1887

Towards a Sustainable Future

Energy Connectivity in Asia and the Pacific Region

image of Towards a Sustainable Future

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.

English

.

International experience - Gas and electricity

Energy connectivity involves cross-border wholesale gas and electricity transactions that may be market-based, reflecting demand-supply deficit or surplus, or through administrative processes based on cost of providing service. Gas and electricity cannot be seen but they can be metered and supply can be turned off, which makes it possible to trade them like other commodities. Furthermore, there are physical markets that require delivery and off-take of gas and electricity, and financial markets that exchange derivatives linked to the physical market. Trading energy derivatives brings in additional funds from investors for operations and long-term investment in the energy sector. More recently, carbon emission has been commoditized so it is becoming a policy instrument for lowering greenhouse gas emissions, and when large investors participate in carbon emission trade, there will be new capital for implementing zero-carbon energy capacity.

English

This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error