IEEJ：November © IEEJ 2022

Special Bulletin
A Japanese Perspective on the International Energy Landscape (609)

November 1, 2022

Discussion in Malaysia at 2022 Pacific Energy Summit
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, Japan
When I visited Malaysia on October 28-31, I participated in the 2022 Pacific Energy Summit
sponsored by the U.S. National Bureau of Asian Research and had an opportunity to exchange opinionswith Malaysian energy industry stakeholders and experts. After the first Pacific Energy Summit took
place in Tokyo in 2009, the summit was held in-person annually in major Asia-Pacific cities. The 10th
one came in Tokyo in October 2019 before a face-to-face conference failed to be realized in 2020 and2021 due to the COVID-19 outbreak. The latest Pacific Energy Summit in the Malaysian capital ofKuala Lumpur was the first face-to-face one in three years.
The number of participants in the Summit was limited to some 40 on a registration basis,including government officials, experts, energy industry stakeholders and others from not onlyMalaysia but also the United States, Japan, South Korea, Indonesia, Singapore and other countries.
Recently, energy security has become unprecedentedly important as the Ukraine crisis has destabilized
the international energy situation. Nevertheless, the world has been required to enhance
decarbonization initiatives to realize carbon neutrality. Furthermore, global geopolitical tensions haveexisted and been growing. Given these points, discussions among the Pacific Energy Summit
participants were timely.
The timeliness was reflected in the latest Pacific Energy Summit’s subtitle “Understanding
Southeast Asia’s Vision for Energy and Climate Security in the Indo-Pacific.” As the Association ofSoutheast Asian Nations, including Malaysia, is seen as one of the future energy demand growthcenters in the world, ASEAN energy security enhancement and decarbonization initiatives areexpected to become extremely important for the region and the rest of the world. In this sense, theconference was particularly important. I participated in the conference only on October 31. In thefollowing, I would like to comment on what I learned through the conference and my talks with
Malaysian energy stakeholders.
First, I felt that interest in nuclear energy was growing in the ASEAN region. In “A Japanese
Perspective on the International Energy Landscape (602),” I noted that nuclear energy was one of theimportant issues at my talks with Malaysian energy stakeholders. In my latest visit to Malaysia, there
was a discussion that Philippine President Bongbong Marcos has indicated an ambition to use nuclear
energy, with interest in nuclear energy growing in Indonesia as well. I felt that ASEAN is growinginterested in next-generation nuclear reactors such as small modular reactors in consideration ofwidely distributed electric demand and nuclear safety.
The nuclear energy trend in the world reached a turning point in the second half of last year.
As electricity prices have spiked amid fossil fuel price hikes, the tight electricity supply-demandbalance has become a global matter of concern. In October 2021, European Commission President
Ursula von der Leyen stated that nuclear was required for the European Union as a stable energy
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source. Later, French President Emmanuel Macron announced a plan for constructing new nuclear
power plants, triggering a series of developments toward nuclear power plant construction. Following
France, the United Kingdom came up with a nuclear power plant construction plan. East European
countries heavily dependent on Russian energy followed suit. Belgium announced a plan to extend theservice life of existing nuclear power plants. Germany, plagued with concern about serious energy
shortages, revised its plan for the phase-out of nuclear power plants within 2022 and decided tomaintain them as a backup power source until next spring. These measures were taken to keep stableelectricity supply and reduce electricity costs amid the destabilization of the international energy
market. Nuclear energy as a stable baseload electricity source is free from CO2 emissions as well. For
European countries with ambitious CO2 emission reduction goals, nuclear has rapidly grown importantas an energy source that can meet requirements for both stable electricity supply and climate change
countermeasures.
In Japan as well, the nuclear energy trend has dramatically changed. Prime Minister Fumio
Kishida has given instructions to promote the restart of idled nuclear reactors, revise the system forextending the service life of nuclear reactors and consider the construction of next-generation reactors.
Nuclear energy has been highlighted as a key means contributing to Japan’s 3E’s – energy security,environmental protection and economic efficiency. Major countries using nuclear energy in the world
are enhancing initiatives to develop next-generation nuclear reactors including small modular reactors.
This trend has been expected to spread throughout the world. Talks at the Pacific Energy
Summit led me to feel that the trend has spread to ASEAN. In ASEAN where energy demand is
expected to increase, nuclear energy is emphasized as a key option to promote decarbonization andsecure stable electricity supply in response to the energy security challenge symbolized by growing
dependence on energy imports. As a matter of course, however, the trend has just been seen as an very
early stage in ASEAN, falling short of producing specific policies or initiatives. It may not be easy for
ASEAN countries to adopt nuclear energy which could lead to sensitive political and social problems.
Political, technological and industrial infrastructure has not been sufficiently developed for the nuclear
energy option in ASEAN. While the nuclear option remains a long-term strategic challenge for
ASEAN, some ASEAN countries may enhance initiatives to introduce nuclear energy in considerationof growing interest in the option.
Second, I felt that ASEAN energy policy planners and energy industry decision makers facean extremely difficult situation, sandwiched between high ideals and realities. Many ASEAN countries
have announced the 2050 carbon neutrality goal, demonstrating their determination to pursue the goal.
They will promote initiatives supported by the high ideals to make maximum efforts to serve the global
interest of preserving the earth environment and preventing climate change. At the same time, however,they may have difficulties in deciding whether these initiatives would realize green growth including
economic and employment expansion. These initiatives could increase economic and social burdens
by boosting energy costs. Given that many people receive energy subsidies in ASEAN countries, it
may not be easy to pursue the ideals. ASEAN will have to follow an energy transition path to strike abalance between decarbonization and energy security enhancement while minimizing costs for thetransition.
In this respect, key points regarding ASEAN’s transition from coal as its major energy source
may include how to use natural gas and LNG effectively while promoting renewable energy, whether
to introduce nuclear energy, how to diffuse carbon capture and storage and other CO2 emission
reduction technologies and how to promote hydrogen and ammonia. ASEAN countries’ conditions aregreatly various and far different from those in developed countries. It will become even more important
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for ASEAN countries to take inclusive and pragmatic approaches on a steady energy transition inconsideration of their respective conditions. I felt that it is extremely important for Japan to understandthe ASEAN conditions sufficiently and cooperate with them in realizing energy transition.
Contact: report@tky.ieej.or.jp
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