Southeast Asian countries can meet their growing energy demand with renewables and cut 75 percent of their energy-related carbon dioxide emissions by 2050, half of the emissions compared to today, according to a new International Renewable Energy Agency (IRENA) outlook report.
Prepared by IRENA in close collaboration with the ASEAN Centre for Energy (ACE), with the support of the ASEAN Secretariat and engagement from the ASEAN Member States, the 2nd edition of the “Renewable Energy Outlook for ASEAN: Towards a regional energy transition” shows that almost doubling renewable power by 2030 creates significant regional business and investment opportunities.
Released by the IRENA during the ASEAN Energy Ministerial, the report identifies transition pathways focusing on renewables, electrification, and emerging technologies such as hydrogen and batteries. It builds on the political momentum for change in the region.
With its massive renewable potential, Southeast Asia stands at a historic crossroad between moving away from fossil fuels and towards a renewable energy transition that meets the region’s economic growth and rising energy demand, said Francesco La Camera, Director-General of IRENA.
ASEAN is home to one of the youngest coal power plant fleets in the world. Yet, an increasing number of ASEAN Members have set net-zero emissions targets by around mid-century.
Planning the transition must begin now if climate goals are to be met, with coal power substitution as a top priority not least to avoid stranded assets.
Coal retirement, coupled with renewables and regional grid interconnection, is an indispensable step to aligning with net-zero targets. Half of ASEAN members have signed up for international efforts to end coal in the power sector. Climate commitments require concerted and accelerated action, which must begin now to have a hope of success, said Francesco La Camera, Director-General of IRENA.
As renewables have become the cheapest power option in much of Southeast Asia, renewable capacity additions can cost-effectively increase up to 40 percent of total power capacity by 2030 compared to one-quarter today. This means around 300 GW of new renewable capacity installations, most of it solar and wind.
Significant investment needed
Significant investment is needed to boost renewables in the national energy mixes, but overall costs are balanced by substantial savings on supply and fuel costs. ASEAN’s investment in renewables must almost triple the current levels.
Investment opportunities include renewable power, transmission, biofuels, energy efficiency, hydrogen, and electromobility, and can amount to over US$6 trillion cumulatively by 2050.
Countries can reduce their energy costs by as much as US$160 billion by 2050. Overall, the avoidance of costs related to health and environmental damage caused by fossil fuels can bring savings of up to US$1.5 trillion cumulatively by 2050.
Electrification and clean hydrogen
Electrification of end-usage is important, ranging from electrifying transport, buildings, and industries to electric vehicles (EVs), and from electric cooking to clean hydrogen production.
The electricity share in final energy will need to rise from 22 percent today to more than half by 2050.
Clean hydrogen and its derivatives can provide a complementary solution for the region’s ambitious climate objectives. They also provide an alternative for decarbonizing transport modes like shipping and some heavy manufacturing industrial processes.
It will also bring significant supply chain opportunities for example in battery, green commodities, and green materials manufacturing.
Accelerating energy transition is crucial in order to meet climate goals and support the region’s economic growth. Guided by the ASEAN Plan of Action for Energy Cooperation (APAEC) Phase II, ASEAN is committed to achieving a 23 percent renewables share in total primary energy supply (TPES) by 2025. Moreover, the regional blueprint includes the optimization of clean coal technology as one of its program areas. I believe IRENA’s Renewables Outlook for ASEAN will help chart pathways to a more sustainable, net-zero future for the region, commented Dr Nuki Agya Utama, Executive Director of the ASEAN Centre for Energy (ACE).