Unique socio-economic challenges and regulatory landscapes will shape each country’s net zero approach. Wong Dai Yuan and Niu Yihao report.
Southeast Asia’s (SEA) energy transition sets itself apart from other regions like Europe, as highlighted by Suzanne Gaboury, Director General of the Private Sector Operations Department, Asian Development Bank (ADB). As she explains it, "(Southeast Asia) is a region that we know is climate-stressed. There is uneven development and, as a consequence, that requires different solutions".
These insights were shared during the SIEW Summit Closing Session on "Energy Transition Roadmap: Navigating Challenges and Opportunities, held at SIEW 2023 on 23 October. The panel included distinguished members:
- H.E. Felix Fuentebella, Undersecretary of Energy, Republic of the Philippines;
- Dr Ajay Mathur, Director General, International Solar Alliance;
- Dr Cheng Qian, Executive President, Gotion Global;
- Alan Heng, Group Chief Executive Officer, Pavilion Energy; and
- Roberto Lorato, Director and Chief Executive Officer, MedcoEnergi
Southeast Asia faces the unique challenge of balancing decarbonisation with economic development goals. This means that fossil fuels will continue to play a critical role as a transition fuel in this region while efforts are underway to scale up renewable energy capacity. That said, the high capital cost of green energy demands targeted financing solutions to redirect investments where needed.
The ongoing role of fossil fuels
Mr Lorato highlighted that "in order to catch up with the more developed world, we are going to see a massive increase in energy demand. The role of fossil fuels in Southeast Asia will be more relevant and more important for more years than other countries".
Agreeing, Mr Heng cautioned against a one-sided view of natural gas. He stressed that long-term investments in oil and gas are still necessary to prevent energy supply shortages. The key, he said, is for all oil and gas producers to commit to managing emissions from their production facilities towards achieving net zero levels by 2030.
Financing crucial for private-sector innovation
Ms Gaboury recognised the fiscal impact of global events on the Southeast Asia region. She emphasised the need for various financing solutions, including guarantees, blended finance, debt and equity tools. These tools are vital to facilitate private-sector innovations in next generation technologies.
Agreeing, Dr Mathur emphasised the importance of equitable renewable energy access. He highlighted that while investments in renewables are on the rise, are they remain concentrated in specific countries. He noted: "For example, 74 percent of (investments in renewables) go to the Organisation for Economic Co-operation and Development (OECD) countries and China. We need to ensure that it goes to all countries."
Different energy technologies need to work in tandem
Dr Cheng pointed out that while the cost per kilowatt-hour for solar cells is now comparable with or even lower than conventional energy sources, solar's intermittent nature necessitates effective energy storage solutions.
He shared that innovations are ongoing to extend the lifespan of lithium-ion batteries to 25 years, in line with the lifecycle of solar panels. This would make green energy more accessible and sustainable.
Mr Fuentebella stressed the importance of different energy sources working in tandem. "We need natural gas as a transition fuel because we need time to build our pump hydros, which are longer-lasting energy storage systems."
In a Special Address by H.E. Sakai Yasuyuki, State Minister of Economy, Trade and Industry, Japan, the importance of global cooperation in the transition towards a net zero world was emphasised.
He echoed the panellists' views that countries must adapt their energy transition plans to their unique situations while promoting innovation in technology and other energy sources. Minister Yasuyuki also highlighted the role of public-private partnerships in addressing energy security, economic growth, and climate change, a consistent theme throughout the SIEW Week.
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