Key Points:
- Fossil Fuel Dominance: Fossil fuels dominated Southeast Asia’s energy mix in 2020, making up 83%, compared to renewables at 14.2%, according to the ASEAN Center for Energy. This heavy reliance on fossil fuels increases vulnerability to energy price shocks and supply constraints, said Zulfikar Yurnaidi, manager of energy modeling and policy planning at the center. As energy demand grows, the region is increasingly turning to renewable energy to ensure energy security. The ASEAN aims for a 23% renewable energy share by 2025.
- Rising Energy Demand: Energy demand in Southeast Asia has risen by an average of 3% annually over the past two decades and is expected to continue until 2030, according to the International Energy Agency. Despite this, fossil fuels remain predominant, with an expected 88% share of the total primary energy supply by 2050. This reliance on fossil fuels makes the region susceptible to global price fluctuations and supply issues. Events such as the pandemic and geopolitical tensions have driven up prices, with oil prices reaching a decade-high in March last year. Yurnaidi noted that Southeast Asia cannot compete with larger economies in securing fossil fuel supplies, highlighting the need for energy diversification for economic growth and security.
Energy Transitions in Southeast Asia:
- Malaysia: In July, Malaysia launched its National Energy Transition Roadmap to scale up renewable energy and reduce dependence on natural gas imports. The roadmap includes 10 flagship projects, such as a one-gigawatt solar photovoltaic plant, and aims to leverage Malaysia’s estimated 290 gigawatts of renewable energy potential.
- Vietnam: Vietnam’s Power Development Plan 8, announced in May, focuses on increasing wind and gas energy while reducing coal reliance. By 2030, renewable energy sources like wind and solar are projected to account for at least 31% of national energy needs. The plan mandates the conversion of all coal plants to alternative fuels or their closure by 2050.
- Singapore: Singapore’s Green Plan 2023 aims to increase solar energy capacity to at least 2 gigawatts by 2030, meeting about 3% of projected electricity demand. Despite geographical constraints, Singapore is implementing measures like rooftop solar panels and importing electricity and hydrogen from neighboring countries.
- The Philippines: The Philippines has removed ownership restrictions for foreign investors in renewable energy projects, allowing full ownership in solar, wind, hydro, or ocean energy resources. This move aims to attract foreign expertise and investment, essential for developing the country’s renewable energy sector. The country has also mandated that electricity suppliers must increase energy from renewable sources by at least 2.52% every year from 2023.
- Indonesia: Indonesia has also eased foreign ownership restrictions in renewable energy, permitting 100% foreign ownership of power projects with a capacity of more than 1 megawatt. This change is expected to boost foreign investment in renewable energy projects in the coming years. The country is part of the Just Energy Transition Partnership, aiming to meet its renewable energy targets.
Conclusion: Southeast Asia is taking significant steps towards renewable energy to mitigate risks associated with heavy reliance on fossil fuels. By setting ambitious renewable energy targets and encouraging foreign investment, the region aims to create a more resilient and sustainable energy future.
