Wednesday, October 4, 2023

Asean on a Mission towards a Sustainable Energy Future

Jayanty Nada Shofa
October 14, 2021 | 7:12 pm
B20, B30, and B100 biofuel samples as seen in Jakarta on February 26, 2019. (Antara Photo/Aprillio Akbar)
B20, B30, and B100 biofuel samples as seen in Jakarta on February 26, 2019. (Antara Photo/Aprillio Akbar)

Jakarta. Asean is in an endeavor to secure a sustainable energy future, as it aims to optimize biofuel and clean coal technologies, among others, under its flagship energy cooperation blueprint, according to a recent discussion with the bloc's energy think tank.

The 2016-2025 Asean Plan of Action for Energy Cooperation (APAEC) is currently in progress, splitting the timeline into two five-year phases. 

Asean reported the first phase —which lasted from 2016-2020— to have borne great results, as it achieved a 13.9 percent share of renewables in its total primary energy supply in 2018. 

In the second phase, the target for renewables share has risen to 23 percent by 2025. To this end, Asean plans to further promote biofuels, especially in the emission-intensive transport sector.


"Southeast Asia has an abundant source of biomass. Biofuel is one of the primary energy that we are planning to significantly tap into for the transport sector," Nuki Agya Utama, the executive director at the Asean Center for Energy (ACE), recently told the Jakarta Globe in an interview.

"The region is home to many experts, research institutes, and industries advanced in biofuels. So it is not difficult for biofuel to penetrate the transport sector," he said.

The 6th Asean Energy Outlook (AEO6) reported, as of 2019, four Asean member states —including Indonesia— have mandated biofuel policies. Indonesia itself currently has a B30 blending mandate, which requires its diesel fuel to contain a 30 percent blend of palm oil-based biofuel.

Under APAEC Phase II, Asean seeks to optimize clean coal technology by deploying more efficient, less emissive supercritical and ultra-supercritical power plants.

"Aside from removing all [of the less efficient] subcritical plants, we are introducing the blending of coal and biomass or co-firing for power generation. That will [enable] affordable electricity while also reducing emissions coming from coal," Nuki said.

About 83 percent of Asean's installed coal-fired power capacity currently runs on subcritical technology. As of 2019, the region had 10,020 megawatts of installed high-efficiency, low emissions coal power capacity. Of that number, more than half came from ultra-supercritical, according to the AEO6.

But Asean's journey towards a sustainable energy future requires a hefty sum of investments. 

Under the APAEC targets scenario (APS), Asean would need a substantial power investment of around $508 billion until 2040. As the name suggests, the APS takes into account the steps required to achieve the APAEC targets.

The AEO6 attributes the larger investment needs in the APS to the higher cost of cleaner technologies in the first several years.

"We need international financing schemes, and this depends on each member state on how they deal with the financial institutions," Nuki said.

"Financial firms like the ADB are trying to stop financing coal-fired power plants. But at the same time, the region is also attempting to significantly reduce coal power plant emissions by stopping all sub-criticals and investing more on ultra-super criticals and supercritical to maintain the power grid's stability," he added.

Meanwhile, Asean is working closely with Germany in its energy programs. 

During the discussion, Sergey Makarov —the lead advisor for the Asean-Germany Energy Programme (AGEP)— shared his insight on how the bloc can improve its investment climate. 

According to Sergey, streamlined investment regulations can open doors for more investments, particularly in the energy sector.

"Secondly, the investment scheme must be long-term and simple. [...] The APAEC gives the private sector an indication of where it will go in ten years and what else goes beyond. Businesses can plan their investments accordingly and calculate their risks," he told the Globe.

The investment climate must also be inclusive with broad access to create competition between private companies.

Sergey also suggested that Asean could also look into the potential of electric vehicles (EVs) for the longer term.

"But [EVs] would require investments in infrastructures like charging stations. [We should also explore] topics on batteries, as well as building specific investment schemes to incentivize the introduction of EVs," Sergey said.

"EVs are something that I would see coming into the region. However, it would take some time for [EVs] to be fully utilized, whereas biofuel is something we can focus on with the existing capacity and R&D centers soon," he added.

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