Energy and the Millennium Development Goals (MDGs)
Even as the MDGs only carry two energy-specific performance indicators (No. 27 GDP per unit of energy use and No. 28 Carbon dioxide emissions per capita), energy is critical to the achievement of all the goals... More
The countries of the East Asia and Pacific region (EAP) are expected to register the fastest energy consumption growth of all regions over the coming decade. China dominates the region’s energy consumption accounting for two-thirds of the regional total in 2002.
The Bank's active portfolio in EAP energy includes 20 lending projects with a total value of $3.5 billion. The Bank also manages a complementary portfolio of 12 projects supported by the Global Environmental Facility (GEF) worth $160 million.
Thermal energy sources dominate the region’s energy supply. The region accounted for a third of the world’s coal consumption in 2002 with China accounting for 80 percent of the region’s total. The region’s rising oil consumption was barely dented by the Asian financial crisis remaining in the range of 14-15 percent of global consumption.
Compared to coal and oil use, the region’s share of global natural gas consumption is low at 6 percent use with China accounting for a third of the region’s consumption. The region’s electricity production amounted to about 2,600 terawatt hours in 2002. That is nearly two-thirds of the electricity produced in the United States during the same period. China accounted for some 70 percent of the regional total. Renewable sources of energy, accounted for less than 10 percent of the region’s total energy use in 2002. These trends of energy demand growth and pre-dominantly fossil fuel-based power generation are expected to continue in the medium term. Their environmental impacts could be disastrous in the longer term.
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The environmental impact of energy use in the region is not restricted to outdoor air quality. Nearly 1 billion people, over 50 percent of the region’s population, relied on biomass for cooking and heating in the year 2000. If biomass energy demand is added to the region’s modern energy consumption, it would represent 17% of the total in 2000. This proportion is not expected to reduce significantly in the coming decade, placing the region’s poor and its forestry resources at great risk.
The region has made impressive progress in increasing access to electricity. The region’s electrification rate jumped from 56 percent in 1990 to 87 percent in 2000. But while access is high at the aggregate level, it varies widely by country. Some 200 million people remain without access to electricity in the region, the majority of them in rural areas.
In parallel, urbanization and growing incomes are placing greater demands on urban energy services. Cities contribute at least 70 percent of the region’s economic growth. And EAP’s urban population is expected to grow faster than any other region between 2005 and 2010. As incomes rise, energy consumption growth will increasingly be driven by urban households using vehicles and electric appliances and household energy demand is expected to rise faster than industrial demand, carrying the threat of further environmental degradation in urban areas.
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This growth in energy demand implies high investment needs, particularly in the power sector. International Energy Agency investment forecasts in Asia average US$144 billion/year over 2001-30. Electricity is predominant with 80 percent, followed by oil and gas (~16 percent) and coal, a distant last (~4 percent). Public resources are not expected to be sufficient to meet these needs.
Managing the region’s energy demand growth is unlikely to be restricted to the domestic policy arena. Domestic demand-supply imbalances can be addressed as countries cooperate to optimally utilize the region’s available energy resources. The hydropower resources of the Greater Mekong Sub-Region provide such opportunities for energy trade.
In the medium term, the World Bank assistance to EAP clients will focus on five major themes. The figure below illustrates the distribution of these challenges across the region.
managing energy demand growth;
improving the energy sector’s investment climate to attract the private sector;
mitigating the environmental impact of energy use (particularly through the use of renewable energy as well as through greater use of gas);
increasing access to modern energy services; and
leveraging regional energy resources through energy trade.
Country-Specific Priorities and Challenges
Asia Alternative Energy Program (ASTAE)
Extractive Industries Issue Brief
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