Jakarta, September 18, 2024—Southeast Asia is predicted to become the world’s fourth-largest economy by 2050. This projected increase in economic growth will coincide with rising energy demand. Therefore, accelerating the transition to renewable energy and implementing energy efficiency in the region will ensure economic growth in line with significant emission reductions.
The Institute for Essential Services Reform (IESR) considers using renewable energy potential in the Southeast Asian region of 17 TW as essential capital to achieve Net Zero Emissions (NZE) in the electricity sector by 2050. To capitalize on this abundant renewable energy potential and achieve NZE by mid-century, IESR emphasizes the need for regional cooperation, innovative climate models, and effective policy implementation.
IESR encourages regional energy planning that can adopt significantly increased renewable energy targets. This needs to be reflected in the ASEAN Post 2025 Vision, which emphasizes the importance of the energy transition in addressing climate change. Without a clear energy transition roadmap, the region risks being trapped in a carbon dependency that could hamper economic growth by up to 35 percent by 2050, based on the NTU Singapore and University of Glasgow Study.
Arief Rosadi, Climate and Energy Diplomacy Manager, IESR, said the ASEAN Power Grid (APG) can be optimized to increase the high use of renewable energy and ensure the region’s energy security. In addition, the opportunity to develop an electric vehicle ecosystem, as stated in the ASEAN+3 Statement last year, also opens up opportunities for international cooperation that benefits the environment and provides economic value for member countries.
Arief said Southeast Asia has critical mineral resources needed in the development of renewable energy, including nickel, which accounts for 27 percent of total global reserves, tin, which accounts for 32 percent, rare earth elements, which account for 36 percent, and bauxite, which accounts for 22 percent.
“These critical mineral resources in Southeast Asia can stimulate further investment in the solar panel and battery manufacturing sectors. And can encourage the potential for broader energy transition energy cooperation in the region that can provide added economic value,” Arief explained at the Workshop Towards the Asean Summit on Wednesday (18/9/2024).
In addition, the decline in the price of renewable energy technologies such as solar modules opens up great opportunities for using renewable energy in the region. Alvin P Sisdwinugraha, IESR’s Electricity and Renewable Energy Analyst, explained that the 66 percent decline in the price of solar modules in the last five years has helped drive solar energy adoption in the region. Solar module production in Southeast Asia is also competitive. Therefore, industrial incentives are needed to support the development of this sector, as has been implemented in Malaysia and India.
“The electricity export cooperation agreement between Indonesia and Singapore, which requires the development of a solar energy supply chain in Indonesia, is an important step towards realizing the ASEAN Power Grid. The potential for green job creation is also significant, particularly in the solar module manufacturing industry, which requires a highly skilled workforce. Cooperation between local education and research institutions and industry is needed to increase labor capacity and ensure technology transfer to local manufacturers,” Alvin emphasized.
