ASEAN looking at renewable energy sources on oil worries

ASEAN looking at renewable energy sources on oil worries

Mynardo Macaraig Agence France-Presse Manila

Rising oil prices have prompted ASEAN members to take a serious look at renewable energy sources, despite concerns over the cost of developing such resources.

Renewable energy was among the key topics raised at a forum of energy ministers of ASEAN and Pacific Rim countries held in the Philippine capital this month to discuss ways of dealing with the high price of imported fuel.

The 10 members of ASEAN, the Association of Southeast Asian Nations, all have various energy programs involving geothermal, hydroelectric, wind and solar power and even vegetable-based fuels from palm or coconut oil.

At the end of their conference, ASEAN and its East Asian trading partners issued a joint statement saying they would "encourage the development and wider use of renewable energy for energy security, the sustainability of the environment and to enable more people to enjoy the benefits of energy."

The Philippines has one of the most ambitious plans. It wants to double its capacity for renewable energy from the present level of 4,500 megawatts or 37 percent of the total to 9,000 megawatts or 60 percent of the total by 2013.

Energy Secretary Vicente Perez said this would involve wider use of geothermal energy, with the Philippines eventually overtaking the United States as the world's biggest producer of such energy.

The Philippines also aims to be the biggest producer of wind power in Southeast Asia by the end of the decade and a leading producer of solar cells, while further tapping energy from bio- mass or organic waste materials like rice husks and sugar cane scraps.

Other ASEAN countries have their own programs ranging from Laos's plan to sell hydroelectric power to its neighbors to Thailand's subsidy for renewable energy producers and Malaysia's promotion of photovoltaic cells.

But energy experts concede that even with an intensive campaign to tap renewable energy, they will still barely keep up with the growing demand in the region for power of all types.

Guillermo Balce, outgoing head of the Jakarta-based ASEAN Center for Energy, said a study he had conducted found that ASEAN's demand for renewable energy was estimated at 68 million tones of oil equivalent (MTOE) in 2005 or about 1.8 percent of total energy demand.

By 2020, demand for renewable energy was expected to rise to only 74 MTOE or 12 percent of the total. In contrast, demand for oil is expected to shoot up from 166 MTOE in 2005 to 292 MTOE in 2020.

Even under ASEAN's energy plans, investment in renewable sources from 2001 to 2020 will only amount to about US$15.44 billion or barely two percent of all ASEAN investment in the power sector, the center said.

In contrast, investment in natural gas will hit $85 billion or about 43 percent of the total in the same period, its figures showed.

Rowaldo del Mundo, an energy program coordinator with the state-run University of the Philippines, said a study showed that ASEAN countries would remain dependent on attracting independent producers to invest in power projects including renewable energy.

But such "green" energy projects are "still struggling in spite of numerous policy studies, demonstrations, projects and available financing support," he said in a report at a business conference held on the sidelines of the ASEAN energy ministers' conference.

Under ASEAN's plans, the grouping's members are scheduled to have a total of 27,467 megawatts of installed capacity in renewable energy by 2010 with Indonesia, the Philippines and Thailand leading the way with more than 4,000 megawatts each, del Mundo said.

Malaysia, Thailand and the Philippines offer the most comprehensive packages to private investors in renewable energy including cash incentives, assistance in grid connection and power purchase agreements, he said.

Del Mundo said studies showed energy from renewable sources was often slightly more expensive than those from conventional sources.

He remarked that none of the ASEAN countries had policies providing investment incentives in exchange for the environmental benefits of such green projects. Instead, they were treated largely like other power programs.

"Green power development can compete in the long term," but it needs such incentives to attract private investors, del Mundo said.

The ASEAN countries -- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam -- must come up the proper policy instruments "to create markets for green independent power producers," he warned.