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CERAWeek: Balancing act for Asia

By  Wednesday, 22 April 2015 13:44
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As global energy growth remains on a strong, steady incline, especially in Asian countries, there is a struggle to find a balance between the economic growth, energy investments, and energy policy objectives. A panel at CERAWeek discussed some of these challenges and what is being done in some Asian countries to overcome them.

Panel. Image from AOG Staff. 

“Every country is unique,” Jefferson Edwards, Shell global gas and LNG market development general manager said. “It’s quite difficult to have every ministry and every national energy trying to optimize on one factor. The industry can be part of that conversation to make sure we are explaining what is technically possible, what’s possible in terms of trading, and how to optimize.”

Edwards said the company sees global energy growth doubling across the decade between 2010 and 2060, about 70% of total primary energy demand growth globally with Asia leading the way.

Balance is the main key moving forward in regards to gas, renewables and other fuels.

There is balance needed for fuel and national energy priorities for costs, environmental protection, energy, grid security, stability, and economy, Edwards said.

“LNG is an industry that has doubled in size and value every 10 years for the past four decades,” Edwards said.

Today, about 30 countries import LNG and about 20 export LNG and due to urbanization,

Shell said there will be about 50 more countries by 2025 meaning that 20 more importing LNG and 25 exporting.

Shell attributes the LNG growth due to the fact that it is very flexible and dynamic. In addition, new technologies come into play, for example floating liquefied natural gas (FLNG) and small scale applications.

Edwards said that both gas and LNG will play an important role in bringing energy to Southeast Asia.

“Countries have to balance energy security, affordability, and environmental issues which are ever-more important,” Edwards said. “Governments will be considering the full value of gas to put policies in place to balance national economies. There is no silver bullet.”

The Philippines is facing several challenges to meet the goals of energy sustainability, affordability, and adequacy including getting private sector investments. The social acceptance of cost, due to high power rates, versus environment is also a challenge.

“We are undergoing collaboration with different stakeholders. Working on how to get the message across to government agencies, investors and the public,” Zenaida Monsada, Undersecretary Philippines Department of Energy said. “We are reviewing existing guidelines and formulating new guidelines particularly for the natural gas sector and having the necessary infrastructure to support these targets.”

South Korea has a high dependency in fuel imports and increasing need to maintain competitively prices outputs. Korea is the second largest importer of LNG, with Japan leading the way.

Korea’s energy market seems to be a bit uncertain for the next 10 years, J.J. Yu, SK E&S president and CEO said. In that regard, as a larger consuming country, we are demanding more flexibility in terms of quantities when we import from the suppliers, he said.

The government has a plan and people have problems striking the balance between economics and environmental issues and there is a lot of resistance in building a coal power plant from South Koreans, but they still to pay lower costs for electricity, Yu said.

In India, the new government is expected to push through reforms and bring on the potential for growth.

“The backdrop for India is extremely bullish,” Apoorv Mathur, Tata Power strategy advisor said. “There is a lot of potential for capital deployment and an interesting time for prospective of commodity prices.”

One of the biggest things the government has focused on in India is how to improve coal production in terms of actual monitoring of coal production, efficiencies in the coal system, and looking at development of new coal technologies, Mathur said.

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