Asia's Energy Transition Requires Pragmatic and Multi-Dimensional Solutions

In his Special Address during the SIEW Summit, Mr Amin Nasser, President and CEO of Aramco, shared critical perspectives about the challenges and realities of the global energy transition.

Prioritising the needs of Asia and the Global South

Mr Nasser stressed that Asia, accounting for almost 50 percent of global GDP and energy consumption, remains underrepresented in global energy transition planning. He highlighted that, despite Asia's economic significance, its priorities—along with those of the broader Global South—are often overlooked.

According to Mr Nasser, while this may be Asia's century, Asia's voice and priorities, like those of the broader Global South, are hard to see in the current transition planning, and the whole world is feeling the consequences.

Neglecting these regions could hinder global progress and stall energy transitions, especially in areas where conventional energy sources remain vital for economic development.

Challenges of the energy transition for developing countries

Mr Nasser highlighted that the current energy transition is too slow and unaffordable for many developing countries. He pointed out that while countries in the Global North have made significant strides in renewable energy, the prohibitive costs of new technologies and infrastructure have left many countries in the Global South behind. 

He cautioned against trying to force an unworkable and unaffordable transition plan on them as this will only hinder their economic progress and even social cohesion. Without affordable solutions, many developing countries may continue to rely on high-emission fuels, exacerbating global emissions. Without affordable solutions, many developing countries may continue to rely on high-emission fuels like coal, exacerbating global emissions

A pragmatic, multi-dimensional energy approach
Mr Nasser advocated for a multi-source, multi-speed, and multi-dimensional strategy, acknowledging the role of conventional energy sources like oil and gas, especially for developing countries. And that we should really be talking about energy addition and not just energy transition. He underscored the need for continued investment in both renewable and conventional energy, recognising the complexities of global energy demands.

Tailored energy mixes for each country

Mr Nasser argued against a one-size-fits-all approach, stating that each country should have the freedom to develop an energy mix that aligns with its unique economic and environmental conditions.

He also asked planners to stop assuming that the world can replace its conventional energy needs with half-baked alternatives almost overnight. He added that this assumption discourages investment in these crucial conventional sources, as well as necessary investments in conventional energy. Each country's energy strategy should be designed to reflect its stage of development, access to resources, and infrastructure.

Balancing affordability, reliability, and sustainability

One of Mr Nasser's key points was that the energy transition must prioritise affordable and reliable energy alongside sustainability. He cautioned that without affordable solutions, this could lead to a resurgence of the world’s most carbon-intensive fuel: coal. He highlighted that in the last year alone, coal demand increased by 2 million barrels of oil equivalent.

Mr Nasser stressed that unless renewable energy technologies like solar, wind, and hydrogen become both cost-effective and reliable, global decarbonisation efforts could be undermined. Continued investment in technologies that can reduce the cost of renewables is crucial to ensure that the energy transition remains both economically and environmentally viable.

Mr Nasser's address at the SIEW Summit 2024 underscored the need for a balanced, inclusive, and pragmatic approach to the global energy transition. His insights highlighted the importance of tailored solutions and ongoing collaboration to achieve a just and effective transition for all.

Stay tuned as the conversation evolves throughout the day. Follow @SIEW_sg on Telegram and Twitter for key insights, as we navigate Day 1 together.