The energy world looked very different when I began my career 30 years ago.
One of the biggest changes has come from South-east Asia, which back then was only beginning to emerge on the global energy scene. As we celebrate the 10th edition of Singapore International Energy Week and the 50th anniversary of Asean (Association of South-east Asian Nations), it's a good time to not only look back at how far the region has come, but also to look forward to the opportunities and challenges the region is likely to face in the future.
The changes I've seen in South-east Asia over the course of my career have been profound.
For example, electrification was scarce in many parts of the region when I was a student. Yet by the time I joined the International Energy Agency (IEA) in the mid-90s, electrification was expanding rapidly and becoming a force for economic growth. The percentage of people with access to electricity in Lao People's Democratic Republic (Lao PDR) was just 12 per cent in 1994, but over the following 20 years, that figure has flipped on its head - now only about 12 per cent of people in Lao PDR lack access to electricity.
Economic growth has been similarly staggering in the region.
In 1994, Gross Domestic Product (GDP) in Singapore, for example, was just under US$100 billion (S$136 billion). Two decades later, its GDP has almost tripled in size.
Vietnam's economic growth has been equally impressive, growing from around US$40 billion in 1994 to close to US$150 billion today, more than a threefold per capita increase. Other countries in the region have shown similar economic success.
Growth in the energy sector also been remarkable. For example, Malaysia has more than doubled its production of natural gas, while Indonesia went from producing insignificant amounts of coal to being one of the world's largest coal exporters. Meanwhile, the region as a whole has increased power generation from hydro by almost 400 per cent since 1994.
These last few decades have been defined by such rapid growth - and there is more growth yet to come. This is a region on the rise and almost every country has a remarkable energy story.
Singapore is a major trading hub for oil and oil products and is well on its way to becoming the same for liquefied natural gas (LNG). The Philippines is the world's second largest producer of geothermal power. Thailand is a leader in energy efficiency with its Integrated Energy Blueprint. Vietnam is a remarkable success story in terms of access to energy, increasing rural electrification to almost 98 per cent. Indonesia is a globally important producer of coal, oil and natural gas. Lao PDR is a major exporter of electricity, having tripled its power exports since 2000. Malaysia is having success encouraging the expansion of renewable power through feed-in-tariffs and other policy measures. Brunei is a major exporter of oil and natural gas, and Myanmar and Cambodia have the resources available to become significant producers and exporters of hydropower in the coming decades.
These are stories of success and potential. But success comes with a price - energy demand is set to increase dramatically. It is demand for electricity specifically that will shape the energy outlook for the region over the coming decades. In all, some 400 gigawatts of generation capacity are set to be built by 2040 - roughly equal to the combined installed capacity of Japan and Korea today - of which a significant amount will be coal-fired. In fact, South-east Asia is one of the only regions in the world that will see a rise in its share of coal for power generation.
This is understandable: coal is relatively inexpensive and abundant. But it highlights the need to significantly accelerate the deployment of more efficient technologies to cut down on not only carbon dioxide emissions, but also air pollution. Many countries in the region are asking us now if it is possible to balance the priorities of access to energy, economic growth, emissions reductions and clean air.
My response is: yes, it is possible. But it won't always be easy.
It starts with cooperation, something that South-east Asia has decades of experience with. Projects like the Asean Power Grid and the Trans-Asean Gas Pipeline can help to accelerate the development of more remote or high-cost energy resources while enhancing energy security. Bringing together the region's energy markets and grids could be a key factor in ensuring balanced and equitable economic growth for all countries in the region.
It will also require investment. In fact, securing the region's energy needs could require US$2.5 trillion of cumulative investment over the coming 25 years, more than half of which would be for the power sector. A further US$420 billion would be needed for energy efficiency. It is policy makers who will play a critical role in setting the conditions to attract and mobilise this investment.
The region's challenges are significant, and they will require smart policy, technological innovation, market reforms and timely investment. With the right efforts, South-east Asia can continue the momentum of the past 25 years to build on its position as one of three growth centres in Asia.
It has been fascinating to follow South-east Asia's rise in the global energy sector throughout my career. When I first joined the IEA as a junior analyst, I could not have imagined that one day as Executive Director, I would have the honour of inviting not only China and India into the IEA family as Association members, but also three Asean member countries: Indonesia, Singapore and Thailand.
This expansion of the IEA family to Asia has been a milestone for the IEA, representing a shift to emerging countries that are increasingly shaping the world's energy dynamics. It also defines a historic few years for global energy governance as the world engages in the greatest energy transition since the Industrial Revolution. I look forward to continuing this journey with South-east Asia as these countries stake out their positions as strong, sustainable, responsible and innovative energy leaders.
Dr Fatih Birol is the Executive Director of the International Energy Agency.
This is an excerpt from Rethinking Energy; Navigating Change: 10 Global Insights, a commemorative book to mark the 10th edition of Singapore International Energy Week (Siew). Dr Birol will be speaking at Siew, which runs till Oct 27.