Cross-border power exchanges are the answer to Asia-Pacific’s booming demand for power, which is set to sharply outpace the rest of the world’s over the next two decades, says a comprehensive new report from the Asian Development Bank (ADB).
“Countries cannot meet these huge power requirements all on their own, so the region must accelerate cross-border interconnection of electricity and gas grids to improve efficiencies, cut costs, and take advantage of surplus energy,” recommends the Energy Outlook for Asia and the Pacific report.
Specifically, Southeast Asia, South Asia, and Central Asia can look at enhancing cross-border power exchange initiatives to eventually establish a pan-Asia energy market by 2030.
Closer intra-Asia cooperation will have other positive spinoffs, including new economic opportunities and warmer relations, the report added.
“Our projections show the region will consume more than half the world’s energy supply by 2035, with electricity consumption more than doubling as economic growth and rising affluence drive demand,” said S. Chander, special senior advisor on infrastructure and public-private partnerships at ADB.
The Energy Outlook for Asia and the Pacific report provides in-depth data and projections on energy use at the sub-region, country, and sector levels until 2035, along with an analysis of the impacts of a “business as usual” approach to power, and an alternative approach in which countries scale up efficiencies and low carbon technologies.
Finding ways to remove current regulatory barriers is crucial for the broader use of renewable energy. The region will have to make heavy investments to meet the region’s energy needs. The sector is estimated to require about US$11.7 trillion in new investments through to 2035, based on business-as-usual power use patterns.
Under the alternative approach, the investment requirements will swell to about $19.9 trillion with the adoption of pricey advanced coal and natural gas-fired-generation technologies and low-carbon options like wind and solar energy.
Fossil fuels will continue to dominate the energy mix in the coming decades, with the demand for coal set to rise by more than 50 percent over the outlook period, or nearly 2 percent a year, led by consumption in China and increasing use in Southeast Asia.
Oil demand will also grow by 2 percent a year, led by the transport sector, with newly affluent South Asians buying an increasing number of motor vehicles. Natural-gas demand will expand at the fastest annual pace of 4 percent because of the lower environmental burden and ease of use.
The reliance on fossil fuels presents major pricing, energy security, and environmental challenges, with Asia-Pacific’s carbon dioxide emissions set to double by 2035, making up more than half the world’s total output.
“Without reducing its heavy reliance on oil imports, using power more efficiently, and adopting more green energy options, the region will see a growing energy divide between the rich and poor, and increasing threats from climate change,” the report warned.