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ASEAN region fuels energy demand

As the ASEAN region’s demand for coal surges, will the region be able to meet its future energy needs at a sustainable cost? Leon Perera, Chief Executive Officer of Spire Research and Consulting, shared his thoughts on the outlook for energy demand in ASEAN for China Daily – Asia Weekly.

ASEAN’s demand for coal is expected to triple to account for nearly 30 percent of global energy growth. Coal is a popular fuel source, thanks to its abundance and cost competitiveness. The share of coal in electricity generation is likely to spike from one-third of total output today to almost half in 2035.

Perera opined that energy growth is a function of Gross Domestic Product (GDP) – which in this case will be driven by the expanding economies of Thailand and Indonesia, followed by the Philippines and Vietnam. All of these economies have substantial room for energy demand growth, due to their growing from a low GDP per capita base and with urbanization and industrialization still not having fully run their course. However, even though ASEAN’s energy use has doubled over the last 20 years, approximately 134 million people in the region still do not have access to electricity.

As a result of this strong demand coupled with supply risks, the adoption of nuclear energy by ASEAN in the next 20 years cannot be ruled out entirely, although the Fukushima nuclear power plant meltdown in 2011 would have pushed back the horizon for serious consideration of this question by ASEAN governments.

Perera also commented that fossil fuel subsidies will remain a fiscal challenge for some governments in ASEAN, despite recent reform efforts in Thailand, Malaysia and Indonesia.

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