“Then the component of the labour will go out of the whole economic-macroeconomic equations. Once the labour component is out, it is left with the IT, and the energy cost will be the bottom line,” Bose said.
Energy cost is the single biggest driver of competitive advantage for ASEAN manufacturing and therefore tariffs paid by electricity users must come down, or cost increases must be suppressed.
Yet coal, on which much of the region depends, has seen soaring prices both in the capital costs of plant construction and in fuel: Bose noted that since around 2007, the international price of coal has risen from around US$40 per tonne to a high of ~US$400 by 2022.
“That means also the marginal cost of energy has gone up. Coal is no longer cheap,” Shuvendu Bose said.
LNG costs will rise from 2030 onward, “because the old cheap gas fields are gone,” and the cost of investment in new fields is higher.
