By Mehmet Enes Beşer
The region of Southeast Asia witnesses the persistent expansion of energy consumption fueled by urbanization, industrialization, and demographic growth. In turn, this trend necessitates the shift of focus towards renewable energy sources due to increased greenhouse gas emissions and susceptibility to price fluctuations and energy supply issues related to the heavy dependence on fossil fuels such as natural gas and coal. Thus, ASEAN acts as a platform for coordinating efforts and fostering cooperation in terms of the spread of renewable energy technologies. Over the last two decades, the approach to renewable energy in the organization has changed from sporadic declarations to institutionalized mechanisms aimed at harmonizing economic and environmental objectives.
One of the institutional drivers supporting renewable energy initiatives within ASEAN lies in the ASEAN Plan of Action for Energy Cooperation (APAEC). Adopted first in 1999, the APAEC serves as a master plan for energy policy in the region and is updated every five years according to global developments and member states’ interests. Being part of the current APAEC 2016-2025 (extended until 2026 due to the impacts of the pandemic), specific objectives for renewables involve reaching a regional market share of 23% in the total primary energy supply (TPES) by 2025. Although they are not binding, such objectives become a foundation for further cooperation and initiatives.
The first facilitation mechanism in the APAEC concerns the Renewable Energy Sub-Sector Network (RE-SSN) organized under the umbrella of the Senior Officials Meeting on Energy (SOME). As stated above, RE-SSN coordinates informational exchange, joint research, and monitoring of selected renewable energy projects within the organization. As a result, ASEAN develops technical capabilities, harmonizes standards, and explores such innovative policy instruments as feed-in tariffs, net metering, and power purchase agreements.
The next institutional entity contributing to the development of renewable energy in ASEAN relates to the ASEAN Centre for Energy (ACE) headquartered in Jakarta. Serving as a think tank, ACE offers expert recommendations about the design and implementation of the initiatives concerning ASEAN-wide energy cooperation. Apart from being responsible for monitoring the achievements of APAEC’s goals and issuing yearly ASEAN Energy Outlook reports, ACE promotes regional discussion of grid integration of renewable energy, resource assessment, and investment opportunities under the ASEAN Renewable Energy Integration Support Program (RE-ISP).
The ASEAN Power Grid (APG) is considered one of the most remarkable and bold regional initiatives implemented by ASEAN. Initially designed to increase energy access and security, APG aims today at ensuring cross-border transfers of renewable energy. Thanks to interconnections via bilateral and multilateral networks, APG allows exchanging electricity generated by renewable energy sources – Vietnamese solar power plants or Lao and Vietnamese hydropower plants, for example – in peak hours for neighboring regions where less amounts of renewable energy can be generated. Even though most of the interconnections between countries are bilateral, LTMS-PIP (Lao PDR-Thailand-Malaysia-Singapore Power Integration Project) initiated in 2022 became the first multilateral cross-border power trade project in the region. Its success would expand possibilities of developing renewable energy infrastructure in the region.
Besides promoting policy initiatives within ASEAN, the organization has established the ASEAN Renewable Energy Guidelines acting as soft-law regulation instruments that aim at helping national policymakers craft favorable regulatory regimes for renewable energy projects. Having engaged international partners (including GIZ) in the process, ASEAN designed guidelines containing best practices of regulation that should ensure transparent processes, mitigate risks, and promote public-private partnerships. The mentioned guidelines had been applied when creating solar auctions in Vietnam, encouraging rooftop solar policy in the Philippines, and developing biomass energy policy in Thailand.
Another area of collaboration between policy and finances includes developing a green investment framework. Issuing the ASEAN Green Bond Standards through the ASEAN Capital Markets Forum (ACMF), the organization seeks to harmonize environmental finance regulations with international practices taking into account peculiarities of individual member states. The mentioned initiative has already been successfully implemented in some member states, like Indonesia, Malaysia, and Thailand, aiming at issuing sovereign and corporate green bonds that will finance renewable energy infrastructure. Even though the uptake of green bonds in other ASEAN member states still appears slow, their creation proves the importance of integrating policy and financial resources for scaling up renewable energy.
Furthermore, ASEAN utilizes external partners to enhance renewable energy policy. Participating in the collaboration with ASEAN+3 (China, Japan, and South Korea) and East Asia Summit Energy Cooperation Task Force as well as maintaining bilateral relations with the EU, the USA, and Australia, ASEAN gains an opportunity to obtain technical assistance, financing, technology, and climate-resilient energy planning tools. Such cooperation allows smaller member states (like Myanmar, Laos, and Cambodia) with less developed infrastructures for renewables to participate in regional projects and initiatives aimed at renewable energy development.
As one can see, the focus shifts nowadays towards incorporating socio-economic aspects into policy-making for renewable energy initiatives. The emphasis on rural electrification, gender empowerment, and community engagement has appeared as another direction for fostering sustainable energy development. Decentralized renewable energy systems like solar home systems, mini-grids, and bio-cooking stoves are considered as instruments of both climate change mitigation and poverty alleviation. Currently, UNESCAP and other organizations collaborate with the ASEAN Centre for Energy in conducting research on gender responsive energy policy and its contribution to the performance of renewable energy projects.
Despite significant progress made by ASEAN in renewable energy initiatives, many challenges should be overcome. Heterogeneity of the region in terms of political will, financial resources, and technical expertise complicates the implementation of projects and programs. Moreover, fossil fuels remain subsidized in many countries, hindering the competitiveness of renewable energy systems. Besides that, high regulatory risk in certain ASEAN states discourages investment, and insufficient infrastructure hampers the development of cross-border power trade.
However, it becomes evident that ASEAN undergoes changes, shifting from diffuse declarations to institutionalized approaches to renewable energy development in terms of practical policies, training institutions, and multilateral initiatives. Being at the front line of energy cooperation models, ASEAN is likely to witness the implementation of initiatives facilitating energy sustainability.