Southeast Asia risks missing 2025 renewables goal: Ace

Spanish Market: Electricity, Natural gas
30/09/24

Member countries of the association of southeast asian nations (Asean) could miss its 2025 renewable energy target, unless the region ensures the implementation of national renewable energy policies and power development plans, according to the Asean Centre for Energy (Ace).

Asean aims for a 23pc share of renewable energy in its energy mix by 2025, but its share of renewable energy in 2022 was only 15.5pc, according to Ace's 8th Asean Energy Outlook 2023-2050 released on 26 September. Asean countries include Brunei Darussalam, Malaysia, Vietnam, Singapore, Cambodia, Indonesia, Lao PDR, Myanmar, Philippines, Thailand and Vietnam.

"It is challenging for Asean to achieve the remaining 7.4 percentage points within three years," according to the outlook. But if countries follow through on their renewable energy policies, the 23pc target could be reached by 2030, and the share of renewable energy could rise further to 38.1pc by 2050.

The outlook sets out projections for the region based on different scenarios, using 2022 as the reference year. The baseline business-as-usual scenario assumes no interventions to meet existing national renewable energy targets and excludes plant capacity additions from power development plans. The Asean member states targets scenario (ATS) assumes the attainment of national policies for renewable targets with modelling interventions, and includes planned capacity additions.

Installed power capacity in 2022 was still heavily reliant on fossil fuels, which accounted for 66.4pc of the total energy mix. Asean has set a target of 35pc of renewable energy in installed capacity by 2025, and managed to achieve 33.6pc in 2022. The baseline scenario is expected to fall short of the target, reaching 34.1pc in 2025. But the ATS could surpass the target to reach 39.6pc by 2025, and 69.4pc in 2050.

But energy financing still poses a challenge. The region faces huge power investment costs to develop the additional capacity required to meet demand. Power investment requirements over 2023-30 range between $20bn-56bn, while for 2041-50 this ranges from $28bn-371bn, according to the report.

Fossil fuels to stay in the mix

Southeast Asia's population and economic growth continue to rise, and the region's total energy consumption under the baseline scenario is expected to reach 1.1bn t of oil equivalent by 2050, more than doubling from 2022 levels. Fossil fuels will likely remain the primary source of energy, making up 76.1pc of total energy supply in 2050 under the baseline scenario, but under the ATS, this could be brought down to 63.4pc by 2050.

Natural gas use is set to continue rising across all scenarios, as it is considered a bridging fuel in the energy transition, especially for the phase-out of coal. Gas can complement the intermittent nature of renewable energy sources like solar and wind, stated the report.

Under the baseline scenario, Asean is projected to become a net importer of natural gas by 2027 as production in the region is set to decline. But this increasing reliance on imports also raises concerns over energy security. An integrated gas market could help to boost energy security as it fosters interconnection networks, and competition would expand the gas pool, in turn lowering business costs and enhancing resource allocation efficiency, according to the report.

By Prethika Nair

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