Brunei Darussalam prioritises renewable energy to confront climate change

Although its dominant oil and gas sector will likely remain at the forefront of economic growth over the medium term, Brunei Darussalam has prioritised sector diversification and development of renewable energy projects in recent years, as highlighted by the 2014 “Energy White Paper”, as well as a climate change plan released prior to the COP21 UN Conference on Climate Change, hosted in Paris in late 2015.

These policies outline an ambitious long-term renewables development strategy emphasising solar projects, private sector participation, and a significant reduction of domestic oil and gas consumption, benefitting the Sultanate by freeing up more oil and gas for export and petrochemical production, in addition to reducing the impact of climate change, and providing new investment and employment opportunities in burgeoning future industries.

Energy White Paper

As outlined in the government’s “Energy White Paper”, published in 2014 and encapsulating a host of long-term energy sector targets – including boosting oil production, investing in overseas oil projects, reducing primary energy consumption and development of renewable resources – climate change represents a significant threat both to South-east Asia and the Sultanate.

The report notes that hydrocarbons production has contributed to higher levels of CO emissions in the atmosphere, and that the consequences of this – severe drought, major floods and heatwaves – present a particular challenge for small island developing states. It further argues that international commitments to limit the global temperature rise to 2°C at the end of the 21st century are technically feasible, and that the energy sector, which contributes two-thirds of global greenhouse gas emissions, should take steps to reduce its environmental impact.

IEA Guidelines 

The paper also takes note of International Energy Agency (IEA) suggestions for measures necessary to reduce CO emissions, including energy efficiency policies, limiting the construction and use of inefficient coal-fired power plants, minimising methane emissions from upstream oil and gas production and phasing out subsidies on fossil fuels. The IEA recommends that countries improve the resiliency of energy systems to climate change – meaning development of renewable energy projects, as well as encouraging the private sector to consider climate risks and impact in their investment decisions.

Fossil Fuels Vs Solar

At present, 99% of Brunei Darussalam’s power is generated by natural gas, which emits 4.2m tonnes of CO equivalent every year, according to a December 2015 report in The Brunei Times. Oil and gas production, which accounts for over 60% of GDP, emits 3.3m tonnes of CO equivalent annually, and Brunei Darussalam’s total CO emissions are an estimated 10m tonnes annually. The Tenaga Suria Brunei Photovoltaic Power Generation Demonstration Project (TSB Project) is Brunei Darussalam’s sole large-scale renewable energy project. The plant is located at the former Seria Power Station, and was jointly developed by the local government and Mitsubishi Corporation. The TSB Project’s photovoltaic (PV) system offers a nominal capacity of 1.2 MW, and is capable of generating 1.3 GWh of electricity annually, saving the Sultanate 340,000 litres of crude oil each year, and reducing CO emissions by 2.1m kg. Construction of the TSB Project began in August 2009, was completed in 2010 and the plant was officially inaugurated in 2011.

Renewable Targets

Having embraced the idea that mitigating climate change is an important policy consideration, the “Energy White Paper” sets a number of ambitious renewable energy targets, with the goal of reaching 124 GWh of renewable power generation by 2017, and 954 GWh by 2035. The paper also hopes to see Brunei Darussalam renewables provide 10% of total energy demand, and reduce energy intensity from a base of 390 tonnes of oil equivalent per $1m of GDP in 2005, to 215 tonnes by 2035, in addition to emphasising the government’s leadership role in development of land for utility-scale solar projects, as well as new waste-to-energy projects. Private sector participation will be critical for these targets, as will smaller-scale, private renewable projects, with the Energy and Industry Department of the Prime Minister’s Office announcing plans in September 2013 to introduce a feed-in-tariff system which will encourage investment in projects such as personal, commercial and government PV solar panel systems. Any excess power generated by these projects would be sold back to the national grid.

The government has also pursued a $1bn loan with the Export-Import Bank of the US, which would be used in part to finance new energy, including renewable energy projects, while private sector interest in Brunei Darussalam’s renewables sector appears to be growing. In March 2016 Taiwanese firm KD Holding told local media that the company is interested in forming a public-private partnership for a renewable energy project. The company has already developed PV solar and biofuel power plants in Taiwan, China and the US, although further details of its proposed Brunei Darussalam project were not made public.

Paris Plan

In November 2015, ahead of COP21, Brunei Darussalam’s Ministry of Development submitted an Intended Nationally-Determined Contribution (INDC) climate change action plan to the UN Framework Convention on Climate Change, restating its ambitious plan to reduce energy consumption and bolster renewables development, in addition to new CO emissions reduction targets. The plan was developed in partnership with global environmental consultancy Ricardo Energy & Environment, and joined 150 other INDCs issued by countries representing 90% of global emissions. At COP21, hosted in Paris in December 2015, 195 countries including Brunei Darussalam adopted by consensus a global action plan which seeks to limit global warming to 2°C or less, and which comes into force in 2020. Brunei Darussalam’s INDC takes into account specific initiatives including the “Energy White Paper” and the Heart of Borneo rainforest conservation plan, a trilateral agreement signed with Malaysia and Indonesia in 2005 in which signatories agree to share responsibility for the remaining intact band of forest in the centre of the Borneo. Under the INDC, the country plans to reduce the rate of total energy consumption and emissions from morning peak-hour vehicle use by 63% and 40%, respectively, as previously stated in the “Energy White Paper”. Brunei Darussalam also aims to increase the total area of forest reserves in the country to 55% of its total land area (from 41% in 2008), as well as increasing the share of renewable energy sources generating power to 10% by 2035.

Conservation Progress

Climate action and conservation efforts were a priority prior to COP21. Brunei Darussalam has taken pains to protect its rain-forest, and in addition to signing the Heart of Borneo agreement, the Sultanate has opened just 1 sq km of Ulu Temburong National Park to tourists out of a total area of 500 sq km. Although illegal logging of agar-wood trees remains a concern, the Sultanate’s limited forest resources are harvested under stringent guidelines encapsulated under the Forestry Master Plan. Export of logs and timber is banned, according to a 2012 report by the European Forest Institute, with the Sultanate implementing a reduced-cut policy with a quota of 100,000 cu metres per year, of which sawn logs production accounts for just 15,000 cu metres. The Brunei Times reported in December 2015 that under the new INDC plan, logging activities will be restricted to an area of just 300 sq km, or 5.2% of the Sultanate’s total land mass. Authorities are also making progress in reducing energy consumption – at the UN Climate Summit, hosted in New York City in 2014, His Majesty Sultan Haji Hassanal Bolkiah announced that Brunei Darussalam had already managed to reduce energy consumption by 13.9% in 2013 – although plenty of room for improvement and reform remains, particularly in transportation emissions and biofuels development.

Challenges

For example, Brunei Darussalam’s plan to significantly reduce morning peak-hour vehicle emissions will require authorities to implement the Land Transport Master Plan, which outlines measures to limit the net increase in CO over 2012 to 67% in 2035, compared to a projected 178% under current circumstances. In January 2016 the Economic Research Institute for ASEAN and East Asia, of which Brunei Darussalam’s National Energy Research Institute is a member (see analysis) published a report which noted Brunei Darussalam is the only ASEAN country that does not currently have a target to incorporate biofuels into the transportation sector, in contrast to neighbouring countries such as Malaysia, which aims to replace at least 5% of diesel with biodiesel by 2030, and Thailand, which aims to replace 12.2% of transportation energy with biofuel.