Energy Outlook for Asia and the Pacific October 2013 Energy Outlook for Asia and the Pacific October 2013 © 2013 Asian Development Bank All rights reserved. Published in 2013. Printed in the Philippines. ISBN 978-92-9254-272-6 (Print), 978-92-9254-273-3 (PDF) Publication Stock No. BKK135488-3 Cataloging-In-Publication Data Asian Development Bank. Energy Outlook for Asia and the Pacific. Mandaluyong City, Philippines: Asian Development Bank, 2013. 1. Energy. 2. Asia and the Pacific. I. Asian Development Bank. The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area. ADB encourages printing or copying information exclusively for personal and noncommercial use with proper acknowledgment of ADB. Users are restricted from reselling, redistributing, or creating derivative works for commercial purposes without the express, written consent of ADB. Note: In this publication, “$” refers to US dollars. In this report, the term “Taipei City” refers to the urban area centered on the City of Taipei or Taipei,China. Unless otherwise stated, boxes, figures and tables without explicit sources were prepared by the Asia Pacific Energy Research Centre. 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines Tel +63 2 632 4444 Fax +63 2 636 2444 www.adb.org For orders, please contact: Fax +63 2 636 2648 [email protected] Contents Preface vi Acknowledgments vii Abbreviations viii Definitions ix Executive Summary x Chapter 1 Introduction 1 Chapter 2 Energy Demand and Supply Outlook: Business-as-Usual Case 13 2.1 Main Assumptions 14 2.2 Primary Energy Demand by Type 18 2.3 Primary Energy Demand by Region 23 2.4 Energy Intensity 26 2.5 Energy Production and Imports 28 Chapter 3 Sectoral Energy Demand Outlook: Business-as-Usual Case 37 3.1 Sectoral Energy Demand Outlook 38 3.2 Industry Sector 40 3.3 Transport Sector 45 3.4 Other Sectors 52 Chapter 4 Energy Demand and Supply Outlook: Alternative Case 63 4.1 Primary Energy Demand: Savings Potential by Source 64 4.2 Primary Energy Demand: Savings Potential by Region 66 4.3 Primary Energy Demand: Savings Potential by Sector 66 4.4 Industry Energy Savings Potential 69 4.5 Transport Energy Savings Potential 72 4.6 Residential and Commercial Energy Savings Potential 76 Chapter 5 Electricity Outlook 81 5.1 Electricity Demand 82 5.2 Electricity Generation 83 5.3 Comparison of the Business-as-Usual and Alternative Cases 86 Chapter 6 Carbon Dioxide Emissions Outlook 91 6.1 Carbon Dioxide Emissions 92 6.2 Carbon Dioxide Intensity 94 6.3 Carbon Dioxide Per Capita 94 6.4 Comparison of the Business-as-Usual and Alternative Cases 96 Chapter 7 Energy Investment Outlook 101 7.1 Energy Investment Outlook: Business-as-Usual Case 102 7.2 Energy Investment Outlook: Alternative Case 106 7.3 Financing Implications 110 iii iv Contents Chapter 8 Central and West Asia 111 8.1 Afghanistan 114 8.2 Armenia 120 8.3 Azerbaijan 127 8.4 Georgia 133 8.5 Kazakhstan 139 8.6 Kyrgyz Republic 146 8.7 Pakistan 152 8.8 Tajikistan 159 8.9 Turkmenistan 166 8.10 Uzbekistan 172 Chapter 9 East Asia 179 9.1 People’s Republic of China 182 9.2 Hong Kong, China 190 9.3 Republic of Korea 196 9.4 Mongolia 202 9.5 Taipei,China 209 Chapter 10 The Pacific 217 10.1 Fiji 220 10.2 Papua New Guinea 226 10.3 Timor-Leste 232 10.4 Other Pacific Islands 238 Chapter 11 South Asia 245 11.1 Bangladesh 248 11.2 Bhutan 255 11.3 India 261 11.4 Maldives 268 11.5 Nepal 274 11.6 Sri Lanka 280 Chapter 12 Southeast Asia 287 12.1 Brunei Darussalam 290 12.2 Cambodia 297 12.3 Indonesia 304 12.4 Lao People’s Democratic Republic 311 12.5 Malaysia 317 12.6 Myanmar 323 12.7 Philippines 330 12.8 Singapore 336 12.9 Thailand 342 12.10 Viet Nam 349 Chapter 13 Developed Group 357 13.1 Australia 360 13.2 Japan 366 13.3 New Zealand 373 Contents v Appendix 1 Historical Performance 381 Appendix 2 Outlook Cases 429 General References 522 Boxes 2.1 Electricity Import and Export within the Association of Southeast Asian Nations Member States for Regional Cooperation 16 2.2 North American Shale Gas Development and Impacts on Asia 22 2.3 Prospects for Electrification in Asia 25 2.4 Fuel Subsidies 28 2.5 Energy Supply from Central and West Asia 33 3.1 Challenges for Biofuels in Asia 39 3.2 Energy Efficiency and Conservation in Asia and the Pacific 42 3.3 Low-Carbon City 50 3.4 Mass Rapid Transit—Potential for Energy Savings and Carbon Dioxide Emissions Reduction 55 3.5 Renewable Energy 57 3.6 Deployment of Carbon Capture and Storage in Developing Members of Asia and the Pacific 59 3.7 Advanced Power Generation Technologies and Challenges in Deployment 60 Preface he Energy Outlook for Asia and the Pacific aims to support ADB energy sector operations by providing stakeholders with an energy outlook for the region up to the year 2035. T It attempts to identify policy, social, infrastructure, and technology issues that must be addressed to meet future energy need of ADB members in Asia and the Pacific. The first edition of the Energy Outlook for Asia and the Pacific, which provided an energy supply and demand outlook for the region up to 2030, was published by ADB in 2009. Since then however, there have been various developments affecting the energy sectors of both developed and developing economies that justify this update, including (i) the lasting economic recession in major developed energy-consuming countries and its impact on other parts of the world, (ii) geopolitical and social unrest in the Middle East and Africa, (iii) repercussions of the Fukushima nuclear incident on nuclear energy development programs, (iv) aging energy infrastructure in Asia and the Pacific, and (v) expansion in renewable energy development and energy efficiency improvements within the region. In contrast to other energy outlooks that deal solely with whole regions, this report also focuses on the local characteristics of the ADB members in Asia and the Pacific, with the intention of providing critical and strategic insights into the energy sector of individual ADB members. This report presents two cases of energy demand and supply for the ADB member economies in Asia and the Pacific: (i) a business-as-usual case, which reflects the impact of existing policies and current technology levels on future energy demand and energy choice, as well as assumes that current trends in the development of new and renewable energy sources will continue into the future; and (ii) an alternative case that considers the potential for energy savings on both the demand and the supply sides from the deployment of advanced and low-carbon technologies to increase energy security in the region. The study also presents the results of analyses made to estimate carbon dioxide emissions and investments required on the supply and demand sides for both the business-as-usual and the alternative cases. Also identified and discussed are major issues that are likely to affect the energy demand and supply in Asia and the Pacific, including electricity trade among members of the Association of Southeast Asian Nations (ASEAN), shale gas development in North America, electrification, fuel subsidies, subregional cooperation on oil and natural gas supply, biofuels in Asia, energy efficiency, low-carbon city development, modal shifts in transportation, renewable energy development, and carbon capture and storage. This report is not meant to predict the future trajectory of the energy sector in Asia and the Pacific. Rather, it is meant solely to provide scenarios of what could happen should the ADB economies take particular courses of action, as defined by the scenario assumptions. Not all issues relevant to the energy sector in Asia and the Pacific have been addressed in this study. The energy outlook projected in this volume does not necessarily reflect the views of the governments of the ADB members. Bindu N. Lohani Vice President Knowledge Management and Sustainable Development 1 October 2013 vi Acknowledgments his publication is an output of Energy Sector Strategy and Development 2007, a regional T technical assistance grant of the Asian Development Bank (ADB). ADB engaged a team of consultants from the Asia Pacific Energy Research Centre (APERC) of the Institute of Energy Economics, Japan, led by Naoko Doi, to prepare this report. The core members of the team included Edito Barcelona, Sichao Kan, Zheng Lu, Tomoko Matsumoto, and Junko Ogawa. Valuable contributions were obtained from the following members of the institute: Yuji Matsuo, Yoshiaki Shibata, and Shigeru Suehiro. APERC members, including Ralph Samuelson, Gayathiri Bragatheswaran, Tran Thanh Lien, Juan Roberto Lozano Maya, and Aishah Binti Mohd, contributed useful policy information that helped in the projections and the writing efforts. Bing-Chwen Yang, Luke Henry Thomas Leaver, and Kensuke Kanekiyo of APERC contributed greatly to the modeling work. Shigeru Kimura and Yukari Yamashita provided overall guidance to the team. From ADB, Jun Tian supervised the preparation of the report, with support from Aiming Zhou.