Shaping A Sustainable Energy Future

/ viiFigure 27. Energy intensity across global regions and Asia-Pacific subregions Figure 28. Energy intensity and annual change, 2000-2017 Figure 29. Growth rate of primary energy intensity, by period, and current global target rate Figure 30. Utility-scale solar PV weighted average cost of electricity, 2016 and 2019, and percentagechange Figure 31. Onshore wind weighted cost of electricity, 2010 and 2019, and percentage change Figure 32. Asia-Pacific energy supply and efficiency investments, 2015-2020 Figure 33. Renewable energy generation costs and generation equivalent costs of energy efficiencyFigure 34.Figure 35.Figure 36.Figure 37.Figure 38.Figure 39.Figure 40.Figure 41.Figure 42.Figure 43.Figure 44.Figure 45.Figure 46.measures in New Zealand RISE policy and regulatory framework scores for clean energy, 2019 Carbon pricing in Asia and the Pacific Global renewable energy employment by technology Renewable energy jobs in Asia and the Pacific, 2019 Renewable energy jobs per 100,000 people, 2019 Quantified energy policy commitments by category share, 2020 Construction and manufacturing jobs created per million dollars of capital investment;emissions by sector, 2018 The phases of the energy transition Balancing the “Energy Trilemma” Asia-Pacific WEC Energy Trilemma Index scores and dimension grades, 2020 Global energy infrastructure pandemic resilience scores Potential threat impacts to utilities Cumulative end-of-life solar PV panel waste projections in a high-loss scenario for selectedAsia-Pacific economies 4546474949545458596464666870717273757677List of tablesTable 1.Table 2.Table 3.Table 4.Table 5.Table 6.Table 7.Asia-Pacific region progress and outlook for achieving SDG 7 targets Results – systematic review of electricity access Top 10 Asia-Pacific economies, average annual gains in electrification, 2010-2018 ISO voluntary performance targets for clean cookstoves Cookstove initiative meta-analysis – general findings Multi-tier matrix for measuring access to household electricity supply Creating an enabling environment for progressing energy access 9141718233036

viiiAbbreviations and acronymsABCadvanced biomass cookstoveLPGliquid propane gasADBAsian Development BankMTFMulti-Tier FrameworkACEASEAN Centre for EnergyMtoemillion tonnes of oil t-hoursCAGRcompound annual growth rateNDCsNationally Determined ContributionsCCUScarbon capture utilisation and storageNGOnon-governmental organizationDREdistributed renewable energyP2Ppeer-to-peerESCAPUnited Nations Economic and SocialCommission for Asia and the PacificPAYGpay-as-you-gopppercentage pointsESCOsenergy services companiesPPApower purchasing agreementEVselectric vehiclesPPPpurchasing power parityFiTfeed-in tariffPULSEproductive use leveraging solar energyGDPgross domestic productPVphotovoltaicGHGgreenhouse gasRBFresults-based financingHDIHuman Development IndexSDGsSustainable Development GoalsICSimproved cook stovesSHSsolar home systemIEAInternational Energy AgencyTFECtotal final energy consumptionIoTInternet of thingsTPEStotal primary energy supplyIPPindependent power producerTWhterawatt-hoursIRENAInternational Renewable Energy AgencyVREvariable renewable energykgkilogramWHOWorld Health Organizationkoekilogram oil d cost of electricityReferences to dollars ( ) are to United States dollars unless otherwise stated.Shaping a Sustainable Energy Futurein Asia and the PacificA GREENER, MORE RESILIENTAND INCLUSIVE ENERGY SYSTEM

/ ixExecutive summarySustainable Development Goal 7 (SDG7) targets universal access to energy,increasing renewable energy’s share in theglobal energy mix, and doubling the rateof energy efficiency improvement. SDG 7offers a framework for realizing not onlya sustainable energy future, but alsounderpins the achievement of myriadsocioeconomic development objectivesin areas including poverty, education,sustainable cities and communities,and the fight against climate change. Asthe world grapples with the continuingchallenges of the COVID-19 pandemic, therole of energy in sustaining economies andlivelihoods, while enabling the delivery ofhealth services and vaccine rollouts, hasbeen highlighted.Societal and economic disruptions dueto the pandemic have given rise to callsfor nations to “build back better,” withgreener, more resilient and inclusiveenergy systems. While the full set ofpolicy responses has yet to be seen,regional leaders have issued a wave ofcommitments towards reduced carbonemissions, to be achieved largely throughexpanded renewable energy capacity andenergy efficiency. At the time of draftingof this report, however, the plans andfinancial measures to achieve theseobjectives remain unclear, and manystimulus measures announced to datehave favoured fossil fuels.Large investments are needed for thetransition to sustainable energy, andcurrent investment levels are falling short.Evidence demonstrates the co-benefitsof investing in energy access, renewablesand energy efficiency, including increasedjobs, gender equality, strengthened energysystem resilience and stronger economicrecovery, making sustainable energy aprudent component of pandemic recoveryefforts. However, regional economies mustwork to improve policy certainty and theinvestment environment in order to attractneeded capital.Progress towards achieving the SDG 7targets is mixed, with the region fallingshort of the pace needed to achieve the2030 goal. The greatest strides have beenmade in expanding access to electricity.National grids have been extended andoff-grid renewable-energy systems arebringing electricity into an increasingnumber of households in hard-to-reachareas. Universal access to electricity inurban areas has almost been achieved,with a 2018 urban electrification rate of99.7 per cent for the Asia-Pacific region.Rural areas lag behind at 92 per cent.Plans and targets to provide electricalconnections are generally robust, althoughenergy access is a multi-faceted issue andimprovements are needed in the areas ofquantity and quality of energy services.Rural areas are particularly under-served,and the institutions that communitieshave most relied upon in the times of thepandemic – health clinics and schools –have suffered from unreliable servicesthat hinder their ability to deliver criticalservices.

xAccess to clean cooking fuels andtechnologies remains the most overlookedSDG 7 target in terms of progress, policyand investment. Yet, a number of positivenational examples of clean cookinginitiatives have emerged within the AsiaPacific region, demonstrating the abilityto initiate strong policies to enablerapid progress in bringing modern, cleancooking options that can deliver socialand health benefits, especially for womenand children. Surveys have demonstratedhousehold willingness to pay for andadopt modern appliances, but marketmismatches in terms of perceived value,utility and affordability comprise some ofthe barriers that must be overcome withincreased awareness as well as innovative,reliable products and delivery models.An increasing share of the final energymix is derived from renewable energy, asthe Asia-Pacific region has experiencedrapid growth in this sector. In 2017,modern renewables accounted for 8.1 percent of total final energy consumption.Hydropower has provided the bulk ofthe region’s growing renewable energysupply, but water shortages from changinghydrological conditions have led torecent reductions in power production,while cross-border resource managementremains a challenge in some river basins.Evolving technologies and falling priceshave supported the rise of variablerenewables in the power sector, witha growing number of megaprojects forsolar and wind appearing, which areundercutting the costs of an increasingnumber of fossil fuel powerplants. Smallscale renewable energy systems are alsobeginning to contribute significantlyto the energy supply in some areas, andShaping a Sustainable Energy Futurein Asia and the Pacificare opening up opportunities to applyemerging technologies, including virtualpowerplants and peer-to-peer energytrading.While progress in the deployment ofrenewable energy has been rapid, theAsia-Pacific’s share of renewables in theenergy mix remains low compared withother global regions; regional economiesmust address key barriers to the growthof the sector, including inadequategrid infrastructure and unstable policyenvironments. Renewable energy pricingvaries across economies and fossil fuelscontinue to be favoured in some contexts,particularly those with domestic fossilfuel resources. However, improvedtechnologies, growing economies of scale,more competitive supply chains anddeveloper experience are expected todrive continued reductions in renewableenergy prices.Energy intensity has steadily declinedacross the region, indicating ongoingprogress in energy efficiency. In there g i o n’s l a rge r e co n o m i e s , e n e rg yefficiency enhancements are helping todrive a regional improvement trend thatoutpaces the global rate of progress.Still, Asia-Pacific energy intensity – 5.2MJ per 2011 PPP in 2017 – remainshigher than the global average of 5.0,and the opportunity for the applicationof energy efficiency measures is large.While minimum energy performancestandards cover a growing share ofenergy consumption, broader applicationacross sectors is needed alongsideincentives, support for energy servicecompanies, financing and harmonizationthat can facilitate growth in clean energytechnology production and trade.A GREENER, MORE RESILIENTAND INCLUSIVE ENERGY SYSTEM

/ xiInvesting in energy efficiency is a costeffective option for lowering the demandon energy systems and reducing theneed to produce more energy. Evidenceshows that energy efficiency investmentscan increase power supply availabilityat generation-equivalent costs that arelower than new generation. Yet, moreinvestment dollars are directed towardsupply, including fossil fuel supply. Theelimination of fossil fuel subsidies andwider adoption of carbon pricing canincentivize emission reductions as wellas spur development, both in energyefficiency and renewables.Advancing clean energy requires strongerpolicy and regulatory frameworks thatprovide predictability through progressivet a r g e t s , c o m p re h e n s i v e p l a n n i n g ,regulations and incentives. Governmentshave a leading role to play in the creationof an attractive investment environment,while approaches are needed that betterbalance the elements of the “energytrilemma” – energy security, energy equityand environmental sustainability. Atthe same time, emerging concerns andexternal threats to energy systems must beconsidered. The growth of the clean energysector is dependent upon the supply ofcritical raw materials, and new geopoliticaldependencies can be expected to emerge.Pandemics, cybersecurity and climatechange present challenges that requireawareness, planning and greater expertiseto combat the threats that they present,particularly as energy systems diversify,decentralise and digitize.COVID-19 pandemic recovery effortsoffer the opportunity to accelerate theenergy transition with smart, jobs-driveninvestments in clean energy. Prioritisationof “shovel-ready” projects that buildon existing successful initiatives andexperience, and align with national plans,can provide the foundation for successfulrecoveries. In the long term, the strongestapproaches will be those that arecomprehensive and holistic, designed toprovide a range of social, economic, healthand environmental co-benefits.Regional cooperation, from dialogue andknowledge exchange to the developmentof harmonized and interconnected energymarkets, can facilitate the acceleration ofthe sustainable energy transition. ESCAPoffers an intergovernmental platform andtechnical capacity to support membercountries in engaging in cooperativeefforts.

xiiINTRODUCTIONAsia and the Pacific – a diverseregion setting the global direction forsustainable energyThe Asia-Pacific region stands at the centreof the global energy stage, with its rapidlygrowing energy demand, expanding economicpower, and rising leadership in sustainableenergy. The region consumes half of the world’senergy and, with growing industrialization,GDP growth outpaces other global regions. Thecentre of renewable energy and energy efficienttechnology manufacturing is here, as are theworld’s largest renewable energy installations.Approximately twice as many people have gainedaccess to electricity in Asia and the Pacific since2010 than the rest of the world combined.10 smallest.1By population,the region has six ofthe biggest countries,2 withChina and India being the toptwo globally, each with a populationgreater than all of Africa. Meanwhile,numerous Pacific economies rank among theworld’s smallest. Geographically, 3 the RussianFederation has the world’s largest land area,with more than 16 million square kilometres,while Nauru has the smallest, at just 20 squarekilometres. Between all of these extremes a widespectrum of national situations can be found.In terms of energy, the economies of Asia andthe Pacific are faced with equally distinct andbroad-ranging circumstances. These are deeplyconnected to economic, social and geographicfactors, but are also driven by national priorities,policies and practices. On a per capita basis,energy consumption rates in 2018 varied 18-foldbetween the lowest and highest consumingnations.1At the same time, the region is defined by itsdiversity. It includes three of the world’s top10 largest economies of 2019, and eight of the23Shaping a Sustainable Energy Futurein Asia and the PacificAccording to data from the World Development IndicatorsDatabase, World Bank, updated 1 July 2020. For the top10 economies, Asia-Pacific economies held the following2019 rankings: China (2), Japan (3) and India (5). For thesmallest 10 economies with data, Asia-Pacific economiesheld the following rankings: Tuvalu (203, the world’ssmallest), Nauru (202), Kiribati (201), Marshall Islands(200), Palau (199), the Federated States of Micronesia(198), Tonga (196) and American Samoa (194).According to data for 2020 from the 2019 Revision ofWorld Population Prospects, United Nations StatisticalDivision.According to data from the World Development IndicatorsDatabase, World Bank, updated 1 July 2020.A GREENER, MORE RESILIENTAND INCLUSIVE ENERGY SYSTEM

/ xiiiThe nations of Asia and the Pacific havecommitted to the 2030 Agenda for SustainableDevelopment. Adopted in 2015, the agendaestablished 17 Sustainable Development Goals(SDGs), including SDG 7 – Ensure access toaffordable, reliable, sustainable and modernenergy for all. The energy-related Goal 7 containsthree targets to be achieved by 2030 – 7.1 toensure universal access to affordable, reliableand modern energy services, 7.2 to increasesubstantially the share of renewable energy inthe global energy mix, and 7.3 to double theglobal rate of improvement in energy efficiency.The SDG targets are global but offer guidanceto Governments in setting their own objectivesand targets. Ultimately, the ambitions, actionsand achievements by individual economies willdetermine the global level of success.sector affects hunger (SDG 2), health and wellbeing (SDG 3) and climate (SDG 13). As energydecision-makers work towards the achievementof SDG 7, the integrated nature of the SDGsrequires holistic thinking and interdisciplinaryapproaches.Energy is the “golden thread” connectingeconomic, social and environmental realms.With a direct influence on the progress of anumber of non-energy SDGs focused on areassuch as health, gender equality, climate andsustainable production, consumption andcities, energy is one of the keys to facilitatingor restricting progress across the developmentagenda. Policy choices concerning the selectionof energy resources, and the extraction,conversion, distribution and consumption ofenergy, can have both positive and negativeinfluences on the achievement of SDG 7 as wellas each of the other SDGs (McCollum et al.,2018). For example, increasing the power supplyto support achievement of universal access toenergy (SDG 7) also enables progress for SDGsrelated to: poverty (SDG 1) by providing a keyinput to business and livelihood activities;education (SDG 4) through providing lightneeded for studying, or power for computers andother educational equipment; and sustainablecities and communities (SDG 11) where lowemission power supplies can improve air quality.Depending on the resources chosen, energy canhave constraining or counteracting impacts onother goals. For example, land-use changes,water stress or pollution arising from the energySustainable energy and the battle againstclimate changeThe global commitment to sustainable energyis strengthened by collaboration at the regionaland subregional levels, including under theAsia-Pacific Energy Forum, through which themembers and associate members of the UnitedNations Economic and Social Commission forAsia and the Pacific (ESCAP) have committed toaccelerating progress towards achieving targetsunder the three priority areas of SDG 7 – energyaccess, renewable energy and energy efficiency.4Energy is a central component of the ParisAgreement’s aim to keep global temperaturerise below two degrees Celsius above preindustrial levels, and to pursue efforts tolimit the temperature increase even further to1.5 degrees Celsius. 5 The climate agenda isadvanced through the delivery of NationallyDetermined Contributions (NDCs) under whichsignatory nations put forward their best effortsto reduce greenhouse gas emissions, periodicallyenhancing them through a process of revisionto ensure that ambition is increased over timeas financial and technical solutions becomeavailable.Concentrations of carbon dioxide in theatmosphere currently show no signs of peaking45See the 2018 Ministerial Declaration of the Second Asianand Pacific Energy Forum, available at: https://www.unescap.org/sites/default/files/ESCAP 74 28 Add1Ministerial%20Declaration.pdf.Paris Agreement to the United Nations FrameworkConvention on Climate Change, Dec. 12, 2015, T.I.A.S. No.16-1104.

xivand continue to rise to new record levels.Due to a fall in energy demand, the pandemichas resulted in a decrease in emissions,but will not reduce carbon concentrations(World Meteorological Organization, 2020).Transformational actions are needed to reducethe consequences of a warming atmosphere,while the transition to low-carbon energysources and technologies is critical to efforts todeliver climate change mitigation. Actions andinvestments are needed that build on experiencein evolving energy systems and lower technologycosts to deliver cumulative returns not onlyfor the energy sector, but for economies, theenvironment and the health of societies.SDG 7: Ensure access to affordable, reliable,sustainable and modern energy for allTHE TARGETSThe C

Figure 5.Asia-Pacific needed annual investments under IRENA'sTransforming Energy Scenario through to 2050 5 Figure 6.Asia-Pacific clean energy investments, 2015-2020 11 Figure 7.Percentage of the population with access to electricity and clean cooking in Asia and the Pacific 15 Figure 8.Access to electricity across Asia-Pacific subregions 16