PE2 co-launches pioneer EE session in ASEAN Energy & Utilities Digital Week

MAKATI CITY, 7 July 2021 – The Philippine Energy Efficiency Alliance (PE2) partnered with Informa Markets and PhilEnergy 2021 to jointly organize and launch earlier today the first-ever energy efficiency (EE) webinar “ASEAN Energy Efficiency Outlook” within the ASEAN Energy & Utilities Digital Week (AEUDW). PE2 hopes that, by helping plan this webinar, an EE session could be perpetuated through future AEUDW events. Over 1,000 participants registered for AEUDW 2021, which was held from 6-7 July 2021. The two-day conference was coupled with a 24-hour virtual exhibition from 30 June - 9 July 2021.

PE2 president Alexander Ablaza, who is also the Founding Convenor and Co-Chair of the Asia-Pacific ESCO Industry Alliance (APEIA) served as principal EE advisor and the moderator of the virtual conference. Ablaza kicked off the discussions saying, “Just this morning, I shared in another regional EE event an estimate from a recent study of mine that Southeast Asia will need to mobilize USD 892 billion in EE capital through 2040, and we are blessed this afternoon to hear from a brilliant panel of experts from IEA, IFC and SEACEF, which offer their respective views on how the regional economy can scale up their EE response.”

Melanie Slade, Senior Programme Manager, Energy Efficiency in Emerging Economies Programme of the International Energy Agency (IEA) presented on the key role of energy efficiency in Southeast Asia’s clean energy transition and post-COVID economic recovery. She explained that the COVID-19 crisis has shocked both economic activity and energy demand while primary energy intensity progress halved in 2020. While EE is expected to contribute over 40% of energy sector GHG abatement up to 2040, a pre-pandemic slowdown in EE investments today lessens the chance of meeting long-term climate goals.

Ms. Slade reported that the IEA Sustainable Recovery Plan envisions average annual investments of USD 1 trillion for the next three years. EE-related investments are the largest category of spending and creates most jobs per unit of investment. Three-quarters of what is needed to decarbonize the buildings could be achieved through the use of mature and early adoption of technologies. She added that further technological innovation would bring additional gains.

Around 10% of ASEAN's total energy use in 2018 was subject to mandatory EE policies. The percentage of energy use covered by mandatory EE policies directly impacts the energy savings. In 2019, annual global electricity demand was reduced by at least 1,600 TWh, equivalent to the total production of wind and solar energy in the top 10 producer countries. If all countries worldwide had adopted similar measures, global savings of 3,600 TWh could have been realized in 2019. This is equivalent to cutting China's total electricity consumption by half. The savings potential from product efficiency worldwide is equivalent to more than USD 230 billion in bill savings in 2030, with 640 avoided coal-fired power plants in 2030.

Ms. Slade identified the key sector priorities for ASEAN economies to consider: (a) Industry – develop incentive programmes and new business models to encourage energy efficiency improvements, develop real-time energy management systems based on low cost sensor and telecom technologies; (b) Transport – develop an EV roadmap, particularly for two and three wheelers; (c) Buildings – accelerate the roll out of buildings codes and mandatory disclosure of building performance, develop grid connected smart buildings as a flexible resource for the energy system; and, (d) Appliances – collaborate internationally to adopt ambitious performance standards to the benefit of ASEAN manufacturers and consumers, develop demand response ready appliances.

Diep Do, Green Building Program Lead of the International Finance Corporation (IFC) of the World Bank Group, shared IFC’s experience in rolling out their EDGE certification program for buildings, and the EE opportunities in Southeast Asia’s existing building stock. She reported that, on average over the last 3 years, IFC has been committing over USD 1 billion a year for green buildings, which is almost 5% of total annual commitments. Green buildings is fast becoming IFC’s biggest climate asset class. Driven by the imperative to create free markets for green buildings and EE users, IFC introduced the EDGE certifications for both new and existing buildings and for a wide range of typologies. The free EDGE software shows the payback for each efficiency measure reducing costs and speeding up design and decision-making. It provides real-time energy feedback on performance such as progress toward certification, construction cost, utility savings and payback and energy, water and materials savings and carbon tracking. EDGE has certified over 22 million square meters of building floor areas across 45 countries, collectively able to deliver over 400,000 tCO2e/yr in greenhouse gas emission reduction.

Mason Wallick, CEO of Clime Capital, which is managing the Southeast Asia Clean Energy Facility (SEACEF), delivered an investor’s perspective on EE investments and how SEACEF can provide high-risk capital for EE projects in early stages of development in Indonesia, the Philippines and Vietnam. He said that the genesis of SEACEF is to help provide early-stage high risk high impact capital upfront and to fund clean energy projects where they can make a difference and to accelerate low carbon transitions as they seek to solve the stemming the increase in CO2 emissions in Southeast Asia. Mr. Wallick said, “We estimate that USD 14 billion of early-stage development capital is required to unlock over USD 500 billion of clean energy projects and businesses in Indonesia, the Philippines and Vietnam.”

SEACEF focuses on globally proven clean energy technologies and business models that will lead the low carbon transition. Energy efficiency is one of the target project types on the demand-side of energy markets in the 3 scoped countries. SEACEF addresses the “early-stage financing gap” for EE by providing high risk capital expand platforms. These relatively small amounts of early-stage capital provide significant catalytic support when purely private capital is unwilling or unable to invest or when private sector appetite requires early-stage technical de-risking and advancement of key permits and approvals. SEACEF benefits from grants and financial resources from recently established aligned programs that support EE as a key pillar of clean energy transitions.