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.