Policies and Partnerships Key To Unlocking Clean Energy Growth In ASEAN Region

Six panellists came together to debate the opportunities and challenges they face in working towards a net zero Asia. Linda Zeng and Lee Mian Rong report.

On 24^th October, Day 2 of SIEW 2023, at the Singapore-IEA Forum’s first session, six panellists from Australia, The Philippines, Indonesia, and Singapore were on stage to discuss their thoughts and experiences on the ‘Opportunities and Challenges for Net Zero in Asia’.

In the two-hour session, the collective discussed the drivers to clean energy growth in the ASEAN region and the challenges that countries face on the path to net zero.

The panellists included:

• Hon. Reece Whitby MLA, Minister for Environment; Climate Action; Racing and Gaming, Western Australia
• H.E. Felix Fuentebella, Undersecretary of Energy, Republic of the Philippines
• Ravi Menon, Managing Director, Monetary Authority of Singapore
• Darmawan Prasodjo, President Director, PT Perusahaan Listrik Negara
• Raymond B. Ravelo, First Vice President and Chief Sustainability Officer, Meralco
• Egon van der Hoeven, APAC Vice President (Business Development), ExxonMobil Low Carbon Solutions

Among the group, there was a strong focus on how this energy transition can be achieved in a "just, affordable, and orderly" way, as mentioned by Raymond B. Ravelo, First Vice President and Chief Sustainability Officer, Meralco. 

H.E. Felix Fuentebella, Undersecretary of Energy, Republic of the Philippines underscored this sentiment: “The cost of energy today is already quite burdensome…and so any transition has just got to be affordable.”

It was clear that not all countries are at the same starting point, and a tailored approach to the energy transition for each country was necessary.

Partnerships in every permutation

Ravi Menon, Managing Director, Monetary Authority of Singapore (MAS), gave a stark reminder that our current emissions trajectory will not get us to net zero by 2050, especially with energy demand in Southeast Asia projected to more than double by 2050.

However, not all hope is lost. There was consensus that collaboration between all stakeholders was crucial to attaining our net zero goals. This ranged from public-private partnerships and a regional carbon market, to the harmonisation of standards.

Policies, local and international

Mr Menon stressed the need for "a pathway that takes account of regional and country realities, their energy demand, their energy composition, and yet gets us to net zero”. To this, he added the importance of  contextualising those pathways and the need for taxonomies and blended financing to achieve a sustainable energy transition.

H.E. Fuentebella further proposed international accreditation to synchronise and provide direction to educational institutions and training facilities for capability building. 

The need for financial instruments

According to Mr Menon, the average annual investment in energy transition in Southeast Asia needs a two-and-a-half-fold increase, from US$70 billion to US$190 billion, by 2030. As such, establishing carbon markets is crucial to provide the right financial impetus for change.

Darmawan Prasodjo, President Director of PT Perusahaan Listrik Negara, agreed and alluded to the Energy Trilemma, adding that we have to see the energy transition not only from an environmental perspective, but also an economic one.

However, Egon van der Hoeven, APAC Vice President (Business Development) of ExxonMobil Low Carbon Solutions, stated that governments cannot be expected to fund projects indefinitely, since the sustainability of the system will ultimately depend on the efficiency of the financial markets.

Fossil fuels, new energy technologies to drive transition

Hon. Reece Whitby MLA, Minister for Environment; Climate Action; Racing and Gaming, Western Australia, strongly believes that the capacity for innovation in Asia will be the key driver for clean energy growth. For example, the building of supply chains and capabilities is crucial for hydrogen and its carriers, in particular ammonia.

Meanwhile, as the supply chains are being established, Liquefied Natural Gas (LNG) will continue to play an important role in this transition. Hon. Whitby said, “It is going to get us through this process. It is better than coal, cleaner than coal.” The kind of skills and capabilities to produce LNG and its auxiliary infrastructure are also the same ones that we can employ for hydrogen.

Panellists recognised the unique challenges of this region, particularly the fact that many countries are still developing their economies and that this will come with increased energy demand. Hence, fossil fuels will continue to play a key role in this region, but it is important to keep in mind that emissions is the key issue rather than the energy source in itself. 

Despite the challenges, there is optimism regarding the high level of commitment of Southeast Asian countries to achieve net zero.

In this regard, technological innovation in the area of carbon capture utilisation and storage (CCUS), technology-neutral policies and regulations that enable cooperation and innovation, and robust markets will be foundational to a timely and sustainable energy transition.