Thursday, June 9, 2016

AEC: Energy is needed for economic growth



by Henry J. Schumacher -

With a combined GDP of $2.1 trillion in 2011, a wealth of natural resources and an enterprising and increasingly well-educated work force, the 10 member-states that make up  the Association of Southeast Asian Nations (Asean) possess the necessary assets to become a pillar of the global structure.
The world’s most powerful economies are focusing increasingly on Asean’s excellent performance and growth potential. There is one important and critical question coming up: Can developing Asean secure the energy it needs to fuel the expected economic expansion? And will Asean shift to clean and green energy sources so that the conference of parties commitments can be fulfilled?
Energy security rests on three pillars: the adequacy and reliability of energy supply, environmental sustainability and affordable access. Failure on any of these fronts could derail economic development and the desired inclusive growth. Asean has an array of options to manage its energy appetite. But tackling issues, such as outmoded subsidies, requires political will, and green innovation requires imagination. Subsidies impose a tremendous burden on public budgets, exceeding 2 percent of GDP in Indonesia and Vietnam, and are undermining the desired level playing field as Asean integrates. In previous Energy SMART conferences organized by the European Chamber of Commerce of the Philippines (ECCP), we raised the issue that the subsidies offered by other Asean countries need to be addressed as soon as possible, as they undermine the competitiveness of the Philippines. We will have this item on our agenda for this year’s Energy SMART event again.
In the Philippines we are looking forward to a deeper public-private partnership (PPP) (in its true sense), which means that private and public stakeholders meet regularly to discuss energy issues and jointly commit to contribute to solutions:
  • The government should develop a sustainable-energy mix policy and feed-in tarrif implementation
In order to drive investments and look sustainable feedstock, the government has to create a long-term vision on the energy mix, looking at (less) coal, a natural-gas industry and renewable-energy (RE) sources, involving geothermal, solar, wind, biomass, hydro, etc. We need a road map; and the refiling the Downstream Natural Gas Industry Bill.
  • Energy efficiency needs to become a national obligation, as 20 percent of energy consumption can be saved in lighting, cooling and with changing to high-efficient motors. ECCP’s cooperation with Philippine Economic Zone Authority is a best-practice case. We need the refiling of the Energy Efficiency and Conservation Bill.
  • The approval process for generating new plants should be streamlined
Approximately 162 permits and signatures are required before a power plant can be built; this means, in the Philippines it takes five years to get a plant on stream, compared to three years in other countries.
  • A comprehensive review of the energy service provision in remote and off-grid areas is needed.
That will entail Portfolio Standards (RE minimum-capacity requirement; to be technically simulated) and minigrid implementing rules and regulations.
  • Waste to energy needs to be taken seriously to solve problems in many communities with communal waste and generate power at the same time. The Supreme Court has cleared the way by ruling that the emission values are important, not the process.
Let’s all agree that we can address energy issues effectively in a PPP. We firmly believe that a National Energy Council (like the National Competitiveness Council) should be formed now so that the energy stakeholders can meet regularly and transparently to secure energy at affordable prices. We have submitted an Executive Order draft, which—unfortunately—has not been signed yet.

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