SE Asia set to become net fossil fuel importer

Southeast Asia’s growth in electricity demand, at an average of 6 percent per year, has been among the fastest in the world. (Photo/ Asian Development Bank)
Updated 31 October 2019

SE Asia set to become net fossil fuel importer

  • Growing reliance on imports also raises concerns about energy security

SINGAPORE: Southeast Asia could become a net importer of fossil fuels in the next few years, the International Energy Agency (IEA) said in a report.

Southeast Asia was already a net oil importer at 4 million barrels per day (bpd) in 2018, while strong growth in demand for natural gas has reduced the surplus of gas for export, the world’s energy watchdog said.

For coal, output from the region’s top producer, Indonesia, remained well above 400 million tons of coal equivalent last year but increases in domestic demand and exports to China and India could reduce its surplus, the IEA said.

“These trends point to Southeast Asia becoming a net importer of fossil fuels in the next few years,” the agency said.

The region’s overall surplus of supply over demand at 120 million tons of oil equivalent (mtoe) in 2011 had been eroded to just above 30 mtoe in 2018, it said.

Growing reliance on imports also raises concerns about energy security, the IEA said. For example, the region’s overall dependence on oil imports is forecast to exceed 80 percent in 2040, up from 65 percent today.

With no change in policy, Southeast Asia’s energy demand is expected to grow by 60 percent by 2040, accounting for 12 percent of the rise in global energy use as its economy more than doubles, the IEA said. This was slower than the region’s 80 percent growth since 2000.

Southeast Asia’s growth in electricity demand, at an average of 6 percent per year, has been among the fastest in the world, the IEA said. Still, some 45 million people there still lack access to electricity. The region is well on the way to achieving universal access to electricity by 2030, it added.

Oil demand in Southeast Asia, home to nearly 10 percent of the world’s population, would surpass 9 million bpd by 2040, up from just above 6.5 million bpd now, the IEA said.

“Oil continues to dominate road transport demand, despite an increase in consumption of biofuels,” the IEA said.

“Electrification of mobility, with the partial exception of two and three wheelers, makes only limited inroads. This pathway suggests little change in Southeast Asia from today’s congested roads and poor urban air quality.”

HIGHLIGHTS

• Renewable power in the Southeast Asia is expected to rise to 30 percent by 2040.

• The region is on way to universal access to electricity by 2030

Demand for coal is also projected to rise steadily over the coming decades, largely fuelled by new coal-fired power plants, despite headwinds facing such projects that include increasing difficulty to secure competitive financing for new facilities.

The IEA said the region’s increasing reliance on imports of natural gas made the fuel less price-competitive though it appeared to be a good fit for the fast-growing cities and lighter industries in the region.

“In our projections, it is industrial consumers rather than power plants that are the largest source of growth in gas demand,” the IEA added.

Renewable energy is set to play a larger role, but without stronger policy frameworks the share of renewables in power generation would rise only to 30 percent by 2040, from the current 24 percent, the IEA said.

Wind and solar energy are expected to grow rapidly, while hydropower and modern bioenergy — including biofuels, biomass, biogas and bioenergy derived from other waste products — would remain the mainstays of Southeast Asia’s renewables portfolio.


Cirque du Soleil walks a tightrope through pandemic

Updated 47 min 34 sec ago

Cirque du Soleil walks a tightrope through pandemic

  • Suitors wage backstage battle to rescue debt-stricken Canadian circus icon
  • Among the potential bidders is former fire eater Guy Laliberte, who fouded the acrobatic troupe in 1984

MONTREAL: Its shows canceled due to the COVID-19 pandemic, an already heavily indebted Cirque du Soleil’s fight for survival has invited an intense backstage battle to try to save the Canadian cultural icon.

High on a list of potential suitors is former fire eater Guy Laliberte, who founded the acrobatic troupe in 1984 but later sold it.

“Its revival will have to be done at the right price. And not at all costs,” said the 60-year-old, determined not to see his creation sold to private interests.

The billionaire clown said after “careful consideration,” he decided “with a great team” to pursue a bid, but offered no details.

Under his leadership, the Cirque had set up big tops in more than 300 cities around the world, delighting audiences with contemporary circus acts set to music but without the usual trappings of lions, elephants and bears.

Then the pandemic hit, forcing the company in March to cancel 44 shows worldwide, from Las Vegas to Tel Aviv, Moscow to Melbourne, and lay off 4,679 acrobats and technicians, or 95 percent of its workforce.

Hurtling toward bankruptcy, the global entertainment giant and pride of Canada commissioned a bank in early May to examine its options, including a possible sale.

Meanwhile, shareholders ponied up $50 million in bridge financing for its “short-term liquidity needs.”

Laliberte, the first clown to rocket to the International Space Station in 2009, ceded control of the Cirque for $1 billion in 2015.

It has since fallen into the hands of American investment firm TPG Capital (55 percent stake) and China’s Fosun (25 percent), which also owns Club Med and Thomas Cook travel. The Caisse de depot et placement du Quebec (CDPQ) retains the last 20 percent.

The institutional investor, which manages public pension plans and insurance programs in Quebec, bought Laliberte’s last remaining 10 percent stake in the business in February, just before the pandemic.

Since 2015, the Cirque has embarked on costly acquisitions and renovations of permanent performance halls, while its creative spirit waned, according to critics in the Quebec press.

Meanwhile, it piled on more than $1 billion in debt.

Fearing that the Cirque would be “sold to foreign interests,” the Quebec government recently offered it a conditional loan of $200 million to help relaunch its shows as restrictions on large gatherings start to be eased worldwide.

But the agreement in principle is conditional on the Cirque headquarters remaining in Montreal and the province being allowed to buy US and Chinese stakes in the company at an unspecified time in the future, “at market value” and with “probably a local partner,” said Quebec Minister of the Economy Pierre Fitzgibbon.

“The state does not want to operate the circus, but the circus is too important to Quebec (to leave it to foreigners),” he said.

In addition to Laliberte, other prospective buyers include Quebecor, the telecoms and media giant of tycoon Pierre Karl Peladeau, whose opening lowball bid was outright rejected.

“It is essentially the value and reputation of the brand” that has piqued interest in the company, says Michel Magnan, corporate governance chair at Concordia University in Montreal.

But “as long as there are restrictions on gatherings of people, the future is not very rosy” for the Cirque, he said.

Several challenges await, according to Magnan.

“There were a lot of people working in all of these shows. Where are they now? What are they doing? How are they doing? In what shape are they, what state of mind?” he said.

“The more time passes, the more this expertise risks evaporating.”

Small consolation: The Cirque resumed its performances on Wednesday in Hangzhou, China, five months after a coronavirus outbreak in the city.