The Future of Energy Systems | Asian Development Bank
Institutional Event: ADB Insights

The Future of Energy Systems

Thursday, 3 May 2018, 3:00 pm–3:45 pm, Learning Resource Center 3, ADB HQ
 The Future of Energy Systems

Seminar Summary

The seminar presented the global energy trends through 2050 and the upheavals expected ahead. It gave a glimpse of how ADB has started to respond to the ever-changing landscape of the energy sector and continuing evolution of energy systems. It also provided space for how on-the-ground experiences has also started to shift. The global energy outlook presented by Antonio Della Pelle of McKinsey showed an increase in energy demand overall at 25% from 2015 to 2050. It would however slow down at a rate that has never been observed in the last century towards the tail-end of the review period. The increase in demand will be driven by India, Africa, and other developing countries in Asia, as the People’s Republic of China (PRC) peaks and OECD countries’ consumption slows down. Asia will drive most of the global energy demand at 38% through 2050 buoyed by consumption in the power and industrial sectors.

Renewables, because of more favorable economics, will increasingly dominate, with solar and wind power generation growing 5-10 times faster than gas while coal-based generation falters. Consumption of fossil fuel will plateau from 2035 due mainly to the decreased use of oil and coal and the continued increased use of gas. Road transport, specifically with efficiency improvements and its electrification, is seen to be one of the major disruptions that could stop the growing use of oil, which is seen to peak before 2040.

Reducing CO2 emission will remain a challenge, particularly in keeping within the 2 degrees Celsius path. Energy-related CO2 emissions will peak around 2030 but will also remain more than twice the level aimed for in the 2 degrees Celsius target. According to McKinsey’s analysis, taking into consideration system performance and transition readiness, Asia is poised to transition its energy systems to the future as the PRC, North and East Asia lead while India, Southeast, Central Asia are just about to cross that critical midpoint.

Innovation has been ADB’s rallying call in recent years. It is critical if ADB intends to continue to be relevant and responsive to the needs of its developing member countries (DMCs). Lin Lu of the Energy Division in the East Asia Department at ADB presented the various ways that ADB has applied innovation in technology, finance, and approaches in improving the air quality of the greater Beijing Tianjin and Hebei region in the PRC. Into its fourth intervention currently, the program is a comprehensive and dynamic application of approaches, instruments, and interventions with broad multisectoral impacts. A policy-based loan was first implemented in 2015 to establish the institutional environment for the subsequent interventions. Then a financial intermediary loan was approved in 2016 to provide financing of numerous activities ranging from renewable energy generation and energy efficiency activities. In 2017, another financial intermediary loan was approved to support advanced technologies that will improve energy efficiency in small and medium-scale enterprises while also implementing renewable energy generation and energy efficiency in transport. A fourth project loan is being prepared in 2018 to address air quality in nearby Shandong province.

Cindy Tiangco of the Energy Division in the Central and West Asia Department in ADB shared preparatory work being done to assess the feasibility of applying floating solar technology in Afghanistan, Azerbaijan, and the Kyrgyz Republic. Potential sites have already been identified and studies conducted to inform on the scale, specifications, and technology to be applied.

The seminar was graced with a view from the grassroots. Tri Mumpuni of the People Centered Business and Economic Institute shared her organization's efforts in providing electricity to households in remote areas in Indonesia. Theirs is an intervention that seeks to improve the socioeconomic situation of rural households using electricity connection as an entry point and a means to create income-generating opportunities.

The seminar closed with a few clarificatory questions from the floor as well as the results of online poll of the audience: a little more than half of those who voted were of the opinion that Asia’s energy systems are not quite ready for the future and that policy, regulation, and enabling environment are the critical variables that will make them so—more than technology and financing.

Panelists

Antonio Della PelleClient Development Director, McKinsey Energy Insights

Mr. Della Pelle has deep expertise in refining, petrochemicals, liquefied natural gas, and power. He has served clients from private and public sectors in Asia on energy markets, energy outlook, energy policies design, business improvements, and strategy engagements. Prior to joining McKinsey, he was the managing director of Enerdata Asia, and was partner at KBC. He is a chartered chemical engineer with 20 years of experience working in the energy industry. Mr. Della Pelle has spoken at major international conferences and forums, and has also been quoted by leading journals and newspapers.

Lin LuSenior Energy Specialist, Energy Division, East Asia Department, ADB

As senior energy specialist, Ms. Lu leads the processing and implementation of energy projects and technical assistances in the People’s Republic of China and Mongolia. She has extensive experience in thermal power, energy efficiency, renewable energy, and air quality improvement. She has led policy dialogues with and has provided technical advice on energy development to the government. Ms. Lu obtained her doctorate degree in mechanical engineering from Drexel University, USA.

Tri MumpuniFounder and Executive Director, People Centered Business and Economic Institute

Cindy Cisneros TiangcoSenior Energy Specialist, Energy Division, Central and West Asia Department, ADB

Ms. Tiangco’s 25-year work experience includes seven years in ADB, leading clean energy projects comprising solar power generation in Uzbekistan and Afghanistan, and energy efficiency in Kazakhstan and Pakistan. She now leads the floating solar initiative to build pilots in Afghanistan, Azerbaijan, and Kyrgyz Republic, and Afghanistan’s second solar grant to build solar rooftop and mini-grids. Prior to ADB, Ms. Tiangco was a consultant to ADB, World Bank, AFD, UNDP/GEF, and the Philippine Climate Change Commission. Cindy holds a PhD, master’s degreee, and bachelor’s degrees in engineering.

Moderator

Yongping ZhaiChief of Energy Sector Group, Sustainable Development and Climate Change Department, ADB

In his current role Mr. Zhai is in charge of ADB’s overall energy policy coordination and technical support to energy sector operations. He develops energy sector knowledge work and interacts with worldwide energy sector partners. Prior to his current position he worked in energy sector operations in South and Southeast Asia, supporting renewable energy, energy efficiency and power trade. Mr. Zhai also worked as a principal program coordinator/public utilities economist at the African Development Bank (AfDB) in charge of energy projects.