Jakarta – The continued reliance on fossil energy in Southeast Asia, particularly by Indonesia and Vietnam, pushes the ASEAN region further into a fossil-based energy crisis. This is revealed in think tank EMBER’s latest report, “ASEAN’s Clean Power Pathways: 2024 Insights”.
The report reveals that ASEAN’s electricity growth, which reached 3.6% in 2023, is entirely covered by fossil energy, especially coal. Moreover, the region’s renewable energy capacity is not growing significantly enough to keep pace with growing energy demand.
With an increase in electricity production from coal-fired power plants of 11 terawatt hours (TWh), Indonesia is the largest user of young power plants in ASEAN. On the other hand, Vietnam also contributed significantly to the increase in carbon emissions, making these two countries the most significant contributors to the region’s fossil energy crisis.
The EMBER report noted that ASEAN carbon emissions rose 6.6% to 718 million tons of CO2 by 2023, with Indonesia and Vietnam contributing 14 million tons and 20 million tons, respectively.
“Indonesia and Vietnam are still too dependent on coal, and this is a big obstacle for ASEAN to shift to clean energy,” said EMBER Senior Southeast Asia Electricity Policy Analyst Dinita Setyawati in a statement on Thursday, October 24. According to her, the region’s high dependence on fossil energy can potentially exacerbate the climate crisis and jeopardize economic sustainability.
The report also projects that the demand for electricity in ASEAN will increase by 41% by 2030. Unfortunately, existing electricity plans show that the region still depends on fossil fuels to meet this growth. Countries such as Singapore and Malaysia still rely on gas, while Indonesia continues to dominate the coal industry in its national energy mix.
While dependence on fossil energy remains high, the EMBER report also highlights the opportunities arising from the falling cost of renewable energy. The price of solar energy has fallen by 55-81%, while wind energy has fallen by 33-35%, paving the way for ASEAN to transition to clean energy quickly. Dinita emphasized that ASEAN has a great opportunity to utilize solar and wind energy to meet growing electricity demand and support regional climate targets.
“With renewable energy prices getting cheaper, this is the right time for ASEAN to diversify its energy in a big way,” Dinita said.
She also added that the development of cross-border power grids will significantly help accelerate the energy transition in the region. One example is the cooperation between Laos, Thailand, Malaysia and Singapore in connecting power grids, which can serve as a model for other countries in ASEAN.
To date, there are 18 planned cross-border power grids in ASEAN, eight of which have been completed. These grids enable the export of up to 7.7 gigawatts (GW) of electricity and are an important step in promoting regional energy cooperation.
Challenges and opportunities of energy transition in ASEAN
The transition towards renewable energy sources is essential to reduce carbon emissions and create new economic opportunities in the ASEAN region. Dinita mentioned that this transition promises to create new jobs, improve energy security, and more inclusive economic growth.
“The energy transition will open up thousands of new jobs in the renewable energy sector. In Indonesia alone, around 96,000 jobs could be created in coal-producing areas,” Dinita said.
However, big challenges still loom, especially regarding the high cost of bioenergy, which in some ASEAN countries can be as much as four times that of hydroelectricity.
The EMBER report shows that despite the huge potential of bioenergy, the cost of bioenergy-based electricity production in Indonesia, Malaysia and Thailand is still prohibitive, ranging from USD 59 to USD 98 per megawatt-hour (MWh). This is much more expensive than hydropower plants in Laos, which only cost USD 25/MWh. (Hartatik)
