By Mehmet Enes Beşer
Southeast Asia is a fast-developing region with an expanding population, growing economy, and urbanization processes. ASEAN has more than 680 million citizens, increasing manufacturing, population, and rising demands of a burgeoning middle class. According to forecasts, the demand for energy in the region is set to grow by more than 60% by 2040. In addition, the issue of climate change and the desire to reduce negative impact on the environment create a favorable context for the development of renewable energy sources.
The ASEAN Plan of Action for Energy Cooperation (APAEC) Phase II (2021-2025) calls for a minimum of 23% renewable energy in total primary energy supply by 2025 with an emphasis on more ambitious goals until 2040. However, despite a common regional plan, there are differences in renewable goals in terms of national needs and possibilities between members of the association.
Vietnam is among the leaders in the development of renewable energy due to high feed-in tariffs, regulatory changes, and active private investments. The solar power generation rose from almost zero in 2018 to about 16 gigawatts in 2021, making the country one of the largest installers of solar panels globally. Moreover, projections predict the electricity-sector capacity increase by a factor of three until 2040. It is expected that in 2040, Vietnam will produce more than 40% of all electricity from wind, solar, and biomass power generation. Offshore wind capacity is emphasized owing to the length of the Vietnamese coast and related policies aimed at developing the industry.
Thailand adopted renewable energy goals as part of the Alternative Energy Development Plan (AEDP). Namely, the country aims to receive 30% of all consumed energy from renewable sources by 2037. Given the already developed biogas, biomass, and solar energy markets, the Thai government seeks a diversified renewable strategy, capitalizing on its agricultural advantages and decent energy transmission infrastructure. The demand for renewable energy is predicted to be steadily increasing until 2040. In particular, the electrification of transport, industry, and residential sectors, as well as energy efficiency measures and electric vehicle adoption, will foster this tendency.
The Malaysian government pursues more moderate but still developing policies. As part of the Twelfth Malaysia Plan and the National Energy Policy 2022-2040, Malaysia aims to reach a market share of 31% and 40% of all installed renewable capacities by 2025 and 2035, respectively. In terms of electricity, it is expected that the demand for renewable energy will grow dramatically by 2040 as the result of reduced dependency on fossil fuels and increased solar energy generation along with potential green hydrogen production. This way, Malaysia is expected to become a regional hydrogen hub.
With great potential and vast territory, Indonesia, which is the largest economy and most populated country in the region, faces challenges and opportunities in renewable energy development. Indonesia possesses great renewable potential, namely hydro, geothermal, solar, and biomass capacity. Nevertheless, the power sector of Indonesia remains fossil fuel dependent. Rencana Umum Energi Nasional (RUEN) forecasts the target of reaching 31% renewable energy by 2050, with an interim goal of 23% by 2025 according to NDCs. Given current conditions without any changes, the target of 25-27% renewable energy by 2040 appears to be real. It is supposed that hydropower and geothermal capacities will be dominant.
The Philippines are one of the countries with an ambitious target for renewable energy. The National Renewable Energy Program (NREP) foresees an achievement of 35% renewable energy by 2030 and 50% by 2040. Such a forecast is caused by the high degree of vulnerability to climate change, strong civil society advocacy on the matter, and an increasing need for energy as the result of urbanization and economic growth. Although there is sufficient potential for solar and wind generation in the central and north parts of the country, there is a growing foreign investment interest in the renewable energy industry of the Philippines due to foreign ownership possibility as per the Renewable Energy Act.
Owing to the small size and scarcity of natural resources, Singapore follows a unique innovation-led policy in the sphere of renewable energy. The country is going to double its capacity by 2025 and reach 2 gigawatt capacity by 2030. Until 2040, Singapore will become highly dependent on imported electricity generated in other countries. For example, the plans include hydropower generation imported from Laos and solar energy generation imported from Indonesia. Thus, Singapore will depend on regional electricity trade infrastructure within the ASEAN Power Grid.
Cambodia, Laos, and Myanmar follow less advanced strategies and face political uncertainties. In particular, Laos relies heavily on its hydropower potential for electricity both domestically and to be sold abroad. In turn, Cambodia develops its renewable industry slowly, whereas Myanmar lags due to an unstable political situation, notwithstanding its great resource potential. The energy demand in these countries is set to grow slower. However, it might be accelerated due to better governance, increased foreign investments, and energy trading with other countries.
To summarize, it can be said that the trend across ASEAN is going to remain upward for renewable energy consumption until 2040. The reason for such a tendency is connected not only with politics and markets of energy but also with technological developments, lower costs of the technologies, energy security concerns, and geopolitical factors fostering decreased dependency on unreliable fossil fuel markets. In order for the development to occur successfully, political will, proper policies, feasible financial solutions, and necessary infrastructure are needed.
The ASEAN Power Grid and regional approaches to it will mitigate asymmetrical energy development within ASEAN. Owing to excess capacity in certain countries, it is possible to support lagging states with necessary capacity. Cross-border infrastructure will improve flexibility and resilience. Moreover, the presence of a proper governance system with a permission-driven approach and institutional basis is a key prerequisite for transforming regional capabilities into results.
Thus, heterogeneity in renewables development in the next decade is likely to occur in the region; however, with a regional view, knowledge sharing, and cooperation, it will be possible to turn fragmented development into a collective effort.