By Ali Al-Saffar
IEA Energy Analyst
19 December 2017
This commentary draws from the Southeast Asia Energy Outlook 2017, a WEO Special Report, published in October.
Providing electricity access for all remains a critical topic in many parts of the developing world. The challenge is especially acute in Southeast Asia, one of the most dynamic regions of the global energy system, but whose rich and varied environment defies one-size-fits-all energy solutions.
Thanks to growing economies and burgeoning and urbanising middle classes, energy demand in Southeast Asia grows at one of the fastest rates in the world. Still, around 65 million people across the ten Association of Southeast Asian Nations (ASEAN) countries are without access to electricity. In a recent special report on the region, we looked in detail at how to close this gap.
The momentum is considerable. Since 2000, around 170 million people have gained access to electricity across the region, including 95 million people in Indonesia. But reaching full electrification becomes progressively more challenging, since those who remain without access typically live in the most difficult places to reach – often in remote communities or on smaller islands.
While a large proportion of the region’s population (in much of Viet Nam, Myanmar, Cambodia, Laos PDR, Thailand and peninsular Malaysia) lives on the main Asian landmass, many are also spread across thousands of islands – ranging in size from Indonesia’s Java and Sumatra (home to more than 190 million people) to many small island communities. If people have access to electricity in these locations, it is often via expensive and polluting diesel generators.
The good news is that ever-cheaper renewable technologies are opening new options for cost-effective access, especially in remote areas. (That topic was explored in depth in the World Energy Outlook Special Report: Energy Access Outlook 2017). This is a key reason why countries across Southeast Asia achieve universal electrification by the early 2030s in our Outlook. Our detailed spatial analysis of four countries – Indonesia, the Philippines, Cambodia and Myanmar – shows that a variety of fuels, technologies and approaches are likely to be required to achieve full electricity access, depending on factors including regional population density, distance from the current grid and local resource availability.
Two examples from Indonesia underline the need for a flexible and pragmatic approach. In Papua, the location and relatively low population density of villages without access makes them prime candidates for mini- and off-grid technologies, powered mostly by renewables-based generation (predominantly solar and small-scale hydropower). This is the least-cost option for the vast majority of the 1.6 million currently without access to electricity, although other forms of generation and an expansion of transmission lines are also planned to meet increasing demand from the region.
The situation is different in East Java, where the population density is more than 80-times higher than in Papua. Each of the 225 recently electrified villages in East Java is on average less than 13 kilometers away from an existing grid. Therefore, grid extensions have formed the bulk of new electricity connections. These examples show why the electrification plans of the government of Indonesia are multi-dimensional; they include the extension of the existing grid, promoting micro-hydro and off-grid solar technologies as well as solar-diesel or solar-battery hybrids; only in relatively few cases are isolated diesel generators the optimal approach.
There is a similar range of solutions in other Southeast Asian countries: renewables-based decentralised solutions (particularly those powered by solar photovoltaics) are prominent in Myanmar, where they account for around 60% of new connections, with half of the 24 million people currently without access gaining access specifically through solar PV.
The road to lowest-cost electricity access in Cambodia runs a different course. Almost all of the additional new connections to 2030 can be serviced via the grid. This is also the case in the Philippines, where 90% of new connections are grid-based, but where off-grid wind and solar PV play a crucial role in bringing access to around 1.5 million people in small islands and remote areas.
Our analysis highlights two broad lessons. First, grid-based and decentralised technologies both have a prominent role to play, depending on local circumstances. Even in places like Cambodia, where decentralised electricity systems play a marginal role, they are crucial in bringing access to 240,000 people in the most marginal communities. In Papua, where the bulk of new connections come from decentralised technologies, innovative grid solutions including small-scale gas-fired plants dotted around the island and fed by liquefied natural gas, also play an important part in bringing universal access.
Second, the picture is not a static one: the relative competitiveness of different fuels changes over time. Renewable options become increasingly attractive as their costs continue to come down and projected fossil fuel prices edge higher. Providing universal, affordable and secure energy is not incompatible with the pursuit of cleaner energy.