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The ASEAN Centre for Energy (ACE) expects Southeast Asian
nations to boost renewable energy deployment following their
climate pledges in recent quarters.
Among the 10 member states of the Association of Southeast Asian
Nations (ASEAN), nine are aiming for net-zero emissions by 2050 or
later to help counter climate change. The Philippines is the sole
exception.
In a virtual forum 11 January, analysts from ACE—a research
body of ASEAN—said Southeast Asian countries are set to design
and implement more policies to expand low-carbon energy sources
soon in order to meet their emissions goals.
Muhammad Rizki Kresnawan, a research analyst specialized in
modelling and policy planning at ACE, suggested regional
governments could provide more financial incentives to promote
renewable installations in the coming years.
"2022 could be a turning point for the ASEAN region to keep up
its energy transition efforts," Kresnawan said. "Proper fiscal
mechanism[s] for providing green recovery packages in the
post-pandemic [years] are expected to hold a crucial role in
bouncing the economy back while still aligning it with climate
goals."
The nine ASEAN members with net-zero targets made their
pledges in 2020 and 2021 when their economies took heavy hits from
the COVID-19 pandemic.
ASEAN is targeting a 23% share of renewables in total primary
energy supply and a 35% share in installed power capacity by 2025.
The intergovernmental organization also wants to see a 32% energy
intensity reduction from 2005 levels.
The latest ACE figures show ASEAN had a
13.9% renewable share of primary energy and a 28.7% share of power
capacity in 2019. But the region had already achieved a 21.8% cut
in energy intensity by that point.
Indonesia, Thailand, and Vietnam are expected to see some of the
largest renewable capacity expansions in Southeast Asia in 2022,
according to ACE.
In Indonesia, two floating solar plants—one 40-MW power
station at a Krakatau Steel facility, and one 145-MW station in
Cirata, West Java—are due to come online this year.
Thailand has plans to have 1.77 GW of capacity installed this
year, the majority of which will be renewable, ACE said.
Having granted approval for 11.8 GW of wind power by the end of
2021, Vietnam is expected to see 488
MW installed in 2022.
According to ACE, ASEAN members are seeking a diverse mix of
renewable energy sources to maintain grid stability.
"Due to their intermittent nature, solar and wind are definitely
insufficient," an ACE research paper said.
"The members recognize the potential of renewable baseload sources
like hydropower, geothermal, and biomass to solve the net-zero
equation in power generation."
ACE is due to release more electricity data in the 7th ASEAN
Energy Outlook report later this month.
Mega trade deal
Separately, some energy experts suggested the Regional
Comprehensive Economic Partnership (RCEP) could help accelerate the
low-carbon transition by facilitating more renewable investment,
trade in equipment, and transfers of green technologies.
Hailed as the world's largest trade agreement by GDP, RCEP was
signed by Australia, China, Japan, New Zealand, South Korea, and
the 10 ASEAN nations. It came into force 1 January.
"RCEP is expected to bring more growth for its members. … Deals
among the members could leverage investment to fuel the energy
transition," Kresnawan said.
However, there are also doubts over whether the RCEP could
actually promote renewable expansion, as the trade deal principally
does not discriminate against energy sources based on their carbon
intensity. When it comes to tariff removals, green energy is not
favored over fossil fuels.
"RCEP is neutral with regards to climate change requirements,"
said Alloysius Joko Purwanto, a senior energy economist at the
Economic Research Institute for ASEAN and East Asia. "We should
work on … the optimization of RCEP to assist the energy
transition."
Jennifer Tay, who heads advisory firm PwC's infrastructure team
in Singapore, suggested that the trade deal does not feature
low-carbon energy trade in particular but could facilitate more
capital flows overall.
"It remains to be seen in terms of implementation," Tay
said.
Climate finance
Tay already saw strong appetite from the private sector for
low-carbon investments. She estimated that nearly $81 billion was
raised globally in the first three quarters of 2021 by
infrastructure investment funds. Of that total, 61% will focus on
renewable energy projects.
"In the last 12 months, we have seen a lot of fundraising
happening in the market," she said. "We see some of the capital
being deployed."
Tay observed that project developers, strategic investors, and
infrastructure fund managers are keenest for solar power to expand
in Southeast Asia, with wind coming in second.
Vong Sok, head of the environment division at the ASEAN
Secretariat, suggested investors could also look for funding from
the public sector.
During COP26, the Asian Development Bank
secured a total of $665 million from the UK, the EU, Cassa Depositi
e Prestiti, and the Green Climate Fund to help develop
post-pandemic green infrastructure projects in Southeast Asia.
The Manila-based development bank separately launched the Energy
Transition Mechanism to accelerate the replacement of coal power
with renewables in the region.
"I think if an ASEAN member gets involved in a sector and makes
use of these opportunities, this would create some good things,"
Sok said.
With ASEAN members aligning their national policies with the
long-term climate goals, the decarbonization efforts are expected
to spread from the power sector to other industries—and ACE
expects this to prompt development of new, low-carbon
technologies.
"Reaching net zero is indeed challenging, but I believe it
provides a clear bar to ensure [ASEAN's] performance in mitigating
climate change," said Monika Merdekawati, an ACE research analyst
focused on renewables and energy efficiency.
"Member states will start seriously looking at innovation. … Net
zero would be a good wake-up call for them to find a way of
decarbonizing hard-to-abate sectors, such as steel, cement, and
transportation," she added.
Cambodia's ambition
Cambodia, which promised to achieve carbon neutrality by 2050 in
late December, could be one example.
In its long-term decarbonization
strategy submitted to the UN Framework Convention on Climate
Change, the country said it will continue to implement the enhanced
Reducing Emissions from Deforestation and Forest Degradation
program (REDD+), gradually decarbonize its power and transportation
sectors, improve energy efficiency, and promote low-carbon
agriculture.
Cambodia's model suggests it could achieve carbon neutrality by
2050 with the food-and-land-use sector providing a carbon sink of
50 million metric tons (mt) of CO2e, offsetting 28 million mt of
emissions from the energy sector and 19 million mt from the
agricultural sector.
"Nowadays, climate change and environmental issues are the major
challenge to the globe," Cambodia's Minister of Mines and Energy
Suy Sem said during the 11 January ASEAN forum. "Cambodia
recognizes the needs in contributing to the abatement of global
climate change."
The ASEAN member is the second in the group of Least Developed
Countries—deemed by the UN as highly disadvantaged in the
development process—to commit to a net-zero goal. Bhutan is the
first.
Posted 11 January 2022 by Max Tingyao Lin, Principal Journalist, Climate and Sustainability