The ten members of the Association of Southeast Asian Nations (ASEAN) – along with China and India – are shifting the centre of gravity of the global energy system towards Asia. Energy demand in Southeast Asia has expanded by two-and- a-half times since 1990, its rate of growth among the fastest in the world. Economic and demographic trends point to further growth, lifting the region’s energy use per capita from just half of the global average today. But how will Southeast Asia’s fuel mix evolve? And what will the region’s supply and demand balance mean for oil, gas and coal trade? The International Energy Agency, in co-operation with the Economic Research Institute for ASEAN and East Asia, has studied these issues in consultation with ASEAN member governments and leading commentators, industry representatives and international experts. This special report, in the World Energy Outlook series, presents the findings.

1. © OECD/IEA 2013
Maria van der Hoeven
Executive Director
International Energy Agency
2 October 2013

2. © OECD/IEA 2013
Southeast Asia: the energy context
 Southeast Asia has emerged as a key player in the global energy system
 growing thirst for energy driven by sustained economic & social development
 Diverse set of countries with vast differences in patterns of energy use
 Many of the individual countries increasingly reliant on energy imports
 although region as a whole is rich in energy resources
 Fundamentals suggest energy needs will continue to grow
 economy to triple by 2035, despite some headwinds at present
 population of 600 million to expand by almost one-quarter by 2035
 per-capita energy use is still low & 134 million people lack access to electricity

3. © OECD/IEA 2013
Southeast Asia Energy Overview

4. © OECD/IEA 2013
200
400
600
800
1 000
1 200
2000 2011 2020 2030 2035
Mtoe Other ASEAN
Malaysia
Philippines
Thailand
Indonesia
Southeast Asia’s energy needs will
continue to grow
Growth in ASEAN primary energy demand
Southeast Asia’s energy demand increases by over four-fifths in the period to 2035,
or by more than the current consumption of Japan
15%
20%
25%
30%
35%
40%
Energy demand per
capita as share of OECD
(right axis)

5. © OECD/IEA 2013
The power sector is fundamental to
the energy outlook of Southeast Asia
ASEAN incremental electricity generation by fuel, 2011-2035
Electricity generation increases by more than the current power output of India;
coal emerges as the fuel of choice, accounting for 58% of the growth
-100 0 100 200 300 400 500 600 700
Oil
Nuclear
Gas
Renewables
Coal
TWh

6. © OECD/IEA 2013
100
200
300
400
2000 2010 2020 2030 2035
TWh
5%
10%
15%
20%
25% Solar PV
Wind
Geothermal
Bioenergy
Hydro
Share of total generation
(right axis)
Renewables enter into the
mainstream
Renewables-based power increases by more than the current total power output of
Indonesia & Thailand combined, although barriers to deployment need to be tackled
ASEAN electricity generation from renewables

7. © OECD/IEA 2013
Net imports
Net
exports
Production: oil in decline & gas
struggling to keep up with demand
ASEAN oil and gas balances
Southeast Asia becomes the world’s fourth-largest oil importer (behind China, India
and the EU) & sees a vastly reduced surplus of natural gas for export
1
2
3
4
5
6
7
8
1990 2000 2010 2020 2035
Millionbarrelsperday
Production
Demand
Oil
50
100
150
200
250
300
1990 2000 2010 2020 2035
Billioncubicmetres
Gas

8. © OECD/IEA 2013
Rising oil & gas imports will
have high economic costs
Net oil and gas imports as a share of demand
The region imports 75% of its oil in 2035, as spending on oil imports triples to
$240 billion; net revenues from gas exports fall by more than three-quarters
-20%
0%
20%
40%
60%
80%
100%
-100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100%
Gas
Oil
2035
Indonesia
Thailand
Malaysia
Philippines
ASEAN
2011Net oil importer, net gas exporter
Net oil & gas exporter
Net oil & gas importer

9. © OECD/IEA 2013
Indonesia: a dominant player
in global coal markets
Indonesia’s coal production
Indonesia accounts for 85% of Southeast Asia’s coal production; it remains the
world’s top exporter of steam coal – by a very large margin – through to 2035
100
200
300
400
500
600
1990 2000 2011 2020 2025 2030 2035
Milliontonnesofcoalequuivalent
15%
30%
45%
60%
75%
90% Net exports
Demand
Steam coal exports as
share of world steam
coal trade (right axis)

10. © OECD/IEA 2013
Fossil-fuel subsidies continue to
distort energy markets
Value of fossil-fuel subsidies in Southeast Asia, 2007-2012
Fossil-fuel subsidies amounted to $51 billion in 2012; despite recent reforms –
notably in Indonesia & Malaysia – they continue to distort energy markets
10
20
30
40
50
60
2007 2008 2009 2010 2011 2012
Billiondollars(2012)
20
40
60
80
100
120
Dollarsperbarrel(2012)
Coal
Natural gas
Electricity
Oil
IEA crude oil
import price
(right axis)

11. © OECD/IEA 2013
Energy efficiency: a huge opportunity
going unrealised
Economically viable efficiency measures can cut the region’s energy use in 2035
by almost 15%, or more than the current energy use of Thailand
ASEAN primary energy demand in the Efficient ASEAN Scenario
relative to the New Policies Scenario
Savings in 2035
Coal 100 Mtce
Oil 0.7 mb/d
Gas 28 bcm
500
600
700
800
900
1 000
1 100
2011 2015 2020 2025 2030 2035
Mtoe
New Policies
Scenario
Efficient
ASEAN Scenario

12. © OECD/IEA 2013
Improved energy efficiency brings
economic gains
In 2035, spending on oil imports is cut by $30 billion, while revenues from exports of
natural gas & coal are increased by $30 billion; regional GDP is boosted by about 2%
5
10
15
20
25
30
35
Coal Gas Oil
Billiondollars(2012)
Import cost
savings
Additional
exportrevenue
Gains in fossil-fuel trade balances
40
80
120
160
200
2020 2025 2030 2035
Billiondollars(2012) 0.5%
1.0%
1.5%
2.0%
2.5%
Change in
GDP
Percentage change
in GDP (right axis)
Increase in GDP

13. © OECD/IEA 2013
Southeast Asia: an emerging giant
of the global energy market
 Southeast Asia – along with China & India – is shifting the centre of
gravity of the global energy system to Asia
 Its outlook for energy production & demand has implications that will be
felt well beyond the region
 Developing policies to improve efficiency & attract investment will be
vital for enhancing energy security, affordability & sustainability
 The region faces global challenges, underscoring the need to enhance
cooperation intra-regionally & with international partners