Jakarta, September 18, 2024 – ASEAN is a forum for inter-governmental cooperation that carries various priority issues. In Laos’ chairmanship in 2024, the issue of energy transition is still one of the priority issues that ASEAN has raised again. Decarbonization of the energy sector, as a low-hanging fruit sector, has the potential to provide a significant multiplier effect.
Arief Rosadi, Manager of the Climate and Energy Diplomacy Program, Institute for Essential Services Reform (IESR), said that globally the energy sector contributes 79 percent of global emissions. In a joint effort to achieve the Paris Agreement target, the world needs three times the additional capacity of renewable energy equivalent to 11 terawatts by 2030.
ASEAN as a region with the largest economic growth, has energy demands that continue to increase. If this increasing demand is met with fossil fuels, the emissions that will be released into the atmosphere will be even greater.
“In the context of the region, ASEAN has established a number of economic collaborations. Cooperation in the energy sector can be carried out more intensively,” said Arief in a Focus Group Discussion forum entitled “Assessing the Progress and Development of ASEAN Energy Sector Cooperation: Indonesia’s Perspective”, Wednesday, September 18, 2024.
Alvin Putra Sisdwinugraha, IESR Power and Renewable Energy Analyst, stated that throughout 2021-2023 several ASEAN countries recorded significant growth in renewable energy, especially solar.
“There are several factors that are key to the addition of solar energy in ASEAN, such as Philippines which adopted 600 MW driven by a net-metering policy with an open energy market model. Malaysia with a large tender policy for 450 MW utility solar power plants. Singapore which added 442 MW of solar energy capacity, also Indonesia which increased the adoption of 388 MW of solar energy, dominated by the Cirata floating solar,” said Alvin.
Alvin added that Southeast Asian countries have the opportunity to become solar panel producers. Currently, the production capacity of solar panels in Southeast Asia reaches 70 GW. This figure represents 9-10 percent of global solar panel demand. This phenomenon can be said to be promising considering that 80 percent of global solar panels currently come from China.
In the 2019-2038 National Electricity General Plan (RUKN) scenario, there is a need for new workers in the Indonesian solar panel industry, which is dominated by high-skilled labor for research and development (R&D) and managerial fields. Cooperation with educational institutions to design appropriate curricula is needed to prepare for this workforce need.
Shofwan Al Banna Choiruzzad, Associate Professor, University of Indonesia, expressed his observations regarding the attitudes of ASEAN countries on international climate commitments. He explained that ASEAN countries view climate commitments as important, but not all ASEAN member countries have translated this view in a more binding policy framework.
“When we want to encourage a joint policy that is regional in nature, there are a number of challenges such as institutional gap, ambition gap, implementation gap, and participation gap,” he said.
Robi Kurniawan, Energy Program Manager, Economic Research Institute for ASEAN and East Asia (ERIA) explained that the contribution of emissions from countries with developing economies is increasing. Therefore, the transition to net zero emissions is inevitable. However, the NZE ambition will also have socio-economic impacts that must be mitigated.
“The transition to net zero emissions will have an impact on the rise and fall of GDP, energy intensity, and emission intensity. To mitigate the negative impacts on these three sectors, funding mobilization is needed so that the transition process runs more smoothly,” said Robi.
Robi added that in terms of invitations for funding collaboration, the private sector still faces various obstacles including policy frameworks, project procedures, payback periods, and regulations on collateral. This means that funding for the energy transition still largely comes from the government budget.
