Interview: Scarcer, more expensive gas slows Asia's energy transition, expert warns-Xinhua

Interview: Scarcer, more expensive gas slows Asia's energy transition, expert warns

Source: Xinhua| 2023-03-15 23:41:45|Editor:

HOUSTON, March 15 (Xinhua) -- The global energy market was on a roller coaster in 2022, leading to "essentially less available and a lot more expensive" gas for Asia, which slows the continent's energy transition, especially in Southeast Asia, an energy expert has said.

"We saw quite a bit of volatility in the natural gas market in Asia in 2021 and 2022. And it's continuing in 2023," Paul Everingham, executive director of the Asia Natural Gas and Energy Association (ANGEA), told Xinhua in an exclusive interview during the global energy forum CERAWeek. The Singapore-based ANGEA represents natural gas and energy producers, buyers, suppliers and companies across Asia.

As the Russia-Ukraine conflict evolved, Western European countries, in particular Germany, came into the gas market last year as premium buyers, he said, adding their significant demand drove gas prices to record levels.

As a result, quite a few south and southeast Asian nations, including India, Indonesia, Vietnam and the Philippines, switched back to coal-fired power generation last year, Everingham said.

"The European situation has really highlighted pretty much for every economy in the world that energy security is now top of mind for governments in all of those countries," he said. "We're seeing Asian economies trying to source gas for their own energy security wherever they can."

However, wealthy Western countries were able to pay whatever the cost to secure gas reserves, spurring severe competition in Asia for the remaining gas, he said.

"So a lot of the less modernized and poorer Asian countries like those in Southeast Asia were unable to afford gas. And they had to look at alternatives," he said, citing scarce solar or wind assets in Southeast Asia that prompted the switch from gas to coal.

This is "a step backwards in terms of the progress that was being made towards a decarbonized economy and a lower emissions future," the expert said.

A recent report by Shell found that Europe imported 45 million tons more of liquefied natural gas in 2022 than the previous year, while the demand for gas shrank by 6 million tons in Southeast Asia.

"Economic conditions for gas will remain unfavorable for at least the next two to three years, which will mean that the price of gas will remain historically elevated until probably 2025-2027," Everingham said.

"That won't help the transition. What we need for a successful transition essentially is to have those economies using natural gas with renewables," he added.

With less gas being available and affordable, Asia, especially Southeast Asia, will have to slow their energy transition, he warned, saying it's widely agreed across Asia that gas "plays a big role" in decarbonization efforts.