ROLE OF RENEWABLES IN THE FUTURE ENERGY MIX POTENTIALS OF THE SOUTHEAST ASIAN NATIONS (ASEAN-10)

Emmanuel Omoniyi Falobi, Center for Petroleum, Energy Economics & Law (CPEEL), University of Ibadan, Ibadan. Oyo State. 200284. Nigeria. Phone +234 705 195 4609, email: .

Prof. Adeola F. Adenikinju. Director CPEEL.,University of Ibadan. Phone: +234 802 344 0018. Email:

Dr. Olugbenga A. Falode. Deputy Director CPEEL. University of Ibadan. Phone: +234 813 004 9657Email: .

Overview

Reliance on fossil fuels sources, especially coal, to meet the rapid energy demand growth in the Association of Southeast Asia Nations (ASEAN-10), has for sometimes posed grave concerns on energy security, energy accessibility, energy affordability and sustainability. Energy policy varies to a large extent, across the ASEAN Member States, reflecting differences in perception in political ideologies, natural resource endowment, economic development and population of each region. This has made it necessary to adopt a differentiated approach to expanding renewables. However, evolution of liquid fuels such as biofuels as a suitable alternative to the highly subsidized fossil fuels in resolving the energy-mix equation challenges is fast receiving global acceptance through the enactment of enabling policies that supports technology, government regulatory framework and biofuel blending mandates in most countries of the world today. Southeast Asia is,in fact, not insulated from the energy challenges being faced by many other countries of the world where investment in energy is being driven by policies. As such, measures are being put in place to overcome the teething challenges being posed by energy security, energy affordability, energy access, energy efficiency, sustainability, fossil fuels and food security resulting from first-generation biofuels (mainly derived from food crops) through the use of innovative second-generation biofuels technology, which derive mainly from conversion of non-edible sources (cellulose, hemicellulose and lignin) into liquid fuels using relatively advanced technologies (IEA, 2010).

According to IRENA’s Renewable Energy Outlook for ASEAN, 2016, the share of modern renewable energy in TPES was just 9.4% in 2014. This share will increase to 16.9% under the Reference Case, which is about 6%short of the ASEAN’s aspirational goal of 23.2% by 2025. Renewable energy having emerged as the single largest source of new power capacity addition in this region in recent years, will no doubt, bring about, lower overall costs, cleaner cities and a more secure and robust energy supply, given a robust energy policy agenda and strategy. Consequently, our objectives are to examine the impact of renewable policy implementation in the achievement of ASEAN’S aspirational renewable target and its rapid growing energy demand; and also,to review the opportunities and challenges of ASEAN energy efficiency and its potentials vis-à-vis its Policy and Plan of Action for Energy Cooperation (2016 – 2025), which is geared towards, “energy security, accessibility, affordability and sustainability for all.”

Methodology

A recursive dynamic Computable General Equilibrium (CGE) model approach using the latest available Social Accounting Matrix (SAM) for the ASEAN-10 States in conjunction with a renewable energy variant of the Global Trade Analysis Project (GTAP) will be employed to examine the economy-wide, and country-wide policy implications of the implementation of the renewable energy targets across the region. In this regard, we shall rely on the works of Burniaux and Truong (2002), Birur, Hertel, and Tyner (2008), and Taheripour (2008), on modeling bioenergy through an extended version of the GTAP-E model.Also, we shall make use of secondary data obtainable from the region for the analysis.

Results

The CGE modeling approach is apt for this exercise as it requires just one-year benchmark data for analysis in place of time-series data that may not be readily available in most developing countries typified by Southeast Asia. Moreover, CGE model approach consider decisions in multiple sectors or markets, thereby, allowing Policy-Makers to analyse, simultaneously, the impacts of policies and external shocks on all sectors of the economy.

Conclusionsse

In conclusion, regional cooperation and integration in focused policy areas of green growth and renewable energy as well as private sector development in the ASEAN 2016 – 25 Development Plan Period is very much desirable for promoting regional growth in renewable energy technologies. This will provide easy access into the untapped huge renewable energy potential of the Southeast Asia region. Key challenges like social security, food security, urban green growth, job creation and infrastructure, to mention just a few could easily be tackled through deep integration and structural reforms. However, development gaps amongst ASEAN Member States may inhibit the implementation of uniform targets by government.

In closing, this is work in progress, as it is an extension of the current doctoral research work, entitled, “The Impacts of Biofuels Policy on Economic Development and Income Distribution in Nigeria using a Dynamic Computable General Equilibrium (CGE) Model Approach”, being carried out by the Author at the Center for Petroleum, Energy Economics, & Law (CPEEL), University of Ibadan, Ibadan. Nigeria.

Keywords: Renewable Energy, Energy Security, Biofuels Policy, CGE model, SAM, GTAP,

References

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