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Towards a Sustainable Future

Energy Connectivity in Asia and the Pacific Region

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This report, aimed at policy makers from Asia and the Pacific, provides a historical perspective on regional energy connectivity and its implementation challenges, as well as outlining an action plan for accelerated regional energy integration to bring shared benefits to ESCAP’s member States. The report concludes that energy connectivity can increase the supply and reduce the cost of energy, while lowering its social and environmental costs and addressing the challenges of energy security. Regional cooperation in energy has been evolving mainly through five subregional clusters –– South-East Asia, Central Asia, South Asia, North-East Asia, and the Pacific. A great many resources have been spent on bringing the subregions together; however, overall results remain below the potential. One of the main reasons for the slow progress is the decision-making process for cross-border projects. Energy markets do not connect by themselves; in the next few decades, actions will be needed to build physical energy networks, institutional connectivity and, most importantly, trust between nations to meet the Region’s two most important challenges — overcoming energy poverty and mitigating climate change. Governments, policymakers, and experts must work together in partnership with the private sector to provide sustainable energy for all by 2050 by connecting Asian energy networks and building institutions of integration. ESCAP is in a unique position to lead such a transformative partnership for ensuring that regional energy connectivity creates incentive structures and institutions to deliver cost-effective energy for the entire Region. It is time to build energy connectivity for an interdependent Asia and the Pacific –– prosperous and connected –– thus ending Asian economic dependence on a single source or a single fuel.

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Institutions for promoting energy connectivity

Several estimates are available regarding the investment needed in the energy sector. The IEA has estimated that the required investment in Asia in the energy supply (including fuel production) and to improve energy efficiency under the New Policies Scenario will add up to about $15 trillion (2012). In another study, ADB has estimated that the investment needed in the energy sector (excluding fuel production) in the developing countries of Asia from 2010 to 2020 will be $4 trillion (2008). The study also estimated that the share of investment in regional projects would be about 4 per cent of the national investment, which is comparable to the case in Europe. Using these estimates, about $20 billion will be needed annually for energy connectivity infrastructure in Asia and the Pacific region. At the 2015 Paris Climate Conference, member countries committed to lower emissions, which will require more power generation using renewable energy, reduction in losses and use of new technologies to improve efficiency. The required annual investment will be higher as energy planning shifts towards cleaner energy.

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