Asia is growing – and there’s much more to come
Asia is home to more than half the world’s people, including four of the five most populated countries on the planet (India, China, Indonesia and Pakistan). According to United Nations data, seven of the 16 countries with more than 100 million people are located in Asia.
Economic activity in Asia is projected to increase massively over the next few decades – largely on the back of rapid growth from emerging economies. Data published by the US Energy Information Administration (EIA) suggests the Asia Pacific region’s economic output could increase by 267 per cent to 2050 under a high economic growth scenario.
Powering Asia’s growth story
Projected economic growth is critical for Asia, as it will improve the living standards of hundreds of millions of people. Although Asia is home to advanced economies such as Japan, South Korea, Singapore and Taiwan, GDP per capita across the region is significantly lower than many other regions and countries.
Economic growth requires energy. And the enormous scale of economic growth projected for Asia will be accompanied with a similarly significant rise in energy use. Under its high economic growth scenario, the EIA forecasts Asia using 72 per cent more energy in 2050 than it does now. Most of this growth will come from emerging Asia. While energy use is predicted to decline in Japan and increase only marginally in South Korea to 2050, in India it is envisioned to more than triple.
The energy Asia uses will matter
The energy sources Asia uses to power its economic growth are of global importance. No region in the world is as dependent on coal, which is the major source of power generation for some of Asia’s fastest growing economies.
Graph thanks to Visual Capitalist.
Coal’s share in Asian electricity production has climbed by nearly 20 percentage points since the mid-1980s and it has supported economic growth in emerging economies – which value its affordability and availability. However, if their reliance on coal continues, regional and global emissions reduction targets will not be met. Countries around Asia have established a range of net zero and carbon neutrality targets – from 2050 to 2070 – and will need to significantly decarbonise energy systems to achieve their goals.
The case for gas in Asia
Although natural gas has a wide range of uses – including as a feedstock for key industrial processes – its greatest impact in Asia over coming decades could be in power generation. The International Energy Agency has found coal-to-gas switching reduces emissions by an average of 50 per cent in electricity production. Gas offers air quality benefits when replacing coal in power generation.
Gas is also a natural fit alongside investment in renewable energy, as a highly reliable counter to intermittent renewable power generation during periods of low sunlight and/or winds.
The ability of emerging nations in Asia to substitute gas for coal at significant scale will depend on both affordability and availability of gas, as well as ongoing security of supply being sufficient to warrant long-term investments in gas infrastructure. In turn, this will require gas-exporting nations around the world to continue to bring on major projects in the decades ahead. Asia lacks the gas resources to be self-sufficient, meaning it is reliant on liquefied natural gas (LNG) imports from other regions.
High-profile voices on gas
Other energy options for Asia
Asia’s energy landscape in 2050 is expected to look a lot different to what it does now. While coal use is projected to decline across the region – switched out for gas in many instances – and investments in renewable energy will continue, development of new fuels could also help shape Asia’s energy future. Likely options include hydrogen and one of its derivatives in ammonia.
Hydrogen and ammonia, which do not emit CO2 when combusted, are already embedded in future energy planning for nations such as Japan, South Korea and Singapore. Japan launched Asia’s first hydrogen plan in 2017 and now plans on investing $107 billion on supply of hydrogen and its derivatives over the next 15 years, with targets of 12 million tonnes a year by 2040 and 20 million tonnes by 2050.
Carbon capture and storage (CCS) is a technology that will be essential to decarbonisation in Asia. In addition to having the capacity to significantly reduce emissions from power generation, it can support decarbonisation of hard-to-abate industries such as steel, cement and chemical manufacturing. By 2050, it is projected that CCS in Asia could constitute up to 3 gigatonnes of CO2 per annum.
