Southeast Asia: the rise in renewable energy
Southeast Asia: the rise in renewable energy
Introduction: ASEAN energy consumption continues to rise
However, just less than 20% of households across the region have access to air-conditioning, a trend that is likely to “skyrocket”, according to projections by the International Energy Agency — a trend that will raise overall electricity demand, and place ever-increasing strains on power systems.1
All this culminates in an “energy gap” across every level of society and presents a broad spectrum of concerns that governments and energy operators must address.
Energy demands continue to be largely met by traditional sources Southeast Asia has considerable potential for renewable energy, but currently meets only around 15% of the region’s energy demand, excluding the traditional use of solid biomass.2
Rising fuel demand, especially for oil, has far outpaced production from within the region. Southeast Asia as a whole is now on the verge of becoming a net importer of fossil fuels for the first time.3
Within Southeast Asian countries, oil continues to dominate transportation demands, despite an increase in biofuels consumption. Electric mobility, with the exception of electric 2-3 wheelers, continues to make limited progress in the market, suggesting that little progress that region has made as a whole with renewables and transportation.
Though hydropower output has quadrupled since 2000, and the modern use of bioenergy in heating and transport has also increased rapidly, its use in modern-day applications remains limited. Moreover, despite falling costs, the contribution of Solar Photovoltaics (PV) and Wind remains small, though some markets are now putting in place frameworks to better support their deployment.4
Energy transition urgency needed across ASEAN However, the steady rise in demand for energy has now exposed various environmental, social, economic, and political concerns throughout the region that place energy transition as a top priority for nations and the region.
Energy: a medium for social, economic, cultural and political transformation
Health and climate concerns continue to strengthen the case for energy transition Outdoor and household air pollution in Southeast Asia is estimated to be responsible for over 650,000 deaths by 2040, up from an estimated 450,000 deaths in 2018.5 If traditional energy continues to pervade our society, that number could go even higher.2 emissions are expected to rise by almost two-thirds to almost 2.4 gigatonnes (Gt) in 2040. As a reference, emissions grew strongly in Southeast Asia in 2019, lifted by robust coal demand, as shared by the International Energy Agency6 .
Multiple social benefits to be realised with energy transition efforts Making the transition to renewables promises multiple benefits throughout entire societies that can lead to a more efficient, healthier, and happier society. The transition to renewable energy can create new local employment opportunities, creating immediate value to the economy.
Economic gains to be achieved with renewable energy
Southeast Asia has large potential for the sustainable use of modern bioenergy, both in terms of today’s technologies and in the development of advanced biofuels to improve the sustainability of its infrastructure, with a particular focus on the transport sector. Significant economic growth and progress throughout all facets of the economy can be realized by making the transition to renewables as the root power of economic development and prosperity.
Renewable energy in ASEAN: a regional effort with individual ambitions
Agreements such as the establishment of regional targets of sourcing 23% of its primary energy from renewables by 2025 and the establishment of the ASEAN Power Grid — an ambitious project to interconnect the power systems in the region and establish multilateral power trading — have pushed energy transition efforts forward7 . These efforts point to the successful raising of a common renewables grid in the region, promising stable supply of renewable energy that is stable, predictable, reliable and flexible to meet regional demands for energy.
ASEAN energy intensity reduction examples8 There are several examples of energy intensity reduction efforts in the ASEAN region:
Singapore has set a target to reduce its energy intensity by 35% by 2030, made by using energy-efficient standard lamps with labelling as introduced in 2015.The Philippine s has targeted to reduce energy intensity by 40% by 2030. It has also introduced an energy efficiency roadmap from 2014 to 2030, including action plans such as generating codes for energy efficiency, establishing efficiency standards, and equipment labelling. The Philippines also aims to raise the share of renewables in the energy mix to 26.9% by 2030, up from less than 17% presently.Laos targets an increase in the share of small-scale renewables in its total energy consumption to 30% by 2025.Vietnam has set targets to increase renewable power mix to 21% by 2030 from the total installed capacity to achieve a 43% reduction in coal capacity by 2030 — coming off the adoption of feed-in tariffs (FiT) for solar photovoltaic, solid waste, biomass, wind and hydropower in 2017.Thailand has also set a target for 2030 to increase its power mix to include 30% of renewable energy by adopting a FiT for renewable energy, while also providing tax incentives to Electric Vehicle manufacturers to spur economic growth. Thailand has also built its EV manufacturing industry to spur its economic development, by providing tax incentives to manufacturers.Indonesia has also updated its energy policy and modified its power purchase agreements to lean more towards renewables in its sourcing efforts. In 2017, Indonesia has updated its energy policy and modified its power purchase agreements. On the transportation front alone, Indonesia has promoted 14 related policies to use Electric Vehicles (EV) in transportation.Malaysia has also committed to solve renewables in the transport sector, targeting to have as many as 100,000 EVs operating on the road and as many as 125,000 renewable energy charging stations by 2020.
Singapore a key mover in the renewable energy transition Singapore, one of the sunniest cities in the world, currently generates about 95% of its power from imported natural gas, with solar energy being its most viable renewable energy option9 . As the city-state looks to diversify its energy supply and meet its goal of cutting net greenhouse emissions to net zero by the second half of the century, Singapore is also looking to import solar electricity to meet its energy transition goals.
In order to reduce its energy intensity by 35% in 2030; Singapore has initiated the use of energy-efficient standard lamps with labelling since 2015. In addition, the Energy Market Authority (EMA) aims to achieve a solar target of at least two gigawatts of peak power by 2030, up from the 260 megawatt-peak in the second quarter of 2019. That new capacity could meet about 4% of Singapore's current total electricity demand and could play an important role in its energy transition efforts.10
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Conclusion: renewable energy in Southeast Asia - a largely untapped market brimming with potential
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Today’s investment levels still fall short of the IEA’s projected needs in the Stated Policies Scenario and are more than 50% lower than what would be required in the Sustainable Development Scenario.13 Mobilising investment to accelerate renewable energy transitions must be a joint participation from both the private sector and governmental efforts.14
