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Felicity Bradstock

Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

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Southeast Asia Is Betting Big on a Green Future

  • Southeast Asian countries are investing heavily in renewables and clean tech, with some receiving funding from international donors.
  • Some countries in the region have committed to ambitious climate pledges.
  • The green transition is expected to bring many benefits, including job creation.
Renewable Energy

Despite the continued reliance on fossil fuels by several Southeast Asian countries, many governments in the region are going full steam ahead on energy transition plans, as they invest heavily in renewables and clean tech. Thanks to funding from international donors, some countries in Southeast Asia are finally able to plan for a greener future, as they establish strategies to eventually decarbonise their economies in line with a global green transition. 

The Association of Southeast Asian Nations (ASEAN) countries have pledged to reduce greenhouse gas emissions in line with Paris Agreement aims, suggesting their commitment to a green transition. However, achieving this transition is not so simple. Countries across the region are facing the challenges of reducing their emissions while also expanding their energy supply to meet the growing demand. Many ASEAN countries are undergoing rapid industrialisation, as well as seeing energy demand expand in line with growing populations. In addition, shifting demand away from fossil fuels in favour of green alternatives will require a significant level of investment across a range of renewable energy and tech sectors. 

While a transition to green is no easy feat, it is expected to bring a multitude of benefits to the region. A recent OECD report suggested that, in Indonesia, transitioning towards cleaner energy production could potentially create more than 1 million new jobs. The OECD Secretary-General Mathias Cormann stated of the report findings, “The green transition will bring new opportunities to boost economic growth and lift living standards in Southeast Asia, a region that is both strongly dependent on nature for its economic activities and heavily impacted by climate change.” Cormann added, “Some sectors will create jobs, some will lose jobs, and others will disappear. Enhancing social safety nets, providing reskilling and upskilling opportunities, and planning for new territorial development models for regions dependent on fossil-fuel related activities will be essential for a smooth transition.”

Despite the significant challenges most Southeast Asian countries face in developing their green energy industries, some are making strides in building their renewable energy capacity. In November, the government of Indonesia announced a new investment plan to develop the country’s renewable energy capacity. Indonesia will invest $20 billion in a green transition, with more private funding expected to follow. 

The Comprehensive Investment and Policy Plan (CIPP), led by the United States and Japan, will provide $20 billion in funding for Indonesia's Just Energy Transition Partnership (JETP). The plan outlines the aim of cutting grid emissions to 250 million metric tonnes of CO2 by 2030, marking an improvement on the previous estimate of over 350 million. Indonesia aims to increase the contribution of renewable energy to the total energy mix to 44 percent by 2030, from just 12 percent in 2022. 

Indonesia continues to rely heavily on coal, as the world's largest exporter of coal for electricity. As the highest energy-demand member state of ASEAN, Indonesia must change its ways to support the achievement of a global green transition. The high level of funding provided by CIPP is expected to encourage private domestic and foreign companies to invest more in Indonesia’s green energy and clean tech sector, helping it to gradually decrease its reliance on fossil fuels and decarbonise its economy. 

In Vietnam, the government approved the Power Development Plan VIII (PDP8) last year, which sets ambitious renewable-energy goals for 2030. Under the plan, Vietnam pledged net-zero carbon emissions by 2050. The government also aims to generate a minimum of 30.9 percent of the country’s energy from renewable resources by 2030, which will increase to 67.5 percent by 2050. Vietnam is highly suited to the development of wind and solar power, with the technical potential of 1,000 GW. Offshore wind is expected to contribute around 15 GW of energy by 2035, from none at present, providing around 18.5 percent of the country’s energy mix. However, developing Vietnam’s wind and solar power capacity will require a significant amount of funding. 

Meanwhile, in 2023, the Malaysian Economy Minister, Rafizi Raml, stated aims for Malaysia to become a regional leader in renewable energy through the government’s National Energy Transition Roadmap (NETR). Raml said, “As a nation, we are used to falling behind and lagging behind. And when others pace ahead, we rarely think about how we could be the ones leading others instead… With NETR, however, there is a real opportunity for us to lead Southeast Asia as the regional powerhouse in renewable energy.” The government aims to generate 31 percent (13 GW) of the country’s energy from renewable resources by 2025 and 40 percent (18 GW) by 2035. 

The Southeast Asia region has a long way to go to develop its renewable energy and transition away from its reliance on fossil fuels. However, several countries in the region have committed to ambitious climate pledges and have established roadmaps to help them achieve their green energy goals. In some countries, this is being supported by funding from international donors, which is expected to attract higher levels of private investment in renewables and clean tech to the region to support a green transition. 

By Felicity Bradstock for Oilprice.com 


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