OverviewofASEANEconomicCommunity(AEC)

andevaluatingASEANPlanofActionForEnergy

Cooperation(APAEC)Blueprint2025Dr.WanMohd Zulhafiz WanZahari

Assist.Professor,AhmadIbrahimKulliyyahofLaws.DeputyLegalAdviser,OfficeoftheLegalAdviser.

InternationalIslamicUniversityMalaysia.

ASEAN:AssociationofSouthEastAsianNations

ASEAN– Awell-connectedregion

• Hugemarketwith628+millionpopulation• Freetradeagreementswithmajorregionaleconomies• Highlyconnectedphysically,institutionallyandamongthePeoples

ASEAN– AnEmergingEconomicPowerhouse• Hugemarket:628million+people• GDP:USD2.43trillion• FDIUSD120billion+

“IfASEANwereasinglecountry,itwouldalreadybethesixthlargesteconomyintheworld,withacombinedGDPof$2.43trillionin2015.”

(Source:ASEANStatsandIMF-WEO)

“Itisprojectedtorankasthefourth-largesteconomyby2050.”

McKinsey&Co– May2014

TheASEANJourneytoCommunityBuilding

• BangkokDeclaration- 1967• “Acceleratetheeconomicgrowth,socialprogressandculturaldevelopmentintheregionthroughjointendeavors.”• “Promoteregionalpeaceandstabilitythroughabidingrespectforjusticeandtheruleoflaw.”

TheASEANJourneytoCommunityBuilding

• BaliConcordII- 2003• “AnASEANCommunityshallbeestablishedcomprisingthreepillars,namelypoliticalandsecuritycooperation,economiccooperation,andsocio-culturalcooperation…”

• 12thASEANSummitCebu,Philippines– 2007• CebuDeclaration• “AcceleratetheestablishmentofanASEANCommunityby2015…”

TheASEANJourneytoCommunityBuilding

• StrengtheningFrameworkofASEANIntegration• 2008- ASEANCharter• 2009- RoadmapforanASEANCommunity2009–2015• 2010- MasterPlanonASEANConnectivity

• LaunchofASEANCommunity– 31Dec.2015

ASEANCommunity2025• ConsolidatetheASEANCommunitythroughdeeperandmorecomprehensiveprocessofintegration• EmphasisonASEANcentrality• EmphasisonequitabledevelopmentoftheASEANMemberStates• MoreconnectedASEAN

CoordinationMechanismoftheASEANIntegration

OverviewoftheASEANCommunity• ASEANPoliticalSecurityCommunity(APSC)• EnsuresthatthepeoplesandMemberStatesofASEANliveinpeacewithoneanotherandwiththeworldatlargeinajust,democraticandharmoniousenvironment.

• ASEANEconomicCommunity(AEC)• TransformsASEANintoastable,prosperous,andhighlycompetitiveregionwithequitableeconomicdevelopment,andreducedpovertyandsocio-economicdisparities.

• ASEANSocio-CulturalCommunity(ASCC)• ContributestorealisinganASEANCommunitythatispeople-orientedandsociallyresponsiblewithaviewtoachievingenduringsolidarityandunityamongthepeoplesandMemberStatesofASEAN.

• NarrowingtheDevelopmentGap(NDG)• Progressingtogetherthroughcooperationindevelopment.

AEC&EnergyPolicyAgenda• EnergyiskeytotherealisationoftheASEANEconomicCommunity(AEC)thatcallsforawell-connectedASEANtodriveanintegrated,competitiveandresilientregion.• TheASEANVision2020envisionsacleanandgreenASEANwithfullyestablishedmechanismsforsustainabledevelopmenttoensuretheprotectionoftheenvironment,thesustainabilityofitsnaturalresources,andahighqualityoflifeforitspeople.• SuchavisionwasincarnatedattheBaliSummitinOctober2003astheAECby2020(BaliConcordII).

• TheenergypolicyagendaoftheAECisdesignedtoensureasecureandreliablesupplyofenergythatincludesbiofuels,aswellasexpeditingthedevelopmentoftheAPG(ASEANPowerGrid)andtheTAGP(TransASEANGasPipeline).• Itallowsfortheoptimisationofregionalenergyresources,ensuresustainableenergydevelopmentbymitigatingGHG(greenhousegas)emissions andstrengthenrenewableenergydevelopmentandcooperation.

• IntheAECBlueprint,therearestatementsaboutspecificprojectssuchasAPGandTAGPandaboutgeneralvisions,suchas

“Secureandreliablesupplyofenergyincludingbio-fuel”,“Strengthenrenewableenergydevelopment,suchasbio-fuels”,and“investmentintherequisiteinfrastructureforrenewableenergy

development”.• TheAECalsorecognisesthelimitedglobalreservesoffossilenergyandtheunsustainableworldpricesoffueloilandemphasisestheneedtostrengthenrenewableenergydevelopmentandcooperation.

• However,theAECBlueprintdoesnothaveadetailedprogrammefortheenergysectorandtherearenospecificroadmapsintheAECBlueprint,exceptfortheAPGandTAGP.• Instead,theenergycooperationportioniscollectivelydocumentedinthesequentialASEANPlanofActiononEnergyCooperation(APAEC).

ASEANPlanofActiononEnergyCooperation(APAEC).• TheASEANPlanofActionforEnergyCooperation(APAEC)isaseriesofguidingpolicydocumentsthataimstopromotemultilateralenergycooperationandintegrationtoattainthegoalsoftheAEC.• ItservesastheplatformfordeepercooperationbothwithinASEANaswellaswithDialoguePartners(DPs)andInternationalOrganisations(IOs)towardsenhancing,energysecurityaccessibility,affordability,andsustainabilitywithintheframeworktheAEC.

1st - APAEC1999-2004

• Six(6)ProgrammeAreaswereintroducednamelythe:• 1)ASEANPowerGrid(APG);• 2)Trans-ASEANGasPipeline(TAGP);• 3)EnergyEfficiencyandConservation(EE&C);• 4)NewandRenewableEnergy(NRE);• 5)CoalandCleanCoalTechnologies(CCT);and• 6)RegionalEnergyOutlook,EnergyPolicyandEnvironmentalAnalysis.

2nd - APAEC2004-2009

• SigningoftheMemorandumofUnderstanding(MOU)fortheAPGandtheintroductionoftheannualASEANEnergyAwards(AEA)forenergyefficiencyandrenewableenergy.• TheProgrammeAreaon“RegionalEnergyOutlook,EnergyPolicyandEnvironmentalAnalysis”wasreplacedby“RegionalEnergyPolicyandPlanning(REPP)”.

3rd - APAEC2010-2015

• (a)SigningoftheMOUbetweentheASEANSecretaryGeneralandtheExecutiveDirectoroftheInternationalEnergyAgency(IEA)in2011inBruneiDarussalam,whichestablishedtheannualASEANMinistersonEnergyMeeting(AMEM)-IEAEnergyDialogue;• (b)SigningoftheMOUonthe“InstrumenttoExtendtheTAGP”foranothertermof10yearsuntil20May2023;and,• (c)exceedingASEAN’saspirationaltargetsof8%reductioninenergyintensityreduction(over2005levels)and15%shareofrenewableenergyintotalinstalledpowergenerationcapacitymixby2015.

4th - APAEC2016-2025

• CurrentAPAECextendedoveralongerperiodof10years.Theimplementationplanisdividedintwo(2)phases• PhaseI:2016-2020and• PhaseII:2021-2025.

• APAEC Phase I: 2016-2020 focused on the short- to medium-termstrategies• The 32nd ASEAN Ministers on Energy Meeting (AMEM) held on 23September 2014 in Vientiane, Lao PDR, endorsed the theme of theASEAN Plan of Action for Energy Cooperation (APAEC) 2016-2025 as• “EnhancingEnergyConnectivityandMarketIntegrationinASEANtoAchieveEnergySecurity,Accessibility,AffordabilityandSustainability

forAll”.• ThekeystrategiesofthesevenProgramAreasoftheAPAEC2016-

2025PhaseI:2016-2020

ASEANPlanofActionandEnergyCooperation(APAEC)PhaseII:2021– 2025• The38thASEANMinistersofEnergyMeeting(AMEM)heldvirtuallyonNovember19,2020,andhostedbyVietnam,endorsedtheAPAECPhaseII:2021-2025,retainingthesamethemeof“EnhancingEnergyConnectivityandMarketIntegrationinASEANtoAchieveEnergySecurity,Accessibility,AffordabilityandSustainabilityforAll”.• Asub-themewasadded:“AcceleratingEnergyTransitionandStrengtheningEnergyResiliencethroughGreaterInnovationandCooperation.”

• TheAPAECPhaseII:2021-2025buildsonthesuccessofAPAECPhaseI:2016- 2020andsetsoutambitioustargetsandinitiativestoenhanceenergysecurityandsustainability.• ItalsosupportstheUnitedNationsSustainableDevelopmentGoal7(UNSDG7).

• UndertheAPAECPhaseII,ASEANwillenhanceitseffortstowardsbuildinganASEANPowerGridbyexpandingmultilateralelectricitytrading toprovideaffordableandresilientelectricity,whileaccommodatinghighersharesofrenewableenergytowardstheenergytransitionandasustainableenergyfuture.• ASEANwillaimtoachieveitsaspirationaltargetsof23%shareofREinTotalPrimaryEnergySupply and35%shareofREinASEANinstalledpowercapacityby2025throughdeployinglarge-scalerenewableenergysystems,accommodatinghighersharesofREintheAPG,increasingREinvestments,andexploringnewandemergingenergytechnologiessuchashydrogenandfuelcells.• ASEANwillpromoteregionalinitiativestoenhancehumanresourcecapability onnuclearscienceandtechnologyforpowergeneration.

IssuesandChallenges• ImpactofCOVID-19Pandemic• TheimpactoftheCOVID-19pandemiconglobalenergydemandandsupplycouldchangehowASEANapproachestheenergytransitionoverthenextfewyears.• AccordingtotheIEA’sGlobalEnergyReview2020,theCOVID-19pandemichascausedmultipleshockstoglobaleconomicandenergymarkets.• Countriesthathaveimplementedfulllockdownsexperiencedanaverage25%declineinenergydemand,whilethosewithpartialmeasuresareshowinganaverageof 15-18%declineinenergydemandperweek.

• Othercontainmentmeasuressuchastravelrestrictionsalsocausedafallinoildemand,oilsupply,anddemandimbalanceaswellasacrashinoilprices.• Globalcoaldemandwashardesthit,fallingbyalmost8%inthefirstquarterof2020comparedtothefirstquarterof2019.• ForASEAN,therehasbeensomeimpactontheoilandgasdemandduetotheCovid-19movementrestrictionspolicy.• Inparticularly,therehasbeenadecreaseofdemandforpetroleumproductsinthecommercial,industrial,andtransportationsectors.• Thedecreaseofnaturalgasdemandhasbeenlargelyrestrictedtothecommercialsector.

• IR4.0• TheFourthIndustrialRevolution(4IR)whichisfasttransformingtheenergysectorintheregion.• Keydevelopmentsincludedigitaltechnologiessuchasinternetofthings,artificialintelligence,bigdata,andcloudcomputingingeneration,distribution,consumption,andsmartproductionofcleanerandmoreefficientenergy.

• Thefuturetrendofelectrificationanddigitalisationwillbringaboutrevolutionarychanges,includingthroughdigitaltechnologiessuchassmartgridsanddistributedpowergenerationwithadvancedsupplyanddemandmanagementsystems,prosumers,andpeer-to-peertradingplatforms.• BuildingupregionalknowledgecapabilitiesinmanagingbigdatasystemwillultimatelyhelptoimprovetheASEANEnergyDatabaseSystem(AEDS)andtheASEANEnergyOutlookwhenmoreenergydataandstatisticsareavailableatregionallevel.

Conclusion

• TheAPAEC2016-2025isadynamicandlivingdocumenttoguidetheimplementationoftheoutcome-basedstrategiesandactionplanstoaccelerateenergytransitionandstrengthenenergyresilienceinASEANtoachieveenergysecurity,accessibility,affordability,andsustainabilityforallundertheframeworkoftheAEC.• Asthecontinuation ofAPAECPhaseI:2016-2020,theAPAECPhaseII:2021-2025comprisescomprehensivestrategiestomeetthechallengesofASEAN’senergytransitionandresilienceinviewofthechanginglandscapeofglobalenergytrends.

• Sowhat’snext?• PreparationsforAPAEC2026-2035PhaseI:2026-2030

Thankyouforyourkindattention

wzulhafiz@iium.edu.my

“DevelopinganewlegalframeworkonrenewableenergyandenablingenvironmentsforSoutheastAsia”RACER/1/2019/SSI10/UIAM//2