APEIA-PE2 lead strategic EE discussions in Asia Clean Energy Summit 2021
MARINA BAY SANDS, SINGAPORE, 27 October 2021- Asia-Pacific ESCO Industry Alliance (APEIA) founding convenor and co-chair and Philippine Energy Efficiency Alliance (PE2) president Alexander Ablaza led earlier today a panel of energy efficiency (EE) experts in a discussion aimed at identifying feasible policy and market solutions to drive EE targets for Southeast Asia. The session “Driving Energy Efficiency in Southeast Asia” was part of the Strategic Conference of the Asia Clean Energy Summit (ACES) 2021 co-organized by the Sustainable Energy Association of Singapore (SEAS) and DMG Events.
The team of panel discussants who shared their expertise were Farida Lasida Adji, East Asia Lead – Green Buildings Market Transformation Program of the International Finance Corporation (IFC), Mason Wallick, Managing Director of Clime Capital Ltd., Melanie Slade, Senior Programme Manager, Energy Efficiency in Emerging Economies, International Energy Agency (IEA) and Septia Buntara Supendi, Manager of Sustainable Energy, Renewable Energy, Energy Efficiency and Conservation, ASEAN Centre for Energy (ACE).
The panel discussion opened with an ACES 2021 declaration that improving energy efficiency could meet a quarter of Southeast Asia’s emissions reduction targets and drawing inspiration from IEA Executive Director Fatih Birol, when he said, “Every saved electron is a green electron.” Energy efficiency has been widely accepted as the low hanging fruit and “first fuel” in the climate fight.
Ablaza kicked off the discussions with his estimate that, based on IEA’s Sustainable Development Scenario, Southeast Asia (SEA) will need USD 892 billion in EE investments through 2040. He asked the panelists if EE laws in SEA can be reviewed to lower EE consumption thresholds, or if ASEAN member states can accelerate the phase-out of energy subsidies, or if MSMEs and energy service companies (ESCOs) can gain improved access to EE debt finance, equity capital and guarantees. The APEIA and PE2 head invited the panel experts to propose viable EE strategies for SEA to achieve its Net Zero targets and Paris climate agreement obligations.
When asked what innovative financial structures, products and vehicles will be needed to accelerate EE capital flows, Mason Wallick said that Clime Capital is starting to see EE coming into the limelight with non-traditional energy players coming forward with portfolio investment models and specialized in-house expertise in EE as a new energy asset class. In partnership with clean energy pioneers, governments, global philanthropic organizations, development financial institutions, NGOs and other local stakeholders, the Southeast Asia Clean Energy Facility (SEACEF) is currently directing early-stage development capital investment into innovative, high-impact clean energy projects and businesses in critical Southeast Asian markets.
Wallick also remarked that, while a new investor class is emerging, it would not be challenging to attract EE capital from traditional energy players who find comfort in renewable energy, power generation, transmission, distribution, upstream oil and gas infrastructure development, especially if risks are manageable and investment returns are attractive enough in a new asset class that is often deployed in the less-regulated side of energy markets. Growth in EE capital mobilization is imminent, and that a “J-curve” trend is certainly not impossible.
Farida Lasida Adji said that developmental financial institutions such as IFC have taken to influence the demand-side of energy markets, to optimize the use of energy, and to enable different key players in different sectors, especially sectors that have a heavy reliance on energy, such as the industrial, building, and transportation sectors. IFC mobilizes commercial funding for EE investments by way of specialized banking instruments to harness new opportunities. They have a growing track record of enabling risk sharing facilities, guarantee programs, blended finance, green bond issuances and sustainable energy finance. IFC also creates and develops EE markets through targeted technical assistance to financial institutions, ESCOs and energy end-users.
As the World Bank private sector investment arm, IFC also builds market awareness through EE marketing activities, targeting both supply-side (producers, developers, vendors) and demand-side (consumers, end-users) players of the energy markets. It also develops financing structures that can be replicated and offered to developing countries for large-scale lending or support research and analysis to back up regulatory decision-making process – to set or increase standards and to introduce incentives when needed to catalyze investment decisions.
She added that from the IFC standpoint, the biggest investment opportunity in climate-smart related business is the USD 16 trillion capital requirement for green buildings through 2030. By pushing energy efficiency in the building sector, IFC believes that it can get the private sector to contribute meaningfully to the Net Zero 2050 targets.
Melanie Slade of IEA shared her view that beyond the accelerated timelines for escalated minimum energy performance standards (MEPS) of energy-consuming products, emerging economies can pursue opportunities to plan, design and finance forced obsolescence or market wash-out of low-efficiency technologies in the region.
She also noted that aside from accelerated MEPS and energy labeling programs, SEA should consider sustainable cooling, digitalization and EE green job creation as game-changing priority strategies to mainstream EE as the region’s first fuel.
IEA released a study that shows that using air conditioners and electric fans to stay cool accounts for nearly 20% of the total electricity used in buildings around the world today. Rising demand for space cooling is also putting enormous strain on electricity systems in many countries, as well as driving up emissions. Additionally, IEA believes that the connectivity benefits of digitalization allow digital technologies to both increase end-use efficiency and the efficiency of the entire energy system. Also, with clean energy transitions continuing to scale up, EE jobs have grown steadily in recent years. In some countries, EE is estimated to be one of the largest employers in the energy sector.
Septia Buntara Supendi of ACE bared his thoughts on innovative ways of pushing aggressive national and regional EE targets through radical policy reform on how to accelerate EE among the ASEAN member states. He said that under the ASEAN Plan of Action of Energy Cooperation (APAEC), ASEAN had successfully reduced the energy intensity of the region by 20% in 2020, and that it now aspires to achieve the 32% energy intensity reduction target by 2025 based on 2005 levels. This can be attained through scaled-up market transformation initiatives in favor of EE technologies deployed in the buildings, transport, and industry sectors.
The regional harmonization of MEPS, EE promotions and registration of product systems, establishment of guidelines for integration of EE, and harmonization of green building codes are all priority actions identified by ACE. He hopes EE could become a fundamental aspect for energy optimization and for EE to become a way of life.
Ablaza concluded the discussions by stating that governments, investors, EE players and end-users will need to rise above their comfort zones to make a meaningful contribution to the 1.5 degree C target. He said that the panelists from ACE, Clime Capital, IEA, and IFC provided the much-needed positivity to propel EE aspirations and targets with actionable plans and programs.
