drykiln to EEdry kiln

ESP in Res&Com by Policy: 54 Ktoe

Elec. SP in Res by Bottom-up: 11 Ktoe

37%

20%

More efficientappliances

0

1

2

3

4

5

6

7

8

9

10

2030

Building sector in ThailandESP in Res&Com by Policy: 9 Mtoe

ESP in Building by Bottom-up: 2 Mtoe20%

More efficiency inair conditioning,lighting and others

26

SNAPSHOT STUDY IN SPECIFIC SECTOR

CO2 emissions from transport sector in the reference scenario are predicted to increase steadily.

Introduction

60%20%

9%

5%6%

India

Power generation Industry transport residential Other sectors

1427.6 million tons

Transport sector

41%

29%

22%

4%4%ASEAN

1039.2million tons

0

100

200

300

400

500

600

700

800

900

1000

2008 2015 2020 2025 2030

CO2 Emissions from Transport Sectorin the Reference Scenario

India ASEANmillion tons

Source : IEA, CO2 Emissions From Fuel Combustion (2010 Edition),World Energy Outlook 2009

Transport sector

CO2 Emissions by Sector

COLLABORATION WITH APERC

APERC presented its CEEDS project. APERC conducts CEEDS in addition to PREE. CEEDS focus on sector wise energy efficiency and

conservation issues. APERC will hold two workshops for CEEDS. APERC and this

WG will explore the possibility to hold APERC and ERIA joint workshops.

It is confirmed that APERC and this WG continues to cooperate in terms of information sharing.

29

THANK YOU