This document discusses energy security and resilience challenges facing the ASEAN region. It makes the following key points: 1) Fossil fuels, particularly coal, will continue dominating ASEAN's energy mix in the coming decades due to abundant coal reserves and coal remaining competitive on cost. 2) ASEAN countries' dependence on Middle Eastern oil imports is projected to increase significantly by 2050, increasing concerns over emergency preparedness for supply disruptions. 3) Achieving global climate targets will require dramatically reducing the share of fossil fuels, especially coal, in ASEAN's power sector mix, though fossil fuels will continue playing an important role in economic growth. 4) Affordable energy access remains a

1. Energy Security and Resilience
in the ASEAN Region
25 Feb 2020
Jun ARIMA
Senior Policy Fellow for Energy and Environment
Professor, GrasPP, University of Tokyo
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2. Outlook of Fuel Mix in ASEAN in BAU
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200
400
600
800
1.000
1.200
1.400
1.600
1.800
1990 2000 2015 2020 2030 2040
Mtoe
Coal Oil Natural gas Nuclear Hydro Geothermal Others
Total Primary Energy Supply in BAU
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990 2000 2015 2020 2030 2040
Coal Oil Natural gas Nuclear Hydro Geothermal Others
Share in Total Primary Energy Supply in BAU
Fuel Mix for Power Generation in BAU
-
500
1.000
1.500
2.000
2.500
3.000
1990 2000 2015 2020 2030 2040
TWh
Coal Oil Natural gas Nuclear Hydro Geothermal Others
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990 2000 2015 2020 2030 2040
Coal Oil Natural gas Nuclear Hydro Geothermal Others
Share of Fuel Mix for Power Generation in BAU
Source : ERIA Energy Outlook and Saving Potential of East Asia Summit Countries 2018
◆ Fossil fuel will play dominant role in ASEAN energy mix in coming decades.
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3. 3
ASEAN’s Dependence on Middle East
◆ By 2050, ASEAN’s dependence on Middle East oil will be the highest among
major regions.
◆ Emergency preparedness will become pressing issue.
Source : IEEJ Asia and World Energy Outlook (2019)

4. 4
Anything could happen in Middle East
Attack on Two Saudi Oil
Installations in Abqaiq and
Khurais on 14 Sept 2019
Attack on Two Oil Tankers in Gulf
of Oman on 13 June 2019

5. Outlook of CO2 Emissions (2018-2050)
Source : IEEJ Asia and World Energy Outlook (2019)
◆ Global CO2 emissions growth depends on Asian region, most notably, India
and ASEAN.
5
Global Emissions Asian Region Emissions

6. What 1.5-2.0 Degree Target Means
◆ In the IEA’s Paris compatible SDS, the share of fossil fuel in power generation,
in particular, coal, needs to be dramatically reduced.
IEA World Energy Outlook 2018
Global Power Generation MixGlobal CO2 Emissions
38%
26%
5%
4%
1%
1%
23%
22%
14%
10%
9%
13%
16%
15%
19%
2%
4%
5%
4%
12%
21%
2%
9%
17%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2017 2040NPS 2040SDS
Coal Oil Gas Nuclear
Hydro Bioenergy Wind Geothermal
Solar PV CSP Marine
6
(NPS)
(SDS)

7. 37% 40%
5%
3% 1%
41%
29%
27%
13%
15%
24%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2017 2040NPS 2040SDS
What 1.5-2.0 Target Means for South East Asia Region
◆ In the SDS, South East Asia also needs to substantially reduce the share of
fossil fuel in power generation, in particular, coal (40% in NPS to 5% in SDS).
0
500
1000
1500
2000
2500
2017 2040NPS 2040SDS
Coal Oil Gas Nuclear
Hydro Bioenergy Wind Geothermal
Solar PV CSP Marine
TWh
IEA World Energy Outlook 2018
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8. “Keep Them Under Ground”
◆ To achieve 2 degrees target, 88% of coal reserves must be kept under ground.
8

9. Stigmatization of Coal at COP25
◼ “Either we stop this addiction to coal or all our efforts to
tackle climate change will be doomed”. (UN Secretary
General A. Guterres @COP25)
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10. ◼ OECD has issued a report urging stopping ODA for fossil fuel related
activities.
◼ European Investment Bank (EIB) stops financing for fossil fuel from
2021.
◼ EU is now developing “green taxonomy” labeling finance fossil fuel
related activities (e.g. coal power plants) as “unsustainable” and
intends to make their taxonomy global standard though ISO.
Squeezing Finance to Fossil Fuel Sector
◼ New finance to fossil fuel related projects in Asian region could be
squeezed.
◼ Utilization of cheap domestic coal resources could be constrained.
◼ Energy access with affordable cost could be threatened.
◼ Replacement of old and inefficient plants with high efficiency low
emissions technologies could become difficult. , which is contrary to
GHG emissions reduction
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11. Energy related Investment Needs in Asia (2018-50)
◆ Asia needs energy related investment of $27.5 trillion from 2018 to 2050.
40% of it goes to India and ASEAN
◆ Fossil fuel related investment amounts to $7.9 trillion (28% of total)
Source : IEEJ Asia and World Energy Outlook (2019)
11

12. Alignment with Development Strategy
Openness/Transparency/Fiscal Soundness
Stability/Safety/Resilience Economic and Financial Soundness
: Cost-effectiveness including
LCC and utilization of markets
Local High-quality Development
: Job creation/capacity building
and transfer of technologies
Social and Environmental
Sustainability
Elements that ensure the quality of infrastructure
◼ In November 2018, APEC (Committee on Trade and Investment) agreed to the
revision of the “APEC Guidebook on Quality of Infrastructure Development
and Investment”.
◼ Stability, safety and resilience is included among key criteria in addition to
alignment with development strategy, economic and fiscal soundness,
contribution to job and social and environmental sustainability.
Holistic Criteria for Energy Infrastructure
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13. 13
Various Aspects of “Resilience”
◆ Energy infrastructure needs to be resilient to various risks (e.g., energy
supply disruption, climate change, extreme weather).
◆ Each technology has strengths and weaknesses regarding risk.
◆ Wind and solar contribute to reducing energy security risk since they are
domestic energy and to reducing climate change risk since they are zero-
emissions energy.
◆ On the other hand, they tend to be vulnerable to extreme weather.
Mega-solar and wind turbine damaged by strong typhoon in Japan

14. EAS region faces multiple challenges
◆ Climate change is one of 17 SDGs, not the supreme objective taking
precedence to others. There are synergies and trade-offs between climate
action and other objectives.
◆ Most SDGs are predicated by robust economic growth underpinned by cheap
and reliable energy supply
Climate Change and SDGs
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15. 15
Source: United Nations My World 2015 (May 2013)
◼ UN global poll engaging 9.7 million people (HDI high countries 44%, medium
countries 27%) in May 2013 indicates highest priority on education, healthcare
and job opportunities while climate change comes at the bottom.
Nigeria 2,735,062
Mexico 1,978,589
India 902,920
Pakistan 701,933
Sri Lanka 665,533
Yemen 413,591
China 321,853
Among respondents from
top 7 countries (79% of
total), 74% comes from low,
middle HDI countries
What Matters Most to You? (1)
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16. 16
◆ More recent survey shows higher priority on climate change, which is mainly
due to high share of high HDI countries among respondents
What Matters Most to You? (2)
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17. Affordable Energy Access: Priority for Developing Countries
◆ Overcoming energy poverty is prerequisite for achieving SDGs
◆ Globally, nearly 1 billion people still lack access to electricity. Improving
electricity access in 2000-2015 has been largely achieved by fossil fuel (68%) ,
most notably, coal (44%).
◆ Abundant coal reserves in Asian region cannot simply be neglected.
IEA Energy Access Outlook 2017 WEO Special Report 17

18. 18
Levelized Cost of Electricity (LCOE) of Various Fuels Differ Across Regions
Source : IEEJ Asia and World Energy Outlook (2019)
◆ Competitiveness of various fuels in terms of LCOE differs across the regions.
◆ In ASEAN, coal will continuously competitive despite cost reduction of solar PV.

19. 19Source : IEEJ Asia and World Energy Outlook (2019)
Variable Renewable Energy (VRE) Integration Cost in ASEAN
◆ While LCOE will decline, integration cost will increase in accordance with increased
share of VRE.
◆ To make VRE competitive, strong policy intervention (e.g. high carbon price) would be
needed.

20. 20
Raising energy cost could encounter backlash
“The elites worry about the end of the world while we worry about
the end of the month”
◆ In France, President Macron’s proposed hike of carbon tax triggered backlash
from truck drivers leading to yellow vest movement.
◆ WTP (willingness to pay) will be even lower in developing countries where
per capita income is lower.

21. 21
The EAS Ministers discussed the work plans being implemented
under the EAS cooperation, including energy efficiency,
renewable energy, natural gas, alternative and low emission
technologies. The Ministers also acknowledged the continued role
of fossil fuels including natural gas and clean coal technologies in
the region in order to contribute to the region’s economic growth,
energy security and environment protection. To this end, the
Ministers called for deeper cooperation and concrete efforts, in
mobilizing finance from a wide variety of sources, to take
advantage of the broad range of energy resources and clean
energy technologies to achieve regional economic growth, energy
security and sustainable ecosystems
EAS Region Needs All Available Options
Joint Ministerial Statement EAS Energy Ministers Meeting (29 Oct 2018)

22. ◼ ASEAN region will have growing energy security and climate change
challenges in coming decades.
◼ Higher dependence on Middle Eastern oil calls for stronger emergency
preparedness (e.g., strategic oil stock, fuel switching, demand response,
regional cooperation mechanism)
◼ All the options should be pursued in Asia for enhancing energy security,
resilience and reducing CO2 emissions through energy efficiency, clean use of
coal, fuel switching, nuclear, renewable and adoption of innovative
technologies (CCS/CCUS, hydrogen etc) reflecting each country’s
circumstances.
◼ Regional and international cooperation is instrumental. US could play major
role for energy security and resilience in ASEAN region.
◼ Given fossil fuel will play a vital role in coming decades for economic growth
through affordable energy supply, squeezing finance to fossil fuel related
sector could have negative implication to affordable energy supply in Asia.
◼ Growing gap between energy reality in Asia region and COP discussion. Asian
energy reality needs to be reflected for seeking more pragmatic solution
Reflecting Asian Energy Reality in the Global Debate
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23. Thank you very much
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