Southeast Asia Lags Clean Energy Adoption As Coal Dominates, Says Report

Southeast Asia is outpacing the world in its growing electricity demand but lagging in clean energy adoption, allowing cheap but pollutive coal to dominate the energy mix, putting net-zero emissions targets out of reach, according to a report.

The need for electricity rose 22% in the region from 2015 to 2021 — five percentage points higher than the world average — but this demand was met by only a 39% increase in low-carbon power, said the study by London-based non-profit Ember.

Solar and wind facilities contributed to only 4% of power generated in Southeast Asia last year. More clean electricity came from hydropower, which is renewable but frequently harmful to local ecology and communities.

Existing plans will bump solar and wind power to only 115 of the region’s electricity by 2030, the study added. The world average today is already over 10%, and growing.

The world will need solar and wind to generate 40%of its power by 2030 to get to net-zero carbon emissions by 2050, according to the International Energy Agency.

The United Nations’ Intergovernmental Panel on Climate Change has also said that keeping climate change in check will require both a sharp increase in renewable power generation and a rapid phase-out of fossil fuels.

The Ember report examined energy trends in five Southeast Asia countries — Indonesia, Malaysia, Thailand, Vietnam and the Philippines — which account for nearly 905 of energy generation in the regional bloc. Clean energy sources studied also include ocean waves, biomass, geothermal and nuclear power.

“Rapid scaling-up of solar and wind, and grid modernisation, are going to be crucial pieces of the puzzle to solve the climate crisis in this region,” said report co-author and Ember analyst Uni Lee.

Coal outshining renewables

The slow growth of clean energy is causing its market share to stagnate and even fall in some Southeast Asian countries, as coal plays an ever greater role in fuelling economic expansion. Power sector carbon emissions in the five studied countries rose 21% in the last six years, the report said.

The biggest laggards are Indonesia and the Philippines, which saw their coal electricity generation increase by over 80 terawatt-hours since 2015, with small increases in clean energy output.

Both countries have been leveraging their large hydropower and geothermal potential for decades but have struggled to make inroads with solar and wind power.

Even Vietnam, which is considered a success story in Southeast Asia due to its lofty solar and wind targets, saw its clean energy additions overtaken by coal in recent years.

Malaysia is a relatively bright spot — with 93% of its new electricity demand for the past six years met with hydropower. Coal use has risen sharply in the country, but it is counterbalanced by a drop in the use of oil and gas.

Thailand, meanwhile, has been relying on energy imports to fulfil its growing electricity demand. The country imports coal and hydropower from neighbouring Laos and Malaysia.

Greater ambition needed

Fossil fuels will continue to play an outsized role in the energy mix if governments do not scale-up their renewable energy plans, even as wind and solar energy prices undercut hydrocarbons, the report said.

Report co-author and Ember analyst Achmed Edianto told Eco-Business that states could pay for building transmission lines to woo private investment in renewable energy projects, especially in jurisdictions like Indonesia, Vietnam and Thailand, where the state-owned utility is the sole electricity buyer.

Analysts have said that building grids that can withstand the variable power supply from wind and solar power projects are key to scaling up their deployment. In past years, solar facilities in Vietnam had to reportedly dump up to 80% of their output because the power lines then could not handle sudden mismatches between electricity supply and demand, causing the project owners to lose money.

Financing solutions would be more varied in open markets such as in the Philippines, Edianto added.

A recent Bain & Company report said that Southeast Asia countries may be underestimating the cost of the grid upgrades needed to scale-up renewable energy deployment. It suggested countries explore public-private financing options.

The Ember report said that multilateral cooperation would help better allocate energy resources and meet Southeast Asia’s energy demand, including for countries that are not major energy producers such as Singapore.C