Southeast Asian countries are largely dependent on fossil fuels for meeting their energy requirements. However, the global energy crisis and supply chain disruptions have highlighted the need for energy security at affordable prices. Thus, renewable energy deployments are gaining traction across the globe as well as in Southeast Asia to ensure sustainable energy systems. This article presents the key findings from the ASEAN Centre for Energy’s 7th ASEAN Energy Outlook, which gives a snapshot of the current and future energy mix in the Southeast Asian region as well as recommendations for the future…
Share of renewables in energy mix
Fossil fuels dominated the bulk of the energy mix in 2020 with 33 per cent share from oil, 28 per cent from coal and 14.2 per cent from renewables. Based on the 2020 level, the aggregate estimate indicates that ASEAN member states (AMS) will produce 2.5 to 4 times more energy by the middle of the century, taking into account the increase in fuel demand, import and export goals for each AMS. In the baseline scenario, fossil fuels will make up roughly 88 per cent of total energy consumption in 2050.The availability of fossil fuels is anticipated to decline by 11 per cent for the AMS target scenario (ATS) and 12.2 per cent for the least-cost optimisation (LCO) scenario during 2021-50.
The LCO scenario, in contrast to the ASEAN Plan of Action for Energy Cooperation Target Scenario (APS), predicts an 8.6 per cent increase in power from natural gas and coal while power from oil and renewables drops. When the ATS and APS are compared, coal led the way in terms of fossil energy reductions in the former, with 127 mtoe by 2050. By 2050, it is anticipated that the production of renewable power will make up 22.8 per cent in the ATS compared to the baseline scenario of 11.9 per cent. By 2025, AMS hopes to obtain 23 per cent of total primary energy supply (TPES) from clean energy sources other than conventional biomass used by the domestic sector. The renewable energy proportion in the TPES increased by 0.4 per cent from 2019 to 14.2 per cent in 2025. The projected renewable energy proportion in the TPES for the ATS in the 7th ASEAN Energy Outlook is less than the 6th ASEAN Energy Outlook.
With some more reductions in coal and oil by 2025, the renewable energy contribution in the APS is expected to reach 22.6 per cent. Increasing renewable energy penetration will require technical and regulatory interventions, such as faster and more flexible grid structures. This will be necessary as the power system becomes more digitised. Funding and policy reforms are needed for the move to higher renewable energy generation. Feed-in tariffs, tenders for renewable power projects, net metering, and biofuel mandates are a few of the programmes being implemented by member states. These policies seek to promote the feasibility of renewable energy application in the AMS. Going forward, ASEAN will start to import more coal and natural gas than it exports. Due to the region’s strong reliance on imported fossil fuels and the associated price instability, this presents a serious threat to its energy security. It will also be necessary to ensure that there is dependable supply of natural gas throughout the changeover to alternative energy sources because renewable energy is intermittent.
Installed power capacity and energy generation
Both the baseline scenario and the ATS indicate a substantial share of fossil fuels up to 2050. The APS, however, projects that renewables will have an equal percentage by 2033 and will continue to increase to 63.2 per cent up to 2050. The energy demand in the ATS, which is mostly met by hydropower, natural gas and coal, requires 787 GW of power plant capacity. The baseline scenario estimates that by 2025, installed renewable energy capacity will be 34.5 per cent, whereas the ATS prediction shows a 5.1 per cent increase by 2025. In order to meet its individual electricity needs, the APS needed 719 GW of energy, with hydroelectric accounting for 35.4 per cent of the total.Additionally, the proportion of solar energy in the mix is rising.
As 2050 arrives, electricity generation from coal and natural gas plants will decrease in the LCO scenario, which can be linked to rising fuel costs. Hydropower and geothermal, with cumulative capacities of 184 GW and 9 GW respectively, will be used to meet the rising need for power. Moreover, there will also be an increase in installed solar and wind power capacity, which are expected to reach 54 GW and 8 GW respectively. According to the estimates, the AMS are expected to produce 1,278 TWh in 2025 to satisfy power demand and comply with international commitments.When compared to the baseline scenario, the proportion of fossil fuels is expected to fall in the future under both the ATS and APS.The drop in fossil fuel consumption under the APS is expected to be 6.9 per cent, which will come from coal.
Power sector investment
Electricity production needs to be increased, as does investment. The baseline scenario and ATS projections indicate that the expected increase in electricity production for ASEAN from 2021 to 2050 will be 636 GW and 454 GW with a renewable energy share of 35.7 per cent and 60.4 per cent respectively. The APS and LCO situations project lower energy demand through improved energy efficiency, notably in the corporate, commercial and residential sectors, and shows which possibility has the lowest future financial needs for energy production. The investment needed to increase energy output are $341 billion in the baseline scenario, $284 billion in the ATS, $213 billion in the APS, and $166 billion in the LCO scenarios by 2050.
Energy trading The setting up of the ASEAN Power Grid indicates a stronger inclination towards energy trading with neighbouring AMS rather than constructing additional energy plants to meet the demand for power. Thailand and Singapore are the two countries in the area that import the most power, sourcing 31 per cent and 11 per cent respectively of their total demand throughout the course of the research period till 2050. Lao PDR, Brunei Darussalam, Myanmar and Cambodia are the top suppliers at the moment, exporting an average of 24 per cent, 23 per cent, 21 per cent and 20 per cent respectively of the power they produce to their neighbours.
Adoption of battery storage
When solar and wind energy production is lower, batteries can be created to gather energy. They, therefore, are anticipated to be essential in permitting wider application of renewables and preserving the integrity of the electrical grid. According to the LCO scenario, the area will need 26.6 GW of battery storage by 2050 to hold around 1,100 GWh of power. However, current policies are anticipated to fall short of the area objective of 23 per cent renewables in the TPES by 2025 in terms of total renewable energy shares.
Sustainable biofuel production is essential, particularly in the context of land use and the water-energy-food nexus. It may be possible to reduce emissions from the shift in land use brought on by the production of biofuels by using bioenergy with carbon capture and storage.
Improving energy reliance should be prioritised while tackling the issue of energy independence. Energy security should take geopolitics into account as well. ASEAN should use its strategic soft power by fostering collaboration and partnership both within ASEAN and with its most important strategic allies.
Increasing the share of renewable energy in the power industry requires moving beyond built capability and into energy dispatch.