Jakarta, June 26, 2024 – The Association of Southeast Asian Nations (ASEAN) countries must start planning to move away from fossil fuels, particularly coal. Not only is it a global commitment to limit the Earth’s temperature rise to 1.5° Celsius, as per the outcome of the 28th Global Climate Change Negotiations (COP), this move will also protect ASEAN Member States (AMS) from the risk of economic shocks due to growing fossil energy imports. Since 2017, Southeast Asian countries’ coal imports have increased from 60 million tons to 120 million tons. Meanwhile, air pollution from power plant activities can potentially increase the risk of premature death by 70,000 per year by 2030.
ASEAN has about 17 TW of renewable energy potential, sufficient to meet energy needs if developed consistently. Renewable energy development can also open up investment opportunities, increase competitiveness in international markets, lower power production costs, reduce economic and social losses due to air pollution, and avoid financial risks due to stranded assets from fossil energy infrastructure in operation and under construction.
However, the latest ASEAN Centre for Energy (ACE) report on the Role of Coal released in May 2024 instead recommends maintaining coal as an essential energy source with the use of Carbon Capture and Storage (CCS) and Carbon Capture Utilization and Storage (CCUS).
Based on recent studies, CCS/CCUS technology is not considered reliable and low-cost for reducing carbon emissions from power plants. The experience of several projects in various countries shows that using CCS/CCUS in coal fired power plant (CFPP) is ineffective in capturing carbon, high cost and high financial risk.
The Institute for Essential Services Reform (IESR) views that maintaining coal-fired power plants will keep AMS in a cycle of carbon lock-in in the long term and complicate the energy transition to clean energy, increasing carbon emissions, increasing the risk of stranded assets from fossil energy, and the potential for high economic costs.
“Recommending this technology solely to maintain CFPP operation and perpetuate the dependence of a number of ASEAN countries to import coal is unwise advice. The implication is that the acceleration of cheaper, affordable and low-risk renewable energy reduces carbon emissions to prevent temperature rise above 1.5°C,” said Executive Director of IESR, Fabby Tumiwa.
Not only that, Fabby said, the desire to maintain coal power plants is contrary to the views of more than 60 per cent of residents in AMS who reject the construction of new power plants and want to phase out power plants, according to the ISEAS survey in 2022.
“The findings of the First Global Stocktake encourage the global community to phase out fossil fuels and triple renewable energy by 2030. Retrofitting CFPP with CCS/CCUS to date has not been shown to significantly reduce greenhouse gas emissions. It is also economically unfeasible and financially inefficient with greater risk of asset abandonment. If ASEAN continues to rely on coal, it will clearly raise doubts about ASEAN’s leadership commitment to climate change mitigation,” Fabby explained.
Raditya Wiranegara, Research Manager of IESR, mentioned ASEAN needs to seriously pursue the target of renewable energy development, with a renewable energy mix of 57 per cent by 2030 and a 90-100 per cent renewable energy mix by 2050.
“The economic benefits of coal will erode along with the energy transition that prioritizes renewable energy in various countries. The commitment to end the operation of coal-fired power plants early and planned by AMS will actually attract investment in the development of renewable energy,” Raditya explained.
In addition, Raditya assessed that the ACE report’s proposal to place coal as a transitional fuel in the ASEAN energy system could obscure AMS’s commitment to the joint commitment to the Paris Agreement and send mixed signals to the renewable energy investment climate in the region to reduce investment interest in renewable energy development.
Project Coordinator of Climate Diplomacy, Arief Rosadi said that developing renewable energy in the ASEAN region is more beneficial for the economy. According to an IESR study, Southeast Asia is an exporter of solar panel modules with a capacity of 64 GW by 2023. Vietnam, Malaysia, and Thailand produce about 11 per cent of the global supply. The increasing demand for solar PV in Southeast Asia to support the clean energy transition can provide an opportunity for developing solar cell and module supply chain manufacturing in Indonesia to meet the demand in this region.
“The demand trend for solar modules in the Southeast Asia region is increasing. This momentum can be utilized by ASEAN countries to make Southeast Asia a regional solar hub by considering the economic advantages of each country. The utilization of this potential and collaborative process will ultimately encourage the development of the energy transition industry in the region and can contribute to strengthening ASEAN’s economic foundation to realize the epicenter of growth in the world,” said Arief.
