Southeast Asia has emerged as possibly the most crucial region for future energy transition. The region offers enormous potential for renewable energy sources, especially solar and wind. However, they have yet to show significant progress in clean energy deployment. As one of the world’s fastest-growing regions in terms of economic growth and electricity demand, achieving its net zero emissions in the future will depend on the pace of renewables uptake.

The progress of clean electricity generation in ASEAN five major countries (Indonesia, Malaysia, the Philippines, Thailand and Viet Nam), which make up 89% of the region’s total electricity generation, shows a positive trend in the past years. Nevertheless, clean electricity could not keep up with the fast rising electricity demand.

As of 2021 the share of clean electricity remains low with the share of fossil fuel increased in the region compared to 2015. Solar and wind accounted for only 4 per cent of ASEAN 5’s total electricity generation in 2021, lagging behind other Asian countries including China (11 per cent) and India (8 per cent). If the current trend is maintained, the ASEAN 5 will be able to increase the share of solar and wind energy to only 11 per cent by 2030. More ambition is needed to put them on a 1.5-degree pathway.

In its new report titled “Unleashing solar and wind in ASEAN”, Ember analyses the latest electricity data in these five major ASEAN countries. Furthermore, it aims to link the progress of clean energy development and the future renewable energy target to the IEA Net Zero pathway. Southeast Asia Infra provides a brief extract of the report…

ASEAN electricity demand is rising fast

ASEAN is one of the world’s fastest-growing economic regions. With over 650 million people and low power consumption per capita, this region has enormous room to grow its electricity demand in the next decade. From 2015 to 2021, 5% of the rise in global electricity demand was in the ASEAN region (192 TWh out of 3834 TWh), showing that the region’s demand could imminently take off.

The ASEAN five majors (Indonesia, Malaysia, the Philippines, Thailand and Viet Nam), henceforth “ASEAN 5”, make up 89% of the region’s total electricity generation. Total electricity demand in the ASEAN 5 grew 22% from 2015, rising more than the global average (17%). The highest growth came from Viet Nam (36%) and the Philippines (31%).

Despite the recent slowdown due to the Covid-19 pandemic, IEA projected high annual demand growth for ASEAN member countries in the coming years, close to 5% per year. This forecasting is in line with its previous analysis, which predicted that ASEAN electricity demand will double by 2040.

Clean power not keeping pace with electricity demand

The ASEAN 5 saw their electricity demand rise by 22% from 2015 to 2021. Less than half of that (39%) was met with clean electricity. Half (48%) was met with a rise in electricity from fossil fuels. This led to a 21% rise in power sector CO2 emissions.

Indonesia

Of the rise in Indonesia’s electricity demand from 2015 to 2020, only 28% was met with clean electricity; with 69% met by fossil fuels. Coal generation rose by 45% across the same period, although this was offset somewhat by a fall in gas generation. The rise in clean electricity was driven by hydropower and geothermal (met 27% of the demand increase), while solar and wind only contributed 1%. The absolute amount of electricity from clean sources rose by 49% from 2015 to 2020, however its share in the generation mix only increased by three percentage points from 10% to 13%. On the other hand, coal power’s share increased by 13 percentage points from 53% to 66%. Indonesia had the highest coal power generation and share in the ASEAN region in 2020. Indonesia electricity data is lagged relative to most other countries, therefore 2021 data is still not available.

Malaysia

Malaysia’s electricity demand increased by 12% from 2015 to 2021, the lowest among the ASEAN 5. 90% of the electricity demand increase was met with increased hydro generation. Solar generation increased by more than five times, but its share in total electricity only rose from 0.18% to 0.87%. There is no wind development in Malaysia. Fossil generation met the remaining 7% of the rise in electricity demand, although a big rise in coal offset a big fall in generation. Coal power rose 31% during the same period. Coal share increased by eight percentage points, from 42% in 2015 to 50% in 2021, meaning that power sector CO2 emissions rose by 9% in that period.

The Philippines Of the Philippines’ electricity demand rise from 2015 to 2021, only 12% has been met with clean electricity, while electricity from coal generation met 85% of the demand. The remaining 3% was met with gas generation. The rise in clean electricity generation was driven by growth in solar and wind which saw a near-double increase in generation. On the other hand, coal power generation increased by 75%. Accordingly, its share jumped from 27% to 47%. It was the only country among ASEAN 5 to see a rise in coal generation every year since the Paris Agreement. This resulted in a rise in power sector CO2 emissions by 42%.

Thailand

45% of the rise in electricity demand between 2015 and 2021 has been met by clean electricity, driven by the increase in biomass, solar and wind. In the same period, coal met 11% of the demand increase. Clean electricity generation increased by 106%, the highest among the 5 countries. The share of clean electricity generation doubled from 8% to 16%. Despite this, coal power increased by 11%, with its share also increasing from 19% to 20%. This meant that power sector CO2 emissions rose by 1%.

Viet Nam

39% of the rise in electricity demand has been met by clean sources. Electricity from coal was two times higher than the demand increase. The rise in clean was driven by growth of solar and wind. Clean electricity generation increased by 39%, but its share of total electricity generation only increased by one percentage point. Viet Nam saw the highest percentage change in coal power generation, which more than doubled. Accordingly, coal share increased from 33% to 51%. This resulted in the power sector CO2 emissions rising by 55%.

More ambitious solar and wind deployment plans are needed

ASEAN countries have targets in place for accelerating clean energy deployment, individually (national energy plans) and regionally (through the ASEAN Plan of Action for Energy Cooperation). However, our report shows that in the ASEAN 5, clean energy planned under these targets could not keep up with rising demand. Despite clean energy generation constantly increasing in recent years, its share remains low. This trend is what has led to the current domination of coal share in the electricity mix.

While the world is shifting to solar and wind following cost declines, solar power is still at the margin of the region’s generation mix, and wind power is almost invisible. Only Viet Nam surpassed the world average with 11% solar and wind generation in 2021. Other countries in the region have solar and wind shares below 5%, lagging behind their peers. The vast potential of clean energy in the ASEAN 5 is unfortunately not reflected in its latest 2030 plans. Our analysis shows that by 2030, the current energy plans would bring the share of solar and wind in this region up to 11% of total generation.

To be aligned with the IEA Net Zero pathway, solar and wind uptake should be accelerated rapidly. The current solar and wind deployment target would only be less than half of the IEA target. More ambitious solar and wind deployment plans are needed.

Way forward

Momentum is building for a clean electricity transition in ASEAN. This has started to create an environment that encourages more sustainable growth and opportunities in some ASEAN countries, which then may translate into more ambitious commitments to decarbonise the power sector across the region.

ASEAN’s power systems, however, are structured around large-scale centralised and dispatch-able power plants. They are becoming increasingly incompatible with the changing generation mix, with rising outputs from variable solar and wind power. This incompatibility, if left unattended, is likely to affect the security and reliability of electricity supply, which could make the region’s transition towards a clean electricity future more difficult.

Rather than a quick technological fix, the resolution of this issue requires a holistic policy approach to reorganising all aspects of the power system: from technology to market, regulation and consumer behaviours