Energy demand in Asia to double by 2030, says ADB

Written by Sajan C Kumar | Chennai | Updated: Jun 23 2009, 06:46am hrs
Energy demand in Asia to reach 6,325 million tonne of oil equivalent (mtoe) by 2030 from 3,227 mtoe in 2006, projected recently released energy policy of Asian Development Bank (ADB). It also said China and India will account major shares. Rapid economic and population growth will drive much of the increase in energy demand. Industrialisation, urbanisation, and the replacement of noncommercial biomass fuels by commercial fuels will also contribute to increase demand.

According to the policy note, other factors which will be responsible for increase in demand are increased economic activities, higher living standards, and greater consumption by households. While higher demand for energy from developing Asia has prompted concerns about energy security, long-term cooperative options need to be explored internationally to ensure production and use of energy at reasonable costs and in a sustainable manner.

The 2009 energy policy is congruent with strategy 2020, enabling energy operations to be aligned with ADBs overall strategy emphassing energy security, facilitating a transition to a low-carbon economy, universal access to energy, and for achieving ADB's vision of a region free of poverty.

The objective of the policy is to help developing member countries (DMCs) provide reliable, adequate, and affordable energy for inclusive growth in a socially, economically, and environmentally sustainable way. It will emphasise energy efficiency and renewable energy; access to energy for all; and energy sector reforms, capacity building, and governance.

To achieve these objecatives, policy implementation will be based on the following principles:

* Support for energy efficiency improvements and renewable energy projects will be prioritised and broadened to reach as many sectors in as many ways as possible. This will ease growth in fossil fuel demand and upward pressure on energy prices, improve energy security, and reduce emissions of greenhouse gases.

* Efforts to provide energy services for inclusive economic growth will be wideranging, and programmes to extend energy services to communities and groups will be accelerated. Because MDG targets cannot be met without access to modern energy services, access to energy is essential to reducing poverty.

* Effective regional cooperation in the energy sector will be promoted to strengthen energy security.

* Energy sector reforms, capacity building, and governance will be emphasised to increase investment and efficient use of resources. Private sector participation (and public-private partnerships) will be encouraged to enhance energy sector efficiency through competition, and to increase investable resources, but not as the end objective of reforms.

* All energy sector investments will comply with ADB safeguards policies regarding the environment, involuntary resettlement, and indigenous peoples to ensure that affected persons are protected from impoverishment risks and development programmes for such vulnerable groups are incorporated and implemented.

* ADB will not be involved in financing nuclear power generation.

* Since coal and oil are internationally traded commodities with established commercial interests, ADB will not finance coal mine development except for captive use by thermal power plants, and oil field development except for marginal and already proven oil fields.

* As a regional knowledge bank, ADB will promote superior knowledge management and dissemination of good practices and lessons learned. ADB will also support advocacy and assistance to DMCs in technology transfer and deployment.

* ADB will collaborate with a range of development partners, including international development agencies, multilateral and bilateral institutions, the private sector, nongovernment organizations, community-based organizations, and philanthropic foundations.

* Specific situations will be identified in each DMC for planning and designing interventions, especially for the Pacific DMCs, given their limited energy resources and unique vulnerability.

* Policy implementation will be monitored by a results framework .

In line with the objectives of the 2009 Energy Policy, policy implementation has taken into account emerging issues and options, lessons learned from past operations, and the experiences of other development partners including the World Bank. It has also been supported by an examination of issues related to fossil fuels, power generation and district heating, power sector reforms and restructuring, regional cooperation, and the special needs of the Pacific DMCs.

For more efficient implementation, ADB will seek further collaboration with a wider range of development partners. To mobilise necessary funds and modalities for new initiatives for the energy sector, such as the energy efficiency initiative and carbon market initiative, a financing partnership facility and trust funds have been set up.