IEEJ：September 2018ｃ IEEJ 2018
○Special Bulletin
A Japanese Perspective on the International Energy Landscape (394)September 20, 2018

Participation in CEPSI 2018
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, JapanOn September 17-19, I had an opportunity to participate in the Conference of the ElectricPower Supply Industry (CEPSI) 2018 in the Malaysian capital of Kuala Lumpur. The bi-annual
CEPSI is hosted by electric utilities belonging to the Association of the Electric Supply Industry ofEast Asia and the Western Pacific (AESIEAP) in rotation. The latest or 22nd one was sponsored by
Malaysian electric utility Tenaga Nasional Berhad.
The large-scale conference attracted more than 2,000 participants as estimated by thesponsor, including Malaysian government officials, representatives from ASIEAP member
companies and relevant firms for electricity industry, and experts. Under the title “Reimaging Utilityof the Future,” they discussed the future course and wide-ranging challenges of the electric power
supply industry amid a global energy transition.
Malaysian Prime Minister Mahathir Mohamad attended the conference to give a specialaddress. Delivering a keynote address at the opening ceremony was Yeo Bee Yin who heads thenewly created Ministry of Energy, Science, Technology, Environment and Climate Change(MESTECC). When Prime Minister Mahathir made the special address at the Plenary Hall, many
audience members had no choice but to be standees, indicating his high popularity. In addition to thespecial address, a total of 17 keynote addresses were delivered in five keynote sessions accompanied
by six technical sessions. I took the opportunity to participate in Keynote Session 2. In the following,I would like to make comments on impressive points of the conference.
First, discussions at the conference were based on a common recognition that while energy
demand is expected to continue expanding over a long term mainly in Asia, electricity demand islikely to post particularly high growth in the so-called electrification of energy demand. Various
future energy scenarios commonly suggest progress in the electrification of energy demand. The
problem is how fast and strongly the electrification would progress. Many people at the conference
forecast the further acceleration of the electrification amid growing hopes on the electrification ofvehicles in the course of economic and social digitalization.
Electricity is indispensable for all countries and societies, and their citizens. The great
expansion of electricity demand or the growing electrification of energy demand means that thestable supply of indispensable electricity will grow even more significant for states, societies andcitizens. In this sense, the mission of the electric power supply industry will grow even more
important. For the electric power supply industry, the market is potentially destined to expand. The
industry is now required to explore business chances in the potentially growing market.
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IEEJ：September 2018ｃ IEEJ 2018
○Second, while various challenges emerging amid the market expansion were pointed out,participants in the conference gave rather optimistic prospects expecting technological solutions tothese challenges. Surely, the electrification will make global progress. Amid such progress, however,the power sector known as the largest carbon dioxide emission source will be required to continue
decarbonization initiatives over a long term. In emerging Asian economies including Malaysia, airpollution countermeasures are more urgent than climate change countermeasures. Therefore, greathopes are placed on the diffusion of clean electricity. In this respect, conference participants placed
expectations on renewable energy power generation that is expanding fast on rapid cost falls.
In the course of renewable energy’s rapid diffusion, decentralization, or a transition from
centralized power systems to distributed ones, will be a major reform. The expansion of intermittent
power sources, the decentralization and advanced demand control are expected to keep step with theabovementioned digitalization. I felt that most of the participants in the conference were optimisticthat the development and diffusion of advanced energy technologies attracting global interest now
would provide solutions to various power sector challenges.
As noted in the keynote address by MESTECC Minister Yeo Bee Yin, clean andeco-friendly energy and electricity are required and their supply must be made affordable in line witheach country’s conditions. It may not be easy to solve these challenges in a society in whichelectricity is growing even more important. At the conference, however, most of the participantspresented positive long-term prospects expecting technological solutions to these challenges.
Third, I would like to point out that there will be various challenges for the electric power
supply industry including incumbent utilities before technological solutions to these challenges areprovided in the far future and that how to overcome these challenges will be very important for theindustry. These challenges include spillover effects of power market deregulation. While most Asian
countries have yet to implement such deregulation, deregulated markets indicate very complicatedand difficult challenges such as how to secure investment and achieve politically desirable energy
mixes. Such challenges also include a decline in wholesale electricity prices and growing difficulties
in recovering capital costs (“the missing money problem”) that are accelerated by renewableenergy-based electricity’s massive inflow into a competitive wholesale power market.
At the same time, the electric power supply industry is growingly required to enhance its
measures against abnormal weather, natural disasters, cyberattacks and other risks as society grows
even more dependent on electricity amid progress in electrification. Amid dramatic changes in theworld and market, stable power supply is growing even more important.
As digitalization, decarbonation, decentralization and deregulation become keywords forelectricity, the electric power supply industry is urged to stably provide eco-friendly electricity ataffordable prices. Its missions or roles are very significant. The industry will be required to haveflexibility and innovativeness to adequately adapt to the changing market environment.

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