Southeast Asia’s energy chiefs meet against backdrop of Iran war

Southeast Asia’s energy ministers are meeting this week to discuss regional energy security against the backdrop of supply disruptions caused by the US-Israel war on Iran.

The gathering of the Association of Southeast Asian Nations (ASEAN) on Wednesday and Thursday comes as the region is seeking to lessen its dependence on energy supply chains upended by conflict in the Middle East.

The meetings in Manila, the Philippines, are expected to discuss various initiatives on energy cooperation and clean energy, including a framework on fuel-sharing and the integration of the region’s power grids.

ASEAN, one of the world’s fastest-growing economic blocs with a combined gross domestic product (GDP) of more than $4.2 trillion, is heavily dependent on imported oil and natural gas.

ASEAN’s 11 member states imported about half of their oil needs from the Middle East before the start of the Iran war in late February, leaving them highly exposed to supply constraints stemming from the effective shutdown of the Strait of Hormuz.

The Philippines, the current chair of ASEAN, declared a national energy emergency within weeks of the start of the war amid warnings that fuel supplies could run dry in 45 days.

Other ASEAN economies, including Thailand, Vietnam, Indonesia and Cambodia, rolled out energy-conservation measures ranging from work-from-home arrangements to fuel rationing.

Rising demand

“What happens in global energy markets can quickly reach our shores, affecting the cost and availability of fuel, disrupting industries, and putting pressure on households,” Philippine Energy Secretary Sharon S Garin said in a statement issued on Sunday ahead of the meetings.

“Our ASEAN Chairship is an opportunity to translate regional cooperation into practical arrangements that strengthen our collective ability to prepare for and respond to disruptions.”

While Southeast Asia’s per capita energy demand has risen by nearly 30 percent over the past decade, oil production in the region has fallen by 40 percent from its 1990s peak, according to the International Energy Agency (IEA).

Electricity demand in the region, home to more than 700 million people, is projected to rise by an average of 5.4 percent annually from 2026 to 2030, according to the IEA.

IEA Executive Director Fatih Birol warned on Monday that Southeast Asia would face challenges meeting its growing energy needs amid an “uncertain global energy landscape”.

“Energy security must be built into decisions across the whole system from oil stocks and gas infrastructure to electricity grids and more efficient use of energy,” Birol said in a statement.

“By working more closely together, ASEAN countries can make better use of their collective resources and respond more effectively when disruptions occur.”

Dinita Setyawati, head of Southeast Asia research at the energy think tank Ember, said that ASEAN ministers will bring different priorities to the table during their discussions.

“For the Philippines, this would be to take part of the ASEAN Power Grid via secured funding and governance that would oversee undersea cable connections,” Setyawati told Al Jazeera.

“For Singapore, it is probably to further solidify commitments from neighbouring countries to export clean electricity to the country, for example, Singapore-Indonesia connections,” Setyawati added.

“There will be countries who are interested in developing a regional carbon market to expand clean energy financing.”

Integration struggles

Despite efforts going back decades, ASEAN has struggled to follow through on its plans for deeper energy integration across the bloc.

Only nine of 18 projects identified as priorities under the ASEAN Power Grid initiative have been completed since the plan was first mooted in the late 1990s.

Unlike the European Union, ASEAN lacks a central, supranational authority and cannot pass or enforce laws, a structure critics say hampers the bloc’s effectiveness.

Laurence Delina, an associate professor at Hong Kong University of Science and Technology who specialises in energy policy in Southeast Asia, said ASEAN’s rhetoric has long exceeded its achievements, with cooperation largely limited to bilateral energy-sharing agreements.

“It has no enforcement power like in the EU,” Delina told Al Jazeera.

Delina said integrating the region’s energy grid would be as much a political as a technical challenge.

“I don’t know if I can see it eventuating in my lifetime,” Delina said.

“Although it’s a region, the context is really different across countries,” he added.

“It’s not actually a regional market. It’s very different from country to country.”

Setyawati at Ember expressed optimism that ASEAN ministers will commit more funding to renewables and electrification to reduce the region’s dependence on fuels.

“Current data for Southeast Asia shows electrification is around 25 percent from total final energy consumption,” Setyawati said.