Energy Working Group - Asia-Pacific Economic Cooperation

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Accounting for around 60% of world energy demand, the APEC region is a net energy importer given that its aggregate annual consumption of energy exceeds annual domestic production. Energy imports to APEC economies are projected to increase by approximately 92% between 2000 and 2020 as domestic supplies fail to keep pace with expanding energy demands which are being driven by economic growth, industrialization and urbanization. According to the Energy Working Group's (EWG) projection, demand for energy in the APEC region will continue to increase for the foreseeable future.

OPEC and IEA projections indicate a need for investment of US$20 trillion between 2005-2030 in all energy sectors world-wide and, in particular for investment in oil and gas of US$6 trillion (International Energy Agency, 2006 World Energy Outlook). The capital expenditure on oil and gas of US$200 billion per year includes the expansion of oil and gas supply capacity as well as the modernization of existing upstream and downstream facilities. The energy sector in APEC economies faces significant challenges in mobilizing the private capital and international financial resources required to fund the estimated US$3.4 trillion to US$4.4 trillion in energy investments needed over the next 20 years.

62% of the world total in gold, 87% in copper, over 60% in bauxite, nickel and zinc, and other strategically important minerals are produced in the APEC region. Some APEC member economies are also the largest coal producers in the world. Energy-efficient exploitation of mining is therefore a priority for the EWG.

The EWG has long recognized that business can make an important contribution to the development and implementation of its work program. It was one of the first APEC fora to establish its own public and private sector dialogue mechanism - the EWG Business Network (EBN). The EBN advises the EWG on energy policy issues from an industry perspective and facilitates regular dialogues between energy policy-makers and business sector representatives.

The EWG, launched in 1990, seeks to maximize the energy sector's contribution to the region's economic and social well-being, while mitigating the environmental effects of energy supply and use.

The EWG is assisted in its work by five Expert Groups (Expert Group on Clean Fossil Energy, Expert Group on Efficiency & Conservation, Expert Group on Energy Data & Analysis, Expert Group on New & Renewable Energy Technologies, Expert Group on Minerals & Energy Exploration & Development) and two task forces (Task Force on Renewable Energy & Energy Efficiency Financing, Task Force on Biofuels) which concentrate on particular strategic aspects of the EWG's agenda.

Achievements

In 2007, 13 APEC-funded EWG projects were or will be carried out, including:

Operation of APEC Energy Data and Analysis: This project aims to collect basic energy statistics and to produce APEC Energy Statistics. It also aims to operate a computerized network system for data and information to assist with the identification of significant trends in energy demand and supply to be consistent with projects and priorities under the theme of Regional Energy Cooperation.

Workshop on Recent Advances in Utility Based Financial Mechanisms that Support Renewable Energy & Energy Efficiency: This project aims to provide APEC decision makers with recent advances in utility based financial mechanisms that support renewable energy and energy efficiency.

Application of Energy Indicator Analysis in APEC Economies: This project aims to assist APEC economies develop robust energy indicators so that they can contribute their information to an energy indicators trends report similar to that operated by the International Energy Agency.

Workshop on Best Practices in Energy Efficiency & Renewable Energy in Buildings: This project aims to provide APEC decision makers with recent advances in the best practices for energy efficiency and renewable energy in buildings.

Lessons Learned in Upgrading & Refurbishing Older Coal Fired Power Plants: A Best Practice Guide for APEC Developing Economies: This project aims to (1) illustrate the methodology and its usefulness as a decision-making tool using actual case studies; (2) draw lessons from plant upgrading project experience that may serve to improve the prioritization and economic assessment methods proposed; (3) make usable information, tools, and best practice guidelines more widely available to APEC developing economies faced with decisions on how to obtain the best value for the limited funds they have available for upgrading.

Environmental Monitoring for Coal-Fired Power Plants in Developing Asian APEC Economies: This project aims to (1) gather, synthesize, and assess experience in Asian APEC economies with regard to environmental monitoring and reporting by individual, both existing and new, coal-fired power generating plants; (2) make recommendations regarding how monitoring should be applied and how it should interact with regulations for effective adoption of clean coal technologies.

Development of Solar Thermal Market in the APEC Economies: Significant thermal requirements of manufacturing processes demand low temperatures, which could be provided by solar thermal energy, collected by vacuum and flat collectors.

Electric Motors-Alignment of Standards and Best Practice Programmes within APEC: The project aims to promote the use of efficient motors in member economies by aligning test methods and energy performance standards.

Survey of Biomass Resource Assessments and Assessment Capabilities in APEC Economies: The project aims to understand what biomass resource assessments have been undertaken in APEC economies, as well as the capability of APEC economies to undertake such assessments.

Establishment of the Guidelines for the Development of Biodiesel Standards in the APEC Region: This project aims to establish the guidelines for development of biodiesel standards in the APEC region for enhancing the trade of biodiesel among APEC member economies.

Survey of Transport Efficiency Policies in APEC Economies: The project will review the range of policies that exist to enhance the efficiency and reduce the oil use of freight and passenger transport in APEC economies, will report to ministers and leaders on successful policy approaches, and will draw on this best practice information to develop future projects to advance energy-efficient transportation and reduce oil dependency in the APEC region.

Alternative Transport Fuels-Implementation Guidelines: The purpose of the project is to provide guidelines for the implementation of successful programs for the introduction of alternative transport fuels that will be both coherent throughout APEC economies and applicable to individual economies.

Technology Status and Project Development Risks of Advanced Coal Power Generation Technologies in APEC Developing Economies: The project will be carried out by a consultant with knowledge and expertise in developing clean coal technology (CCT) projects in the APEC region, including capital and operating costs, performance, and risks of commercial projects.

The Energy Security Initiative (ESI) was first put forward by the group in 2000 to prepare the region for energy supply disruptions and their impact on the APEC economic development. The ESI includes short-term measures such as the Monthly Oil Data Initiative, Sea Lane Security, Real-Time Emergency Information Sharing, and Oil Supply Emergency Response. It also includes long-term responses to Energy Investment, Natural Gas Trade, Nuclear Power, Energy Efficiency, Renewable Energy, Hydrogen, Methane Hydrates, and Clean Fossil Energy. JODI is a collaborative oil information collection program undertaken by APEC, OPEC, IEA, IEF, and UNEP.

Current Activities

The 8th APEC Energy Ministers Meeting (EMM8) was held in Darwin, Australia on May 27-30, 2007. The discussion focused on improving energy efficiency and support for the development and deployment of cleaner and more efficient energy technologies.

Energy Ministers directed officials to improve energy efficiency by:

setting individual goals and action plans;

collaborating with the IEA to develop energy efficiency indicators;

sharing information on energy efficiency policies and measures;

encouraging APEC economies to contribute to and utilize the APEC Energy Standards Information System (ESIS); and

establishing an Energy Peer Review Mechanism, which will be a useful way to take these efforts forward on energy efficiency.

�Energy Ministers agreed to develop and deploy cleaner and more efficient energy technologies and also determined that addressing the challenges of energy security and sustainable development should be based on well-functioning markets and directed the Energy Working Group to contribute to the proposed APEC Energy Trade & Investment Study and Roundtable.

At its 34th meeting in Hong Kong, China in September 2007 members reviewed the ongoing implementation of the APEC Energy Security Initiative (ESI), implementation of the Darwin Declaration from EMM8, and discussed the EWG work plan. EWG35 will be hosted by Peru in Iquitos in the first week of March 2008. Concurrent to the EWG meeting was that held by the Energy Business Network (EBN). �The EBN Chair noted the importance of developing linkages with ABAC as an opportunity to relate energy messages and recommendations to APEC Leaders.