Energy Cooperation for ASEAN enters Phase II APAEC Plan

On November 20, 2020, the 2nd phase of ASEAN Plan of Action for Energy Cooperation (APAEC) was adopted at the ASEAN Ministers on Energy meet (AMEM). The 2021-2025 Plan aims at “Enhancing energy connectivity and, market integration in ASEAN to achieve energy security, accessibility, affordability and sustainability for all” and accelerate “energy transition and strengthening energy resilience through greater innovation and cooperation.”

APAEC was adopted at the 17th AMEM in 1999. Since then, it has worked to meet the Energy needs of the region through cooperation. The third such meet adopted the 2016-2025 APAEC plan basically to meet the targets of the 2030 Sustainable Development plan of the UN and the Paris Climate Accords, 2015. The 1st Phase was implemented from 2016-20 with broad aims on the Energy Sector like the ASEAN Power Grid a reality.

Recently, Vietnam was felicitated for helping Brunei through the signing of Phase II of APAEC. Brunei Darussalam took over the chairmanship of the ASEAN in 2021 and it thanked Vietnam for guidance in the APAEC process. Vietnam was also praised for having achieved the targets of phase I. On this behalf, three new initiatives were initiated by Brunei concerning Energy.

These are AMEM-Wide Education and Training Exchanges on the Role of Natural Gas in Advancing a Low-Carbon Energy Transition, ASEAN Energy Establishments and Climate Change Organizations Cooperation on Energy Issues and Establishing ASEAN Energy Interaction Programmes.

ASEAN is heavily dependent on hydrocarbons for its energy needs. APAEC plans to increase the share of renewable and other cleaner technologies in this decade. APAEC has seven major Programme Areas namely ASEAN Power Grid, Trans-ASEAN Gas Pipeline, Coal and Clean Coal Technology, Energy Efficiency and Conservation, Renewable Energy, Regional Energy Policy and Planning, and Civilian Nuclear Energy. The second phase will expedite the work done in these sectors and introduction of new technologies like solar, electric, bio-energy and other niche technologies.
APAEC is playing a major role in the region creating a blueprint for a sustainable future. The ASEAN region has one of the highest growth rates among the emerging markets in the world. The region’s power needs are growing fast. It is estimated that energy needs will grow by approximately 50 per cent in ASEAN by 2025. APAEC is also looking to raise the share of renewables in the energy basket by 23 per cent by the end of the second phase. APAEC also intends to further multilateral Electricity trading and develop a common Gas Market for ASEAN countries. Other initiatives include clean coal technologies and digitization of the Energy Sector.

However, challenges continue to remain in the path of realization of APAEC goals. For starters, the region has become a net importer of Oil due to high growth in the demand for power. The production of Petroleum and Natural Gas in the region has fallen short of the requirements and has not been able to grow as fast as the overall demand. This makes power not only costly but the economy becoming vulnerable to volatile oil prices.

The intra-region trust in ASEAN is lacking in areas like investment in each other’s markets, a global market for energy commodities will face differences among the members. In spite of Phase I’s blueprint, there are no policies or plans for good governance in the energy market. The Pandemic has seriously strained the finances of majority of the ASEAN Member States. Many will need to put on backtracks the costly renewable energy plans. The Pandemic is also creating regional disparities between the ASEAN nations. APAEC Phase II may miss the ideal targets depending on the rate of recovery from the Pandemic. ASEAN’s bid to transform its energy sector into a sustainable one is ambitious but if successful, ASEAN will take another towards an integrated common market.

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