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RENEWABLE

ENERGY OUTLOOK

FOR ASEAN

TOWARDS A REGIONAL

ENERGY TRANSITION

2ND EDITION

Unless otherwise stated, material in this publication may be freely used, shared, copied, reproduced, printed and/or stored, provided that

appropriate acknowledgement is given of IRENA as the source and copyright holder. Material in this publication that is attributed to third

parties may be subject to separate terms of use and restrictions, and appropriate permissions from these third parties may need to be

secured before any use of such material.

Citation: IRENA & ACE (2022), Renewable energy outlook for ASEAN: Towards a regional energy transition (2nd ed.), International

Renewable, Energy Agency, Abu Dhabi; and ASEAN Centre for Energy, Jakarta.

ISBN: 978-92-9260-467-7

Report available for download: www.irena.org/publications.

For further information or to provide feedback: publications@irena.org

About IRENA

The International Renewable Energy Agency (IRENA) is an intergovernmental organisation that supports countries in their transition to a

sustainable energy future, and serves as the principal platform for international co-operation, a centre of excellence, and a repository of

policy, technology, resource and ﬁnancial knowledge on renewable energy. IRENA promotes the widespread adoption and sustainable use

of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and wind energy, in the pursuit of sustainable

development, energy access, energy security and low-carbon economic growth and prosperity. www.irena.org

About ACE

Established on 1 January 1999, the ASEAN Centre for Energy (ACE) is an intergovernmental organisation within the ASEAN structure

representing the 10 ASEAN Member States (AMS) interests in the energy sector. It is guided by a Governing Council composed of Senior

Ocials on Energy from each AMS and a representative from the ASEAN Secretariat as an ex-ocio member. Hosted by the Ministry of

Energy and Mineral Resources of Indonesia, the oce is located in Jakarta. For more information, visit www.aseanenergy.org

Acknowledgements

This report was prepared by IRENA in close collaboration with the ASEAN Centre for Energy (ACE), with the support of the ASEAN Secretariat

and engagement from ASEAN Member States, including: Ministry of Energy Brunei Darussalam, Ministry of Mines and Energy Cambodia,

Ministry of Energy and Mineral Resources Indonesia, Ministry of Energy and Mines Lao PDR, Ministry of Energy and Natural Resources

Malaysia, Ministry of Electricity and Energy Myanmar, Department of Energy Philippines, Energy Market Authority Singapore, Department of

Alternative Energy Development and Eciency Thailand, and the Ministry of Industry and Trade Viet Nam.

Brunei Darussalam: Abdul Matiin Bin Hj Md Kasim, Hadinah Yahaya, Shaikh Mohamad Faiz Bin Shaikh Hj Fadilah. Cambodia: Chiphong Sarasy.

Indonesia: Andriah Feby Misna, Tony Susandy, Elis Heviati, Senda Kanam, Suharyati, Jamaludin Lastiko, Edwin Nugraha Putra, Herian Atma.

Lao PDR: Boualom Saysanavong, Phouttavanh Phommachan. Malaysia: Esther Lew. Myanmar: Win Myint. Philippines: Mylene C. Capongcol,

Marissa P. Cerezo, Michael O. Sinocruz. Thailand: Lumyai Mungpangklang, Narapandra Yamalee, Prasert Sinsukprasert, Siriyapohn Petchamli,

Sutthasini Glawgitigul, Watcharin Boonyarit, Yaowateera Achawangkul. Singapore: Latha Ganesh, Agnes Koh, Brian Tham, Lucius Tan,

Lee Seng Wai, Kim Jin, Haolin Jia, Lindy Tan, Yingxian Huang, Sophie Gan, Lionel Choo, Jia Yong Leong, Wai Ying Ho, Guang Yong Ong,

Christopher Gan, Wenkang Wong, Yvonne See, Zahin Amrad. Viet Nam: Nguyen Ninh Hai, Nguyen Hoang Linh. ASEAN Centre for Energy:

Septia Buntara Supendi, Monika Merdekawati, Zulﬁkar Yurnaidi. ASEAN Secretariat: Marie Gail de Sagon, Muhammad Indra Wahyudin.

The report was authored by Adam Adiwinata, Zainab Omolade Ajibade, Seán Collins, Maisarah Abdul Kadir, Raul Miranda, Walter Sanchez and

Nicholas Wagner under the guidance of Dolf Gielen (Director, IRENA Innovation and Technology Centre), Ricardo Gorini (Senior Programme

Ocer, Renewable Energy Roadmaps), and Emanuele Taibi (ex-IRENA).

Additional valuable comments and suggestions were provided by IRENA colleagues Ahmed Badr, Badariah Yosiyana, Bishal Parajuli, Diala

Hawila, Elizabeth Press, Emanuele Bianco, Francis Field, Gurbuz Gonul, Gondia Sokhna Seck, Herib Blanco, Ines Jacob, Michael Renner,

Michael Taylor, Nazik Elhassan, Paul Komor, Paula Nardone, Rabia Ferroukhi, Simon Benmarraze, Stephanie Clarke, Ute Collier and Xavier

Casals. The following colleagues also provided methodological and analytical support for the report: Maria Vicente Garcia, Krisly Guerra,

Gayathri Prakash and Rodrigo Leme. The editor of this report was Stefanie Durbin.

IRENA would like to thank the Government of Denmark for supporting IRENA with the work that formed the basis of this report. Speciﬁcs

thanks go to Dorthea Damkjær, Laura Skøt, Niels Bisgaard Pedersen, Simon Fløe Nielsen, Anders Kruse, Nadeem Niwaz, Stefan Petrović,

Aisma Vitina, Thomas Capral, Loui Algren.

Disclaimer

This publication and the material herein are provided “as is”. All reasonable precautions have been taken by IRENA to verify the reliability of

the material in this publication. However, neither IRENA nor any of its ocials, agents, data or other third-party content providers provides a

warranty of any kind, either expressed or implied, and they accept no responsibility or liability for any consequence of use of the publication

or material herein. The information contained herein does not necessarily represent the views of all Members of IRENA. The mention of

speciﬁc companies or certain projects or products does not imply that they are endorsed or recommended by IRENA in preference to others

of a similar nature that are not mentioned. The designations employed and the presentation of material herein do not imply the expression of

any opinion on the part of IRENA concerning the legal status of any region, country, territory, city or area or of its authorities, or concerning

the delimitation of frontiers or boundaries.

TOWARDS A REGIONAL ENERGY TRANSITION | 3

RENEWABLE

ENERGY OUTLOOK

FOR ASEAN

TOWARDS A REGIONAL

ENERGY TRANSITION

2ND EDITION

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RENEWABLEENERGYOUTLOOKFORASEANTOWARDSAREGIONALENERGYTRANSITION2NDEDITION©IRENA&ACE2022Unlessotherwisestated,materialinthispublicationmaybefreelyused,shared,copied,reproduced,printedand/orstored,providedthatappropriateacknowledgementisgivenofIRENAasthesourceandcopyrightholder.Materialinthispublicationthatisattributedtothirdpartiesmaybesubjecttoseparatetermsofuseandrestrictions,andappropriatepermissionsfromthesethirdpartiesmayneedtobesecuredbeforeanyuseofsuchmaterial.Citation:IRENA&ACE(2022),RenewableenergyoutlookforASEAN:Towardsaregionalenergytransition(2nded.),InternationalRenewable,EnergyAgency,AbuDhabi;andASEANCentreforEnergy,Jakarta.ISBN:978-92-9260-467-7Reportavailablefordownload:www.irena.org/publications.Forfurtherinformationortoprovidefeedback:publications@irena.orgAboutIRENATheInternationalRenewableEnergyAgency(IRENA)isanintergovernmentalorganisationthatsupportscountriesintheirtransitiontoasustainableenergyfuture,andservesastheprincipalplatformforinternationalco-operation,acentreofexcellence,andarepositoryofpolicy,technology,resourceandfinancialknowledgeonrenewableenergy.IRENApromotesthewidespreadadoptionandsustainableuseofallformsofrenewableenergy,includingbioenergy,geothermal,hydropower,ocean,solarandwindenergy,inthepursuitofsustainabledevelopment,energyaccess,energysecurityandlow-carboneconomicgrowthandprosperity.www.irena.orgAboutACEEstablishedon1January1999,theASEANCentreforEnergy(ACE)isanintergovernmentalorganisationwithintheASEANstructurerepresentingthe10ASEANMemberStates(AMS)interestsintheenergysector.ItisguidedbyaGoverningCouncilcomposedofSeniorOfficialsonEnergyfromeachAMSandarepresentativefromtheASEANSecretariatasanex-officiomember.HostedbytheMinistryofEnergyandMineralResourcesofIndonesia,theofficeislocatedinJakarta.Formoreinformation,visitwww.aseanenergy.orgAcknowledgementsThisreportwaspreparedbyIRENAinclosecollaborationwiththeASEANCentreforEnergy(ACE),withthesupportoftheASEANSecretariatandengagementfromASEANMemberStates,including:MinistryofEnergyBruneiDarussalam,MinistryofMinesandEnergyCambodia,MinistryofEnergyandMineralResourcesIndonesia,MinistryofEnergyandMinesLaoPDR,MinistryofEnergyandNaturalResourcesMalaysia,MinistryofElectricityandEnergyMyanmar,DepartmentofEnergyPhilippines,EnergyMarketAuthoritySingapore,DepartmentofAlternativeEnergyDevelopmentandEfficiencyThailand,andtheMinistryofIndustryandTradeVietNam.BruneiDarussalam:AbdulMatiinBinHjMdKasim,HadinahYahaya,ShaikhMohamadFaizBinShaikhHjFadilah.Cambodia:ChiphongSarasy.Indonesia:AndriahFebyMisna,TonySusandy,ElisHeviati,SendaKanam,Suharyati,JamaludinLastiko,EdwinNugrahaPutra,HerianAtma.LaoPDR:BoualomSaysanavong,PhouttavanhPhommachan.Malaysia:EstherLew.Myanmar:WinMyint.Philippines:MyleneC.Capongcol,MarissaP.Cerezo,MichaelO.Sinocruz.Thailand:LumyaiMungpangklang,NarapandraYamalee,PrasertSinsukprasert,SiriyapohnPetchamli,SutthasiniGlawgitigul,WatcharinBoonyarit,YaowateeraAchawangkul.Singapore:LathaGanesh,AgnesKoh,BrianTham,LuciusTan,LeeSengWai,KimJin,HaolinJia,LindyTan,YingxianHuang,SophieGan,LionelChoo,JiaYongLeong,WaiYingHo,GuangYongOng,ChristopherGan,WenkangWong,YvonneSee,ZahinAmrad.VietNam:NguyenNinhHai,NguyenHoangLinh.ASEANCentreforEnergy:SeptiaBuntaraSupendi,MonikaMerdekawati,ZulfikarYurnaidi.ASEANSecretariat:MarieGaildeSagon,MuhammadIndraWahyudin.ThereportwasauthoredbyAdamAdiwinata,ZainabOmoladeAjibade,SeánCollins,MaisarahAbdulKadir,RaulMiranda,WalterSanchezandNicholasWagnerundertheguidanceofDolfGielen(Director,IRENAInnovationandTechnologyCentre),RicardoGorini(SeniorProgrammeOfficer,RenewableEnergyRoadmaps),andEmanueleTaibi(ex-IRENA).AdditionalvaluablecommentsandsuggestionswereprovidedbyIRENAcolleaguesAhmedBadr,BadariahYosiyana,BishalParajuli,DialaHawila,ElizabethPress,EmanueleBianco,FrancisField,GurbuzGonul,GondiaSokhnaSeck,HeribBlanco,InesJacob,MichaelRenner,MichaelTaylor,NazikElhassan,PaulKomor,PaulaNardone,RabiaFerroukhi,SimonBenmarraze,StephanieClarke,UteCollierandXavierCasals.Thefollowingcolleaguesalsoprovidedmethodologicalandanalyticalsupportforthereport:MariaVicenteGarcia,KrislyGuerra,GayathriPrakashandRodrigoLeme.TheeditorofthisreportwasStefanieDurbin.IRENAwouldliketothanktheGovernmentofDenmarkforsupportingIRENAwiththeworkthatformedthebasisofthisreport.SpecificsthanksgotoDortheaDamkjær,LauraSkøt,NielsBisgaardPedersen,SimonFløeNielsen,AndersKruse,NadeemNiwaz,StefanPetrović,AismaVitina,ThomasCapral,LouiAlgren.DisclaimerThispublicationandthematerialhereinareprovided“asis”.AllreasonableprecautionshavebeentakenbyIRENAtoverifythereliabilityofthematerialinthispublication.However,neitherIRENAnoranyofitsofficials,agents,dataorotherthird-partycontentprovidersprovidesawarrantyofanykind,eitherexpressedorimplied,andtheyacceptnoresponsibilityorliabilityforanyconsequenceofuseofthepublicationormaterialherein.TheinformationcontainedhereindoesnotnecessarilyrepresenttheviewsofallMembersofIRENA.ThementionofspecificcompaniesorcertainprojectsorproductsdoesnotimplythattheyareendorsedorrecommendedbyIRENAinpreferencetoothersofasimilarnaturethatarenotmentioned.ThedesignationsemployedandthepresentationofmaterialhereindonotimplytheexpressionofanyopiniononthepartofIRENAconcerningthelegalstatusofanyregion,country,territory,cityorareaorofitsauthorities,orconcerningthedelimitationoffrontiersorboundaries.TOWARDSAREGIONALENERGYTRANSITION3RENEWABLEENERGYOUTLOOKFORASEANTOWARDSAREGIONALENERGYTRANSITION2NDEDITION4RENEWABLEENERGYOUTLOOKFORASEANFOREWORDTheSoutheastAsiaregionwillseerapideconomicgrowthinthecomingdecadesandenergyuseissettogrowsignificantly.Today,theregionstandsatacrossroads.Ontheonehand,itcanpursueapathofcontinuedrelianceonfossilfuels,mostofwhichcomefromnon-indigenoussources,increasingtheregion’semissionsandexposuretovolatileandincreasinglyexpensiveglobalcommoditymarkets.Ontheother,theregioncouldutiliseitsample,affordable,indigenousrenewableenergyresourcestolowerenergycosts,reduceemissionsanddriveregionaleconomicdevelopment.ThissecondeditionoftheRenewableenergyoutlookforASEANwasdevelopedincollaborationtheASEANCenterforEnergy(ACE)andtheASEANRenewableEnergySub-sectorNetwork.ItisguidedbyIRENA’sWorldenergytransitionsoutlookandbuildsuponthefirstRenewableenergyoutlookforASEAN,releasedin2016,byincorporatinganet-zeropathwayandalonger-termperspectiveto2050.Astheregioncommitstoevermoreambitiousclimatetargets,includingnet-zerocommitments,planningmustbeginnowinearnest.WhileASEANhasambitiousrenewableenergygoalsinthenear-term,theregionneedstothinkandplanforthelong-term.Ithasauniqueopportunitytodevelopasustainableenergysystembasedonrenewableenergyresourcesthatcansupportsocioeconomicrecoveryanddevelopmentwhileaddressingclimatechangemitigationandadaptationstrategies,andaccomplishingenergysecurity,universalisationandaffordabilitygoals.Thisreportprovidesacomprehensiverenewables-focusedenergypathwayforthedevelopmentofacleanerandmoresustainableregionalenergysystem.Itexploresend-usesectorelectrification,therapidexpansionofrenewablegeneration,energyefficiencysolutions,theroleofemergingtechnologiessuchascleanhydrogenandbatteries,aswelltheimportanceofexpandingregionalpowersectorintegration.Italsopresentssector-specifictechnologicalpathwaysandinvestmentopportunitiesthatwillenrichtheregionaldebateandhelpacceleratetheenergytransformationacrossASEAN.TheengagementwithASEANMemberStateswascrucialtothedevelopmentofthisoutlook.WealsoaregratefulforthesupportofregionalorganisationssuchasACE,andourDanishpartners,whosupportedthisproject.Acceleratingtheenergytransitionwillrequirefar-sightedchoices,disciplineandwiseinvestments,backedbyinternationalco-operationandstrongregionalplanninginASEAN.IRENAstandsreadytoworkwithcountriesacrossASEANandourcloseregionalpartners,tohelpmakethevisionpresentedinthisreportareality.FrancescoLaCameraDirector-General,IRENATOWARDSAREGIONALENERGYTRANSITION5FOREWORDFollowingthefirstIRENARenewableenergyoutlookforASEANpublishedin2016,theInternationalRenewableEnergyAgency(IRENA)andtheASEANCentreforEnergy(ACE)haveco-developedtheRenewableenergyoutlookforASEAN:Towardsaregionalenergytransition(2ndEdition).Theoutlookaddressespotentialsolutionstotheloomingenergycrisisinthewakeofgeopoliticalconflicts,theCOVID-19pandemicandclimatechangebyexploringhowASEANmayoptimisetheuseofcleanenergytechnologies,devisesupportivepolicymeasuresanddetermineeffectivetimelinesforfinancing.ThereportdiscusseschallengestoachievingthetargetsoftheASEANPlanofActionforEnergyCooperation(APAEC)PhaseII:2021–2025.Theseincludetheaspirationalgoalstoincreasetheshareofrenewablesinprimaryenergyandtotalinstalledcapacitywhilstreducingenergyintensity.Reflectingrecentnetzeropledges,thissecondeditionalsoexploresapathwaytoexpandtheshareofrenewablesinsupplyandend-usesaspartofajusttransition.ThispathwaycouldenableASEANtoacceleratetheenergytransitionandstrengthenenergyresiliencethroughgreaterinnovationandcooperation.ThereportcomplementsthelaunchofACE'sflagshippublication,the7thASEANEnergyOutlook(AEO7),withbothstudiesraisingconcernsaboutregionalenergysecurity.Coal'sshareremainsdominantinthepowersector,asdoesoilintransportation,andASEANdesperatelyneedstodiversifyitsenergymix.Onthecontrary,theintermittencyofrenewableenergysources,particularlysolarandwind,remainsanobstacleowingtothestrainonthepowergrid.Thepotentialofbioenergyfeedstocksisnotyetfullyassessedorutilised,withonlya7%shareofthetransportfuelmixby2020.Inshort,ASEANneedstoimproveregionalcooperationtospeeduptheestablishmentofflexibleandreliablepowerinfrastructureandthehigheradoptionofenergy-efficienttechnologiesthroughend-userelectrification.Indevelopingthisreport,IRENAandACEreceivedsupportfromtheRenewableEnergySub-SectorNetwork(RE-SSN).ThisspecialisedworkinggroupconsistsofgovernmentofficialsfromtenministriesofenergyinASEANmemberstates.WehopethefindingsofthisstudywillprovideinsightfulanalysisfortheconsiderationofRE-SSNandreceivepositivefeedback.Wealsosincerelyhopeitwillofferencouragingmessagesonthepromiseofthecleanenergytransitiontoallstakeholders,fromprivatecompaniesandacademiatoprofessionalassociations.Dr.NukiAgyaUtamaExecutiveDirector,ASEANCentreforEnergy6RENEWABLEENERGYOUTLOOKFORASEANCONTENTSFIGURES,TABLES,BOXES.......................................................................................................7COUNTRYCODES................................................................................................................11ABBREVIATIONS..................................................................................................................12KEYFINDINGS.....................................................................................................................14EXECUTIVESUMMARY.........................................................................................................161.INTRODUCTION..............................................................................................................26Focusofthereport............................................................................................................................26Methodologyandprocess...............................................................................................................272.THEROADMAPFORASEAN.............................................................................................32CurrentstatusandthePES..............................................................................................................32Climatepledges...............................................................................................................................37Renewableenergyroadmap...........................................................................................................40Demandsectors................................................................................................................................483.POWERSECTOR..............................................................................................................58Overviewandscope........................................................................................................................58Powercapacityandgeneration.....................................................................................................63Powerflexibility..................................................................................................................................744.TECHNOLOGYVIEWS.....................................................................................................88Electrificationinbuildings,industryandtransport.........................................................................88Energyconservationandefficiencyinresidentialairconditioning.............................................90EnergysolutionsforislandsintheSoutheastAsianregion:Mini-gridsandstand‑aloneenergysystems............................................................................................................91Bioenergy...........................................................................................................................................93Hydrogen...........................................................................................................................................98Energyintensityandconsumption................................................................................................103CO2removal....................................................................................................................................104CriticalmaterialsfortheenergytransitionandASEAN................................................................104Indonesia’snickelproductionandambitionstobeSoutheastAsia’sEVbatteryhub...............107SolarPVindustrialisationopportunities.........................................................................................109EnergysecurityintheASEANregion.............................................................................................1095.INVESTMENTS,COSTSANDBENEFITS............................................................................112Investmentneeds............................................................................................................................112Costsandsavings............................................................................................................................1156.ACTIONSNEEDEDNOW–END‑USESECTORFOCUS.....................................................118REFERENCES......................................................................................................................121TOWARDSAREGIONALENERGYTRANSITION7Figure1SoutheastAsia’stotalfinalconsumption,byscenario,2018,2030,2050..................................18Figure2SoutheastAsia’spowercapacityalternativesfor1.5-S,in2050.................................................19Figure3Transmissionlinesandbatteriesin2050,1.5-SRE90.......................................................................20Figure4Bioenergyandhydrogenuseintheend-usesectors,byscenario,2018,2050.......................21Figure5Energy-relatedCO2emissionsandsavings,bytechnologytype,2018,1.5-Sin2030and2050...............................................................................................................................................22Figure6ASEANcountriesconsideredintheREmapandFlexToolanalyses..............................................27Figure7DescriptionofthescenariosintheREmapstudy..............................................................................28Figure8REmaptoolsforanalysisoftheend-useandpowersectors.........................................................30Figure9Totalfinalconsumptionbycarrierandcountry,PES,2018-2050.................................................33Figure10Annualelectricityconsumptionpercapita,PES,bycountry,2020-2050...................................34Figure11Shareofpopulationwithaccesstocleancooking.............................................................................34Figure12ShareofrenewablepowercapacityandgenerationinASEANandAMS,2020......................35Figure13ASEANpowersectorcapacityintheBESandPES..........................................................................35Figure14ASEANpowersectorgenerationundertheBESandPES..............................................................36Figure15PrimaryEnergySupply,PES,2018,2030,2050..................................................................................37Figure16Totalfinalconsumptionbyscenario,2018-2050.................................................................................42Figure17Powercapacityandrenewablesharebyscenario,2018-2050.......................................................44Figure18Powergenerationandrenewablesharebyscenario,2018-2050..................................................45Figure19Totalenergy-relatedCO2emissions,byscenario,2018-2050.........................................................46Figure20Buildingsectorconsumption,allscenarios,2018-2050....................................................................50Figure21Industryenergyconsumption,allscenarios,2018-2050..................................................................52Figure22Transportsectorenergyconsumption,allscenarios,2018-2050..................................................55Figure23InternationalshippingbunkeringdemandinASEAN,byscenario,2018-2050.........................55Figure24InternationalaviationbunkeringdemandinASEAN,byscenario,2018-2050..........................56Figure25REmapToolkitoverview............................................................................................................................60Figure26ASEANregionrepresentationwith35nodes......................................................................................62Figure27ASEANcapacityexpansion,byscenario,2018,2030,2050...........................................................64Figure28ASEANpowersectorCO2emissionsandemissionsintensity........................................................65Figure29ASEANtransmissioncapacityexpansion..............................................................................................66Figure30InternationallineexpansionalongtheMekongRiverinthe1.5-SRE90....................................67Figure31NationalexpansionofsolargenerationcapacityandtotalVREshareofcapacityinthe1.5‑SRE90in2050...........................................................................................................................68Figure32Totalinstalledcosts,capacityfactorsandcostofelectricitybycountry,2021.......................70Figure33TimelinefromPLNtoretirementcoalpowerplantstocarbonneutral.......................................72Figure34SolarandwindVREshareinASEANcountriesinthe1.5-SRE90and1.5-SRE100by2050...........................................................................................................................................................75Figure35EnergyexchangeatthedispatchlevelacrosstheASEANregionin2050underthe1.5-Sand1.5-SRE100.......................................................................................................................78Figure36Transmissionlinesandbatteriesin2050,1.5-SRE90.......................................................................79Figure372050weekwithmaxVREgenerationinVietNam-1.5-SRE90.................................................80FIGURES8RENEWABLEENERGYOUTLOOKFORASEANFigure38Mapoftheaveragehourlyprofileofexportsandimportsacrosstheregionby2050,1.5-SRE90...................................................................................................................................81Figure39Batterycapacitydevelopmentacrosstheperiod,1.5-SRE90(upper)and1.5-SRE100(lower).....................................................................................................................................82Figure40Batterycharge/dischargedailyaverageprofilesasapercentageofpeakpower,1.5-SRE90.......................................................................................................................................................83Figure41AveragehourlychargingprofileofEVs.................................................................................................84Figure42Operatingreservesprovisionin2050,1.5-SRE90.............................................................................85Figure43InertiacontributionbysynchronousmachinesintheJava-BaligridinApril2050-1.5-SRE90...................................................................................................................................................86Figure44Buildingsectorelectricitydemand,byscenario,2018,2030,2050.............................................88Figure45Shareofindustryenergydemandbycarriergroup,byscenario,2018,2030,2050..............89Figure46EVstock,byscenario,2018,2030,2050..............................................................................................89Figure47Vehiclesharebytechnology,byscenario,2018,2030,2050.........................................................90Figure48Spacecoolingenergydemandinbuildings,byscenario,2018-2050..........................................91Figure49Overviewofmeasurestoscaleuprenewableenergymini-grids..................................................93Figure50ShareofbioenergyinTFECinASEAN,byscenario..........................................................................94Figure51Hydrogenconsumptionbysubsectorandscenario...........................................................................99Figure52Globalhydrogentradeflowsin2050underIRENA’sGlobalHydrogenTradetoMeetthe1.5°CClimateGoalreport....................................................................................101Figure53Averagecostofcapital(WACC)ofsolarandwindprojectsinASEANandselectedcountries.............................................................................................................102Figure54Hydrogencostcurvepotentialbasedon2030values....................................................................102Figure55FinalenergyconsumptionpercapitainASEAN...............................................................................103Figure56Topcountriesprocessing(left)andproducing(right)copper,nickel,cobalt,rareearthelementsandlithium.............................................................................................................106Figure57RenewableenergyshareinASEANTPES...........................................................................................110Figure58ASEANtotalenergysystemcostupto2050,byscenario............................................................115Figure59Totalenergytransitioncostsavingsandreducedexternalities,1.5-SvsPES,cumulativeto2050.....................................................................................................................................116TOWARDSAREGIONALENERGYTRANSITION9TABLESTable1Selectkeyactionsforachievingthe1.5-Sby2050...........................................................................17Table2Selecttechnologyscale-upandcumulativeinvestmentneedsto2030and2050..................23Table3RegionalpopulationandGDP,2020,2030and2050........................................................................32Table4ASEANMembersStates’NDCs................................................................................................................38Table5Summaryofkeyindicatorsbyscenario,2018,2030,2050.............................................................41Table6ViewsonattainingASEANMemberStates’near-termtargets......................................................43Table7Buildingsectorsummary,byscenario,2018-2050.............................................................................49Table8Industrysectorsummary,byscenario,2018-2050............................................................................51Table9Transportsectorsummary,byscenario,2018-2050..........................................................................53Table10ASEANvehiclestockgrowth(millionunits),bymode.............................................................................54Table11ASEAN’srenewableenergypotentialforpowergeneration..........................................................59Table12Rationaleforlong-termpowersectorsimulations.............................................................................61Table13Peakload(GW)in2018andby2050inglobal1.5°CcompatiblepathwayandhydroandgeothermalpowerresourcedistributionacrossASEAN(GW).........................73Table14Sensitivityscenariosonoperatingreserves.........................................................................................86Table15Summaryof13potentialpathwaysforIndonesia,Malaysia,Myanmar,ThailandandVietNam.................................................................................................................................................95Table16HydrogenprojectsinASEAN..................................................................................................................100Table17ASEANshort-termenergytransitioninvestmentneeds,1.5-S,2018-2030.............................112Table18TotalASEANenergytransitionrequirementbysectorandscenario.........................................114Table19Buildings:Indicatorsofprogress–statusin2018andviewto2030and2050.....................118Table20Transport:Indicatorsofprogress–statusin2018andviewto2030and2050....................119Table21Industry:Indicatorsofprogress–statusin2018andviewto2030and2050.......................12010RENEWABLEENERGYOUTLOOKFORASEANBOXESBox1REmapToolkitandpowersectoranalysis............................................................................................29Box2WhatthescenariossayaboutattainingASEAN’snear-termaspirationaltargets...........................43Box3Regionalrenewableenergyaspirationaltargets:Theirstatusandpathwaystowardsachievement–aviewfromACE’s7thASEANEnergyOutlook(AEO7)......................46Box4DecarbonisinginternationalshippingandaviationinSoutheastAsia.........................................55Box5Ambitiousdeploymentofsolarpowerinthe1.5-S...........................................................................67Box6Phasingoutcoal............................................................................................................................................71Box7Cleandispatchablesupplyfromrenewablesources..........................................................................72TOWARDSAREGIONALENERGYTRANSITION11SHORTNAMEOFFICIALNAMECOUNTRYCODEBruneiDarussalamBruneiDarussalamBNCambodiaKingdomofCambodiaKHIndonesiaRepublicofIndonesiaIDLaoPDRLaoPeople’sDemocraticRepublicLAMalaysiaMalaysiaMYMyanmarRepublicoftheUnionofMyanmarMMPhilippinesRepublicofthePhilippinesPHSingaporeRepublicofSingaporeSGThailandKingdomofThailandTHVietNamSocialistRepublicofVietNamVNCOUNTRYCODES12RENEWABLEENERGYOUTLOOKFORASEAN1.5-S1.5°CScenarioforASEANalignedwiththeWETOtargetingnet-zeroemissionsgloballyby20501.5-SRE90sensitivityforthepowersectorwith90%renewablepowergeneration1.5-SRE100sensitivityforthepowersectorwith100%renewablepowergenerationACEASEANCentreforEnergyAFOLUagriculture,forestryandotherlanduseAICaverageinvestmentcostAMSASEANMemberStatesAPAECASEANPlanofActionforEnergyCooperationASEANAssociationofSoutheastAsianNationsBAUbusinessasusualBECCSbioenergywithcarboncaptureandstorageBESBaselineEnergyScenario°CdegreeCelsiusCCScarboncaptureandstorageCHPcombinedheatandpowerCO2carbondioxideCOPConferenceofPartiesCOP2626thUnitedNationsClimateChangeConferenceCORSIACarbonOffsettingandReductionSchemeforInternationalAviationCSPconcentratedsolarpowerACCSdirectcarboncaptureandstorageESGenvironmental,socialandgovernanceEJexajouleEVelectricvehicleFOLUforestryandotherlanduseGBEPGlobalBioenergyPartnershipGCCGulfCooperationCouncilGDPgrossdomesticproductGHGgreenhousegasGJgigajouleGtgigatonneGtCO2eqgigatonneofcarbondioxideequivalentGWgigawattGWhgigawatthourHz/sHertzpersecondJPYJapaneseyenkgkilogrammekmkilometrektkilotonnektCO2eqkilotonneofcarbondioxideequivalentkWkilowattkWhkilowatthourIRENAInternationalRenewableEnergyAgencyLCOElevelisedcostofelectricityLEDlight-emittingdiodeLMELondonMetalExchangeLNGliquifiednaturalgasLOHCliquidorganichydrogencarrierLPGliquefiedpetroleumgasLULUCFlanduse,land-usechangeandforestryMEPSminimumenergyperformancestandardMJmegajouleMtmilliontonneMtCO2milliontonneofcarbondioxideMWmegawattNDCNationallyDeterminedContributionABBREVIATIONSTOWARDSAREGIONALENERGYTRANSITION13NEUnon-energyuseNPInickelpigironO&MoperationandmaintenanceOECDOrganisationforEconomicCo-operationandDevelopmentPESPlannedEnergyScenarioPJpetajoulePLNIndonesia'sstate-ownedelectricityutilityPSTPowerSystemTransformationPVphotovoltaicR&DresearchanddevelopmentRE-SSNRenewableEnergySub-sectorNetwork(ASEAN)REDRenewableEnergyDirectiveREErareearthelementRoCoFRateofChangeofFrequencySAFsustainableaviationfuelSDGSustainableDevelopmentGoaltCO2eqtonnesofcarbondioxideequivalentTESTransformingEnergyScenarioTFECtotalfinalenergyconsumptionTPEStotalprimaryenergysupplyTSOtransmissionsystemoperatorTWterawattTWhterawatthourUNFCCCUnitedNationsFrameworkConventiononClimateChangeUSDUnitedStatesdollarVLSFOverylowsulphurfueloilVREvariablerenewableenergyWACCweighted-averagecostofcapitalWETOWorldEnergyTransitionOutlook14RENEWABLEENERGYOUTLOOKFORASEANKEYFINDINGSTheAssociationofSoutheastAsianNations(ASEAN)isatapivotalpointinitscollectiveenergyfuture.Thisreportoutlinesenergytransitionpathwaysthatfocusonrenewables,end-useelectrification,energyefficiencyandemergingtechnologies,suchashydrogen.Themainfocusofthisreportisthe1.5°CScenario(1.5-S),anenergypathwayforASEANthatisalignedwithIRENA’sglobal1.5-degreepathwayfromtheWorldEnergyTransitionsOutlook.Thisreportshowshowtheregioncantransitionfromjust19%renewableenergyshareinfinalenergyin2018to65%by2050,andintheprocessreduceenergy-relatedcarbondioxide(CO2)emissionsby75%comparedtocurrentpolicies.Inthenear-termto2030,emphasisshouldfocusonkeytransitiontechnologiessuchasincreasingsolarPVtoover240gigawatts(GW)ofinstalledcapacity,puttingover13millionbattery-electricvehiclesontheroadwith3.7millionchargingstations,andwidescaleeffortsfocusingonimprovingenergyefficiency,materialsefficiencyandcirculareconomy,andscalingupsustainablebioenergy,hydropowerandgeothermalenergysources.Inthelonger-term,regionalpowersystemintegrationshouldbefosteredandimprovedtofurtherutiliseatotalrenewableenergypowerexpansionreachingaround2770GWto3400GWby2050inthe1.5-S.Coalpowerplantphaseoutshouldbeexpeditedinthenear-term,andexpansionoffossilfueldependentinfrastructureavoidedwhereverpossibletoavoidstrandedassets.Transmissionanddistributiongridswillneedexpansionandreinforcementtomeetgrowingelectricityconsumptionandenablemoreefficientandreliablesystemoperation.Thisseesaninternationalexpansionoflinesnearingatotal200GWby2050inthe1.5-S,deepeningpowersystemintegrationacrossASEAN.TOWARDSAREGIONALENERGYTRANSITION15Renewablepowercapacity,powergridsandinfrastructure,andenablingtechnologies(e.g.storage),willneedtoseeoverUSD5trillion(UnitedStatesdollars)ininvestmentovertheperiodto2050,makinguptwo-thirdsoftotalenergyinvestment.Energyefficiencymeasuresandtechnologystandardsshouldbeconsideredafirstprinciple,withcorrespondingcumulativeinvestmentsofUSD1616billionuntil2050,whichinturnwillbringenergyintensitydown45%by2050,comparedto2018levels.Intransport,EVswillneedtogrowtomorethan100millionbattery-EVcars,andalmost300millionelectrictwo-andthree-wheelersby2050.Bioenergyisalsoimportantinallend-usesectors,particularlyformodessuchasaviationandforsomeindustrialsectors.Domesticbioenergyusewillneedtomorethandoubleto7.6exajoules(EJ)by2050.Cleanhydrogenanditsderivativesprovideanalternativesolutionfordecarbonisingshippingandareimportantforsomeheavymanufacturingindustrialprocesses.Hydrogendemandfordomesticuseswillexceed11milliontonnes(Mt),whileadditionalfuelwillbeneededforinternationalbunkering.The1.5-ScanreducetotalcostsrelatedtoenergysupplybyasmuchasUSD160billioncumulativelyto2050.Additionally,avoidedexternalitiesresultingfrom1.5-SrangefromUSD508toUSD1580billioncumulativelyto2050.Allinall,thetransitioncanbeachievedatalowercostthanthePlannedEnergyScenario,thisreport’sreferencecase.16RENEWABLEENERGYOUTLOOKFORASEANEXECUTIVESUMMARYTheSoutheastAsiaregionisexpectedtoseerapideconomicgrowthoverthenextfewdecades.Drivenbythis,aswellaspopulationgrowth,energydemandintheregionwillgrowrapidlytoo.Today’senergysupply,meanwhile,isdominatedbyfossilfuels,whichmakeupover85%ofprimaryenergy.SoutheastAsiathereforestandsatacrossroads.Itcangodownapathofcontinuedrelianceonfossilfuels–moreofwhicharecomingfromnon-indigenoussources(ACE,2020a)–andtherebyincreaseitsexposuretovolatile,andincreasinglyexpensive,globalcommoditymarkets.Or,alternatively,theregioncanchoosetouseitsample,affordableandindigenouslocalrenewableenergyresources.Bytheendof2018,thetotalinstalledelectricitygenerationcapacityofalltenASEANmemberstateswas252GW,with28%ofthatcapacitycomingfromrenewablesources,mostlyhydropower.In2020,thatsharehadincreasedto33.5%(ACE,2022a),dueinparttotherapidexpansionofsolarphotovoltaics(PVs).ThepowersectorisoneofthemajorsectorscontributingtoASEAN’senergy-relatedCO2emissionsasaresultofitbeingheavyreliantonfossilfuels.Coalretirement,coupledwiththecontinuedexpansionofrenewables,isoneimportantstepinaligningwithnet-zerotargets.HalfofASEANmemberstatesaresignatoriestotheinternationalefforttoendcoalutilisationinthepowersector.BruneiDarussalam,Indonesia,thePhilippines,SingaporeandVietNamsignedontotheGlobalCoaltoCleanPowerTransitionstatementduringthe26thUnitedNationsClimateChangeConference(COP26)(ACE,2022a).Thesecommitmentscoverthree-quartersofASEAN’scoalemissions.ManyarealsoparticipatinginanearlycoalretirementinitiativeundertheleadershipoftheAsianDevelopmentBank,whichhassigneduparound25GWforearlyretirement.Takingtheseeffortstoachievethesecommitmentsintoaccount,renewableenergyhasneverbeensoimportant,andtheregionhasseenagrowingdeploymentofrenewableenergy.Between2015and2021,thetotalinstalledcapacityfromrenewablesjumpedfrom55GWto97GW(IRENA,2022a).Bytheendof2021,VietNam,ThailandandIndonesiawereleadingtheregionalracewithatotalof43GW,12GWand11GWofinstalledrenewableenergycapacity,respectively.ASEANhasambitiousrenewablesgoalsintheneartermwhich,whenleveragedwithitshugeuntappedpotentialrenewablesources,canprovidelocalandaffordablealternativestofossilfuels.Theregionhasaspirationaltargetsaimingtohave23%ofprimaryenergyaccountedforbyrenewableenergyby2025,alongwitha35%shareofrenewableenergyininstalledcapacity.However,investmentsinrecentyearsshowmixedprogressonthe2025objectives.ASEANonlyhada14.3%shareofrenewableenergyinprimaryenergyin2021(ACE,2022a),asharethathasremainedmoreorlessconstantforhalfadecade.Yettheregionalsohada33.5%shareofinstalledrenewablepowercapacityin2020(ACE,2022a),asubstantialincreasejustoverthelastcoupleofyears.Therefore,whiletheinstalledcapacitysharelookswithinreach,theprimaryenergytargetwillbeachallenge.Overthelongerterm,ASEANMemberStates(AMS)haveawiderangeofbothconditionalandunconditionalclimatetargetsthatsetoutlevelsofemissionreductions.Alsointhelastyear,manyhaveindicatedadesiretoachievenet-zeroemissionsaroundmid-century.Theselong-termcommitmentsrequireconcertedandacceleratedactionthatmustbeginnow.TOWARDSAREGIONALENERGYTRANSITION17ANENERGYTRANSITIONROADMAPFORTHEREGION’SSUSTAINABLEFUTUREIRENA’sroadmapsconsidermultiplepossiblefutureenergypathways.ThetwomainscenariosarethePlannedEnergyScenario(PES),whichconsiderscurrentandplannedpolicies,andthe1.5°CScenario(1.5-S),whichfollowsIRENA’sWorldEnergyTransitionOutlook(WETO)1.5-Sscenarioaimingtoreachnet-zeroemissionsgloballyby2050.Forthe1.5-S,multiplepowersectorsupplyscenariosareconsideredforASEAN,onewith90%renewablepowergeneration(1.5-SRE90)andonewith100%renewablepowergeneration(1.5-SRE100).TheASEANregionwillbeakeydriverofglobalenergy-demandgrowthoverthenextthreedecades.ProjectionsunderthePESshowthattotalfinalconsumption(TFC)willincreasemorethan2.5-foldby2050.Theregion’sdemandwillgrowabout3%annually,drivenbypopulationandeconomicgrowth,reachingover50exajoules(EJ)by2050,whileanenergytransitioneffortdetailedbythe1.5-Swilldriveaslowerdemandgrowthof2.4%annuallyandsave19%oftotalconsumptioncomparedtothePESinthesameyear.Torealisethe1.5-Soutlinedinthisreport,effortsareneededacrosstheentireenergysystemofASEAN.Thefollowingtableoutlinessomeofthekeyindicatorsneededtoachievethe1.5-S.Whilethesearenotexhaustive,theyoutlinehowmuchofthetransitionisbasedonrenewableenergyuseandelectrification.Awiderangeofmeasuresareneeded,butrenewableenergywillbethecrucialdriverinASEANtomeetthe1.5-S.Table1Selectkeyactionsforachievingthe1.5-Sby2050REFERENCETIMEFRAMEORYEARBASEVALUEWHEREWENEEDTOBEIN1.5-SIN2050KEYACTIONS1CleanElectricityWithelectricitygenerationgrowinguptofive-foldby2050inthe1.5-S,renewablesmustprovidebetween90-100%ofthetotalelectricitysupplyby2050,upfrom26%in2019.201926%90-100%2MaximiseindigenoususeofrenewablesTheshareofrenewablesinTFECwillneedtoincreasefrom19%in2018to65%by2050.Directelectrificationwithrenewablesisthelargestcontributor,followedbybioenergy,butgeothermal,greenhydrogenandsolarplayimportantroles.201819%65%3ScaleinvestmentsustainablyAverageannualinvestmentinrenewablepowercapacityshouldscalefivetimesfromnowuntil2050comparedtothe2019-2021annualaverage.2019-2021averageUSD15billion/year1USD73billion/year4Electrifyend-usesTheshareofelectricityinTFECshouldincreasefrom22%in2018to52%by2050.201822%52%5EnergyefficiencyEnergyefficiencymeasuresandefficienttechnologyarecrucial.Theenergyintensityimprovementratewillneedtoalmostdoublecomparedtothe1.1%/yearexpectedinthePESto2050,to1.9%/yearin1.5-S.PESto20501.1%/year1.9%/yr6InvestindisruptivetechnologiesTheproductionofcleanhydrogenanditsderivativefuelsmustrampupfromnegligiblelevelsin2020toatleast11Mtby2050.2020<0.1Mt11Mt7CarbonmanagementsolutionsWhilethemeasuresoutlinedinthisreportreducedemissionsby75%comparedtothePES,toreachnet-zeroemissions,CO2capturewillberequiredviacarboncaptureandstorage(CCS),bioenergywithcarboncaptureandstorage(BECCS),orothercarbonremovalandstoragemeasures.PES--700milliontonnesofcarbondioxidein2050(MtCO2)1Source:(BloombergNEF,2022)(ASEAN&UNCTAD,2021).18RENEWABLEENERGYOUTLOOKFORASEANTheenergymixinASEANwilltransformsignificantlyinthe1.5-S.Renewables,bothdirect-useandfromrenewable-basedelectrification,willmakeuptwo-thirdsofenergydemand.Electricity,whichislargelyrenewablebasedinthe1.5-Sby2050,makesup52%offinalenergydemand.Meanwhile,overallbioenergyusewillneedtomorethandoubleandwillbecrucialinsomeend-usesectors,suchasindustry.ThisreportalsoassessesascenariocalledtheTransformingEnergyScenario(TES),whichislessambitiousthan1.5-Sandconsidersthereadilyavailable,andaffordable,technologiesattheexpenseofslightlyhigheremissions(around1gigatonne[Gt]vs0.7Gtfor1.5-S).WhileboththePESandTESrequireremovalofCO2emissionsthroughcarbonmanagementsolutions,TESwouldrequireabout50%moreremovalstoenablenet-zeroemissions.TheenergymixinASEANwillgrowbutwillalsoneedtobesubstantiallytransformedby2050.Figure1SoutheastAsia’stotalfinalconsumption,byscenario,2018,2030,2050HeatNaturalGasSolarCoalBioenergyOilNon-EnergyHydrogenOtherElectricity20182030PES2050010203040506020182030TES2050201820301.5-S2050Totalﬁnalconsumption(EJ)Totalﬁnalconsumption(EJ)010203040506020182030PES205020182030TES2050201820301.5-S2050Non-EnergyUseIndustryBuildingsTransportOthersTOWARDSAREGIONALENERGYTRANSITION19Industryenergydemandwillincrease3.6%peryear.Inthe1.5-S,thesectorwillbecomeconsiderablylessreliantonfossilfuels,whichcurrentlydominatethesector’senergysupply.Instead,industrialprocessheatwilltransitiontowardstheuseofelectricity,biomassandgreenhydrogen.Awidemixoftechnologiesarenecessaryforindustry,whichincludeshard-to-electrifyindustrialprocessesandfeedstockrequirements.ASEANindustrycanalsobenefitfromthetechnologiesfoundinthe1.5-S.Withasignificantsupplyofcriticalmaterialsneededformanyenergytransitiontechnologies,theregioncouldbecomeapowerhouseofmanufacturing.Thetransportsectorwillseetwoparallelpaths,onefocusedonelectrifyingmodessuchaspassengerroadvehicles,andanotherthatwillrequirecleanerfuels.Thecarfleetwillneedtogrowtomorethan100millionbatteryEVcarsandalmost300millionelectrictwo-andthree-wheelers.Biofuelsarealsoimportantforsomemodes,suchasfreight,aviationandinlandshipping.Meanwhile,hydrogenanditsderivativesareimportantforinternationalshipping.Thebuildingsector’senergydemandwillgrownearly3%annually,reaching10EJby2050inthePES.Spacecoolingwilldominateenergydemandinbuildings,growingfrom17%sharein2018toalmosthalfin2050.Theshareofcookingenergydemandwillfallbelow20%mainlyduetothephaseoutoftraditionalbiomassandthetransitiontowardscleancookingtechnologies,mainlyliquefiedpetroleumgas(LPG)inthePESandelectrificationinthe1.5-S.Overallelectrification,andmorestringentenergyefficiencystandardsandtechnology,willreducethebuildingsector’senergyconsumptionby27%inthe1.5-ScomparedtothePES,withelectricitybecomingthedominantfuelconsumedinthesector.ElectricityconsumptioninASEANtodayisaround1100terawatthours(TWh)/year.Electricitywillbecomethedominantenergycarrierin1.5-S,increasingfivefoldcomparedtotoday.EveninthePESitwillstillriseconsiderablytobecomethesecond-largestcarrier,growingnearlyfourfoldunderthecurrentpolicytrajectory.HowpowergenerationcapacityisexpandedtomeetthiswillbeinstrumentalwithregardtoCO2emissions.Tochartpossiblealternativestoarelianceonfossilfuelsinpowergeneration,thisreportpresentstworoutesforwardfortheregion’spowersystem:a100%renewablessystem,andonethatreaches90%renewablesandallowssomeremainingfossilfuelgenerators(mostlynaturalgas).Thedifferentiationmaynotseemlarge,butinpracticeclosingtheremaining10%gaprequiressignificantadditionalstorageandtransmissionexpansion.SolarPViskeyacrossallscenariosduetoitsabundantresourcesacrosstheregion.However,the100%renewableenergyscenariowillneedaverysignificantexpansionofsolar,upto2400GW,andasimilarlylargeexpansionofbatterystorage.Thepowersectorwillseedemandincreasefivefold;inthe1.5-S,solarPVwillbethecrucialtechnology.Figure2SoutheastAsia’spowercapacityalternativesfor1.5-S,in2050GWThermal-GasCCSOshoreWindThermal-NaturalGasSolarPVRooftopThermal-OilSolarPVUtilityThermal-MunicipalSolidWasteOceanEnergyOnshoreWindThermal-BiomassCCSThermal-BiomassHydropowerGeothermalThermal-Hydrogen050010001500200025003000350040001.5-SRE901.5-SRE10020RENEWABLEENERGYOUTLOOKFORASEANThesignificantlevelofgrowthinrenewableelectricityinthe1.5-Srequiresflexibilityofthepowersystem,particularlyintransmissionandstorageassets.TailoringconsumptiontowhenthesunisshiningwithsmartchargingofEVsandpower-to-Xhelpsharnessthemostsolarresourceswhilealleviatingtheneedforadditionalstorage.Hydropowerandbioenergyhelptobalancesupplyanddemand.Batterieswillhaveakeyroletoplaystartinginthe2030sandbeyondbutwillbedeployedthisdecadeinsomeapplications.Giventheneedforsizeablepowerassets,strategicconsiderationsneedtobeappliedincarryingoutcapacityexpansionplanstooperatethesystemby2050.Potentialissuescanbeaddressedbyoptingformorecircuitsoflowercapacityinthecaseoftransmissionlines,ratherthanafewlargerones,andbyadoptingfast-frequencyreservesforsmallandmediumgridsinthemediumtermandlargegridsinthelongterm.Alsointhelongterm,thesystemshouldbeplannedtoenableittocopewithfewersynchronouspowerproducers,withgridforminginverterslikelytoplayaleadingrole.Importantly,thefullpotentialofrenewablesrequiresopenmarketsandthealignmentofregulationsbetweennationaltransmissionsystemoperators(TSOs).Theformerensuresthattheleast-costmeritorderbasedonshort-runmarginalcostisfollowedacrosstheregion,andeventuallyalsoisfollowedevenforancillaryservices.Commonregulationssecurereliabilityacrosstheregionbysettingnormsfortheprovisionofservices(energy,regulation,reserves),theamounttobeprocuredateachtimescale,andthepracticesfollowedbyTSOs.Theregionshouldalsosignificantlyexpandtransmissioncapacityinthe1.5-S,includingbothcross-borderinterconnectorsanddomestictransmissionlines.TransmissionexpansionwillbecriticalfortappingresourcesacrossASEANandbringingelectricitytoloadcentres.Figure3Transmissionlinesandbatteriesin2050,1.5-SRE904GW36GW14GW22GW9GW5GW5GW2GW2GW13GW5GW11GW109GW182GW50GW9GW12GW8GW18GW154GW56GW12GW15GW0.6GWStorageCross-borderInterconnectorsMaindomestictransmissionlines(Indonesia)31GW33GW28GW1GW23GW0.9GW5GW4GW14GW9GW0.5GW4.5GW24GW4GW1GW10GWDisclaimer:Thismapisprovidedforillustrationpurposesonly.BoundariesandnamesshowndonotimplytheexpressionofanyopiniononthepartofIRENAconcerningthestatusofanyregion,country,territory,cityorareaorofitsauthorities,orconcerningthedelimitationoffrontiersorboundaries.TOWARDSAREGIONALENERGYTRANSITION21AccordingtoWETO,bioenergymakesupover50%ofrenewableenergyusegloballytoday.Achievingthenet-zerogoalwillnotbepossiblewithrenewableelectricityandenergyefficiencyalone.Bioenergywillrepresent25%oftotalprimaryenergysupplygloballyby2050inIRENA’s1.5°CScenario(IRENA,2022b).InASEAN,bioenergyplaysanimportantroletoday,andthatwillcontinue.Inabsoluteterms,theincreasewillbefromaround2.7EJ(primary)in2018to7.6EJby2050inthe1.5-S.In2018,around14%offinalenergycamefrombioenergysourcesintheregion,withalittleunderhalffromtraditionalsourcesofbioenergy.By2050inthe1.5-S,thesharewillincreaseto19%,withalltraditionalusesofbioenergyreplacedwithmodernbioenergy.Scalingupbioenergyusewillthereforebecrucialfortheregiontomeetitsenergyandclimategoals,anddoingsomustcoincidewithbioenergyusethatissustainableandaffordable(IRENA,2022c).Cleanhydrogenwillprovideacomplementarysolutionintheregion’sambitiousclimateobjectives.HydrogeniscleanwhenitsmanufactureresultsinnoCO2emissions.Twomainroutestocleanhydrogenareproducingitviacarbon-freeelectricity(greenhydrogen)andproducingitfromfossilfuels,typicallynaturalgas,combinedwithCCS(bluehydrogen).ThemajorityofcleanhydrogenproducedinASEANinthe1.5-Sisgreenhydrogen.Cleanhydrogenwillplayaroleinindustrysectorssuchasironandsteel,aluminium,chemicalsandinternationalbunkeringforshipping.The1.5-Sshowsmorethan11Mtofdemandfordomesticusesalone,inadditiontofurtherdemandforinternationalbunkeringfuels(namelyforinternationalshipping).Biofuelsandhydrogenhaveanimportantroletoplayinsectorswheredirectelectrificationisnotpossible.Figure4Bioenergyandhydrogenuseintheend-usesectors,byscenario,2018,2050012345678BioenergyH2BioenergyH2BioenergyH2BioenergyH220182050PES2050TES20501.5-SEJBuildingsIndustryTransportNon-energyuseNote:Internationalbunkeringisexcludedfromthefigure.ASEAN’senergy-relatedCO2emissionsin2018werejustunder1.5Gt–around4%ofglobalemissions.Intheneartermto2030,emissionswillriseto2.1GtinthePESin2030,andto1.8Gtinthe1.5-S.Lookingoutto2050,inthePESemissionswillreachalmost2.8Gt.Thepowersectorwillbethelargestemitter,followedbytransportandindustry.Thesethreetogethermakeupover90%oftheregion’senergy-relatedCO2emissions.Bymid-century,theregion’semissionsunderthe1.5-Swillbereducedby75%comparedtothePESlevelin2050andreducedtohalfoftoday’semissions.Alittleoverhalfofthatreductionwillbetheresultofrenewablesusedinbothpowergenerationanddirectuse,withanother20%resultingfromdirectelectrification(poweredbyrenewables),andaround25%comingfromenergyefficiencymeasures.Toreachnetzero,carbondioxideremovalwillberequiredontheorderofaround0.7Gtin2050,whichisconsistentwiththepathwaytonet-zeroemissionsthatisoutlinedgloballyinIRENA’sWETO.22RENEWABLEENERGYOUTLOOKFORASEANThebulkofenergy-relatedCO2emissionssavingswillcomefromrenewables,energyefficiency,anddirectelectrification.Figure5Energy-relatedCO2emissionsandsavings,bytechnologytype,2018,1.5-Sin2030and2050201820302050-2000-10000100020003000Energy-relatedemissions(MtC02)NaturalGasElectriﬁcationofenduses(direct)HydrogenanditsderivativesBECCSandothercarbonremovalmeasuresCoalOilPESEmissions1.5-SEmissionsEnergyconservationandeciencyRenewables(poweranddirectuses)Wide-scaleinvestmentisneededacrosstheentireenergysysteminASEAN,fromsupplytoinfrastructuretotheend-usesectors.SignificantinvestmentofaboutUSD200billiontoUSD245billionannuallywillneedtobedirectedintorenewables,energyefficiencyandenablingtechnologiesandinfrastructureovertheperiodto2050toachievethe1.5-S.Incumulativeterms,the1.5-SforeseesinvestmentofaboutUSD6.3trilliontoUSD7.3trilliontoreachtheRE90andRE100,respectively–about2.5to3timestheinvestmentneededinthePES.Inthenearer-termto2030,solarPVinstalledcapacitywillneedtoreach240GWacrosstheregion,requiringinvestmentofUSD150billionwithinthisdecade.GridinvestmentwillrequirenearlyUSD200billion,includingnationalandinternationaltransmissionexpansion.SignificantadditionalinvestmentisneededinkeyenablingtechnologiessuchasEVsandchargingstations,biofuelsupply,andenergyefficiency.TOWARDSAREGIONALENERGYTRANSITION23Wide-scaleandsignificantinvestmentscale-upwillberequired.Table2Selecttechnologyscale-upandcumulativeinvestmentneedsto2030and2050SHORTTERMTO2030(1.5-S)LONGTERMTO2050(1.5-SRE90)LONGTERMTO2050(1.5-SRE100)PARAMETERTOTALINVESTMENT2018-2030(USDBILLION)PARAMETERTOTALINVESTMENT2018-2050(USDBILLION)PARAMETERTOTALINVESTMENT2018-2050(USDBILLION)INVESTMENTREQUIREMENTPOWERSolarPVTotalInstalledcapacity(GW)2411562108108324021245Otherrenewableenergy(non-hydro)TotalInstalledcapacity(GW)5690276970633901793HydroTotalInstalledcapacity(GW)7356227368227368GRIDANDFLEXIBILITYTransmission(intl.)km(thousand)3413665252755285Transmission(national)km(thousand)2479212474611247461Distributionkm(thousand)2739691381134613811346StorageGW1586661611175306BIOFUELSSUPPLYBiofuelsmillionlitres5747566118133235118133235ELECTRIFICATIONEVchargersmillionunits3.7473541935419EVcarsmillionunits1365210963901096390Note:GWh=gigawatthours;km=kilometre.24RENEWABLEENERGYOUTLOOKFORASEANWhenconsideringawidercostperspectivethatincludesfuelcosts,operationandmaintenance(O&M),andfinancingcosts,overtheperiodto2050theregionwillspendUSD28.3trilliononitsenergysysteminthePES.Ofthetransitionscenarios,TEShasthelowestcost,atUSD27trillion,butitalsohasthehighestemissions.Ofthe1.5-Scases,RE90isthelowestcost–USD28.1trillion–aroundUSD0.16trillionlowerthanthePES,and1.5-SRE100hasthehighestcost–USD29.4trillion–orUSD1.1trillionhigherthanthePES.TheSoutheastAsiaregionmustactnowtoreverseitsrelianceonfossilfuels,moreofwhicharecomingfromnon-indigenoussources,therebyincreasingexposuretovolatileandincreasinglyexpensiveglobalcommoditymarkets.Theregionshouldtransitiontowardsenergytransformationpathwaysutilisingample,affordableandindigenouslocalrenewableenergyresources,usingtechnologiesapplicabletotheenergysupplyandend-usesectors,whilerespectingthecontext,statusandcharacteristicsofeachcountryandtheregionasawhole.Withmorerenewableenergyprojects,higherambitiontargetsforEVimplementation,andseveralASEANcountriesbeinghometotheworld’slargestnickelandotherkeymineralresources,foreigninvestmentinenergytransformationwillbenefitthecountriesindevelopingtheirindustrialsectors,increasingtheirhumanresourcescapacityandreceivingtechnologytransfer.Policieswillneedtosupportexpandinglocalindustriestotakeadvantageofthesignificantvaluechainthatwillneedtobecreated.ThemarketneedssignalsthatallowinvestmentsincompetitiveGW-scalemanufacturingcapacityfromtechnologiesrangingfromsolarPVmodulestolargerbalanceofsystemcomponents,batteriesandEVs.ThefindingsoutlinedinthisreporthighlightthepivotalrolethatrenewableswillneedtoplayintheASEANregion.Thestudyshowsthatrenewablepotentialsarevastlyunderutilisedandmostcanbeexpandedforlesscosttoend-consumersthanconventionalenergysources.Theyalsopresentsignificanteconomicopportunityaswellasopportunitiestocreatelocalvaluechainsandindustries.TOWARDSAREGIONALENERGYTRANSITION251INTRODUCTION26RENEWABLEENERGYOUTLOOKFORASEAN1.INTRODUCTIONInearly2022,theInternationalRenewableEnergyAgency(IRENA)releasedthemostrecenteditionoftheWorldEnergyTransitionsOutlook(WETO).Theoutlookshowsthatadrasticreductioningreenhousegas(GHG)emissionsisneededtomeettheParisAgreementgoalofkeepingtheriseinglobaltemperaturewellbelow2degreesCelsius(°C)andlimitedto1.5°C.Keytothisemissionreductionoverthecomingdecadeswillbeincreasedinvestmentsinenergytransitiontechnologies,focusedheavilyongreaterdeploymentofrenewableenergy,significantchangesinenergyinfrastructure,higherenergyefficiency,aswellassomeutilisationofcarbonmanagementsolutions.IRENA’srenewableenergyroadmapsprogramme,REmap,providesstrategiesfortheenergytransitionatthecountryandregionallevels,withperspectivesupto2050.IRENA’sPowerSystemTransformation(PST)programmeprovidestechnicalanalysisandperspectivesonelectrification,hydrogenandpowersystemoperation.Bothoftheseprogrammeswereusedtoconducttheanalysisthatformsthebasisofthisreport.SeparateIRENAeffortswillexaminethesocio-economicbenefitsofthetransition,aspartofIRENA’sRenewableEnergyBenefitsseries,andareportonthistopicisforthcoming.Regionalstudiescanclarifyhowaregioncanpromoteanenergytransitionpathwaycollectively,whilerespectingcountries’uniqueenergyresources,socio-economicstatus,andinstitutionalandregulatoryaspects.Thiscanbeachievedwhilecontributingtotheglobalemissionreductionobjectiveandleveragingopportunitiestomeetregionalenergyandinvestmentgoals.WhiletheASEANregionaccountsforaround5%ofglobalenergydemandandisresponsibleforabout4.6%ofglobalenergy-relatedCO2emission,thepercapitaemissionisonly1%oftheglobaltotalin2020(RitchieandRoser,2022).Withgrowingenergydemandandincreasingimportdependency,theregionwillbenefitfromashifttoclean,indigenousandaffordableenergyresources.Therefore,theenergytransitioninASEANshouldnotbeviewedaloneasaneffortinreducingemissions;ratherasanecessarysteptowardsbetterenergysecurity,morewidespreadenergyaccess,moreaffordableenergyandahealthierlocalenvironment.Withthisinmind,IRENAisreleasingthisnewoutlookfortheregion’senergytransition.Inparallel,IRENAconductedanin-depthstudyonthecountry-basedtransitionfortwokeyASEANcountries,IndonesiaandMalaysia.Dedicatedenergytransitionoutlooksforthesetwocountriesareforthcoming.FOCUSOFTHEREPORTThisreportevaluatesseveralpotentialpathwaysofrenewableandlow-carbontechnologiesintheend-useandpowersectorsinthetenASEANMemberStates(AMS),withamedium-termfocusto2030andalong-termfocusto2050.Theanalysisisfocusedonenergy-consumingsectorsandtheirsupply,andtheassociatedenergy-relatedcarbondioxide(CO2)emissions.Thisanalysisprovidesaperspectivethatcansupportthedecision-makingprocessofpolicymakers,energyplanners,governmentinstitutionsandtheprivatesectortodefinealow-carbondevelopmentenergypathwayintheregion.ThestudywasdevelopedinconsultationwiththetenAMSandsupportedbytheASEANCentreforEnergy(ACE).TheengagementprocessincludedmultilateralconsultationandfeedbackthroughtheASEANRenewableEnergySub-sectorNetwork(RE-SSN)andbilateralconsultationwithcountry-basedrepresentativesandenergyspecialists.ThefundingforthisworkwasprovidedbyavoluntarycontributionfromthegovernmentofDenmark.TOWARDSAREGIONALENERGYTRANSITION27Thisengagementresultedinregionalandcountry-basedvisionsandstrategiesfortheenergytransformationpathway.Outcomesincludeproposingtechnologiesapplicabletotheenergysupplyandend-usesectorswhilerespectingthecontext,statusandcharacteristicsofeachcountryandtheregionandconsideringactivity-levelparametersandinvestmentneeds;identifyingdataandinformationgapsandprovidingrecommendations;andsupportingthedevelopmentofenergytransitionstrategiesthroughworkshopsandoutreach,andtheprovisionofinputstoenergysectorplanning.ThetenASEANMemberStatesmakeuparound8%ofglobalpopulation.Figure6ASEANcountriesconsideredintheREmapandFlexToolanalysesDisclaimer:Thismapisprovidedforillustrationpurposesonly.BoundariesandnamesshowndonotimplytheexpressionofanyopiniononthepartofIRENAconcerningthestatusofanyregion,country,territory,cityorareaorofitsauthorities,orconcerningthedelimitationoffrontiersorboundaries.Source:WikimediaCommons.METHODOLOGYANDPROCESSTheanalysisisbasedonatechnologymodellingframeworkcalledREmap.Thisincludesadetailed,bottom-updemandanalysisforend-usesectors(industry,buildingandtransport)foralltenAMS,andpowersystemcapacityexpansionplanningandoperationalanalysisusinganindustry-standardmodellingtool,PLEXOS,incombinationwithasupplementarypowersystemflexibilityanalysisusingFlexTool.OnepowersystemmodelwasdevelopedforASEANthatrepresentsallcountriesindividually,andtwomoredetailedpowersystemmodelsweredevelopedforIndonesiaandMalaysiawithinthesameregionalmodel.ThemodelsdrawonuniqueIRENAdatasetsforresourceendowmentandtechnologycostdata.Inaddition,anassessmentofassociatedcosts,investmentsandbenefitswasconducted.Theworkwasperformedinclosecollaborationwithcountries’energyexpertsthroughaseriesofmulti-stakeholderconsultativeworkshopsandexpertmeetings.28RENEWABLEENERGYOUTLOOKFORASEANThisprocessincludesthefollowingmethodologicalsteps:1.ThePlannedEnergyScenario(PES),theprimaryreferencecase,isassessed.Thisscenarioreflectsenergyandclimatepoliciesinplaceatthetimeofanalysis.Policiesortargetsthathavenotbeentranslatedintolaworplanningstructuresarenotconsidered.Additionally,inthepowersector,aBaselineEnergyScenario(BES)isconsideredthatreflectsamorestaticviewofcapacityexpansionbasedonhistoricalprecedent.BESisnotconsideredtheprimaryreferencecasebutratherisusedtoshowpossibleenergypathwaydevelopmentifpoliciesandtargetsarerolledbackornotadheredto.TheBESpathwayisonlypresentedincertaincasesinthepowersectordiscussion.2.Anassessmentofenergytransitionscenariosisconducted.TheseincludetheTransformingEnergyScenario(TES),whichlargelyconsiders“low-hanging”currentlyavailableandcompetitivelow-andzero-carbontechnologies,andamoreaggressiveenergytransitionscenario,the1.5°CScenario(1.5-S).The1.5-SfollowsIRENA’sWETO1.5-Saimingtoreachnet-zeroemissionsgloballyby2050.For1.5-S,multiplepowersectorsupplyscenariosareconsideredforASEAN,onewith90%renewablepowergeneration(1.5-SRE90)andonewith100%renewablepowergeneration(1.5-SRE100).The1.5-Sisconsideredtheprimaryenergytransitionscenarioandislargelythefocusofthisreport.3.Finally,ananalysisofcosts,investmentsandbenefits(avoidednegativeexternalities)ofthetwotransitionscenariosispresented.Thisprovidesahigh-level,firstassessmentofthetotalinvestmentneeds,costsandbenefitsresultingfromtheenergypathwaysofthetwotransitionscenarios.Thisreportprovidesmultiplepossibleenergypathwaysincreasinginenergytransitionambition.Figure7DescriptionofthescenariosintheREmapstudyBaseEnergyScenario(BES)TheBESislimitedtothepowersectorassessment,andreflectsamorestaticviewoncapacityexpasion,maintainingamorehistoricaltrendintothelongterm.Itassumesthatcurrentorplannedpolicesarenotadheredtoorrolledback.Thisscenarioissimilartoa"business-as-usual"scenario.PlannedEnergyScenario(PES)ThePESreflectscurrentplansandotherexpectedobjectivesorpoliciesandpoliciesthatwereapprovedasofthetimeofconductingtheanlaysis.ThePESistheprimaryReferenceCaseforthisstudy,anditisfromthisscenariothattheenergytransitionscenariosaredeveloped.TransformingEnergyScenario(TES)TheTESdescribesanenergypathwaybasedlargelyoncurrentlyavailableandcompetativelowandzerocarbontechnologies.Itischaracterisedlargelybyrenewableenergyexpansionandenergyefficiency.1.5°CScenario(1.5-S)The1.5-Sismoreambitiousenergypathway,andoutlinesoptionstofurtherreduceCOemissionsintheenergysysteminchallengingsectors.ItlargelyfollowstheWETOscenarioaimingtoreachnet-zeroemissionsgloballyby2050.Howwilltheregion'senergysystemevolvebasedoncurrentandplannedpolices?Whatarepossibleenergytransitionstrategiesintheregion?Whichbenchmarksshouldbefollowedforanacceleratedtransition?Whichsectoristhemostrelevanttoprioritise?Whatistheroleofregionalenergyintegration?Whatistheroleofvariousrenewableenergycarriers?Whataretheinvestmentneedsandcostsforthetransition?TOWARDSAREGIONALENERGYTRANSITION29StakeholderengagementisanimportantpartofIRENA’sworkwhenperformingcountryandregionalanalysisandenergytransitionstudies.Acountryandregionalengagementprocesswasconductedfortheassessmentoftheenergyscenariospresentedinthisstudy.Representativesfromgovernmentministriesorinstitutionswerethemainstakeholdersinvolvedintheprocess.Additionally,keypartnersincludedACEand,inthecaseoftheworkforIndonesia,Danishinstitutionsduetotheirlong-termengagementincreatingtheIndonesiaenergyoutlookandsupportingtheIndonesiangovernmentwithenergyscenariosandplanning.AfteraninitialinceptionworkshopconductedinJuly2020,furtherconsultationworkshopswereheldataregionallevel,suchasASEANRE-SSNattheSeniorOfficialsofEnergyMeetings.Forindividualcountryconsultation,bilateralmeetingswithAMScountrieswerealsopartoftheengagementroutetoensurecloseparticipationfromASEANcountriesinthedevelopmentofthestudy.Morein-depthengagementwithIndonesiaandMalaysiaalsotookplaceaspartoftheircountryenergytransitionreports,whichrequiredfurtherdiscussionofscopedevelopmentsandmoredetailedconsultationsaboutdemandandpowersectors.Inmanycases,theengagementprocessalsoinvolvedothernational,regionalandinternationalorganisationsandkeyactorsworkingintheenergytransitionatcountryorregionallevels.DuetothetimeframeofthisassessmentcoincidingwiththeCOVID-19pandemic,andwithinternationaltravelandin-personmeetingsgenerallyrestricted,consultationandengagementwerelargelydonevirtuallythroughbilateralandmulti-stakeholdermeetingsandworkshopsfrom2020toearly2022.Box1REmapToolkitandpowersectoranalysisTheREmapToolkitisasoftwareenvironmentthatallowsforthedevelopmentoffullenergybalancescoveringthewholeenergysystem,includingenergydemand,energytransformationandlosses,andprimaryenergysupply.TheToolkitisbasedonmodulesthatcanbeuseddependingonthespecificrequirementsanddataavailabilityofeachproject.Thetoolkitisaparametricmodelwherefutureenergydemandandsupplyareassessedbasedoninputparameters,suchasactivitylevels,energyservicepenetration,technologysharesandfuelmixes.Theseareallexogenousinputstothemodel,andenergydemandisfullydeterminedfromthoseinputsthroughdeterministicmodelequations.Thetoolkit’sdemandanalysisdoesnotrelyoncost-optimisationormulti-criteriadecisionalgorithmstoassessenergydemand.Thosearedeterminedfromexpertjudgementinconsultationwithliteratureandcountryexperts.ThemaingroupofmodulesoftheREmapToolkitiscalledtheREmapActivityToolandcoverstheassessmentofenergydemandforend-usesectors.TheActivityToolisflexibleandcanaccommodateadetailedbottom-upanalysisbasedongranularactivityandtechnicalparametersoratop-downanalysisbasedonaggregatedsocio-economicinformation.Thechoiceofthemethodandlevelofdetaildependsontheavailabilityofinformationandwasdecidedastheanalysisdeveloped.Forthisreport,theanalysiswasbasedlargelyonabottom-upassessment.Energydemandisbrokendownintofourmainsectors:buildings,transport,industryandotherconsumption.Eachinturncanbefurtherdividedintosub-sectorssuchasresidentialandcommercialbuildings,passengerandfreighttransport,anddifferenttypesofindustry.Inthebottom-upapproacheachsector/sub-sectorisanalysedbasedondetailedactivityandtechnologycharacterisationofenergydemand.Thisisadata-intensiveapproachthatdependsontheavailabilityofanextensivesetofinformationsuchaspopulation,households,floorarea,transportdemandinpassenger-kilometres(km)andtonne-km,energyservicepenetrationrates,technologypenetrationrates,fuelmixes,specificenergyconsumptionbytechnologytype,etc.Thetop-downapproachisbasedonaggregatedsocioeconomicdatasuchaspopulation,grossdomesticproduct(GDP),numberofhouseholdsandaggregatedenergyintensityindices.30RENEWABLEENERGYOUTLOOKFORASEANBox1REmapToolkitandpowersectoranalysis(continued)Energydemandwasestimatedonayearlybasis,year-by-year,throughoutthetimeframeoftheanalysis,withspecialattentionpaidtothebaseyear(2018)andtwofutureyears(2030and2050).Yearlydataforelectricitydemandarethenusedinthesupply-sidemodels.Forother,non-electricitycarriers,theREmapToolkitoffersasimplifiedsupply-sideassessmentfordifferentcarriers,includingbioenergy,hydrogen,e-fuelsandfossilfuels.TheREmapToolkitalsoincludestheestimationofCO2emissionsandanassessmentofcosts,investmentsandbenefitsintermsofavoidedexternalities.Forthepowersector,thisstudyusesthecommercialsoftwarePLEXOSforboththelong-termcapacityexpansionandoperationalanalysis.Additionally,IRENA’sFlexTool(whichisfreeandopen-source)performspowersystemflexibilityassessmentsbasedontheresultingcapacityexpansioninkeymilestoneyears.TheFlexToolassessmentsreflectfullpowersystemdispatchandofferadetailedviewofflexiblegenerationoptions,demandflexibilityandenergystorage,alongwithsector-couplingtechnologiessuchaspower-to-heat,electricvehicles(EVs)andhydrogenproductionthroughelectrolysis.Figure8showstheinteractionofthedifferenttoolstoperformenergyanalysesoftheend-useandpowersectors,aswellasestimationsofinvestment,fortheregionalassessment.Theanalysispresentedinthisreportisbasedonnumerousmodelsandtools.Figure8REmaptoolsforanalysisoftheend-useandpowersectorsREmapToolkit•End-usesectorenergydemandanalysis(transport,industry,buildingssectorsetc.)•Energyandemissionsbalance•Stockturnovermodel•Capitalneedsanalysisforeachenergyend-usesector•FuelandoperationalcostsEnergydemandandsupplyassessment•Expandpowergenerationcapacityandinterconnectiontomeetprojecteddemandgrowth•OperationallyanalyseresultsofcapacityexpansiontoensureitisrobustandreliableActivityToolInvestmentToolExpansionoptimisationmodelandﬂexibilityanalysis•Energysectorsupply,demandandcostsareaggregatedtoprovideanintegratedoverviewofeachcountry’senergysectorneeds•Emissionscalculations&energyeciencyindicatorsAggregationframeworkTOWARDSAREGIONALENERGYTRANSITION312THEROADMAPFORASEAN32RENEWABLEENERGYOUTLOOKFORASEAN2.THEROADMAPFORASEANCURRENTSTATUSANDTHEPESUnderthePES,theregionwillcontinueitsrelianceonfossilfuels,withrenewableenergyandelectricityconsumptiongrowingmodestlyandenergyconsumptionpercapitamorethandoublingfrom30gigajoules(GJ)in2018to63GJin2050.Theregion’scontinuedrelianceonfossilfuelsinthePESwillresultintotalenergy-relatedCO2emissionsdoublingtoday’sleveltoalmost2.8gigatonnes(Gt)ofCO2,drivenmainlybytransport,powerandtheindustrialsector.ThePESwillseegrowthinsomerenewableenergies,namelysolarphotovoltaic(PV),whichwillgrowtoover1000gigawatts(GW);however,thiswillnotbesufficienttoreducetheoverallgrowthinpowersectoremissions.In2020,ASEANwashometoaround680millionpeople,witharegionalGDPofnearlyUSD3trillion(UnitedStatesdollars).ThisreportusesGDPgrowthrateprojectionsfromthegovernmentstudiesandplansthatformthebasisofthePES.ItisnecessarytoaligntheGDPgrowthfromthesestudieswiththeenergydemandprojectionsthatformthebasisofthePES.Basedonthoseprojectionsandscenarios,by2050theregion’spopulationwillincreasetoslightlyover800millioninhabitants,andregionalGDPwillmorethantripletooverUSD11trillion,increasingatacompoundannualgrowthrateof4.6%.ASEANwillcontinuetoseerobusteconomicgrowthalongwithagrowingpopulation.Table3RegionalpopulationandGDP,2020,2030and2050202020302050Population(millions)660722802GDP(billions,constant2015USD)2880460011110GDPpercapita(constant2015USD/capita)4350638013750Totalfinalconsumptionintheregionwasaround19000petajoules(PJ)in2018,withthebuildingsectorconsumingaround20%,thetransportandindustrysectorsaroundone-thirdeach,andnon-energytheremainder.Oilanditsproductsmadeupthemajorityshareofenergyconsumption,followedbyelectricity,naturalgas,biofuelsandcoal.Overtheperiodto2050inthePES,energyconsumptionwillincrease2.5timestomorethan50exajoulesTOWARDSAREGIONALENERGYTRANSITION33(EJ).Allenergycarriersgrow,withelectricityandnaturalgasseeingthelargestingrowthterms,butoilwillremaintheprimaryenergycarrier.Bycountry,energyconsumptionislargelyfocusedonIndonesia,Malaysia,thePhilippines,ThailandandVietNam,withthemostgrowthseeninIndonesia,thePhilippinesandVietNam.Coincidingwithrobusteconomicgrowth,ASEANwillalsoseeenergydemandincrease2.5-foldupto2050.Figure9Totalfinalconsumptionbycarrierandcountry,PES,2018-2050SingaporeIndonesiaPhilippinesCambodiaMyanmarBruneiMalaysiaThailandLaoPDRHeatHeatCoalandCokeCoalandCokeSolarSolarNaturalGasNaturalGasHydrogenHydrogenOilOilNon-EnergyNon-EnergyBioenergyBioenergyOtherOtherElectricityElectricitySingaporeIndonesiaPhilippinesCambodiaMyanmarBruneiMalaysiaThailandLaoPDR01020304050602018PES2030PES2050PESTotalﬁnalconsumption(EJ)01020304050602018PES2030PES2050PESTotalﬁnalconsumption(EJ)VietNamPercapitaannualelectricityconsumptionintheregionhasincreasedoverthelasttwodecades,reachinganaverageof1630kilowatthours(kWh)in2018;thisisaroundone-fifthofthepercapitaelectricityconsumptioninmembercountriesoftheOrganisationforEconomicCo-operationandDevelopment(OECD).Percapitatotalfinalenergyconsumption(TFEC)intheregionwasanestimated29.5GJin2018andisexpectedtoincrease35%by2030and210%by2050undercurrentnationalenergypolicies(thePES),withtheregion’spercapitaannualelectricityconsumptionreaching6815kWh.Myanmar,LaoPDRandCambodiaarethecountriesinwhichpercapitaelectricityconsumptiongrowsthemost.Thesedemographicandenergystatisticsdemonstratetheneedforintegratedenergyplanningnotonlyonthesupplyside(tocoverrisingenergydemandinanoptimalway),butalsointheend-usesectors,ensuringtherationaluseofenergywhilealsoconsideringpotentialenvironmentalandsocio-economicimpacts.34RENEWABLEENERGYOUTLOOKFORASEANElectricityconsumptionpercapitawillriseover50%inthecomingdecades.Figure10Annualelectricityconsumptionpercapita,PES,bycountry,2020-205002000400060008000100001200014000160001800020182020203020402050Electricitypercapita(kWh/capita)BruneiCambodiaIndonesiaLaoPDRMalaysiaMyanmarPhilippinesSingaporeThailandVietNamASEAN(avg.)Mostcountriesintheregionhadreached100%ornear-100%electrificationrateasof2020,apartfromMyanmarat70%(IEA,IRENA,UNSD,WorldBank,WHO,2022).IndonesiaandLaoPDRaimtoachieve100%electrificationbytheendof2022,whileMyanmartargetsfullelectrificationby2030.Withmoreruralareasachievinglastmileconnectivitytothenationalgrid,effortsmustbeinplacetoensureaccesstogood,reliableandaffordableelectricity.TheshareofthepopulationinASEANthathasaccesstocleancookingvariesgreatlybetweencountries.Onlythreecountrieshavereachedsharescloseto,orat,100%.SignificantimprovementinthelasttwodecadesasseeninIndonesiaandVietNam(seeFigure11)areduetoLPGprogrammes,whilesomecountriespromotetheuseofefficientcookstoves.AccordingtoACE,asof2017around60millionhouseholds,or240millionpeople,stillcookwithtraditionalbiomassornon-modernfuelsinASEAN(ACE,2020a).AccesstocleancookingfuelsisoneareawheremanyASEANcountriesneedtoimprove.Figure11Shareofpopulationwithaccesstocleancooking2000201020200%10%20%30%40%50%60%70%80%90%100%BruneiCambodiaIndonesiaLaoPDRMalaysiaMyanmarPhilippinesSingaporeThailandVietNamSource:WHO(2022).TOWARDSAREGIONALENERGYTRANSITION35Asof2020,renewablesharesinpowergenerationvariedsignificantlyamongAMS,withsomeashighas56%andotherslowerthan1%.Generallyhighrenewableenergysharesaretheresultofhydropowergeneration,thoughsomehavesizablegeothermalandbioenergyproductionwhichalsocontributetothesehigherrenewableenergysharesatanationallevel.Notablealsoishowinrecentyears,VietNamhasmadegreatstridesinincreasingitsgenerationfromsolarPVandwind.ThetotalrenewableshareinASEANforcapacityandgenerationis33.5%and29%,respectively.Thedisparityinrenewablesharesatthenationallevelisduetoarangeoffactors,butallcountrieshavetheabilitytosignificantlyexpandtheirrenewablepowerportfolios.Renewablesharesrangefrombelow1%toashighas56%in2018.Figure12ShareofrenewablepowercapacityandgenerationinASEANandAMS,20200%10%20%30%40%50%60%70%REshareinstalledcapacityREshareelectricitygenerationASEANBruneiCambodiaIndonesiaMalaysiaMyanmarPhilippinesSingaporeThailandVietNamSource:(IRENA,2022a).SolarPVinstalledcapacitywilldominatetheregion’spowersector.Figure13ASEANpowersectorcapacityintheBESandPES0%10%20%30%40%50%60%70%80%90%20182030BES2030PES2050BES2050PESGWGeothermalHydropowerNuclearOshoreWindOnshoreWindSolarCSPSolarPVRooftopSolarPVUtilityThermal-OilThermal-BiomassThermal-CoalThermal-CoalCCSThermal-GasCCSThermal-NaturalGasVREShare%REShare%2000180016001400120010008006004002000Note:RE=renewableenergy;VRE=variablerenewableenergy.36RENEWABLEENERGYOUTLOOKFORASEANUndercurrentpolicies(PES),ashort-termprojectionresultedincoalandnaturalgascomprisingmorethanhalftheshareofASEAN’spowersystemcapacityin2030.SolarPVinstallationsareprojectedtoreachabout100GW,withthree-quartersoftheinstallationsbeingutilityscale.Renewableswillaccountforonlyone-thirdoftheregion’stotalpowergenerationin2030.Inthelongterm,morethanthree-quartersofASEAN’sinstalledcapacitywillberenewables.About1100GWofthiswillbevariablerenewablesdominatedbysolarPV,whiletheshareofcoalwillfallbelow10%.SolarPVwillmakeupalargeshareoftheregion’selectricitygeneration,nearly1600TWhin2050,withhydropowerandgeothermalalsoplayingimportantroles.ThelowcostofsolarPVisthemaindriver(seeChapter3).Underthebusinessasusualscenario(BES)whenAMSfailtoimplementtheirrenewableenergytargetstheregion’selectricitygenerationwillcontinuebedominatedbycoal,withonly550GWofsolarPVinstalledcapacityby2050.However,itisimportanttonotethatinBESthissolarPVentersthemixinthemodelforthisscenarioonacostbasiswithoutanyincentivesbecauseitundercutsthecostoffossilfuelgenerationexpansion.SolarPV,hydropowerandgeothermalenergywillplayimportantrolesintheregion’selectricitygenerationunderthePES.UndertheBES,theregionwillcontinuebedominatedbycoalandnaturalgas.Figure14ASEANpowersectorgenerationundertheBESandPESPowergeneration(TWh)BES2018BES2030PES2030BES2050PES2050NetimportsExportsImportsHydropowerSolarPVUtilitySolarPVRooftopSolarCSPGeothermalOnshoreWindOshoreWindThermal-BiomassNuclearThermal-OilThermal-NaturalGasThermal-GasCCSThermal-CoalCCSThermal-Coal050010001500200025003000350040004500PrimaryenergysupplyunderthePESinASEANwillgrow2.8-foldfrom2018to2050,reaching62EJ.Fossilfueldemandisexpectedtogrowoverall2.5-foldby2050,drivenbyadoublingofoilconsumption,inlargepartfromthetransportsector.Naturalgasdemandisexpectedtogrowthreefold,whilecoaldemandisexpectedtogrow2.5-fold,bothofwhicharemainlyusedinindustryandthepowersector.WhilesomeAMShavedomesticnaturalresourcestocatertosomegrowingfossilfueldemand,overallimportdependencyisexpectedtorise–ashasbeenthecaseinthelastdecade.Thevolatilityinglobalcommoditypricesmeansthatbecomingincreasinglyreliantonnon-indigenousfossilfuelsriskspotentialsupplysecurityissuesandcostuncertainty.TOWARDSAREGIONALENERGYTRANSITION37Primaryenergysupplyisexpectedtoincrease2.8-foldby2050underthePES.Figure15PrimaryEnergySupply,PES,2018,2030,20500102030405060702018PES2030PES2050PESPrimaryenergysupply(EJ)WindHeatNaturalGasNuclearSolarCoalNon-EnergyTraditionalBiomassOilHydroBiomassGeothermalElectricityCLIMATEPLEDGESAMStakepartinglobalclimatediscussionsaspartoftheUnitedNationsFrameworkConventiononClimateChange(UNFCCC)ConferenceofParties(COP)process.Asofearly2022,allASEANcountrieshadsubmittedNationallyDeterminedContributions(NDCs)thatsetouteitherfirmoraspirationalcommitmentstoreducinggreenhousegas(GHG)emissions.Thesecommitmentvarygreatlyinscopeandambition,rangingfromallGHGtoonlyenergy,andfromafewpercentagepointsreductionstosignificantlymore.Manyreferenceincreasedambitionaspartofconditionalcommitmentsthatmakereferencetointernationalsupport.Table4presentsanoverviewofthebroadNDCcommitmentsofAMSasofthefirsthalfof2022.38RENEWABLEENERGYOUTLOOKFORASEANASEANMemberStatesarecommittedtoreducingtheiremissionTable4ASEANMembersStates’NDCsMITIGATIONTYPETYPEOFCOVERAGESECTORALSCOPEMITIGATIONTARGETMITIGATIONDETAILSCOUNTRYBruneiDarussalamRelativeemissionreductionEconomy-wideEnergy,Agriculture,Transport,Waste,LULUFC(landuse,land-usechangeandforestry),Industry20%reductioninGHGemissionsReduceGHGemissionsby20%belowbusiness-as-usual(BAU)levelsby2030.CambodiaRelativeemissionreductionEconomy-wideEnergy,Agriculture,Transport,Waste,LULUFC,Industry41.7%reductioninGHGemissionsBy2030,forestryandotherlanduse(FOLU)isexpectedtoreduceemissionsbyroughly64.6milliontonnesofCO2equivalent(MtCO2eq)/yearundertheNDCscenario(41.7%reduction,ofwhich59.1%isfromFOLU).IndonesiaRelativeemissionreductionEconomy-wideEnergy,Agriculture,Transport,Waste,LULUFC,Industry29%reductioninGHGemissions(unconditional),41%reductioninGHGemissions(conditional)Committedtounconditionallyreducing29%ofitsGHGemissionsby2030,comparedtotheBAUscenario,whichforecastsroughly2.87gigatonnesofCO2equivalent(GtCO2eq)in2030.Indonesiamightreduceitsemissionsby41%by2030,dependingonforeignsupportforfinance,technologytransferanddevelopment,andcapacitybuilding.LaoPDRRelativeemissionreductionEconomy-wideEnergy,Agriculture,Transport,Waste,LULUFC,Industry60%reductioninGHGemissions(unconditional)Unconditionalaimfor2030:60%reductionsinGHGemissionsrelativetothebaselinescenario,orapproximately62000kilotonnesofCO2equivalent(ktCO2eq)inabsoluteterms.MalaysiaCarbonintensityreductionEconomy-wideEnergy,Agriculture,Transport,Waste,LULUFC,Industry45%reductioninGHGemissions(unconditional)Aimstocutitseconomy'scarbonintensity(asapercentageofGDP)by45%by2030,comparedto2005level.MyanmarPoliciesandactionsSectoralEnergy,AFOLU(agriculture,forestryandotherlanduse)(MyanmaraspiresintheNDCtofurtherengageinothersectorstoestablishabaseforsettinganeconomy-widetargetinthefuture)Emissionsreductionscontributionsby244.52milliontCO2eq(unconditional),and414.75milliontCO2eq(unconditional)by2030Totalemissionsreductionsare244.52MtCO2equnconditionally,andatotalof414.75MtCO2eqconditionallyby2030.Intheenergysector,aconditionaltargetofavoiding144.0MtCO2eqemissionsby2030comparedtoBAUbyincreasingtheshareofrenewableenergy(solarandwind)to53.5%(from2000megawatts[MW]to3070MW)by2030,anddecreasingtheshareofcoalby73.5%(from7940MWto2120MW)by2030.TOWARDSAREGIONALENERGYTRANSITION39MITIGATIONTYPETYPEOFCOVERAGESECTORALSCOPEMITIGATIONTARGETMITIGATIONDETAILSCOUNTRYPhilippinesRelativeemissionreductionEconomy-wideEnergy,Agriculture,Transport,Waste,Industry2.71%reductioninGHGemissions(unconditional),72.29%reductioninGHGemissions(conditional)comparedtoBAUscenarioby2030Commitstoaprojected75%reductionandavoidanceofGHGemissions,ofwhich2.71%isunconditionaland72.29%isconditional,inthesectorsofagriculture,waste,industry,transportandenergyfrom2020to2030.Thiscommitmentismeasuredagainstpredictedcumulativeeconomy-wideemissionsof3340.3MtCO2eqoverthesametimeunderBAUconditions.SingaporePeakofcarbonemissionsEconomy-wideEnergy,Agriculture,Waste,LULUFC,IndustryIntendstopeakemissionsat65MtCO2eqaround2030Intendstopeakemissionsat65MtCO2eqaround2030.Note:Basedoncurrentprojections,thiswillallowSingaporetoachievea36%reductioninemissionsintensityfrom2005levelsby2030.ThailandRelativeemissionreductionEconomy-wide(excl.LULUCF)Energy,Agriculture,Transport,Waste,Industry20%reductioninGHGemissions(unconditional),25%reductioninGHGemissions(conditional)comparedtoBAUlevelby2030ReduceitsGHGemissionsby20%fromtheprojectedBAUlevelby2030.Thelevelofcontributioncouldincreaseupto25%,subjecttoadequateandenhancedaccesstotechnologydevelopmentandtransfer,financialresourcesandcapacitybuildingsupport.VietNamRelativeemissionreductionEconomy-wideEnergy,Agriculture,Transport,Waste,LULUFC,Industry7.3%and9%(unconditional)reductionsinGHGemissions,anda27%reductioninGHGemissionsby2030(conditional)By2025,decreasetotalGHGemissionsby7.3%(52.9MtCO2eq)comparedtoBAU,andby2030,reducetotalGHGemissionsby9%comparedtoBAU(83.9MtCO2eq).The9%contributioncouldincreaseto27%by2030(250.8MtCO2eq)withinternationalsupport.Note:StatusasofJune2022.AsseeninTable4,theASEANregionhasoutlinedintheirNDCsreductionsofGHGemissionsindifferentsectorsandinvaryingquantities.GenerallytheseNDCsweresubmittedinthelead-uptotheCOP26inNovember2021.Atthatconference,andinthesucceedingmonths,manyofthecountriesintheASEANregiondeclaredevenmoreaggressivetargets,withSingaporeaimingatnet-zeroemissionsbyoraroundinthemiddleofthiscentury.Forinstance,theIndonesiangovernmenthasincreaseditsclimateambitiontoreachnet-zeroemissionsby2060orsooner.Indonesiahasnotyetcommunicatedanexplicitnet-zerotarget,butexploresscenariosthatcouldleadtonetzeroby2060initslong-termstrategy.TheNationalEnergyCouncilannounceditwillfurtherassessnet-zeroscenariospreparedincollaborationwithseverallineministriesandthestate-ownedelectricityutility,PLN,tolatercommittoapathway(Climateactiontracker,2021).Thailandhasalsocommittedtoavoidthepotentialadverseimpactsofclimatechangefromglobalwarming.Itissuggestedthatthetargetofnet-zeroemissionsshouldbereachedbymid-century.ThailandisaimingtoTable4ASEANMembersStates’NDCs(continued)40RENEWABLEENERGYOUTLOOKFORASEANachievecarbonneutralityby2050(Diewvilai,R.,Audomvongseree,K.,2022).VietNamannouncedanet-zerotargetby2050duringtheCOP26.Thenewpledgemarksamajorshiftinthedevelopmentoftheeconomy,especiallyintheenergysector.BruneiDarussalam,whoseeconomyhasbeendominatedbytheoilandgasindustry,declareditsnet-zerotargetby2050.Thecountryonlycontributesabout0.025%ofglobalGHGemissions.Still,thecountryiscommittedtomakingasubstantialpositivedifference,asexpressedintheCOP26.Malaysiahasalsoechoedthelanguageofcountriesintheregionwithagoaltoachievenet-zeroemissionsby2050.Thisplanhasbeenannouncedinthe12thMalaysiaPlan,thoughthetwoarenotnecessarilythesame.Finally,theLaoMinistryofNaturalResourcesandEnvironmenthasunveilednewmeasuresinrelationtoclimatechange,targetingnet-zeroGHGemissionsby2050.RENEWABLEENERGYROADMAPKeyhighlights:RenewableenergyshouldbecometheprimaryenergysourceacrossASEAN.In2018,19%oftheregion’sfinalenergyconsumptioncamefromrenewablesources;inthe1.5-S,thissharewillincreaseto65%by2050.Electrificationofend-usesisamajordriver,withscale-upinapplicationsrangingfromroadtransport,tocookingandindustrialprocesses.Theshareoffinalenergycomingfromelectricitywillincreasetoalmostone-half,frombelowone-fifthin2018.Thispairingmustcoincidedwithwidescalescaleupofrenewableelectricity.Inthe1.5-S,electrification,fuelswitchingtomodernandrenewablefuels,andenergyefficiencywillreduceASEAN’stotalconsumptionby20%relativetothePESin2050.Theregionstotalemissionswillincreaseintheshortterm,butunderthe1.5-Stheywilldeclineto50%belowtoday’svalueby2050and75%belowthePESin2050.TheSoutheastAsiaregionwillseerapideconomicgrowthaveraging4.6%annuallyinthecomingdecades.Inturn,energyusewillgrowrapidly.Today’senergysupplyisdominatedbyfossilfuels,whichmakeupover85%ofprimaryenergy.SoutheastAsiastandsatacrossroads.Eitheritcancontinueitsrelianceonfossilfuels–moreofwhicharecomingfromnon-indigenoussources,therebyincreasingexposuretovolatile,andincreasinglyexpensive,globalcommoditymarkets–ortheregioncanutilisetheample,affordableandindigenouslocalrenewableenergyresourceinanenergytransitionpathway.Thischapteroutlineshowtheregioncouldpursuethatenergytransitionpathway.Inthemostambitiousofthoseenergytransitionscenarios,the1.5-S,renewableenergycanmeettwo-thirdsoffinalenergydemand,cuttingenergy-relatedCO2emissionsby75%comparedtothePES,orlessthanhalfcomparedtotoday’senergyandprocessCO2emissions.ThiswouldoccurwhileGDPincreasessignificantlyovertheperiod.However,asisthecaseinthe1.5-SinWETO,othermitigationtechnologieswillberequiredtoreachnet-zeroemissionsby2050.TOWARDSAREGIONALENERGYTRANSITION41TheenergytransitionwillrequireaholisticandmultifacetedtransitionacrosstheentireenergysystemTable5Summaryofkeyindicatorsbyscenario,2018,2030,2050201820302050BaseyearPESTES1.5-SPESTES1.5-SRE901.5-SRE100POWERRenewableenergyinstalledcapacity(%)3046535777868899Renewableenergyinstalledgeneration(%)23344139607690100TotalInstalledsolarPV(GW)51071422411121173021082402SUPPLYTotalprimarysupply(EJ)23353332625449Renewableenergyshare(%),PECM18192426254260DEMANDFinalenergyconsumption(EJ)17242423454036Renewableenergyshare,fuels(%)16151719141823Renewableenergyshare,fuels&electricity(%)1921262729456065Electricityconsumptionshare(%)22252932304352INDICATORSTPESenergypercapita(GJ/capita)35484544776761TFECenergypercapita(GJ/capita)26353332574944TPESenergyintensity(MJ/USD)8.07.57.16.95.64.94.4Energyintensityimprovementrate(%/year)0.5%0.9%1.3%1.1%1.5%1.9%Electricityconsumptionpercapita(kW/capita)1631247327202824473458566394EMISSIONSGtCO2–energyrelated1.42.11.81.72.81.20.7TPES=totalprimaryenergysupply;kW=kilowatt;PCEM=physicalenergycontentmethod.42RENEWABLEENERGYOUTLOOKFORASEANInthe1.5-S,energydemandwilldouble,andelectricitywillbecomethedominantenergycarrier.Figure16Totalfinalconsumptionbyscenario,2018-2050HeatNaturalGasSolarCoalBioenergyOilNon-EnergyHydrogenOtherElectricity20182030PES2050010203040506020182030TES2050201820301.5-S2050Totalﬁnalconsumption(EJ)Totalﬁnalconsumption(EJ)010203040506020182030PES205020182030TES2050201820301.5-S2050Non-EnergyUseIndustryBuildingsTransportOthersTOWARDSAREGIONALENERGYTRANSITION43TotalfinalconsumptioninSoutheastAsiaisexpectedtogrow2.5timesinthePESscenariofrom2018to2050.Withelectrificationacrossallsectorsandenergyefficiencymeasures,thefinalconsumptionwillgrowmoreslowto2.3and2.1timesintheTESand1.5-S.Electricitydemandintheregionisexpectedtogrowonaverage4.1%,4.7%and5.0%inthePES,TESand1.5-S,respectively.TheadditionaldemandgrowthismainlydrivenbyEVsinthetransportsector,wherealmost80%ofthetotalroadfleetby2050willbeEVs.Hydrogenwillalsohaveagrowingimportance,especiallyintheindustryandnon-energysectorwithintheregion,withalesserroleintransport,accountingfor3.7%oftotalfinalconsumptionby2050inthe1.5-S.Bioenergyusewillalsotriplefrom2018to2050acrossallscenarios,withaslightlyhighershareinthe1.5-S(19%)tomeetmoreambitiousbiofuelblendingratetargets,andincreaseduseintheindustrialsector.Abreakdownofmeasuresacrosseachsectorforeachofthescenariosisprovidedinthefollowingsections.Box2WhatthescenariossayaboutattainingASEAN’snear-termaspirationaltargetsIn2016,theASEANregionsettheaspirationalgoalofincreasingtherenewableshareinprimaryenergyto23%by2025andincreasingtheshareofrenewableenergyinthecapacitymixto35%by2025.Overthepastfewyears,theshareinTPEShasremainedflatataround14%,whiletheshareofrenewablesincapacityhasincreasedconsiderably,reaching33.5%in2020(ACE,2020a).BasedonthePES,theregioncanexpecttomeetandexceedtherenewablecapacitytarget,reaching41%ofcapacityby2025.Inthe1.5-S,thetargetissurpassedbyaconsiderablemargin,reaching47%ofcapacity.However,therenewableshareintheprimaryenergytargetwillnotbeachievedinthePES,reachingashareofonly17%,considerablylowerthanthe23%target.Thisisalsoincidentallythesamesharethatwasprojectedinthemainreferencecaseofthe2016ASEANoutlook(IRENA&ACE,2016).Whileprogresshasbeenmadeindeployingrenewables,namelyinthepowersector,overallenergydemandhasrisen,offsettingtheincreaseinrenewablesconsumption.Attainingtheaspirational23%goalinthePESisnotachievedbecausewheninterpretinggovernmentplansacrossASEAN,whichformthebasisofthePES,thetotalshareacrosstheregiondoesnotmeetthattarget.However,inthe1.5-S,therenewablesharereaches20%by2025,belowthetargetbutaconsiderableandsubstantialincreaseofsixpercentagepointsoverthecurrentshareofjust14%.Overthesucceedingfiveyearsto2030,thesharewillincreaseto26%inthe1.5-S,exceedingthetarget.Therefore,thetargetisestimatedtobeachievedinthetimeframe2025-2027.TheASEANregionisontracktomeetitsrenewablecapacitytargetby2025.Table6ViewsonattainingASEANMemberStates’near-termtargets201820202025ASEANtargetPES1.5-SRenewableenergyshareTPES14%14%23%18%20%Renewableenergycapacitypower28%33.5%35%41%47%Note:The2025sharesforthePESand1.5-Sareadjustedbasedonthelatestsharesavailablefor2020.44RENEWABLEENERGYOUTLOOKFORASEANSolarPVcapacityexpansionwillbedominantby2050regardlessofthescenario.Figure17Powercapacityandrenewablesharebyscenario,2018-2050GW05001000150020002500300035004000OceanEnergyGeothermalThermal-MunicipalSolidWasteThermal-BiomassCCSThermal-BiomassOnshoreWindHydropowerOshoreWindSolarPVRooftopThermal-HydrogenSolarPVUtilityNuclearThermal-GasCCSThermal-NaturalGasThermal-CoalCCSThermal-CoalThermal-Oil20182030BES2030PES2030TES20301.5-S2050BES2050PES2050TES1.5-SRE901.5-SRE1000%10%20%30%40%50%60%70%80%90%100%VREShareREShareNote:RE=renewableenergy;VRE=variablerenewableenergy.Totalrenewableenergyinstalledcapacitygrowssubstantially,reaching62%,77%and82%intheBES,PESandTES,respectively,by2050from27%in2018,withvariablerenewableenergy(VRE;mostlyPV)accountingforone-halftonearlythree-quartersofthisrenewablecapacity.Thetwo1.5-ScasesseeVREinstalledcapacitygrowtobecomebetween80%and90%oftotalinstalledcapacityby2050,withtotalrenewableenergyinstalledcapacityinboththe1.5-Scasesreachingabove90%.Thenon-renewableinstalledcapacitywillstillbepresentintheformofnaturalgas,togetheraccountingfor12%,13%and9%intheBES,PESandTES.The1.5-SRE90caseseesan8%shareofthesetechnologiesinthesystem,whileitis0%inthe1.5-SRE100.Electricitygenerationin2050willbedominatedbyrenewableenergyinallthescenariosexcepttheBES,from60%inthePESto100%inthe1.5-SRE100.TheTESwillseethree-quartersofASEAN’selectricitygenerationproducedbyVREsources,andthisvaluereachesalmost80%inthe1.5-SRE100.Achievingallthesegenerationmixeswillrequiresignificantexpansionofthepowersystem,andmostwillneedatransformationinsystemoperationtointegrateanincreasinglyvariablesupplyanddemandbymakingandvaluingflexibilityasacornerstoneofsystemoperation.TOWARDSAREGIONALENERGYTRANSITION45Powergenerationgrowstoover6000TWh/yearinthe1.5-S.Figure18Powergenerationandrenewablesharebyscenario,2018-20500%10%20%30%40%50%60%70%80%90%100%0100020003000400050006000700080002018BES2030BES2030PES2030TES20301.5-S2030BES2050PES2050TES1.5-SRE901.5-SRE100TWhOceanEnergyGeothermalThermal-MunicipalSolidWasteThermal-BiomassCCSThermal-BiomassHydropowerOnshoreWindOshoreWindSolarPVUtilitySolarPVRooftopThermal-HydrogenNuclearThermal-GasCCSThermal-NaturalGasThermal-CoalCCSThermal-CoalThermal-OilVREShareREShareNote:RE=renewableenergy;VRE=variablerenewableenergy.ASEAN’stotalenergysectoremissionsin2018were1434MtCO2eq,withpower,transportandindustrythemostemittingsectors.Voluntarymitigationtargetstowardsshort-termemissionreductionshavebeenannouncedbyseveralAMS.InthePES,emissionsareexpectedtorise,reaching1.5timestheir2018value,atarateof3.4%annuallyuntil2030,beforeslowingdownto1.3%annuallytowardsmid-century.ASEAN’senergysectoremissionsin2050willbeaboutdouble2018’svalueunderthecurrentpolicy(PES).Ashard-to-decarbonisesectors,industryandtransportemissionsgrowthefastestataverageratesof3.5%and2.4%,respectively,over30years.Theindustrysectorincreasesitsemissionsharefrom17%in2018to27%in2050.ASEAN’saspirationaltargettoincreaserenewables’shareofcapacityto23%by2025willresultinthepowersector’semissionsgrowingataslowerrateofaround1%annuallyandreducingitstotalemissionssharefrom43%in2018tolessthanone-thirdoftotalenergysectoremissionsbymid-century.After2030,whentheestablishedenergytargetsinthe1.5-Shavebeenmetandtheinvestmentsinend-usetechnologyhavebeenmade,gainsinemissionreductionscanbeexpected.Emissionsin2050maybereducedbymorethanone-halfandthree-quartersintheTESand1.5-S,respectively,overthePES.Thepowersectorprovidesthelargestemissionreductiongains,remainingatonlyabout15MtCO2eqinthe1.5-Sby2050,coupledwiththerapiddeploymentofrenewableenergy,inparticularsolarPVandbatterystorage,tocurbtheuseoffossilfuelpowerplants.Thetransportsectorwillaccountforhalfoftheregion’sremainingemissionsinthe1.5-S,followedbyindustry,emitting28%ofthetotalenergysector’semissionbymid-century.Despiteanincreasingshare,bothofthesectors’emissionswillreach16%and19%belowtoday’slevelby2050,drivenbymassivedevelopmentofEVs,electrificationofindustrialactivities,useofbioenergyanddirectuseofrenewables,aswellasthetransitiontowardsenergyefficienttechnologies.Theremainingemissionscomefromfossilfuelconsumptionintheheavydutytransportsector–mainlylargetrucksandhigh-temperatureindustryprocesses.46RENEWABLEENERGYOUTLOOKFORASEANEnergy-relatedCO2emissionswillalmostdoubleinthePESbutcanbereduced75%inthe1.5-S.Figure19Totalenergy-relatedCO2emissions,byscenario,2018-2050050010001500200025003000Emissions(MtCO)PESTES1.5-SPESTES1.5-S201820302050OtherBuildingsReﬁneriesIndustryTransportPowerPlantsBox3Regionalrenewableenergyaspirationaltargets:Theirstatusandpathwaystowardsachievement–aviewfromACE’s7thASEANEnergyOutlook(AEO7)AuthoredbytheASEANCentreforEnergyASEANenergylandscapeandrenewableenergytargetsAsaregionwithemergingeconomies,theenergyconsumptionacrossallAMShasincreasedrapidlysince2005.TheASEANtotalfinalenergydemandgrew1.6timesin2019from2005.Itthendeclinedbyabout6.8%to384milliontonnesofoilequivalentin2020duetotheCOVID-19pandemic.Respondingtothisgrowingdemand,ASEANTPEShasincreasedsharply.Fossilfuelsdominatetheregion’senergymix,whichaccountsforabout83%,ofprimaryenergycomparedto14%renewablesin2020.ASEANhasbeenanetoilimportersincebefore2005,withoutanysignificantadditionalreservesidentifiedinthelastdecadeduetoexplorationchallenges,especiallyindeep-waterareas.Withagrowingrelianceonfossilfuelimports,ASEANcouldfaceseriousenergysecuritychallenges.Sincethefossilfuelmarketsarevolatile,thefluctuatingpricescouldaffecttheaffordabilityoffuelsneededbytheASEANeconomies.AlltenAMShaverecognisedtheurgencyofenergysecurityanddecarbonisation,whichisreflectedintheirenergy-relatedtargetsandpolicies.Theenergytransitionpoliciesrangefromincreasingtheshareofrenewablesintheelectricitymixtoreducingtheenergyintensityinallsectors.TofurthersupporttheAMSnationaltargetsandtoguidetheregiontowardsenhancedenergysecurity,accessibility,affordabilityandsustainability,theASEANPlanofActionforEnergyCooperation(APAEC)wasestablished.Nowinitssecondphase,APAEC2016-2025reaffirmsthestrongcommitmentofAMStoacceleratetheenergytransitionandstrengthenenergyresiliencethroughgreaterinnovationandco-operation(ACE,2020b).Itsetsthetargettoincreasetherenewableenergyshareto23%ofTPESand35%ofinstalledcapacityby2025.Althoughtherenewableenergyshareininstalledcapacityhasalmostreachedthe2025target,moreambitiouseffortsfromtheAMSareneededtorealiseitsrenewableenergytargetinTPES.TOWARDSAREGIONALENERGYTRANSITION47Box3Regionalrenewableenergyaspirationaltargets:Theirstatusandpathwaystowardsachievement–aviewfromACE’s7thASEANEnergyOutlook(AEO7)(continued)Statusandprojectionofregionalrenewableenergytargets:Insightsfromthe7thASEANEnergyOutlook(AEO7)Despitetheglobalpandemic,renewableenergygrowthinASEANhasshownresiliency.Accordingtotherenewableenergytargetmonitoringin2022,theregionachieved33.5%renewableenergyshareininstalledpowercapacityin2020,whichmeansonly1.5percentagepointsarerequiredtoachievetheregionaltarget.Amongthese,hydroledthewaywith20.9%,followedbysolarwith8%.Bioenergyandgeothermalareunderutilisedwith2.1%and1.4%,respectively.BasedontheAMSpowerdevelopmentplans,60%ofthenewlyinstalledcapacitybetween2021-2025willbefromrenewables.Withthese,37.6%ofinstalledcapacityin2025willbeintheformofrenewableenergy.Thisis2.6percentagepointshigherthantheregionaltargetof35%.Meanwhile,therenewableenergyshareinTPESin2020wasrecordedasreaching14.2%,anincreaseof0.7percentagepointsfromitsreportedvaluein2019.ComparedtotheAMSNationalTargetScenarioofthe6thASEANEnergyOutlook,suchafeatexceeded0.6%oftheprojectionvaluein2020(13.6%).Evenso,itisstilllaggingbehind.Therefore,toachievethe2025targetof23%,promptactionsandeffortstoincreasetherenewableenergysharearerequired.TosupportAMS,the7thASEANEnergyOutlook(AEO7)providesthelateststatusofregionalenergytargetsandexploresthepotentialpathwaystowardachievingthosetargets.Partofthisistheevaluationofthenationaltargetsandpoliciestowardregionaltargets,thepotentialgaps,andthestrategiestoclosesuchgaps.TheBaselineScenarioofthe7thASEANEnergyOutlook(AEO7)projectsthatin2025,only14.4%oftheTPESwillbeinformofrenewableenergy.AssumingtheAMSmanagetoachievetheirnationalrenewableenergytargets,theAMSNationalTargetScenarioprojectsthatatotalof17.5%shareofrenewableenergyinTPEScanbeachievedin2025.This,ofcourse,stillleavesagapof5.5percentagepointstoreachtheregionalrenewableenergytarget.Tofillthegap,amoreambitiousAPAECRegionalTargetScenarioshowsthepotentialpathwaystoachievethe23%shareofrenewableenergyinTPESby2025.TowardstheachievementoftheaspirationaltargetsTheCOVID-19pandemicandthegeopoliticalconflictbetweenRussiaandUkrainehavecausedtherecentenergycrunchandtheeconomicslowdown.Thedecliningenergyconsumptionduringthepandemicimplieslesssupply,limitingtheneedforcapacityexpansion.Althoughrenewableenergydevelopmenthasdemonstratedbetterresiliencythanfossilfuels,policyinterventionisstillessentialtomaintainthegrowthofrenewableenergycapacity.Forexample,theinclusionofrenewableenergyaspartoftheframeworkofAMS’greenrecoveryshouldbeconsidered.However,theexistingnationalpoliciesareinsufficienttoachievetheAPAECtargets.Withonlyafewyearsremaininguntil2025,amoreambitiousrenewableenergytarget,robustpolicyimplementationandenhancedco-operationamongAMSarenecessary.Focusingtheeffortonincreasingtherenewableenergyshareofinstalledcapacityisnotenough.Itshouldbetranslatedintoelectricitydispatch.Inaddition,electrificationofend-usesectorsandhigherbioenergyutilisationinthetransportandindustrialsectorsshouldcomplementthedecarbonisationofthesupplyside,becausethesetwoarethemostenergy-intensivesectors.ThepromotionofEVuseandhigherbiofuelblendingshouldworktogethertoeffectivelyincreasetheintakeofrenewableenergysupplyinthetransportsector.WiththedominationofmotorcyclesandprivatevehiclesinASEAN,theimprovementoffueleconomyandEVadoptionoffersignificantroomfortheshareofrenewableenergysharetoshiftthesectorawayfromoiluseandachievebetterefficiency.Thisisespeciallytruegiventhatbiofueluseisnotyetoptimised,withonlya7%shareoftransportfuelmixby2020.Theintermittencyissueofwindandsolarisoftenraisedasthemainbottlenecktodecarbonisingthepowersystemfully.However,commercialdevelopmentofenergystoragetechnologieshasopenedthepossibilityofelevatingrenewableenergy’sroleasthebaseloadgeneration.Thoughcurrentenergystoragecostsarenotlowenoughfortherenewableenergyprojecttoreachpriceparitywithfossil-basedgeneration,gridimprovementcouldbealow-hangingfruittorampupthedispatchrateofrenewableenergyimmediately.Inaddition,ASEANstillhasmanyuntappedgeothermalandbioenergyresourcestoleveragerenewableenergyutilisationasbaseloadgenerationalongsidehydropower.Inconclusion,achievingtheregionaltargetiswithinreachifAMSimprovetheircollaborationtostrengthenpoliciesforend-userenewables,smarterandflexibleinfrastructuretoallowhighrenewableenergypenetrationinthefuture,anddiversificationawayfromcoalandgas.48RENEWABLEENERGYOUTLOOKFORASEANDEMANDSECTORSKeyhighlights:Inthe1.5-S,therenewableenergyshareinTFECwillincreasetocover65%oftheregion’s2050energydemand,ledbywide-scalescaleupofdirect-useofrenewables,andelectricity.Electricitywillbecomethedominantenergycarrierconsumedbytheregioninthe1.5-S2050,growingitssharefromaround22%in2018to52%in2050inTFEC.Industryisprojectedtobethemostenergy-consumingend-usesectorbymid-century,increasingitsshareintheregion’stotalfinalconsumptionfromaround33%in2018toabout40%in2050underallthescenariosanalysed.Demandforsustainablebioenergywillgrowalmost2.5-foldby2050underthePESandnearly3-foldunderthe1.5-S,intheformofmodernbiomassandliquidbiofuelintheindustryandtransportsectors.Overallbioenergydemandwillonlyslightlymorethandoubleduetothephaseoutoftraditionalusesofbioenergy.Fuelswitchingtorenewables,electrificationandincreasedenergyefficiencywillreducetheregion’stotalenergydemandby20%inthe1.5-ScomparedtothePESin2050.Theend-usedemandsectors,whichincludebuildings,industryandtransport,arethekeydriversforenergydemandgrowthinASEAN.ASEAN’senergydemandwillgrow3%annually,reachingover2.8timestoday’svalueinthePESby2050.Energyefficiency,fuelswitchingandelectrificationinthe1.5-Swillslowdownenergydemandgrowthbyaround20%comparedtothePES,yetgrowtheveninthe1.5-Swillbesignificantandrequireenergysourcesthatarezerocarbon.Electricitydominatesend-useenergyconsumptioninboththeTESandthe1.5-S.Industrywillbethemajorconsumerofend-usesectors’energydemandinallthescenarios,followedbytransport.Thebuildingsector’senergydemandwillgrowoverallbutwillreducedemandinthe1.5-Sby27%overthePESin2050duelargelytoelectrificationandenergyefficiencyimprovements.BuildingsectorKeyhighlights:Theshareofrenewablefuelsandelectricitywillgrowfrom78%to84%inthePESandto92%inthe1.5-Sin2050.Thebuildingsectorhasatraditionallyhighshareofrenewableenergyduetobiomassconsumption.Theshareofspace-coolingenergydemandgrowsfrom17%toabout50%ofthetotalbuildingsector’senergydemandinthe1.5-Sin2050,highlightingthekeyimportanceofconsideringcoolingneedsinfuturebuildingconstructionandretrofitting.TOWARDSAREGIONALENERGYTRANSITION49Electricityisthekeytodecarbonisingthebuildingsector.Table7Buildingsectorsummary,byscenario,2018-2050201820302050PESTES1.5-SPESTES1.5-SBUILDINGSECTORFinalenergyconsumption(PJ)4093508045224256998382107318Renewableenergycomponent–incl.traditionalbiomass(%)31%14%12%12%5%6%7%Solarthermal(PJ)-2812165382Electricitysharesinbuildings(%)46%62%65%67%78%82%85%Cleancooking(%)64%73%80%84%78%84%85%Electricstove(millionunits)17.632587067123160Solarwaterheaters(millionunits)0.040.30.71.12.45.48.6CO2emission(MtCO2eq)2713703122963336642Drivenbyfloorareasalmostdoublingandthetotalpopulationreachingmorethan800millionby2050,ASEAN’sbuildingsectorenergydemandwillgrownearly3%annually,reaching10EJby2050underthePES.Spacecoolingandapplianceswillgrowthefastest,spurredbyeconomicandpopulationgrowth.Spacecoolingwilldominatethebuildingsector’senergydemand,growingfroma17%sharein2018toalmost50%in2050.Overall,thisrepresentsagrowthofoversixtimes2018’senergyconsumption.Morestringentenergyefficiencystandardswillbenecessary.Ifimplemented,theywillreduceelectricitydemandfromspacecoolingbyaboutone-quarterandone-fifthinthe1.5-SandTES,respectively,overthePESbymid-century.Theshareofcookingenergydemandwillfallbelow20%in2050,mainlyduetothephaseoutoftraditionalbiomassandthetransitiontowardscleancookingtechnologies,mainlyLPGinthePESandelectriccookinginthe1.5-S.BothofIRENA’stransformationscenariosemphasisetheutilisationofelectricstoves,mainlyintheresidentialsectorandsmallcommercialbusinesses,substitutingLPGasthemaincarrier.Overallelectrification,andmorestringentenergyefficiencyimplementation,willreducethebuildingsector’senergyconsumptionby18%and27%intheTESand1.5-S,respectively,overthePES.Electricitywillbethebuildingsector’sdominantcarrierinthefuture.Oilproductswillaccountforabout15%by2050inthePES,butwilldecreasebelow10%inthe1.5-S.Theutilisationofbiomasswilldecreasesignificantlyfromabout33%ofbuildings’totalenergydemandtoonlyabout5%inallthescenarios,intheformofmodernbiomass.50RENEWABLEENERGYOUTLOOKFORASEANElectrificationandenergyefficiencyreducebuildings’energydemandbyone-quarterinthe1.5-Sin2050overthePES.Figure20Buildingsectorconsumption,allscenarios,2018-20500246810PESTES1.5-SPESTES201820302050EJAppliancesCookingLightingMotivepowerOthersPubliclightingSpaceCoolingWaterheatingWater/Wastewater0246810PESTES1.5-SPESTES1.5-S201820302050EJBiomassElectricityNaturalGasOilSolar1.5-SIndustrysectorKeyhighlights:Industryconsumedoverone-thirdoftheregion’senergydemandin2018andwillcontinueasthelargestconsumingsectorin2050,risingtoover20EJofdemandinthePES.UnderthePES,thesectorcontinuesitsrelianceonfossilfuelswithoverhalfofthesector’senergycomingfromfossilfuels,andaquarterofthesector’senergyintheformofelectricity.Renewablefuels,electrification,hydrogenandefficiencyallowthesectortoreduceitstotalenergydemandinthe1.5-Sby15%overthePESin2050,withelectricityaccountingforover50%ofdemandandrenewablefuelsandhydrogenmakingupa30%share.Theindustrysectoraccountsforone-thirdoftheregion’senergydemandintheend-usesectors.ThistrendwillcontinueinthefuturedrivenbyrapideconomicdevelopmentandmanufacturingintheASEANcountries.InthePES,theindustrysector’senergydemandwillgrowover3.6%annuallyuntilmid-century,risingtoover20EJ.Thefuelmixwillcontinuetobemajorityfossilfuels,withoverhalfofthesector’senergycomingfromfossilfuels.Inthe1.5-S,energyefficienttechnology,electrificationandthedirectuseofrenewableswillseetotalindustrysectorenergydemandreducedby15%inthe1.5-Sin2050andtheshareofrenewableenergyinthetotalenergydemandofthesectorrisetothree-quarters.TOWARDSAREGIONALENERGYTRANSITION51Electrification,bioenergyandhydrogenarethekeydriversfortheenergytransitionintheindustrysector.Table8Industrysectorsummary,byscenario,2018-2050201820302050PESTES1.5-SPESTES1.5-SINDUSTRYSECTORTotalenergyconsumption(PJ)6048110271059110175201381860216951Non-energyconsumption(PJ)2142326132573257516251545139Electricityshare(%)29%27%34%37%25%43%53%Renewableenergyshare(incl.electricity)46%47%57%61%47%67%76%Renewableenergydirectuse(PJ)(biomass+solarthermal)1011204520531967411531692705Hydrogen(PJ)--264322441628Hydrogeninnon-energyuse(PJ)--38974261703Energyintensity(GJ/USD)2146239523002209181216741525Emissions(MtCO2eq)480748700675892380205Fossilfuelsmakeupthemajorityoftheindustrysector’scarrierconsumption.TheshareoffossilfuelsinASEAN’sindustrysectorwas53%in2018.Naturalgasaloneaccountedfor21%ofthesector’senergyconsumptionin2018.Despitereducingitsshare,fossilfuelwillcontinueaccountingforoverhalfofthesector’senergyconsumptioninthePESby2050.Electricityusewillgrow,andwillbethelargest,non-fossilfuelcarrierconsumed,coveringaboutaquarterofthesector’senergyconsumptionin2050.Theelectrificationofprocessheatinthe1.5-Swillseeelectricityaccountforoverhalfofthesector’senergyconsumptionbymid-century.Theutilisationofsolarthermaloffersadditionaloptionsindecarbonisinglow-temperatureprocessheat.Fossilfuelsstillplayarole,buttheirsharewillfalltolessthanone-fifthoftotalenergydemand,morethanhalfofwhichwillcomefromnaturalgas.Thesefossilfuelsareusedforhigh-temperatureindustrialprocess.TheavailabilityofbiofuelinASEANallowsthesectortobenefitfromtheutilisationofmodernbiomassandreducedependencyonfossilfuelsforsomehigh-temperatureprocesses.Theregionwillalsoseetheroleofgreenandbluehydrogenincreaseforsomeindustrysegmentsstartingaround2030.ModernisinginfrastructureandnewgrowthacrossASEANisadriverforgrowthinironandsteelaswellascement.DatafromtheSoutheastAsiaIronandSteelInstituteshowedtotalsteelconsumptioninIndonesia,Malaysia,Philippines,Singapore,ThailandandVietNamandwasabout80milliontonnesin2019(SEAISI,52RENEWABLEENERGYOUTLOOKFORASEAN2021).Indonesia,ThailandandVietNamwerethelargeststeelconsumingcountriesinthesameyear.TheASEANregionisseenasattractiveforsteelinvestmentandmanyoftheASEANcountriesalsoforeseeexpansionofintegratedcarbonsteelmillsinthefuture(SEAISI,2020).Furtherdevelopmentcouldbespurredthroughcomprehensiveeconomicpartnershipsamongthememberstates,whichareaimingtoeliminate90%oftariffsin20years.EightASEANcountrieshaveasignificantcementindustrywithconsiderableproductionofclinker(SingaporeandBruneiareexceptionsduetotheirsmallsizeandlandmass).Thecementindustrycanbecategorisedas“mature”inMalaysiaandThailand;“emerging”inIndonesia,thePhilippinesandVietNam;and“frontier”inCambodia,LaoPDRandMyanmar(SEAISI,2020).Overall,energydemandinASEANfortheiron,steelandcementindustrieswillgrow3.2%annuallyto2050,reachingnearly2EJinthePES.Thepetrochemicalsectorwillseeanaveragegrowthof2.7%perannumintheregionto2050,especiallydrivenbyBrunei,Malaysia,ThailandandVietNam.Inthe1.5-S,alargerproportionofthepetrochemicalfeedstockwillneedtocomefromgreenhydrogenandbiobasedfuelsby2050,especiallyintheproductionofammoniaandmethanol,inlinewiththeannouncednet-zerotargetsfromtheoilandgascompaniesintheregion.Electricityandthedirectuseofrenewableswillplayimportantrolesindecarbonisingtheindustrysector.Figure21Industryenergyconsumption,allscenarios,2018-205005101520PESTES1.5-SPESTES1.5-S201820302050Energyconsumption(EJ)SolarHeatBiogasBiomassBiofuelHydrogenElectricityNaturalGasCoalOilTransportsectorKeyhighlights:OilproductscontinuetheirdominanceinthetransportsectorinthePES,withonly5%ofthesectorelectrifiedby2050.Biofuelsgrowto10%ofsectorenergyby2050inthePES.ManyAMShaveinitiatedapolicytotransitiontowardsEVs,andinthe20501.5-Stheshareofthesector’senergythatcomesfromelectricitywillincreaseto30%;however,over80%ofpassengerroadactivitywillbeelectric.TOWARDSAREGIONALENERGYTRANSITION53Duetotheneedtolookforalternativestooilproductsforheavyroadtransport,shippingandaviation,theshareofbiofuelconsumptioninthesectorwillgrowfrom5%todayto25%in2050underthe1.5-S.Electrification,biofuelandenergyefficiencyimprovementswillreducethesector’senergydemandby27%inthe1.5-SoverthePESbymid-century,withtheshareofelectricityreaching30%oftotalfuelconsumption.Thetransportsectormadeupthelargestshareoftheregion’send-useenergydemandin2018,withroadtransportmakingup90%ofthesector’senergyconsumption.Drivenbypopulationandeconomicgrowth,thesectorisprojectedtogrowonaverage3%annually,reachingalmost2.5timestoday’senergyconsumptionby2050underthePES.Gasolineanddieselcomprisedabout85%ofthesector’stotalenergydemand,whereasbiofuel’ssharewasaround5%in2018.Theshareofoilproductswillfallfrom93%in2018to83%inthePESby2050butwillstillmakeupthemajorityshare.Theshareofgasolinereducesfrom50%toabout39%,whiledieselconsumptionwillcontinuetoaccountforone-thirdofthesector’senergydemand.ThetransitiontoEVsforlight-dutytransportandbiofuelforheavy-dutytransportiskeytotheenergytransitioninthetransportsector.Table9Transportsectorsummary,byscenario,2018-2050201820302050PESTES1.5-SPESTES1.5-STRANSPORTSECTORTotalenergyconsumption(PJ)6444893387088362155831283511353Electrificationoftransport(%)-2%5%7%5%18%30%Biofuelsintransport(millionlitres)99573918347866570176486793175111904Biofuelshareintransportfuels(%)4.8%11%13%15%10%16%25%EVs-motorcycles(millions)-21537183246299EVs-cars(millions)-2.68.9131986108InstalledEVchargers(millions)-0.72.33.65.022.431.1Emissions(MtCO2eq)431567542511952598367ManyASEANcountrieshaveshownaninterestinreducingtheirdependencyonfossilfuelsandtransitioningtowardsEVs.Despitethesegovernmentplans,electricitywillcompriseonly5%ofthesector’stotalenergyconsumptionin2050inthePES.ThebiofuelblendingratewithintheASEANregiondifferscountrytocountrydependingontheavailabilityofresources.Increasedbiofuelblendingtargetssetupbyseveralcountrieswill54RENEWABLEENERGYOUTLOOKFORASEANdrivebiofuelconsumptiontogrowalmosttenfold,reaching1.6EJbymid-century.Indonesiahasthehighestbiofuelblendingrate,increasingfrom19%inthebaseyearto79%bymid-centuryinthe1.5-S.Singaporehasbannednewdieselcarsalesfrom2025,andtheSingaporeGreenPlan2030requiresthatallcarsandbusesregisteredby2040runoncleanerenergy.IndonesiahasacceleratedtheEVtarget,aimingfor12millionEVcarsand13millione-motorcyclesby2030.LookingattheburgeoningEVandbatterystorageindustryinIndonesia,itispossiblethatdevelopmentinthecountrywillacceleratemorequickly.Malaysia’sLowCarbonMobilityBlueprint2021-2030envisionsa15%shareofelectricmotorcyclesand20000electriccarsby2030.Roadtransportcontinuestogrowwithpopulationandeconomicgrowth.Table10ASEANvehiclestockgrowth(millionunits),bymode201820302050Motorcycle220272349Car5382165Microbus2.12.43.4Bus11.52.3Smalltruck7.611.825Largetruck2.13.16.5Total287374553AnacceleratedtransitiontowardsEVsinIRENA’s1.5-Swillseeelectricity’ssharegrowto30%ofthesector’stotalenergyconsumptionby2050.TotalEVstockinthe1.5-Sreachesabout440million,orfourtimesmorethanthePES.Electriccarscomprisearound25%whileelectricmotorcyclesmakeupalmost70%ofthetotalEVpopulationinthe1.5-S2050.Thenumberofelectriccarsandelectricmotorcyclesinthe1.5-Sbymid-centuryissixandfourtimesoverthePES,respectively.Oilproductscontinuetohavearoleinthesector,accountingfora44%share,mostlyconsumedinheavy-dutyfreight,shippingandaviation.Thistranslatestoamorethan60%oilfuelreductioninthe1.5-SoverthePES.Theshareofbiofuelgrowstoone-quarter,becauseitisanimportantfuelfordecarbonisingheavy-dutyroadtransport.Theresultofaswitchtoelectricity,andhigheroverallefficiency,meansthatinthe1.5-Sthetransportsector’senergydemandwillgrowonaverageonly1.8%annually–lowerthanthePESat2.8%.Totaltransportenergydemandinthe1.5-Sisone-quarterlowerthanthePESbymid-century,butstillalmostdoublethesector’senergydemandin2018.TOWARDSAREGIONALENERGYTRANSITION55ThetransportsectorwillseeanaggressivetransitiontowardsEVsandbiofuels.Figure22Transportsectorenergyconsumption,allscenarios,2018-20500246810121416PESTES1.5-SPESTES1.5-S201820302050EJOilNaturalGasElectricityHydrogenBiofuel0246810121416PESTES1.5-SPESTES1.5-S201820302050EJRoadAviationNavigationRailBox4DecarbonisinginternationalshippingandaviationinSoutheastAsiaMaritimetransportSituatedinoneofthebusiesttradingroutes,SoutheastAsiacurrentlycapturesalmostaquarterofthebunkeringfuelmarketforinternationalshipping,whileSingaporeprovides21%ofbunkerfuelrequirementsglobally(IEA,2021).About98%ofthefuelisoilbased,butthereisincreasingdemandforlow-carbon,verylowsulphurfueloil(VLSFO)andliquifiednaturalgas(LNG)astheInternationalMaritimeOrganizationadoptsmandatorymeasurestoreducethesector’sGHGemissions.Internationalbunkeringforshippingwillneedtoshiftfromoiltoabroadermixoffuels.Figure23InternationalshippingbunkeringdemandinASEAN,byscenario,2018-205000,511,522,532018PES20501.5-S2050EJAdvancedBiofuelsLNGAmmoniaHydrogenMethanolElectricityOil56RENEWABLEENERGYOUTLOOKFORASEANBox4DecarbonisinginternationalshippingandaviationinSoutheastAsia(continued)IRENA’sWorldEnergyTransitionsOutlook(WETO)1.5°Cscenariooutlineshow,by2050,60%ofallfuelneededforinternationalshippingwillbefromhydrogenanditsderivatives,includingammoniaandmethanol(IRENA,2022b).AccordingIRENA’sanalysisoftheglobalsupplychainforhydrogen,SoutheastAsiahasthepotentialtoproduceupto64EJofcost-effectivegreenhydrogenacrossthewholeregion.Therefore,thereisopportunityforcountriestocapturepartofthemarketshareofprovidinglow-carbonbunkeringfuelsfromexcessrenewable-energy-basedelectricity(IRENA,2022d).AviationInadditiontodomesticdemand,around18%ofallinternationalaviationpassengerseitherdepartorarrivefromaSoutheastAsiacountry,where10%ofbunkeringdemandisfulfilledintheregion(ICAO,2021;IEA,2021).TheCarbonOffsettingandReductionSchemeforInternationalAviation(CORSIA)schemebytheInternationalCivilAviationOrganizationobligatesairlinestomonitorandreportemissionswhileaimingtooffsetGHGemissionsthroughtechnologicalandoperationalimprovementsandsustainableaviationfuels(SAFs).FuelsforinternationalaviationwillrisesignificantlyacrossASEAN.Figure24InternationalaviationbunkeringdemandinASEAN,byscenario,2018-205000,511,522,533,544,52018PES20501.5-S2050AviationJetFuelAdvancedBiojetFuelHydrogenElectricitySyntheticKeroseneEJCurrently,morethanhalfofAMShaveagreedtovoluntarilyparticipateintheCORSIAschemefrom2023.RecentinitiativesintheregionalsoindicatethatSAFsarealreadybeingusedintheregion,withseveralairlinesparticipatinginpilotflightsusingblendedSAFs.IRENA’sWETO1.5°Cscenarioproposesthataround47%ofaviationfuelcomefrombiokeroseneand27%fromsynthetickeroseneby2050.WhileaviationenergydemandwithinASEANisexpectedtogrowthreefoldfrom2018to2050,thedemandforSAFswouldstillconstitute14%oftheglobaldemandinthe1.5-S.TOWARDSAREGIONALENERGYTRANSITION573POWERSECTOR58RENEWABLEENERGYOUTLOOKFORASEAN3.POWERSECTORKeyhighlights:Electricitydemandcouldgrowbyasmuchasfivefoldcomparedtotoday'slevelsby2050inASEANinthe1.5-Sresultingfromthewide-scaleelectrificationoccurringacrossend-uses.HowpowergenerationcapacityisexpandedtomeetthisdemandwillbeinstrumentalinaddressingnationalCO2emissions.Ifnoactionistaken,sectoralemissionscouldrisefrom650Mt/yeartodaytoover2000Mt/yearby2050.ASEANhasavastwealthofrenewableenergyresources.KeyamongtheseissolarPV,whichhasanoverallresourcepotentialofabout15terawattspeak(TWp).Integratedplanningindistribution,transmissionandgenerationcapacitywillbeneededtodeterminehowandwheretheseresourcesaredevelopedsothattheycanbeeffectivelyandmeaningfullyunlockedinahighrenewablespathway.Toachieveahighrenewablespathway,renewableenergyprojectsneedtobeidentifiedandprioritisedinnationalandinternationalexpansionplanningandbebankable.Existingpowerpurchasingagreementsforcoalunitsinparticularhavetheeffectofdisincentivisingthisprocessduetotheirflexibility,long-termPPA,and"takeorpay"fuelcontracts.Suchissueshamperrenewablesexpansionplanningandareabarriertorenewablesexpansionandcoalphaseout.Note:PPA=PowerPurchaseAgreement.OVERVIEWANDSCOPETobeconsistentwithaclimate-compatibleworld,theelectricitysectorwillhavetobethoroughlydecarbonisedbymid-centuryacrosstheASEANregion.Accomplishingthiswillrequireacceleratingthedeploymentinpowergenerationofallformsofrenewableenergytechnologies:wind(onshoreandoffshore),solarPV,hydropower,biomassandgeothermalenergy,amongothers.WindandsolarPVwillleadthetransformation,supplyingupto20%oftotalelectricitygenerationby2030(fromjustover1%today)inASEAN.ASEAN’spowersectorisakeysourceofemissionsandspansavastregionwhichisoperationallyintegratedtovaryingdegreesandinsomeregionsthroughanelectricalinterconnectionsystem.Thelargeshareofcoal-firedgenerationmeansthepowersector’s649MtCO2ofemissionsin2020areresponsibleforthebiggestshareofenergysectoremissions,withcoalrepresentingover80%ofthepowersector’semissions.Theexpansionofcoalgenerationoverrecentandcomingyearsmeansthattheemissionsintensityofelectricityhasbeenandwillcontinuetobeonanincreasingtrendinthenearterm.ThescaleofASEAN’semissionsmeanthatitisapivotalplayerinanyglobalemissionsreductionpathway.Toachievedecarbonisationgoalsinaclimate-compatiblepathwaywillrequirehigherlevelsofelectrificationacrosstheenergysystemcombinedwithincreasedlevelsofrenewablespenetration.However,measuresTOWARDSAREGIONALENERGYTRANSITION59designedtoachievesuchgoalsmustalsohavesecurityofsupply,affordabilityandenvironmentalconsiderationsattheirheart.Historically,ASEANhasover-projectedelectricitygrowth,whichisanimportantconsiderationinthecontextofsuchambitiouslevelsofelectrification.The1.5-Spowersectoranalysesdidconsidertheimpactsoflowerpotentialelectrificationlevelsoncapacityexpansion,butthesystemswerelargelyofasimilarcomposition,whichindicatesthatattainingalowerlevelwouldnotinhibitoralterthetechnologymixneededatanoverallhighlevel,justitsoverallmagnitude.ASEANhassignificantresourcesofbothfossilfuelsandrenewables,butthevastmajorityofitsrenewableenergypotentialremainstobedeveloped.Todate,thekeyrenewablesinthepowersectorhavebeengeothermalandhydropower.TherehasbeenverylittledevelopmentofwindandsolarPVgenerationinmostcountrieswiththenotableexceptionofVietNam,whichhadacombinedinstalledcapacityofapproximately21GWby2021(IRENA,2021a).Additionally,bioenergyalsocurrentlyplaysaminorrolewithnearly9GWinstalledby2021(IRENA,2021a)ofitsapproximatepotentialof76GW,whichimpliessignificantscopeforgrowth.TherenewableenergyresourcepotentialusedinthisstudycanbeseeninTable11.ASEAN’srenewableenergypotentialmassivelyexceedscurrentdeployment.Table11ASEAN’srenewableenergypotentialforpowergenerationRENEWABLEENERGYRESOURCES(GW)PVONSHOREWINDOFFSHOREWINDBIOMASSHYDROGEOTHERMALBruneiDarussalam1.9---0.1-Indonesia289819.658943.394.629.5Cambodia15972.588.8-10-LaoPDR98311.9-1.2260.1Myanmar53102.4-140.4-Malaysia337-53.34.229-Philippines122.53.569.40.210.54Singapore0.30.1----Thailand350932.429.61815-VietNam84431.1322.18.6350.3Source:Seetext.60RENEWABLEENERGYOUTLOOKFORASEANRenewableenergyresourcepotentialsusedforbioenergy,hydropowerandgeothermalinthisanalysiswerederivedfromarangeofpublishedreputablenationalandinternationalstudies(DGEetal.,2021;Handayanietal.,2022;IRENA,2022e).Giventheseasonalityofhydropower,itsgenerationpatternvariesineachcountryacrosstheyear.Thus,themodelwascalibratedinthisregardbasedonbestavailabledatawhichwaseitherprovidedbynationalbodiesorextractedfromthePLEXOSWorldmodel(UniversityCollegeCork,2019).However,todeterminethesolarandwindpotentials,andrespectiveresourcehourlyprofiles,ananalysiswasperformedusingthesamemethodologyaswasappliedinGlobalhydrogentradetomeetthe1.5°Cclimategoal:PartIII–Greenhydrogencostandpotential(IRENA,2022j).Thisusedageographicinformationsystemsearchenginewithextractionlayerstodeterminethesepotentialsandtheirhourlygenerationprofilesforfivedifferentclasseseachrespectivelyofresourcequality(AmanteandEakins,2009;Amatullietal.,2018;Friedletal.,2010;Gao,2017;IUCNetal.,2022;Maclaurinetal.,2019;Service(C3S),2017).Giventhescaleoftheresources,inparticularsolar,sucharepresentationwascrucialinunderstandingtherolethattheycanreasonablyplayinthelong-termexpansionoftheASEANpowersystembycapturingtheopportunitiesandchallengestheyhaveintermsofrenewableenergyintegration.ItwasalsoimportantinunderstandhowwindpowerinASEANcanbeexpanded,despitethelargenationalpotentialinsomecountriesthequalityofthisresourceanditslocationmaymakeittoocostlytoeffectivelyharness.ThemethodologicalapproachappliedacrossthisstudyseekstodeliveranassessmentthatmeetsthegrowingenergydemandacrossASEANmemberstateswhilstalsodeliveringonseveralkeyregionalgoalsintermsofemissionsreductions,energycosts,energysecurityandenergyaccess.Thisrequiresanintegratedapproachthatspansthewholeenergysystemoftheregionandcapturestheevolutionofallenergyend-usesectorssuchastransport,industryandbuildingsoutto2050withhighgranularity(e.g.passengertransport,industrialprocessheat,buildingcoolingandmiscellaneousappliancesetc.).ThiswasachievedbyusingtheapproachoutlinedinFigure25,inwhichtheenergysupplyanddemandassessmentcomposedthreeseparatemodellingactivities1)Activity-leveldemandassessment;2)capacityexpansionofthepowersector;and3)operationalflexibilityanalysisofthepowersystem.Thisenabledthepowersystemtobeexpandedbasedontheunderstandinggainedofhowenergydemandwillevolveandwhatlevelsofelectrificationoftheseenergydemandscanbeachievedwhilstmaintainingreliableoperationofthesystem.Thisinturnenabledatailoredcapacityexpansiontobedevelopedtodeliveremissionsandenergycostreductionswhilstbolsteringenergysecurityandaccess,largelythroughincreaseddeploymentofrenewablesacrossASEANinanoperationallyrobustpowersystem.IRENA’sREmapenvironmentconsistsofmanyintercorrelatedanalyses.Figure25REmapToolkitoverviewREmapToolkit•End-usesectorenergydemandanalysis(transport,industry,buildingssectorsetc.)•Energyandemissionsbalance•Stockturnovermodel•Capitalneedsanalysisforeachenergyend-usesector•FuelandoperationalcostsEnergydemandandsupplyassessment•Expandpowergenerationcapacityandinterconnectiontomeetprojecteddemandgrowth•OperationallyanalyseresultsofcapacityexpansiontoensureitisrobustandreliableActivityToolInvestmentToolExpansionoptimisationmodelandﬂexibilityanalysis•Energysectorsupply,demandandcostsareaggregatedtoprovideanintegratedoverviewofeachcountry’senergysectorneeds•Emissionscalculations&energyeciencyindicatorsAggregationframeworkTOWARDSAREGIONALENERGYTRANSITION61Forthepowersectortheanalysisconsistsoftwokeyparts:along-termcapacityexpansionanalysisforallscenariosofenergydemandresultingfromtheactivitytoolassessmentwithaviewtocapturingabroadrangeofpossiblepowersystemdevelopmentsoutto2050;and,anoperationalassessmentofthesescenariosforpowersystemflexibility.Inthecaseofthisstudy,boththelong-termexpansionandshort-termoperationalflexibilityanalyseswereperformedusinganindustry-standardmodellingtool,PLEXOS.Thepowersystemlong-termexpansionanalysiswasguidedbytwokeyquestions:1.Whatistheroleofnationalandregionalintegrationinunlockingthepotentialbenefitsofajointenergytransitionstrategy?2.Whatistheroleofvarioustechnologiesinachievingahighlyrenewableandlow-carbonpowersector?Theanswerstothesequestionsdependontheenergydemandscenariosconsideredandwide-rangingassumptionsinthepowersystemexpansionmodelling.ScenariossuchasBESandPESweredesignedtobestrepresent“business-as-usual”andbestavailablenationalplans,respectively.WhileTESstrivestodeliverhigherrenewableanddecarbonisationambitionthanBESandPES,andboth1.5-Scases(a90%and100%renewablepowergenerationcase)expandonthiswithafocusondeeperdecarbonisationindesigningpowersystemtechnologypathwaysthatcandeliveraclimatecompatiblefutureforASEAN.TherationaleforthiscapacityexpansionanalysisisshownbelowinTable12andspansfourpillars.Manyfactorsneedtobeconsideredforproperlong-termpowersectorsimulation.Table12Rationaleforlong-termpowersectorsimulationsBES/PESTES1.5-SRE901.5-SRE100RELEVANTSCENARIOSGUIDINGQUESTIONSANDCONSIDERATIONSExistingpipelineofrenewableenergyprojectsineachcountryWhatistheimplicationofnotexpandingwithfossilfuel?Isittechnicallyfeasible?Isiteconomical?BetweenREandCCSornuclear-whichismorecompetitive?Howfeasibleisittopushfurthertoward100%REgeneration?FossilfuelexpansionbasedonnationalplansWhichcountriesareaffectedandwhy?HowchallengingisittodeployadditionalrenewablesandtodeployCCSornuclear?Whatarethekeyfactorsthataffectthetechnicalfeasibilityandwhataretheinfrastructureneeds?Limitedexchangebetweenmarketplayers–countriesbasedonaconservativescenarioinAIMSWhichtechnologiestaketheroleofthefossilexpansion?Whataretheadditionalinvestmentneeds?Isiteconomicandisitoperationallyrobust?MOTIVATIONTodemonstratewhatcanbeachievedundercurrentplanswithexistingframeworkandendowmentenablingenvironmentforrenewables(PES)ornoneatall(BES)Toanalysehowregionalandnationalsystemsareaffectedbyanincreaseinrenewableambitionandwhatarethetechnicalandnon-technicalbarriersthatneedtobeovercomeinachievingthisTodemonstratehowaclimatecompatibleand/orhighlyrenewablefuture(90%REinpowergeneration)canbeachievedwhilstconsideringalltechnologyoptionsavailablesuchasnuclearandCCStechnologiesToexploreandanalysewhataclimatecompatible100%REpathwaymeansfortheASEANregionandhowitcanberealisedwhileexcludingallfossilandnucleartechnologiesNote:CCS=carboncaptureandstorage;RE=renewableenergy.62RENEWABLEENERGYOUTLOOKFORASEANThesescenariosforthepowersectorwereconsideredina35-nodemodelofASEANasshowninthefollowingfigure,with18nodesinIndonesia,nineinMalaysiaandonenodeforeachoftheremainingAMS.MalaysiaandIndonesiaarerepresentedinmoredetailthanotherASEANcountriesbecausetheyarealsothefocusofnationalreports.Figure26ASEANregionrepresentationwith35nodesWestKal.North-EastKMNorthernSWPapuaPhilippinesVietnamLaoPDRMyanmarCambodiaNorthPenangEastSabahSarawakPerakWestSabahBruneiThailandSingaporeNorthSMCentralSMCentralJVEastJVBaliWesternNusaTenggaraEasternNusaTenggaraCentralKal.SouthKal.SouthernSWMalukuIslandsSouthSMWestJVSouthEastCentralCentralSWDisclaimer:Thismapisprovidedforillustrationpurposesonly.BoundariesandnamesshowndonotimplytheexpressionofanyopiniononthepartofIRENAconcerningthestatusofanyregion,country,territory,cityorareaorofitsauthorities,orconcerningthedelimitationoffrontiersorboundaries.Note:NorthSM=NorthSumatra-Aceh;NorthernSW=Gorontalo,NorthSulawesi;CentralSM=WestSumatra,Jambi,Riau;CentralSW=Central,WestSulawesi;SouthSM=SouthSumatra,Lampung-Bengkulu,BangkaBeitung;SouthernSW=South,SoutheastSulawesi;WestJV=WestJava,Jakarta,Banten;CentralJV=CentralJava-Yogyakarta;EastJV=EastJava.TOWARDSAREGIONALENERGYTRANSITION63POWERCAPACITYANDGENERATIONKeyhighlights:ThedeploymentofsolarPVisacommonfeatureacrossallscenariosduetothestrengthoftheresourceacrossASEAN.By2050itcouldexceed2000GWinthe1.5-S,butthiswouldrequireaparadigmshiftinsystemoperationandamovetowardamoredistributedpowersystem.1.5-Swillrequiremakingcleandispatchabletechnologieskeytobalancingresourcevariability.Thecostsandavailabilityofthesetechnologiesarepivotalintermsoftheircost-effectivedeploymentinanyhighlyambitiousdecarbonisationscenario.RegionalinterconnectionwithinASEANhasmanybenefitsinachievingalower-costpowersystemoverall.Byallowingforintegratedenergysupplyplanningandminimisingofduplicationofbothenergyandnon-energyserviceprovision,itreducessystemcostsinallscenariosregardlessofambitionlevel.Internationallineexpansioninaggregateincreases100-foldby2050inboth1.5-Sclimate-compatiblepathwaysgiventhecrucialroleitplaysinunlockingthewideanddiverserenewablepotentialoftheregion.A100%renewablepowersystemispossibleandfeasibleforASEAN,butitdoescallformuchgreaterscalingofrenewableenergyandinternationalco-ordinationforsystemoperation,withcostsonly5%higherthaninthe90%renewablecase.Powercapacitywillneedtogrowatpacetoensurethatelectricityneedsaremetoutto2050.Therearemanypossibletrajectoriesforpowersystemexpansion,butactionisneededtoavoidfossilfuellock-ininvestmentsinthenearterm,particularlygiventheprevalenceofcoal-firedgeneration.SolarPVisgoingtobeakeytechnologyinASEAN’spowersectorcapacityexpansioninallthescenarios,regardlessofambitionlevel,asshowninFigure27.Regionalexpansionofinterconnectionwillenablemuchofthisregionalintegrationofrenewables.Carefuloperationsplanningandancillaryserviceprovisionisneededtoensureeffectiveintegrationofthetechnology,andthisincreaseswithrenewablesambition.SolarPVintheBES,PESandTESwillreachabout550GW,1120GWand1730GW,respectively,representingtheshareof47%,65%and68%oftotalinstalledcapacity,respectively,by2050acrossthewholeofASEAN.Thetwo1.5-Scases,boththeRE90andRE100,willseethesolarPVshareoftotalinstalledcapacityby2050atapproximately70%.Translatedintoaveragebuildratesoverthestudyhorizon,thiscorrespondstoannualbuildrateof64GWto73GWperyearforboththe1.5-SRE90andRE100cases,respectively.Otherrenewableenergysourceswillalsoplayimportantrolesinthesehighlyambitiousscenarios.TheBESandthePESwillseebothgeothermalandhydropowercapacityincrease3.5-foldand2.5-foldby2050acrossASEANtomeetelectricitydemandgrowth.TheTESwillseemoregeothermalandhydropowerinstalledcapacity,reaching25GWand200GW,oraboutasevenfoldandfourfoldexpansionfromtoday’slevels,respectively.Both1.5-Scasesreinforcethesetechnologytrendswithbothtechnologiesreaching32GWand227GWbymid-century,increasesofninefoldandfivefold,respectively,overtoday’slevels.Windenergywillalsoseeincreasedimportanceespeciallyinthemosthighlyrenewablescenarios,namely1.5-SRE90andRE100,mainlyduetoitsdifferinggenerationprofilewhichcancomplementthehighlyconcentrateddailyprofileofsolarPVgeneration.TheBES,PESandTESwillseethetotalinstalledwindenergyreaching31GWinbothearlierscenarios,and103GWintheTES,inwhichonshorewinddominatestheinstallation.Thetrendinboththe1.5-Scaseswillseeoffshorewindbeingmoredominantasaresultof64RENEWABLEENERGYOUTLOOKFORASEANthemoreaggressivedevelopmentofthetechnologyandlackofland.Totalinstalledwindenergyinthe1.5-SRE90andRE100caseswillreach349GWand639GW,respectively,ofwhichoffshorewindaccountsforaround65%andmorethan80%,respectively,bymid-century.Thiscorrespondstoanaverageannualbuildrateofunder1GWperyearintheBESandPES,risingto3GWperyearintheTESand10.5GWperyearand19GWperyearinthe1.5-SRE90and1.5-SRE100cases,respectively.Thevastmajorityofthiscapacityisconcentratedinafewcountries,suchasVietNamandthePhilippines.Thereisamaintainedroleforfossilfuelswithandwithoutcarboncaptureandstorage(CCS)andnon-renewablemodesofgenerationcapacityby2050,withtheircombinedcapacityshareof38%,23%and18%intheBES,PESandTES.Theirproportionallylowshareofcapacityhoweverbeliestheirvalueintermsofpowergeneration,wheretheirabilitytodeliverpowerduringperiodsoflowVREprovidesvaluablesystemresilience.Additionally,giventherangeofuncertaintiesthatexistwiththesetechnologies,thisroleneedstobecarefullyexploredsothatthesearewellunderstoodintermsoftheirsensitivitytotheseuncertainties.Theshareofthesetechnologiesinthe1.5-Sareallbelow10%,andare0%intheRE100case.SolarPVwillplayafundamentalroleinASEAN,regardlessthescenarios.Figure27ASEANcapacityexpansion,byscenario,2018,2030,2050GW05001000150020002500300035004000OceanEnergyGeothermalThermal-MunicipalSolidWasteThermal-BiomassCCSThermal-BiomassOnshoreWindHydropowerOshoreWindSolarPVRooftopThermal-HydrogenSolarPVUtilityNuclearThermal-GasCCSThermal-NaturalGasThermal-CoalCCSThermal-CoalThermal-Oil20182030BES2030PES2030TES20301.5-S2050BES2050PES2050TES1.5-SRE901.5-SRE1000%10%20%30%40%50%60%70%80%90%100%VREShareREShare0%10%20%30%40%50%60%70%80%90%100%0100020003000400050006000700080002018BES2030BES2030PES2030TES20301.5-S2030BES2050PES2050TES1.5-SRE901.5-SRE100TWhREshareREshareNote:RE=renewableenergy;VRE=variablerenewableenergy.TOWARDSAREGIONALENERGYTRANSITION65Theshareofrenewablesinpowergenerationin2050willreach35%,59%and75%intheBES,PESandTES,respectively,increasingfrom23%in2018.Both1.5-Scasesseeatleast90%ofASEAN’spowergeneratedfromrenewablesbymid-century.Meanwhile,theshareofvariablerenewablepowergenerationreachesover50%intheTES,andboththe1.5-Scasesreach69%and78%intheRE90andRE100cases,respectively.SolarPVplaysakeyroleinASEAN’spowergenerationinallthescenarios,especiallyinthe1.5-S,accountingforover55%ofgeneration.Inthegenerationmix,theroleofdifferentpowergenerationsourcesinmeetingdemandacrosstheyearbecomesclear.ThisistosaythatinpowersystemswithhighsharesofsolarPVandotherrenewables,thenatureofrenewablepowersourcesimpliesthattheoperationofthesystemandtheiruseacrosstheyearrelyonthevariabilityoftheresourcesunderpinningthem.Inthesescenariostheseattributesaremitigatedtolargeextentbyavastexpansionofbatterystoragecapacity.However,thisresourcevariabilitydoesalsoseetheexpansionoflowerorzeroemissiontechnologiessuchasnuclearandfossilfueltechnologieswithCCSwhichcanreadilybedispatchedregardlessofshortorlong-termweatherconditions,thoughentailsignificantuncertaintyindeploymenttimelinesandcosts.Properpolicyandmarketdesignandimplementationareneededtoachievetheprojectedscenariossuccessfullyastheroleoffossilfuelsisdecreasinginallthescenariosandtheenergyandnon-energyservicesthattheyprovidewillneedtobesubstituted.In2018,unabatedcoalrepresentedabouthalfofASEAN’spowergenerationbutby2050coal(bothabatedandunabated)willhavepenetrationsof70%,27%and4%inthegenerationmixoftheBES,PESandTES.ASEANisprojectedtohavenocoalpowergenerationby2050inallthe1.5-Scases,withafullretirementorconversionforeseenofallgenerationunits.TheCO2emissionsineachscenariopaintastarkpictureoftheneedforactionacrosstheregion.EvenwithsignificantreductionsintheuseofcoalgenerationandincreasesinsolarPVgenerationinthePES,totalemissionsremainatabouttoday’slevelsby2050.Figure28makescleartheneedtoacceleratetheexpansionofsolarPVfurtherandthecrucialneedforcleandispatchablecapacityacrosstheregion,whichcouldtaketheformofbatteries,hydropower,bioenergy,nuclearandCCS.InthePES,theexpansionofcleangenerationcapacitydoesnotoutpacedemandgrowth,whichleadstoflatliningofemissionspost-2040despitelargereductionsinemissionsintensity,incontrasttotheTESandboththe1.5-Scases,whichachievenearzeroornegativeemissionsintensity.GridexpansionPowersectoremissionsfallsignificantlyinthe1.5-Swhentheregion’srenewableenergypotentialisoptimised.Figure28ASEANpowersectorCO2emissionsandemissionsintensity2020203020402050-50005001000150020002500Mtperyear-1000100200300400500600700gCOperkWhBESPESTES1.5-SRE901.5-SRE100202520352045202020302040205020252035204566RENEWABLEENERGYOUTLOOKFORASEANTherearebenefitstoincreasedinternationaltransmissionexpansioninallscenarios,evenintheBESandPES,wheretheexpansionislimited.Transmissionexpansionallowsforreducedduplicationofenergyandnon-energyservicesprovisionineachcountry,allowingthesharingofdifferentsystemgenerationsourceswhichleadstocostsavingsasaresult,regardlessofrenewablesambition.However,thistransmissionexpansionbecomescrucialinintegratingrenewablesinthehigher-ambitionTESandinboththe1.5-Scases.ThisisshowninFigure29,whichshowsthesumtotalofinternationallineexpansionforeachscenario.Whileitdoesnotshowindividualcandidates(whicharefurtherdiscussedinthe“Powerflexibility”section),itdemonstratesthelevelofregionalpowersystemintegrationneededandtheeconomicbenefitsoftheselineexpansions,giventhesewerederivedusingcostoptimisationmodellinginafullregionalmodeloftheASEANpowersystem.ThisisnotonlyowingtoVREintegrationbuttosharingofclean,dispatchablepowersourceslikebatteries,hydropower,bioenergyandgeothermalacrosstheregion.Transmissionexpansionneedstoincreasesignificantlyintheenergytransitionscenarios,especiallywhenRE100ispursued.Figure29ASEANtransmissioncapacityexpansionBESPESTES1.5-SRE901.5-SRE100MW25000020000015000005000010000020182020203020402050202220282026202420382036203420322048204620442042Togiveaninsightintowhatthisimpliesatanationallevel,aninterestingexampletoconsideristhatofcountriesalongtheMekongRiver.Inthisarea,awealthofhydropower,solarpowerandwindpowerresourcesarenotuniformlydistributed.TheroleofhydropowerinLaoPDRandMyanmarinhelpingtomitigateregionalsupply-demandfluctuationsiscrucialinunderstandinghownationalsystemcharacteristicscancomplementeachotherandfacilitatepowersystemflexibilityandsharedsystemservicesprovision.Thisleadstoasignificantexpansionofinterconnectorlines,asshowninFigure30,betweenthesecountries,whichexchangehydropowerandsolaranddrivethisexpansion.MostnotablearetheexpansionoflinesbetweenLaoPDRandbothVietNamandThailand,whichwillbe24GWand5GW,respectively,by2050,andMyanmarandbothVietNamandThailand,whichreach11GWand13GW,respectively,by2050inthe1.5-SRE90.TOWARDSAREGIONALENERGYTRANSITION67TheMekongareawillrequireinternationaltransmissionlineexpansion.Figure30InternationallineexpansionalongtheMekongRiverinthe1.5-SRE90LA-VNKH-LALA-MMLA-THMM-LAMM-THMM-VNKH-VNTH-VNKH-THTH-MY250002000015000050001000030000MW20182020203020402050202220282026202420382036203420322048204620442042Note:Forthecountrycodelegendpleaseseethebeginningofthereport.Itisnotonlyhydropowerandsolarpowerthatdrivethisexpansion,asevidencedbythenear15GWlinebetweenThailandandVietNamwhichasahigh-voltagedirectcurrent(HVDC)line/soverwaterisatechnicallycomplexexpansioncandidatetoimplement.TheoffshorewindpowerpotentialinVietNamdrivesthislineexpansionwithThailandduetothecomplementarityofitsgenerationprofileandcostefficacy.Thisexpansionoflinesleadstosignificantgridintegrationacrosstheregionand,implicitly,closelyintegratedsystemoperationalongtheMekongRiver.Whilebeneficialataregionallevel,allinternationalexpansionoftransmissionlineswouldalsoneedtobedevelopedwithcloseinternationalcollaborationwhichrecognisesthepoliticalcomplexityindevelopingtheselines.Thisispivotalinensuringthattheirbenefitsandcostsarefairlydistributedwhichshouldspantheentirelifeoftheprojects,allthewayfromtheprojectdevelopmentphasethroughtomutuallybeneficialoperationinthelong-term.Box5Ambitiousdeploymentofsolarpowerinthe1.5-SNationalplansintheregiongenerallyenvisagealimitedroleforsolarPVintheneartermwithalimiteddeploymentoverallintheplannedhorizonascanbeseenintheBESandPES.TheTESand1.5-Sseeavastlymoresubstantialexpansionalongthestudyhorizon,withincreasingPVandotherrenewabledeploymentintheTESand1.5-S.IntermsofanationaldistributionofsolarPVanditsnationalshareofthecapacitymix,thereisquiteadifferenceamongcountriesintheregion,asshowninFigure31.Thispresentsasimultaneousopportunityandachallengefortheregion.Itisanopportunitytotakeadvantageofoneofthelowestcostsourcesofpoweravailabletodayanddevelopanindigenousindustrytodevelopandrolloutthetechnology.SuchistheresourcelevelinASEANandthetechnologycostprojectionthattheregioncouldbecomeaworld-leadingplayerinthetechnologyatthebackboneofadecarbonisedworld.However,skillsneedtobedevelopedandasupplychainpreparedtomeetsuchambitiouslevelsofdeploymentoutto2050,whichiswherethechallengelies.Along-termperspectiveisneededtoenablesuchdeploymentineverysense,bothtechnicallyandeconomically.68RENEWABLEENERGYOUTLOOKFORASEANBox5Ambitiousdeploymentofsolarpowerinthe1.5-S(continued)Figure31NationalexpansionofsolargenerationcapacityandtotalVREshareofcapacityinthe1.5‑SRE90in20500%10%20%30%40%50%60%70%80%90%100%1002003004005006007008009001.5-SRE901.5-SRE1001.5-SRE90VREShare(2ndaxis)1.5-SRE100VREShareGWBruneiDarussalamIndonesiaCambodiaLaoPDRMyanmarMalaysiaPhilippinesSingaporeThailandVietNam0Note:RE=renewableenergy.Evenwhenconsideringaverageexpansionrates,whichneglecttheS-shapedeploymentrateoftechnologies,thiscorrespondstoveryhighlevelsthatneedtoberolledoutoverthelongterm,eveninthe1.5-SRE90.Intermsofannualdeployment,thisreachesaveragelevelsasshownbelow,whicharequiteambitiousbetween2018and2050.ForASEANasawhole,thiscorrespondsto64GWperyear,whichisasignificantshareofthe206GWperyearenvisagedinforAsiainIRENA’sWETO2022outtotheyear2050.1.5-SRE90BruneiIndonesiaCambodiaLaoPDRMyanmarMalaysiaPhilippinesSingaporeThailandVietNamAverageannualSolarPVadditions(GWperyear)0.0724.180.630.401.233.114.930.1611.1517.86CostsforrenewableenergywithincountriesinASEANRenewabletechnologieshaveseenunprecedentedcostreductionsoverthelastdecade.IRENA’slatestRenewablepowergenerationcostsin2021report(IRENA,2022f)showsthatcostreductiontrendshavecontinuedforkeyrenewableenergytechnologies,suchassolarPVandwind.Thereport,andunderlyingdatabase,presenttechnologycostsforselectedtechnologiesinsomeASEANcountries.ThetwocoresourcesofdataforthecostandperformancemetricsarebasedontheIRENARenewableCostDatabaseandtheIRENAAuctionsandPowerPurchaseAgreementdatabases.TheIRENARenewableCostDatabasehasgrowntoincludeproject‑levelcostandperformancedataforover1900GWofcapacityfromaround20000projects,eitherinstalledorinthepipelineforcommissioninginthecomingyears.SolarPV,whichhasseenmorethanan80%reductionincostoverthelastdecade,showsawiderangeincostinASEAN.Theaverageinvestmentcosts(AIC)forsolarPVrangesfromthelowestatUSD690/kilowatt(kW)TOWARDSAREGIONALENERGYTRANSITION69inVietNamwithmanyothersinASEANfallingbelowUSD2000/kW.WindenergyhaslargelybeenlimitedtoprojectsinVietNamandThailand,andaveragearoundUSD1500-1700/kWforonshore.HydropowercostsgenerallyrangefromaroundUSD2000toUSD2200/kW,withtheexceptionofVietNamatUSD1300/kW.Geothermalandbiomassarethemostcapital-intensivetechnologiesintheregion,withcostsrangingfromUSD2800tooverUSD5000/kW.ThecapacityfactorofsolarPVfallsbetween14%inSingaporeto17%inCambodia,ThailandandVietNam.TheotherAMShavesolarPVprojectswiththecapacityfactorat16%.WindprojectsinVietNamreachcapacityfactorsofbetween34%foronshoreand38%foroffshorewind.GeothermalprojectsinIndonesiarepresentthehighestcapacityfactor,reaching84%,whilebiomassisslightlybehindatonaveragecloseto80%.ThecapacityfactorofhydropowerintheASEANregionis44%,45%and52%inVietNam,LaoPDR,andIndonesia,respectively.However,AICdoesnotfullythecapturecostofproducingelectricity.TheLCOEofagiventechnologyistheratiooflifetimecoststolifetimeelectricitygeneration,bothofwhicharediscountedbacktoacommonyearusingadiscountratethatreflectstheaveragecostofcapital.Thecostandperformancemetricsincludetotalinstalledcosts(includingcostbreakdowns,whenavailable),capacityfactors,operationalcosts(suchasfuel)andmaintenancecosts(O&M)andthelevelisedcostofelectricity(LCOE).TheLCOEforsolarrangesislowestatUSD0.046/kWhinVietNam,withmanyothersfallingintheUSD0.05‑0.075/kWhrange.TheLCOEofonshorewindisUSD0.048/kWhandforoffshore,USD0.076/kWh.HydrorepresentsthelowestLCOEintheregionwithacostofUSD0.036/kWh.GeothermalandbiomassgenerallyfallaroundUSD0.08/kWh.Thesemetricsallowaperspectiveontheevolutionofthecostsofrenewablepowergenerationtechnologies.IRENA’scostingworkanalysisshowswhattheunderlyingdriversareintermsofcostsandcostreductions.AlthoughLCOEisausefulmetricforafirst-ordercomparisonofthecompetitivenessofprojects,itisastaticindicatorthatdoesnotconsiderinteractionsbetweengeneratorsinthemarket.TheLCOEdoesnotconsidereitherthattheprofileofatechnology’sgenerationmaymeanthatitsvalueishigherorlowerthantheaveragemarketpriceitmightreceive.However,theglobaltrendischangingasitisalsointheASEANregion.LCOEsfromrenewablesaregettingcheaper.Renewablessuchaswindandsolarhaveexperiencedmassivedeploymentglobally,whichhascontributedtoloweringthecostofequipment.Becauseequipmentcostmakesupahighshareofcapitalcost,theLCOEofrenewablesisalsoexpectedtocomedowninASEANascapacityinstallationsgrow.Ontheotherhand,fossilfuelthermalplantshaveexperiencedanincreaseininvestmentcostduetostricteremissionandenvironmentalstandards,andrisingglobalfossilfuelpricesaredrivinguptheirgenerationcost(IESR,2019).Theshifttorenewablepowerandelectrificationisatrendthathasbeenreflectedinrecentyears.Thecompetitivenessofrenewablescontinuedtoimprovein2021.DatafromtheIRENARenewableCostDatabaseandanalysisofrecentpowersectortrendsaffirmtheiressentialroleinthejourneytowardsanaffordableandtechnicallyfeasiblenet-zerofuture.Theperiod2010to2021witnessedaseismicshiftinthebalanceofcompetitivenessbetweenrenewablesandincumbentfossilfuelandnuclearoptions.TheglobalweightedaverageLCOEofnewlycommissionedutility‑scalesolarPVprojectsdeclinedby88%between2010and2021,thatofonshorewindandconcentratedsolarpower(CSP)by68%,andoffshorewindby60%(IRENA,2022f).CostsinASEANcountriesspanawiderange,whiledeploymentin2021wasmodest,meaningcosttrendscanalsobevolatile.Havingnotedthesecaveats,Figure32showsthetotalinstalledcosts,capacityfactorsandLCOEforprojectscommissionedinASEANcountriesin2021.VietNamhasachievedsomeofthemostcompetitivecoststructuresintheregion,withcostsforhydropower,utility-scalesolarPVandonshorewindbelowUSD0.05/kWh.70RENEWABLEENERGYOUTLOOKFORASEANRenewablepowertechnologycostscontinuetheirrapiddecline.Figure32Totalinstalledcosts,capacityfactorsandcostofelectricitybycountry,2021BiomassGeothermalHydroSolarPhotovoltaicOshoreWindOnshoreWindBiomassGeothermalHydroSolarPhotovoltaicOshoreWindOnshoreWind010002000300040005000Totalinstalledcost(USD/kW)BiomassGeothermalHydroSolarPhotovoltaicOshoreWindOnshoreWind0%10%20%30%40%50%60%70%80%Capacityfactor0.0000.0250.0500.0750.1000.1250.1500.175Levelisedcostofelectricity(USD/kWh)FossilfuelcostrangeinG20BruneiCambodiaIndonesiaLaoPDRMalaysiaPhilippinesSingaporeThailandVietnamSource:IRENARenewableCostDatabaseNote:Dataaretheweighted-average(bycapacity)forprojectsinthedatabase,whichareasubsetoftotalprojectscommissionedin2021.IRENAsurveyedthefinancesector,utilities,developersandbankprofessionalsin2021onthecostoffinanceforrenewablepowergenerationprojects(IRENA,2022f).Thissurveyconcludedthatfinancingcosts(theweighted-averagecostofcapital[WACC])forsolarPV,onshorewindandoffshorewindwerehigherthaninmoreestablishedrenewableenergymarketsinMalaysiaandVietNam.ThesesurveydatawereusedtocalibrateabenchmarkmodelofWACC,withresultsforASEANcountriesforutility-scalesolarintherangeof4.5%(forThailandandSingapore)to6%(forIndonesiaandVietNam)toahighof7.5%(forCambodiaandLaoPDR).WindWACChadsimilarranges,withthelargestmarketinVietNam,averaging5.1%foronshorewindand7.4%foroffshorewind.Insomeofthesemarkets,asthesetechnologiesbecomemoremainstreamandpolicesbecomesupportive,financingcostswillcomedown.ReducingtheWACCwillalsointurnincreasethecompetitivenessofthesetechnologiesandlowercostsforprocuringelectricityfromsolarPVandwind.ThepowersystemmodellingreliesontheIndonesiantechnologycatalogueforamajorityofitstechnologyparametersandcostsforthemodellingoftheASEANpowersector.Thecatalogueenvisagesacontinuationofthesetrendsandisbasedonarangeofreputablenationalandregionalsources(DGEetal.,2021).ThecapitalcostprojectionsenvisagesignificantreductionsinthecapitalcostsofrenewableenergytechnologiessuchassolarPVandonshorewind,whichwilldroptoUSD410/kWandUSD1080/kW,respectively,by2050.AllthesecostsweremostlyderivedfromthetechnologycataloguebyDGEetal.(2021),buttheAnnualTechnologyBaselineproducedbyNREL(Vimmerstedtetal.,2021)wasalsoconsultedinadditiontothetechnologycatalogueoftheUSEnergyInformationAdministration(NalleyandLaRose,2022)andthatoftheJointResearchCentreoftheEuropeanCommission(ECJRC,2017),whichwereconsultedinasensitivityassessmentoftechnologycostsandtheirimpactonmodellingresults.TOWARDSAREGIONALENERGYTRANSITION71Box6PhasingoutcoalTheASEANregionishometotheyoungestcoalpowerplantsintheworld.TheaverageplantageoftheASEANcoalfleetis11.8years(ACE,2022b).Coalcontributestoabouttwo-thirdsoftheemissionsfromthepowersectoracrossASEAN.Coalpowerplantlifetimeismeasuredinmanydecades,withmanyoperatingfor40to50yearsorlonger.Therefore,partialorcompleteshutdownsintheneartermwillresultinstrandedassetsformanyplantowners,investorsandtheutilitycompanieswhosignedconstructionandoperationcontracts.Insomecountries,suchasIndonesia,shuttingalargeportionofcoalpowergenerationwillrequirelarge-scaledeploymentofalternativegenerationsources,suchasrenewables,andinvestmentsincomplementaryinfrastructure,suchasgridsandstorage.Inthenearterm,itseemslikelythatsomecoalpowerplantswillcontinuetooperate.Thereareseveralpathwaysthatcouldbetakentoaddressemissionsfromthesecoalplantsastheregionshiftstolowandzero-carbonsourcessuchasrenewables.Oneisthedeploymentofbiomassco-firing,orcarboncaptureutilisationandstorage,andhigh-efficiencylow-emissionstechnologies.Buttheseremainstop-gapmeasuresintheshort-tomedium-term.Inthelongerterm,thesecoalplantswillneedtoberetiredastheregionmovestowardsnet-zeroemissionsbymid-century.Inthe1.5-S,whilemanycoalplantsarephasedoutintheperiodfromnowthroughthe2030s,coalpowerisentirelyphasedoutbetween2040and2050.Importantly,nonewcoalplantsshouldbebuiltexceptthosethatarealreadyinplanningandconstruction.Countrieshavealreadyexpressedtheircommitmenttophasingdowncoalbutrequirefurtherregulatoryframeworksandroadmapsthatallowasmoothertransition.Thisimpliesthatthecoalphase-downwillneedatleastthreephases:1.strengtheningthegridtoenablehigherrenewableenergypenetration2.enablingfinancialmechanismsthatcanencourageearlyretirementofexistingcoal-firedpowerplants3.continuousimplementationandimprovementinintegrationofcleanenergysourcesandnoveloperationalpractices.Strategiesforstrengtheningthegridincludetheinvestmentinexpandingintegratedgridinfrastructureandcapacitytoaccommodaterenewableresource-richlocations.Enablingpoliciesandfinancialmechanismsthatpromotetheuseofsmartgridtechnologies,marketmodelsthatpromotehigherstorageadoption,andfinancialmechanismsthatwouldsupportAMSinterconnectionthroughtheASEANPowerGridallneedtobepartofthesolution.Meanwhile,enablingfinancialmechanismscouldincludeimplementationofstricteremissionstandardsandcarbonpricingschemes,alignmentwiththeglobalmarketmechanismsetbytheGlasgowClimatePact,agreedbycountriesduringtheCOP26inGlasgow(UNFCCC,2021),andprovisionofsupportthatenablescoalplantoperatorstorecyclethecapitalfromclosingtheirplantsthroughconversionand/orreplacementwithrenewablestoearnreturnsontheirinvestment.Thepoliticallandscapes,resourceavailability,powermarketsetups,andregulationsprovidedifferentstartingpositionsforacoalphase-downineachcountry,withfurtherimportantfactorsincludingsocialconsiderationsrelatedtojobsecurityandenergyaffordability.However,therearealsocommonalitiesthatcanbesharedacrosscountries.Theseincludethestrategiestoensurecoalphaseouttargetachievement,toestablishajustworkforcetransition,andtomaximisethesocio-economicbenefitsoftheenergytransition.IntheASEANregion,thephaseoutofcoalisimperativetoaccomplishnet-zerotargets.Thisisnotaneasytasktoaccomplish.However,Indonesiahassigneduptoaglobalpledgetophaseoutcoal.TheroadmaptophaseoutcoalisdepictedinFigure33.72RENEWABLEENERGYOUTLOOKFORASEANIndonesia’sstate-ownedutilitycompanyaimstobecarbonneutralby2060.Figure33TimelinefromPLNtoretirementcoalpowerplantstocarbonneutralReplacementof1.1GWcoalandgaswithbaseloadRE2055205020452040203520302025202120601GWsubcriticalcoalretirement(1ststage)9GWsubcriticalcoalretirement(2ndstage)10GWsupercriticalcoalretirement24GWUSCcoalretirement(1ststage)5GWlastUSCcoalretirementGradualretirementofUSCcoalpowerplantsNote:USC=ultrasuper-critical;RE=renewableenergy.Source:(PLN,2021).Box7CleandispatchablesupplyfromrenewablesourcesCleandispatchablepowerhasbeen,andwillcontinuetobe,acrucialelementinthegenerationmixofASEAN.Mostnotablyfromgeothermalandhydropowerwhichcandeliverpoweron-demandtobalancesupply-demandvariabilityandprovideawholehostofnon-energyservicestohelpprovidesecureandstablesystemoperation.Toadvancebothgenerationsourcesinternationally,theInternationalRenewableEnergyAgency(IRENA)hasco‑ordinatedtheGlobalGeothermalAllianceandtheCollaborativeFrameworkonHydropowertoserveasplatformsfordialogue,co-operationandco-ordinatedactionbetweenpolicymakersandstakeholdersworldwide.ThisknowledgewasusedtolookdeeperintothepowersectorinASEANanddevelopfuturepathwaysforpowersystemforthisreport.Intermsofthepowergenerationmix,in2020itwascomposedmostlyoffossilfuelwhichrepresentedlittleover70%ofpowergenerationcapacityandnearly80%ofpowergeneration.GeothermalandhydropowercombinedmakeupthevastmajorityofrenewablepowerintheASEANregionwiththeremaindermadeupofsolarPV,windandbioenergy.Geothermalandhydropowercontributedarounda20%shareofgenerationcapacityandpowergenerationbutthisunderstatesthecrucialroletheyperformandcanperformgoingforward.Geothermalisnotweather-dependentandcanoperateatveryhighcapacityfactors.Beyondelectricityandancillaryservicesrelatedtothegridoperation,geothermalcanalsoprovideheattoindustryandbuildings.Allofthesecharacteristicsmakeitparticularlydependableacrosstheentireyear,duetoitslackofseasonality,andmakeitacrucialcomponentofthepowersystem.Particularlybecauseitcanmitigateperiodsoflowrenewablesupplyfromotherrenewablesandsupplyinterruptionsandpricevolatilityfromnon-renewablesources.Whereasgeothermaltendstooperateasabaseloadpowerplant,hydropoweriscapableofbothoperatingatconstantratesandswiftlypowerrampingtoaccommodatevariablerenewablesand,overall,contributetothesupply-demandenergybalance.Besides,hydropowercanbeequippedwithreservoirsthatcanactasstoragebufferswhichcangiveroomtovariablerenewablesbyallowingupstreamresevoirstosaveunusedenergyforlateruse.Thesecharacteristicsalsoseepumpedhydrostoragefacilitiesoftenreinforcethebenefitsofthesestoragecapabilitiesbyallowingittostoreenergysourcedfromothermodesofgenerationbypumpingwateruptoupstreamreservoirs.Itshouldbenoted,however,thathydropower’sflexibilitysometimeshasprojectspecificlimitationsrelatedtothemultipleusesofwater(e.g.mandatorymax/minoutflowratesduetoenvironmentalprotectionmeasuresandotherlocalisedconsiderations)andmaypresentsocio-environmentalimpactsduetothedisplacementofwaterflows.However,theyalsocanhavepositiveimpactsinimprovedmanagementofwateravailabilityandfloodingcontrol.Geothermalandhydropoweraregenerallyconsideredmaturetechnologiesinthattheirdeploymentandoperationalintegrationarewellknown.EnhancedGeothermalSystems(EGS)arestillinthedemonstrationstageandcouldprovidenearlyunlimitedamountsofenergy,butchallengesstillremaininitscommercialdevelopment(IRENA,2017).TOWARDSAREGIONALENERGYTRANSITION73Box7Cleandispatchablesupplyfromrenewablesources(continued)Thecomparativetechnologicalmaturityofgeothermalandhydropowerasawhole(thoughpotentialforfurtherinnovationremains)standsincontrasttostaggeringtransformationofvariablerenewabletechnologiessuchassolarPVandwind,whichhaveseenrapiddeclinesincostinrecentyearsbecauseoftechnologylearninggainedthroughmassdeploymentacrossmanyregionsoftheworld.ForASEAN,bothsolarPVandwindholdmuchpromise–mostnotablysolarPVgiventhesheerscaleoftheresourceavailableinallASEANcountrieswhichplaceitamongthelowestcostpowersourcesavailable.Thisaloneseesthemfeaturestronglyinlong-termpowercapacityexpansionpathwaysfortheregionpurelyonacostbasis,regardlessofdecarbonisationambitionconsideredwhichreachbetween2100GWand2400GWfortheASEANinIRENA’s1.5°Cclimatecompatiblepathwayby2050.Theirmodularitycanseethemdeployedinanarrayofcircumstancesbutalsoimpliesamoredistributedpowersysteminthesepathways.Combinedwithincreasedelectrificationofend-usesectorswhichwouldalsobewidelydistributed(particularlynotableinhighdecarbonisationscenarios)indicatesaparadigmshiftinsystemoperationbeingneededtooperatesuchapowersystem.Achallengeinachievingthisinnationalgenerationmixesstemsinincreasedvariabilityofsupplyanddemand,whichgeothermalandhydropowerarewellpositionedtomitigatethroughtheapplicationofflexibleoperationalpractices.Asaveryactivevolcanicregion,geothermalpotentialiswidelyspreadacrossSoutheastAsia.SoitisnowonderthatIndonesiaandthePhilippinescurrentlyranksecondandthirdrespectivelyingeothermalinstalledcapacityglobally,andtheformerhasoneofthehighestpotentialsintheworld.HydropowerresourcesareprominentacrosscountrieslikeMyanmar,VietNam,andregionssuchasSarawak(Malaysia)andKalimantan(Indonesia).Sohowandwhereprojectsaredeployedusingtheseresourceswillbecrucial,giventhattheyarenotnecessarilylocatednearthelargestdemandcentersintheASEANregion,asshowninTable13,andtomaximisetheirsystemimpact,theyneedtodeliverpowertowhereitisconsumed.Forexample,someselectcountriesalongtheMekongRiversuchasCambodia,LaoPDRandMyanmarhavehydropowerpotentialthatsubstantiallyexceedstheirpotentialpeakdemandinaclimatecompatiblepathwayby2050.ThisimpliesthatsuchhydropowerprojectswouldneedtobedevelopedinaregionalcontextwithregionalexpansionofinterconnectionsofacilitatepowerflowtothelargedemandcentressuchasthoseinThailand,VietNamandothercountries.Regionallyintegratedplanningandoperationofthepowersectorwithaviewtodeeperregionalintegrationisapowerfultoolinharnessingtheseresourcesgoingforwardthatwouldbepropelledbyincreasedsysteminterconnection.Thatalsoentailscoordinatedoperationandalignmentinregulationandelectricitymarkets.Table13Peakload(GW)in2018andby2050inglobal1.5°CcompatiblepathwayandhydroandgeothermalpowerresourcedistributionacrossASEAN(GW)APPROXIMATEPEAKELECTRICITYDEMANDIN2018PEAKELECTRICITYDEMANDBY2050INGLOBAL1.5°CCOMPATIBLEPATHWAYHYDROPOTENTIALGEOTHERMALPOTENTIALBruneiDarussalam0.74.20.1-Indonesia35.926194.629.5Cambodia0.96.010.0-LaoPDR0.96.626.00.1Myanmar2.317.240.4-Malaysia24.162.929.0-Philippines12.389.510.54.0Singapore6.917.9--Thailand27.7116.215.0-VietNam21.3126.435.00.3Source:(DGEetal.,2021;Handayanietal.,2022)andIRENAanalysis.74RENEWABLEENERGYOUTLOOKFORASEANBox7Cleandispatchablesupplyfromrenewablesources(continued)However,thebenefitsofregionalintegrationbothnationallyandinternationallygofarbeyondthisgiventhatitiskeytounlockingthelowestcostpowersystemforASEANasawhole.Itisanenablerofreducedduplicationofeffortsatnationalleveltoprovidethesamenecessarysystemserviceswhichcouldreinforceregionalenergysecuritywhilstreinforcingmutualreliance.POWERFLEXIBILITYKeyhighlights:TheintegrationofnationalpowersystemshelpstoutilisethebestsolarresourcesfromcountrieslikeIndonesiaandVietNamanddeliverthisenergytothemainloadcentres.AscenariowithlimitedinterconnectorsmakesthedecarbonisationmoreexpensiveandaddsanupperboundarytotheintegrationofVRE.Hydropowerresourceswithreservoirshaveanimportantroletoplayinbalancingsupplyanddemand,particularlyduringthenight.Nevertheless,batteryfacilitieswillbecomeoperationalasof2030-35,reachlarge-scalecost-effectivenessfrom2040onwardsandbecomethebackboneofthefuturesystem.Therewillbeasteepgrowthofstorageresources,mostlybatteries,andtherespectivemarketmustbereadywhenthetimecomes.Therewillbebatteryprojectsbeforethisperiodtoeventuallysolvelocalnetworkissues,andoverallexperimentation.Onaverage,over50GWofspinningreservecapacitymustbeavailableeverymomentintheentireregionin2050.Availablebatteriesandhydropoweraresufficientfortheprovisionoffrequency-responsereservesthatareequalto10%ofthedemandloadateverytimestep,andsparsepotentialshortageswouldbeseenwhetherreservesweresetat15%oftheload.Yet,high-capacitytransmissionlinesmayimposechallengestostabilityincaseoftrippingofalinein2050.Giventheneedforsizeablepowerassets,cautionisneededtoplanandoperatethesystemby2050.Inthecaseoftransmissionlines,optingformorecircuitsoflowercapacityratherthanafewlargerones–andtheadoptionoffast-frequencyreservesforsmallandmediumgridsinthemediumterm,andlargegridsinthelongterm–canhelpaddresspotentialissues.Nonetheless,thecombinationofhighVREgenerationandlowdemandorsynchronousgenerationsmaylimitpowerexchangeatcertainmoments–notbecauseofthelinecapacitybutbecauseofvoltagestability.Lastly,thesystemshouldbedesignedtocopewithlesssynchronousmachinesinthefuture,whengrid-forminginvertersarelikelytoassumetheleadingrole.Thefullpotentialofrenewablesrequiresopenmarketsandthealignmentofregulationsbetweennationaltransmissionsystemoperators(TSOs).Theformerensuresthattheleast-costmeritorderbasedonshort-runmarginalcostisfollowedacrosstheregion,andforregulationandeventuallyevenancillaryservices.ThatalsomeansgivingnoprivilegestodomesticresourcesandsettingupanintegratedASEANmarketforgeneratorsandtransmissionrights.Commonregulationssecurereliabilityacrosstheregionbysettingnormsfortheoperationandprovisionofservices(energy,regulation,reserves),theamounttobeprocuredateachtimescale,andthepracticesfollowedbyTSOs.Anindependentregulatorandmarketauthoritymightbeprovidentialwhetherthatisthedefinedpathwayfortheregion.TOWARDSAREGIONALENERGYTRANSITION75Solarandwindgeneration’sshareintheASEANregionwillachieve20%by2030and69%by2050underthedecarbonisedenergyscenariocompliantwiththeParisAgreement.Thisis66%moreambitiousthanthesharebasedoncurrentplans.Iftheregiondecidestogoto100%renewablepowersupply(1.5-SRE100),VREgenerationincreasesto78%,almosttwotimesthecurrentaspirations.Solarresourcescomprise56-58%oftheaforementionedscenarios,whilewindgoesfrom13%to22%.Flexibilityrequirementsaresubjecttotheexistenceofmoreorlessofeitheroftheresources,inadditiontootherrenewableslikehydropowerandthebroadernationalandregionalpowerassetsfromneighbouringcountries.Forexample,countrieslikeBruneigenerate96%ofpowerfromthesununderthe1.5-SRE100case.Nearlyallcountrygeneration(excludingcross-borderexchange)issubjecttodailysolarprofiles.Others,likeLaoPDR,havehydropowerresourcesmakingupthebulkofthenationalgeneration;thus,VREparticipationismodestat10-20%by2050.Therefore,thecountrymightfacesomechallengesinthefuture,whileitcanprovideflexibilityabroad.PowersystemflexibilityrequirementsaresubjecttothetotalVREshareandthepredominantVREresource(solarand/orwind).Figure34SolarandwindVREshareinASEANcountriesinthe1.5-SRE90and1.5-SRE100by20501.5-SRE901.5-SRE1000%20%40%60%80%100%SolarPVSolarPVSolarPVWindSolarPVWindSolarPVSolarPVSolarPVWindSolarPVSolarPVSolarPVBNTHPHVNSGMYIDKHMMLAGenerally,thereisaneedfor1)accommodatingthesolarandwindgenerationtothedemand(e.g.storagesolutions);2)operatingthenon-VREgeneratingportionofthesystemflexibly,basedonthenetload;and3)adjustingdemandtotheavailabilityofenergyinthesystem(e.g.smartchargingofEVs).76RENEWABLEENERGYOUTLOOKFORASEANAdditionally,powergenerationfromrenewablesisconstrainedbasedonthelocationofresources.Forinstance,theislandofJava,hometo68%ofdemandinIndonesia,possessesonly4%ofthesolarpotential.Thatnecessarilywillmeantransportingmassivequantitiesofelectricityfromthebest-qualityrenewablespotstowhereitismostneeded,aspointedoutintheprevioussection.Balancingsupplyanddemandatalltimesiscrucialforasystem’sreliableoperation,sinceevenasmallmismatchcandisturbpowersystemfrequencyandpossiblyaffectthereliabilityofsystemoperations.1Putsimply,powersystemflexibilityreferstoapowersystem’sabilitytorespondtobothexpectedandunexpectedchangesindemandandsupply.Giventhatsupplymustequaldemandacrossalltimescales,flexibilityisgenerallytheabilityofsystemassetstomodulateeithertheproductionoruptakeofelectricityaccordingtoitsavailabilityandpriceacrossalltimescales.AseriesofflexibilityoptionshavebeenconsideredtohelpintegrateVREinIndonesia.Theyassumethattherewillbeapriceortime-basedsignaltoconsumers,oracallfromTSOsunderagivenframework,toincreaseordecreaseconsumptionaccordingtoelectricityavailabilityatagiventime.Wholesalemarketsthatalsoincludetheparticipationofsmallandmediumconsumersthroughaggregators,demandresponseprogrammesatindustrialfacilities,time-of-userates,amongothers,areusefulforthispurpose.Flexibilityoptionsconsideredforthisstudyare:•smartchargingofEVs(opposedtochargingwhenmostconvenientfromtheuserperspective–i.e.whenarrivingathome)•flexibleproductionofgreenhydrogen•storageassetstosupportbotharbitrageandtheprovisionofspinningreserves•expansionofthetransmissiongridacrossislands.TheASEANpowergridisanenableroftheregion’sdecarbonisationTheASEANPowerGrid(APG)isaninitiativetodeployaregionalpowerinterconnectionregardingphysicalinfrastructure,procedures,andenablermechanismsforpowertrade.Frominitialcross-borderbilaterals,theplanistoexpandtosub-regionalandthentoanintegratedSoutheastAsiapowergrid.TheASEANCentreforEnergy(ACE)andASEANPowerUtilities/Authorities(HAPUA)havediscussedthewayforwardthroughaseriesofASEANInterconnectionMasterplanStudies(AIMS).TherehavealsobeendialoguesconnectingtheregionwithAustraliaandongoinginitiativeswithEasternandSouthernAsialiketheGMSandtheBayofBengalinitiative.Theregion-widetransmissionofelectricitymaximisestheuseofrenewablesandneededflexibleassetsoverASEAN.Italsohelpsmeettherisingelectricitydemandandimproveenergyaccessatthelowestpossibleprice.Forinstance,the230MWlineconnectingWestKalimantan(Indonesia)andSarawak(Malaysia)hasdisplacedbetween50-130MWoffueloil-basedgeneratorsintheformer,insteadsuppliedbyhydropowerresourcesfromthelatter,resultingoverallincheaperelectricitysupply(ADB,2015;IEA,2019).However,notonlythephysicalinterconnectionmustbeinplace,butalsoamultilateralmarketandcentraliseddispatchthemakethebestuseofresourceswhenandwhereneeded.1Powersystemsaredesignedtooperateundernearlyconstantfrequency.Frequencydeviationsbeyondacceptablelimitsandtimeperiodscandamagegeneratorsandelectromechanicalequipmentandthuscreateachainreactionoflossofloadand/orgenerationthatcanleadtoablackout.TOWARDSAREGIONALENERGYTRANSITION77Todate,powerexchangehasbeenmostlyrealisedonabilateralbasis.Nevertheless,initiativesliketheLTMS-PIP2haveservedasexperimentationformultilateraltradingbyenablingpowertransactions(andsharingofhydropowerresources)fromLaoPDRtoMalaysiaandSingapore,leveragingThailand’sexistingnetwork.TheGMS3alsoprovidesaframeworkforbilateralexchange,whichenvisionsamultilateralmarketinthelongterm.Standarddraftgridcodeshavebeendiscussedwiththisaim.Yet,technicalandregulatorychallengesstillneedtobeovercome,includingcreatingtheRegionalPowerCoordinationCenter(RPCC)tooverseecross-bordertransactionsandcoordinateregionalplanning(GMS,2022).PlansalsoincludeestablishingasynchronousgridbetweenLaoPDR,Myanmar,ThailandandChina’ssouthernprovinces.Aregionalcentralisedandliberalisedmarketwithgateclosureascloseaspossibletothephysicaldeliverywouldprobablybethemostresource-efficientoption,thusmaximisingtherenewablesuptakeandtheoverallaccessibilitytoavailableflexibleassets.Theoverallobjectivewouldbeharmonisingthemarketintoasinglepricecouplingsolution,foreachdeliveryperiodacrossallbuyersandsellersunderasamebiddingzone(e.g.acountryregionorsubregion).Themarketsolution,includingprices,canbedefinedbyapricecouplingalgorithmrunbyacentralcouplingoperator,andeventuallycross-checkedinparallelbyotherrelevantentitiesasseenintheEuropeanMarket(Meeus,2020).Thatcouldalsofacilitateaneventualmarketforregulationandancillaryservicesandshouldbeideallyimplicitlycoupledwithinterconnectortransmissionrights.4However,suchaframeworkwillrequirecomplexcollaborationunderpolitical,technical,andinstitutionalspheres.Nevertheless,therearemidwaysolutionsthatmightbetterfitagivencountry'scontext,includingsubregionalconfigurations,untilorwhetheraregionalframeworkisnotachieved(IEA,2019).5Forthisstudy,theASEANsystemoperationisrunacrossagivenyearathourlytimesteps,followingtheexpansionoptimisation.Generatingelectricityandcross-borderexchangeminimisestotalsystemoperatingcostsateachstep.Thus,themarginalgenerationissetatthelowestavailableshort-runmarginalcost.Theoverallparticipationofrenewablesvariesbyscenarioandcountry.Inanycase,thevariabilityofsolarandwindissupportedbyhydro,geothermalandbiomasspowerplants.Energybalanceisenhancedbystoragefacilitiesandthetailoringofdemand-sideactivitiesliketheproductionofgreenhydrogenandthesmartchargingofEVs.Thatisreflectedintheregionalexchangeofpower,whereeachASEANcountryhasauniqueroletoplayintheproperfunctioningofthesystem.SolaristheflagshipresourceforASEAN'sdecarbonisation;thus,itspotentialismassivelydeployed,whileallotherpowerassetsthatmakeupthesystem,tomoreorlessextent,aretailoredtoitsavailability.Itmeansthatsolar(andwind)energyistransportedtodemandcentres,anddeviceslikestorageareoptimisedtodisplacegenerationtowhenpowerismostneeded,whileflexibledemandisreleasedwhenpricesareatlowerlevels.VietNam,Thailand,Sumatra,NusaTenggara(Indonesia)andthePhilippinesarethesolarhotspots.VietNamandthePhilippinesarealsohometogoodwind.TheelectricityismostneededinVietNam,Java-Bali(Indonesia),ThailandandthePhilippines.OnlyJava-Baliwillimportmorethan1000TWhby2050inthecaseofa100%renewableenergyscenario.ThisisalmostthreetimestheoverallelectricitydemandoftheUnitedKingdomin2021,oroneandhalftimesthatofBrazil.2TheLaoPDR,Thailand,MalaysiaandSingaporePowerIntegrationProject(LTMSPIP)enablespowerexchange,includingbetweenthosecountriesthatdonotsharebordersthroughso-calledtransitcountries(e.g.ThailandandMalaysia).3TheGreaterMekongSubregion(GMS)collaborationisformedbyCambodia,LaoPDR,Myanmar,ThailandandVietNam,alongwithsouthernprovincesofChina.Asanactivity-basedprogramthatincludesenergycooperation,thegrouphasbeendiscussingcreatingamultilateralpowermarketfollowingongoingbilateraltransactions.4Beyondcross-borderinterconnectors,domestictransmissionnetworksmustbereadytodealwithresultsfromtheeventualcross-regionmarketmodeloptimisation,whichmeansreinforcementsandexpansionmayberequired.Otherwise,internalbottlenecksmaylimittheflowofactivepower,andfurthermarketsplittingcaneventuallybeapplied.5ThePhilippinesandSingaporehaveongoingwholesalemarkets,andMalaysiaisontheway.Therefore,apotentialregionalmarketmustintegrateorbecomplementarytoexistingones.78RENEWABLEENERGYOUTLOOKFORASEANTheplaceswiththebestsolarresourcesandovergeneration,likeVietNam,SumatraandNusaTenggara,feedpowerhungryregions/countrieslikeJava-Bali,PeninsularMalaysiaandThailand.Figure35EnergyexchangeatthedispatchlevelacrosstheASEANregionin2050underthe1.5-Sand1.5-SRE100-1100-900-700-500-300-100100300500Java-Bali/INDPeninsular/MYSingaporeThailandPhilippinesCambodiaBruneiMyanmarLaoPapua/INDSarawak/INDMaluku/INDSulawesi/INDSabah/INDVietNamKalimantan/INDNusaTenggara/INDSumatra/INDEnergy(TWh)-1060-860-660-460-260-60140340540Java-Bali/INDPeninsular/MYSingaporeThailandPhilippinesCambodiaBruneiMyanmarLaoPapua/INDSarawak/INDMaluku/INDSulawesi/INDSabah/INDVietNamKalimantan/INDNusaTenggara/INDSumatra/INDEnergy(TWh)Imports(GWh)1.5-SRE90Imports(GWh)1.5-SRE100Exports(GWh)1.5-SRE90Exports(GWh)1.5-SRE100NetInterchange(GWh)1.5-SRE90NetInterchange(GWh)1.5-SRE100ExportersImportersTheASEANpowergridmustbereliableandcapableofdealingwithsignificantamountsofelectricitywithminimuminterruption(expectedandunexpected).Forexample,thesuddeninterruptionofa10GW+interconnectorcancollapsethesystem,leadingtoblackouts.Forcomparison,Brazil’sandChina’smostextensiveexistingtransmissionlinesincapacity(andlength)cantransport7-8GWalong2000-2500km.Existingsubseacableshaveachievedover2GW.By2050,therequiredlinesinASEANarelikelytoreachthreetofivetimesthisvalue.Itmaymeanhavingtwoormorelines(circuits)inparallel,irrespectiveoffuturetechnologicalbreakthroughs.ThatalsominimisestheTOWARDSAREGIONALENERGYTRANSITION79possibilityofcollapsingthesystemduetothetrippingofveryhigh-capacitytransmissionlines.Nonetheless,thecombinationofhighVREgenerationandlowdemandorsynchronousgenerationsmaylimitpowerexchangeatcertainmoments–notbecauseofthelinecapacitybutbecauseofvoltagestability.Therefore,deviceslikesynchronousandstaticVAR6compensatorsmayberequiredtoimprovethesystemstrength.Althoughvoltagecontrolisalocalproblem,co-operationandsharingofinformationbetweenTSOsareneededtoensurecross-borderstabilitywithstandardcontrolmethods.Cautionisrequiredintheplanning,commissioningandoperationoftheassetsthatcomprisetransmissioncapacitiesof10-30GWbetweentworegionsorcountries.6Volt-AmpereReactiveFigure36Transmissionlinesandbatteriesin2050,1.5-SRE904GW36GW14GW22GW9GW5GW5GW2GW2GW13GW5GW11GW109GW182GW50GW9GW12GW8GW18GW154GW56GW12GW15GW0.6GWStorageCross-borderInterconnectorsMaindomestictransmissionlines(Indonesia)31GW33GW28GW1GW23GW0.9GW5GW4GW14GW9GW0.5GW4.5GW24GW4GW1GW10GWDisclaimer:Thismapisprovidedforillustrationpurposesonly.BoundariesandnamesshowndonotimplytheexpressionofanyopiniononthepartofIRENAconcerningthestatusofanyregion,country,territory,cityorareaorofitsauthorities,orconcerningthedelimitationoffrontiersorboundaries.Flexibilityexchangefromimportingtoexporting-orientedregionsAcountry'sbalancebetweensupplyanddemandisthoroughlyandconstantlyadjusted,takingadvantageoftheavailabledomesticsystemassets.Thepriceofelectricityattheoperationstepresultsfromthesystem’sshort-runmarginalcostofgeneratinganadditionalunitofelectricity.Themostexpensiveunitinoperationtypicallysetsthat.Itcanbeveryloworzeroatmomentsofhighgenerationfromsolarandwind,whichhasnoorminimalmarginalcost.Providedmarketsaresetforthat,fromthedemandside,electricityconsumptioncantailortotheavailabilityofenergyinthesystem.Thatmeansthereisanattempttousetheleast-costgenerationresourcesandconsumeelectricityattheleast-costmoments.Asthesystemoptimisationoccurs80RENEWABLEENERGYOUTLOOKFORASEANfromtheregionalperspective,thesamedynamicdefinescross-borderpowerexchange,fromlow-costtohigh-costregions.Regionalgridsenablethesharingofflexibleresourcesandoperatingreserveswheremarketsandregulationsareappropriatelyset.Forinstance,cross-bordersupportisnoticedinmomentsofovergenerationinDenmark(lowprice),whenpowerisexportedmainlytohydropower-dominatedNorwayandSweden.Inaway,electricityisstoredinhydropowerreservoirs.Inpractice,hydropowerunitsdecreasepowergenerationtogiveroomtotheimportedwindenergywhilemaintainingwaterlevels,orevenincreasingthem,thatwouldotherwisebeused.Energycanthenbeexportedbackwhenneeded.Asimilarcontextwithbatterieshasnotbeenseengiventhestillrelativelyfewprojectsinthefield,butitshouldfollowasimilarpattern.In2050,short-to-medium-termstoragefacilitieswillcycledailytoabsorbthemassivegenerationofsolarspotsinASEANforlateruse,whileflexibleconsumptionwillalignwiththesolargeneration.Atthesametime,interconnectorsmakewayforsolartogowhereitismostneeded.Figure37illustratestheweekwiththehighestVREgenerationinVietNam,where200gigawatthours(GWh)ofsolarenergyisproduceddailyabovetheassumedinflexibledemand.7Storagedevicesincreasedemand-loadinsuchmoments,andflexibleend-useslikegreenhydrogenproductionandchargingofEVs8areconcentratedduringthedaytime.Theuseofshort-termstoragelikebatteriesisvitalinbalancingdailysupplyanddemand.Thefurtherdisplacementofthedemand(e.g.EVscharging,electrolysers,others)tomomentsofsolargenerationhelpsalleviatetheneedforadditionalstorageandtransmission.7Theentirecountry’sdemandminustheflexiblepartofhydrogenproduction,smartEVchargingandalloweddemandresponse.8TheproductionofgreenhydrogenandthechargingofEVswereassumedtobe90%flexibleand10%inflexible.Thatentailstheuseofhydrogenstorage(includedinthemodel),andtherequiredEVcharginginfrastructureforsteepspikesofloads.Theinflexiblepartofbothofthemfollowsaflatdemandcurvealongtheday.Eligibleflexibledemandisdeemedas3%oftheload.Figure372050weekwithmaxVREgenerationinVietNam-1.5-SRE900100200300400500-300-200-100Generation(GW)NaturalGasBiomassGeothermal11Apr2050121716151413HydroDemandResponseBatterydischargeWindSolarPVCrossZoneExchangeElectrolyserV1GBatterychargeDemandTOWARDSAREGIONALENERGYTRANSITION81Toillustrate,VietNamisresponsibleforroughly50%oftheMekongregion'ssolargenerationand100%ofthatfromwind.VREprovides74%ofthatregion'stotalelectricitygeneration,whichisexpectedtobepartiallyexported.However,thecountry's180GWofbatterychargingcapacity(withanaverageeighthoursofstorage)isinsufficienttoexportenergyatnightfall,whichoccasionallyhappensduringnightsofsolidwind(depictedondays16-17April).Toovercomethat,existinghydropowerunitswithreservoirsfromLaoandMyanmarprovideelectricityduringthenightbyimportingandstoringsolargenerationduringthedayfromVietNam(lowerpartofFigure38)tobelaterexported(upperpartofFigure38).Inpractice,hydropowerunitsdecreasepowertogiveroomtotheimportedelectricitywhilemaintainingwaterlevelsthatwouldotherwisebeused.Supportingthesystemwiththeseexistingreservoirsismorecost-effectivethanbuildingadditionalstorage,whichisjustoneofmanyregionalinteractionshighlightingtheimportanceofcountrieswithlowtotalyearlypowerexchange,asdepictedinFigure35.Hydropowerinregions/countrieslikeLaoPDR,MyanmarandSarawakplaystheroleofimportingsolargenerationtoexportitthroughthenight.Figure38Mapoftheaveragehourlyprofileofexportsandimportsacrosstheregionby2050,1.5-SRE900%20%40%60%80%100%2321191715131197531AverageshareofexportsHour020%40%60%80%100%2321191715131197531AverageshareofimportsHourJava_BaliThailandPhilippinesSingaporeVietnamLaoPDRMyanmarBruneiCambodiaPeninsularSarawakSulawesiSumatraNusaTenggaraVietnamLaoPDRMyanmarKalimantanPhilippinesSabahSarawakSulawesiMalukuThailand82RENEWABLEENERGYOUTLOOKFORASEANElectricitystorageshiftgenerationtomeetthepeakloadandthenightThereisawiderangeofcommercialstoragetechnologies,mostofwhicharelikelytohavearoleinprovidingthedifferentservicesfortheenergytransition(IRENA,2020).However,forthesakeofsimplicity,thisstudyconsiderstwotechnologiesasflexibilitycandidates:batteriesandpumpedstorage.Inaddition,itshouldbenotedthathydropowerwithreservoirshasembeddedstoragecapabilities9astheenergypotentialfromwaterfallsfromreservoirscanbemanageddrivenbytheavailabilityofvariablerenewables.Asexpected,resultsshowaclearcorrelationbetweenstorageneedsandtheexpansionofrenewablesincountriesacrossscenarios.Short-termstoragelikebatteriesisvitalinbalancingdailysupplyanddemand.However,long-termstorageneedsarereducedgiventhelowvariationofsolarresourceavailabilityacrosstheyear.Beyondthat,storagemayalsopostponeoralleviatetheneedfortransmissionprojects.Assuch,batteryrequirementswillreach667GWby2050inthe1.5-SRE90scenario(Figure39).Cost-effectivenessisfirstachievedinVietNamin2030,comestoothercountriesafewyearslaterandspeedsupfrom2040onwards.Thelastmiletowards100%renewablesischallenging,requiringanadditional50%capacity,gettingtoover1000GW.Batterystorageiscost-effectiveinafewcountriesfrom2030,achievinglarge-scalematurityfrom2040intheASEANregion.9Hydropowerwithreservoirsmayhavesocio-environmentalimpacts.Upstreamfloodingandthereductionofdownstreamwaterflowscandestroywildlifehabitatsandimpactsmall-scalefishery,farminglandandothers,raisingcoststhatareoutsidethescopeofthisstudy.Figure39Batterycapacitydevelopmentacrosstheperiod,1.5-SRE90(upper)and1.5-SRE100(lower)TOWARDSAREGIONALENERGYTRANSITION83Thestoragecharginganddischarginghourlyprofilefollowstheavailabilityofsolarenergy(Figure40).Thatisessentiallythecaseacrosstheregionunderthe1.5-SRE90case,exceptforJava-Bali,wheresolarcapacityisrelativelylowandbatterieshavetheprincipalroleofprovingoperatingreservesratherthanenergy.TheMalukuIslandshavesignificantparticipationofwind;thus,chargingactivitiesalsohappenduringthenight(upperchart).SimilarbehaviourisseeninVietNamandthePhilippines,underthe1.5-SRE100case(lowerchart),wheredomesticwindthrivesat44%and60%,respectively.Again,marketandforecastswillbeessentialtogivetherightpricesignalstoensurethebatterybehaviourthatismorebeneficialtothesystem.Understandingwhenbatterieschargeanddischargehasimportantimplicationsforsystemoperation.10Thestudyassumedthatgreenhydrogenproductionoccurswherethedemandislocated.Forthcomingworkwillassesspotentialexchangeroutesintheregionandexportstonon-ASEANcountries(seealsotheHydrogensectioninchapter4).Figure40Batterycharge/dischargedailyaverageprofilesasapercentageofpeakpower,1.5-SRE90100%0%40%20%60%80%Hoursoftheday05101520CambodiaJava-BaliKalimantanLaoMalukuMyanmarNusaTeggaraPhilippinesSabahSulawesiSumatraThailandVietNamElectricitystoragechargeElectricitystoragedischargeHoursoftheday05101520Similarly,EVchargingandelectrolyseroperationfollowtheavailabilityofenergy.Thecountries’EVfleetpresentedinsection4wasdeemed90%flexible,sotheycanchargewheneverelectricitypricesareatlowerlevels.Theremaining10%isinflexible(e.g.onsitehydrogenproductionwithoutstorage,non-responsiveEVchargingbehaviour),representedbyacontinuousflatcurvealongtheday(Figure41).DemanddisplacementpotentialisnaturallyhigherindenselyurbanisedandindustrialisedareaswheretheEVfleetandhydrogenproduction10arehigher.84RENEWABLEENERGYOUTLOOKFORASEANChargingEVswhenvariablerenewablegenerationisatitspeakisakeyenablingsolutionforflexibility.11ConsideredgridsareBrunei,Cambodia,Indonesia(Java-Bali,Kalimantan,Sumatra,EasternNusaTenggara,Sulawesi,Maluku,andPapua),LaoPDR,Malaysia(Peninsular,SarawakandSabah),Myanmar,thePhilippines,Singapore,ThailandandVietNam.EasternNusaTenggaraandMalukuinIndonesiaareisland-regions,madeupofseveralsmall-isolatedsystems,sorequirementsareaproxyexercise.Figure41AveragehourlychargingprofileofEVs100%10%0%50%70%40%30%20%60%80%90%Hoursoftheday05101520RegionCambodiaJava-BaliKalimantanLaoPDRMalukuMyanmarNusaTeggaraPeninsularMalaysiaPhilippinesSabahSarawakSingaporeSulawesiSumatraThailandVietNamPapuaDailyelectricvehiclechargingperregion(%ofpeakcharging)SystemreservesinthepowersectorSpinningreservesaretheamountofunusedgenerationcapacityatonlinepowerassetskeptonstandbyforthecausalityofpowershortagesorfrequencydrops.Inpractice,reserveprovidersmustoperatebelowtheirratedvaluetoquicklyrampuppowerwhenneeded.Reservesrequirementsaretypicallydefinedbasedonthelargestpowerasset(generator,transmissionlineandotherassets).Thisisthe“n-1criteria”thatisthestandardinIndonesia.Inrenewable-dominatedsystems,theinstalledcapacityofgenerationunitstendstodecreasewithdistributedandsmaller-scaleassetsratherthanlarge,centralisedpowerplants.Fromthisperspective,reserverequirementstendtoreduce.However,theincreasingnumberofhigh-capacitytransmissionlinestendstoraiseneeds.Reservesweresetat10%oftheloadforallregion-grids,exceptforJava-Bali,wherea15%loadriskwasconsidered.11Reservescanbesharedwithinaregion(e.g.Sumatra’sSouthernMid-Centerprovinces),butnotacrossmacro-regionsorcountries(Sumatra,Java,orCambodiaandThailand).TheexceptionistheJava-Baligrid,giventheexistingsynchronousgridthere.Thesharingofreservesbetweenothermacro-regionswouldprobablymakeprovisionmoreefficient,whichwouldalsoentailgridsynchronisationoftherespectiveareas.Onlyhydropowerandstorageassetswereallowedtoprovideassetsby2050(upward/downward),toavoidhavingnon-renewableassetslockedinforthispurpose.Whetherpowerelectronicsaredesignedtodoso,batterytechnologiescandeliveraresponseonamillisecondscale,whichisfasterthananytraditionalgenerator.Solarandwindweresettoprovidedownwardreservesonly(curtailment),thoughoperationadjustmentscouldalsoallowthetechnologiestoofferanupwardresponse.TOWARDSAREGIONALENERGYTRANSITION85Onaverage,over50GWofreservecapacitymustbeavailableeverymomentintheentireregion.Provisionisafunctionoftheresourcesavailableinagivenarea.Forinstance,reservesareguaranteedbyspinninghydropowerresourcesinMyanmar,whilebatteriesmainlybackEasternNusaTenggarainthewakeofthetremendoussolardevelopment.Almost70%ofreservesarebattery-based,withtheremainingmetbyhydropower.TheexceptionisSingapore,wherethereisaneedfornaturalgasresourcesinthe1.5RE90case.Theprovisionofreservesismadefromthemostavailablerenewable-basedresourceineachregion.Figure42Operatingreservesprovisionin2050,1.5-SRE9096%78%60%16%100%88%76%62%10%71%74%71%4%22%100%40%100%84%12%24%38%100%100%29%26%29%100%72%18%0%20%40%60%80%100%Java-Bali/IndonesiaThailandPhilippinesSingaporeVietNamLaoPDRMyanmarBruneiCambodiaSarawak/MalaysiaSulawesi/IndonesiaSumatra/IndonesiaKalimatan/IndonesiaNusaTengg./IndonesiaSabah/MalaysiaP.MalaysiaW.N.Guinea/IndonesiaGasBatteryHydroInterc.Asensitivityscenarioanalysiswasundertakenwherespinningreservesaresetat5-20%ofdemandfortheJava-Baligrid,giventheregion'senormousdemand,themagnitudeofresourcesandthephaseoutofasignificantnumberofthermalunits.Althoughthe15%reservescaseraisesshortage,onlythehighestrisklevel(20%ofload)wasdeemedcritical(Table14).86RENEWABLEENERGYOUTLOOKFORASEANTable14Sensitivityscenariosonoperatingreserves12Consideringgridfrequencyof50Hz.STATUSSHORTAGE(GWh)HOURS(hrs)GWh/hr5%NoNo-10%NoNo-15%1901381.3720%4939054439.07ThelargetransmissionassetsconnectingtheJava-Baligridcanbringoperationchallengesincaseofthetrippingofaline,namelywithSumatra(36GW),Kalimantan(33GW)andNusaTenggara(31GW).Thesemayprovide24%,22%and20%ofitsaverageloadattotalcapacity,or70%incaseofsimultaneousimports.Eventhoughthisisnotlikelytohappen,andeachofthelinesthemselvesshouldbecomposedoftwoormoreindependentsmallercircuits,thatshouldbeadequatelyexploredingridintegrationstudies.Therewillbeaneedtorethinkhowimbalancesarenoticedandreservesareactivated.Therewillbelessandlesssynchronousinertia,whichistheabilitytoopposechangesinfrequencyafterafailure,inherentlyprovidedbysynchronousgeneratorslikethermalplantsandhydropower.Theamountofreservesandagilityneededintoday’spowersystemsisafunctionofinertiaconditions.Figure43showsinertiaprovisionintheJava-Baligridin2050ataround300MWsonaverage.AtleasttwotimesthisvalueisneededtomaintaintheRateofChangeofFrequency(RoCoF)at1Hertzpersecond(Hz/s),andmorethanfourtimestokeepitat0.5Hz/s,12incaseoftrippingtwooftheabovementionedlinestogether,consideringeachasasingleasset.Therefore,thefuturesystemwilllikelyneedfaster-frequencyresponseresourceslikebatteriesandadifferentwaytosignalimbalances.Thegoodnewsisthatgrid-forminginvertersareonthevergeofaddressingthisissue,allowingoperationatveryloworevenzero-inertiaconditions.Movingfromsynchronousmachinestoinverter-dominatedsystemsreducesthesysteminertia,requiringinnovativeapproaches.Figure43InertiacontributionbysynchronousmachinesintheJava-BaligridinApril2050-1.5-SRE90HydroBioGasGasccsOil015000030000045000060000001/04/205029/04/205027/04/205025/04/205023/04/205021/04/205019/04/205017/04/205015/04/205013/04/205011/04/205009/04/205007/04/205005/04/205003/04/2050MWsInertiatokeepRoCoFat1Hz/safteratheoretical12GWinfeedlossInertiatokeepRoCoFat1Hz/safteratheoretical25GWinfeedlossTOWARDSAREGIONALENERGYTRANSITION874TECHNOLOGYVIEWS88RENEWABLEENERGYOUTLOOKFORASEAN4.TECHNOLOGYVIEWSThissectiongoesintogreaterdepthonsomeofthekeytopicsandtechnologiesthatarecrucialforthetransitionintheASEANregion.Manyofthesesolutionsarecross-sectoral,andtheyarediscussedhereinawidercontext.However,manyfindingsrelatedtothesesolutionsarealsocontainedinchapters2and3.ELECTRIFICATIONINBUILDINGS,INDUSTRYANDTRANSPORTTheshareofelectricityinenergyconsumptioninthebuildingsectorincreasesfrom46%in2018to78%inthePES2050and85%inthe1.5-S2050.Thisisprimarilyduetoanincreaseintheuseofelectricityforspacecooling,appliancesandcooking.Inbothresidentialandcommercialbuildings,spacecoolingisthemostelectricitydemandingservice,increasingfromabout36%in2018to57%inthePES2050and53%inthe1.5-S2050.ThiscanbeassociatedwiththeincreaseduseofairconditionersandfanswithintheASEANstatestomeettheresidentialspacecoolingneedsovertheyears.Althoughelectricitydemandremainedconsistentforappliancesacrossallscenariosineachyear,thereisasignificantincreaseinelectricitydemandforcookingfrom2.5%in2018to9.1%inthe1.5-S2050.Thisismainlyduetothedecreaseintheuseoftraditionalcookstovesandwideradoptionofefficientelectriccookstoves.Electricitydemandinthebuildingsectorisdominatedbyspacecooling.Figure44Buildingsectorelectricitydemand,byscenario,2018,2030,205001234567820182030PES2030TES20301.5-S2050PES2050TES20501.5-SElectricityconsumption(EJ)SpaceCoolingAppliancesCookingOthersPubliclightingLightingWater/WastewaterWaterheatingInindustry,electricityisusedacrossawiderangeofapplications,fromrunningmachineryandappliancestomotors,processheat,fansandcoolingsystems.Aroundone-quarterofthesector’senergydemandcomesfromelectricity,andthissharewilldeclineto22%inthePESin2050,largelyduetothegrowthofheavyandmediumindustry,whichutilisesmorefuels.Inthe1.5-S,measurestodirectlyelectrifyprocessheatingarethemaindriversinincreasingtheelectricityshareto45%ofsectorenergy.Additionally,theemergenceofgreenhydrogenalsocomesintoplayforcertainindustrialsubsectors.TOWARDSAREGIONALENERGYTRANSITION89Electrificationandhydrogenwillbekeytotheenergytransitioninindustrialprocessheat.Figure45Shareofindustryenergydemandbycarriergroup,byscenario,2018,2030,20500%20%40%60%80%100%20182030PES2030TES20301.5-S2050PES2050TES20501.5-SEnergyShareElectricityHydrogenNon-ElectricityTheelectrificationofroadtransportisthesinglemostimportantshiftintransportthatwilloccuroverthecomingdecades.ShiftingtoEVsmustcoincidewithashifttorenewablepowerandotherlow-carbonsourcesofelectricitysupply.UnderthePES,theshareofEVsintheregionreachesaboutone-fifthby2050.Inthe1.5‑S,theshareofEVsintheregiongrows,resultinginonlyabout20%oftotalroadvehiclesrunningoninternalcombustionengines.Forthesevehicles,biofuelcoversalittleoverone-thirdoffuelconsumptionin2050.Electrictwo-wheelersandelectriccarsinthe1.5-Swillreach86%and75%,respectively,of2050’stotalfleetshare.Almost70%ofthetotalbusfleetinthe1.5-Sby2050willrunonelectricity,whilelessthan25%ofthetruckfleetwillbeelectrified.Oilproductscontinuetohavearoleinthetransportsector,accountingfora44%share,mostlyconsumedinheavy-dutyfreight,shippingandaviation,despiteanincreasingbiofuelsharereaching25%oftotaltransportenergydemandby2050underthe1.5-S.EVswillneedtogrowsubstantiallytoreducerelianceonfossilfuelanddecarbonisethetransportsector.Figure46EVstock,byscenario,2018,2030,2050050100150200250300350400450PES2030TES20301.5-S2030PES2050TES20501.5-S2050EVstock(millions)MotorcycleCarMicrobusBusSmalltruckLargetruckNote:“Car”includesjeeps,vansandSUVs;“motorcycle”includesthree-wheelers.90RENEWABLEENERGYOUTLOOKFORASEANOnlyaboutone-fifthofASEAN’svehiclesarenotrunningonelectricityby2050underthe1.5-S,mostofthoseareheavyfreightvehicles.Figure47Vehiclesharebytechnology,byscenario,2018,2030,2050EVsNon-EVs0%7%17%24%20%64%79%100%93%83%76%80%36%21%0%10%20%30%40%50%60%70%80%90%100%2018PES2030TES20301.5-S2030PES2050TES20501.5-S2050VehiclesharebytechnologyENERGYCONSERVATIONANDEFFICIENCYINRESIDENTIALAIRCONDITIONINGSpacecoolingisthemaindriverforthebuildingsector’senergydemandinthefuture.IntheASEANregion,theshareofspacecoolingenergydemandinthebuildingsectorincreasesfrom17%in2018to46%in2050,equaltoabout4.5EJ(~1.3TWh).Thisincreasingenergydemandisduetothegrowthinequipmentpenetrationandownership,thenumberofhouseholdsandtheregion’seconomy.UnderthePES,residentialspacecoolingenergyconsumptionisprojectedtogrowmorethaneightfoldinthestudyperiod,withcommercialspacecoolinggrowingmorethanfivefold.Withthecurrentminimumenergyperformancestandard(MEPS),theoverallexpectedenergysavingsinresidentialspacecoolingisonlyabout10%inthe1.5-SoverthePES.Thestockofresidentialairconditioninggrows5%annuallyintheregion,reachingtotalstockofmorethan120millionunits–about3millionunitsalesannuallyto2050.ThisshowstheimportanceofmorestringentpoliciestoimprovethespacecoolingMEPSacrosstheregionassoonaspossible.Commercialsectorspacecoolingshowsmorepromisingenergydemandreduction,leveredbymodedevelopedbuildingcodesandefficientchillertechnologies,whichallowsabout40%demandreductionfromtheactivitiesinthe1.5-Sby2050overthePES.Theuseofnaturalrefrigerantshouldalsobeconsideredasoneoftheeffortsinreducingtheglobalwarmingeffectfromthespacecoolingactivities.TOWARDSAREGIONALENERGYTRANSITION91Spacecoolingdemandrisessignificantlyinthebuildingsector,growingalmostfivefold.Figure48Spacecoolingenergydemandinbuildings,byscenario,2018-2050011223Electricityconsumedforcooling(EJ)CommercialResidential20182030PES2030TES20301.5-S2050PES2050TES20501.5-SENERGYSOLUTIONSFORISLANDSINTHESOUTHEASTASIANREGION:MINI-GRIDSANDSTAND-ALONEENERGYSYSTEMSSoutheastAsiaisavastregionthatconsistsofmainlandSoutheastAsiaandastringofarchipelagostothesouthandeastofthemainland,alsoknownasinsularSoutheastAsia.ThearchipelagicgeographyoftheinsularSoutheastAsiaregioncomprisesmanyremoteandsmallislandcommunities,andthesmallestandmostremoteremainwithoutaccesstoelectricityorareelectrifiedmainlybydieselgenerators.Ruralelectrificationthroughtheextensionoftheexistingelectricitygridinfrastructuretotheseremotelocationsisoftenunviable–leavingmini-gridsandstand-aloneenergysystems,especiallythoseincorporatingrenewableenergy,asanidealsolution.ThearchipelagicnatureoftheASEANregionmakesprovidingelectricityinmanyisolatedislandsandremotecommunitiesachallenge.Dieselmini-gridsaremainlyusedtoprovidelimitedelectricitysupplyintheseareas.Thisentailscoveringthehighcostofdeliveringtheseservicesaswell.Toacceleratethedeploymentofrenewablesforoff-gridelectrification,aholisticenergyaccessstrategymustbebackedbydedicatedpoliciesandregulationsdesignedfordecentralisedrenewableenergysolutions.Astableregulatoryframeworkisnecessarytoattractprivateinvestmentinallareasofthesectorwherepublicfundingfallsshort.Theframeworkmustbealignedwiththeobjectiveofuniversalenergyaccess(i.e.leavingnoonebehind)andprovideadequateguidanceandincentivestoreachtheverylasthousehold,firmorpublicfacilitythroughthemostoptimumsolution,andtoensurepermanenceofsupplythroughbothdefaultandlast-resortproviders(GCEEP,2020).92RENEWABLEENERGYOUTLOOKFORASEANAccordingtoIRENA’sWETO,significantprogresshasbeenmadeoverthepastdecadeindevelopingpolicyandregulatoryframeworkstoguideinvestmentsinenergyaccess.Dedicatedpoliciesandregulationsfordecentralisedrenewables,particularlymini-gridsandstandalonesolarsystems,complementedbyregionalprogrammesanddonor-ledinitiatives,havedrivenrecentgrowthindeployment.Yetlargegapsremain,andsomeofthecountriesintheinsularSoutheastAsiadonotyethavededicatedpolicies,whileothersneedadaptationstosupportthedynamicnatureoftheirelectrificationprocessesinremoteislands(IRENA,2022b).Inthespecificcaseofstandalonesystems,fiscalincentives,suchasexemptionsfromimportdutiesandvalueaddedtaxes,areoftenneededtoincentivisemarketdevelopmentandmakesolutionsmoreaffordable.Scalinguprenewableenergymini-gridsrequiresdedicatedpoliciesandregulationstoaddresslicensingandpermittingrequirements(includingqualitystandards),tariff-setting,theimplicationsofthearrivalofthemaingridandthedistinctiveaspectsofmini-gridpublicfinancing.Legalandlicensingprovisionsprovidethelegalbasisformini-gridstogenerate,distributeandretailelectricityinagivenarea.Largelyadministrative,theycaninvolvetransactioncoststhatmaybesignificantformini-gridprojects.Dedicatedmini-gridregulationsareincreasinglysimplifyinglicensingrequirements.Tariffregulationiscentraltotheviabilityofanymini-gridandisoftenshapedbylocalpoliticaleconomyconsiderations.Giventhehighercostofsupplyinoff-gridareas,thetariffsettingprocessmustbalancecostrecoverywithconsumers’abilitytopay.Earlymini-gridregulationsuseda“willingbuyer,willingseller”approachtosettariffsformini-gridsofpre-definedsystemsizes.However,thiscomeswiththeriskofcommunitieswithdrawingconsentduringtheoperationalphase.Acost-of-serviceapproachtotariffsettingisrecommendedthattakesfinancialsupport(e.g.capitalexpendituresubsidies)intoconsideration.Tosupportscale,portfolio-leveltariffapprovalsarealsorecommendedastheyallowdeveloperstocross-subsidisetheirportfolios.Wherenationaluniformtariffsareapplicableorregulatorsdetermineretailtariffs,adequatesubsidymechanismsareneededtobridgethegapbetweenthecostofserviceandtariffrevenue.Thearrivalofthemaingridisamajorriskforisolatedmini-grids.However,forremoteislandsthisisnotalwaysthecase.Butinsomecasesmini-gridregulations,includingthoseinIndonesia,Kenya,NigeriaandtheUnitedRepublicofTanzania,haveattemptedtoaddressthisriskthroughintegratedplanningandearmarkingoptionsforoperators.Thesegenerallyincludecompensation(basedonapre-defineddepreciationscheduleandbusinessvalueestimation)andconversiontothestatusofsmallpowerproducersordistributors.Ineachcase,theregulatoryguidancemustbeclear,transparentandreliable,giventhesignificantriskofstrandedassets.Finally,itisimportanttounderlinethatmeasuresformini-gridandstand-alonesolutionsfordistributedgenerationentailapackageofactions.Thesecanbecategorisedinprimarymeasuresthatdirectlyaffectprojectdevelopmentandoperation,wherenationalregulatoryframeworksmusttacklemeasuresthatareneededtosustaintheseprojects(IRENA,2018).Theimplementationofsecondaryandtertiarymeasuresusuallyrestswithinstitutionsoutsidetheenergysector.Secondarymeasuresincludepoliciesrelatedtolandrightsanduse,bankingandcompanyformation.Tertiarymeasurescoveraccesstolocalstatistics,technicalassistanceandcapacitybuilding,e.g.tosupportlocalenterprisedevelopmentformini-gridsandstand-aloneenergysolutions.TOWARDSAREGIONALENERGYTRANSITION93Mini-gridsasstand-alonesolutionsfordistributedgenerationareparticularlyimportantforislandsandisolatedcommunities.Figure49Overviewofmeasurestoscaleuprenewableenergymini-gridsPrimarymeasures1Secondarymeasures2Tertiarymeasures3RuralelectrificationstrategyandmasterplanTaxationandothermeasuresDataandinformationaccessMini-gridpoliciesandregulationsLandrightsanduseSynergieswithothersectorsLegalandlicensingprovisionBankingCostrecoveryandtariffregulationIncorporation,companyformationGridinterconnection,arrivalofmaingridFinancialsupportformini-gridsNationalpolicyonenergyandrenewablesEnvironmentandhealthprotectionTechnicalassistanceandcapacitybuildingQualityandstandardsADDRESSLACKOFPOLICYATTENTIONSource:(IRENA,2018).BIOENERGYSustainablebioenergypotentialandavailabilityinSoutheastAsiaAccordingtoWETO,bioenergytodaymakesupover50%ofrenewableenergyuse.Achievingthenet-zerogoalwillnotbepossiblewithrenewableelectricityandenergyefficiencyalone.Bioenergywouldrepresent25%ofTPESby2050inIRENA’s1.5°CScenario.Thatwouldrequirejustover150EJofbiomassprimarysupply,oraroundathreefoldincreaseover2019levels–achallengingscale-upeffort.94RENEWABLEENERGYOUTLOOKFORASEANBioenergy,intheformofmodernbiomass,willhaveanincreasingroleinASEAN’sdecarbonisationeffort.Figure50ShareofbioenergyinTFECinASEAN,byscenario02468PESTES1.5-S201820302050EJTraditionalBiomassBiogasBiofuelsSolidBiomass201820302050201820302050InASEANthescale-upissimilar.Inabsoluteterms,theincreasewillbefromaround2.7EJ(primary)to7.6EJby2050inthe1.5-S.In2018,around14%offinalenergycamefrombioenergysources,withalittleunderhalffromtraditionalsourcesofbioenergy.By2050inthe1.5-S,thesharewillincreaseto19%,withalltraditionalusesofbioenergyreplacedwithmodernbioenergy.However,duetoanincreaseinoverallenergydemand,totalconsumptionwilltriple.Thesupplyofbiomassfeedstockswillneedtoexpandifitistomeettheneedforitsuseasenergy.Globalandregionalestimatessuggest,however,thatbiomasscouldreachtheneededresourcelevelsthroughaprudentandsustainableexpansioninbioenergy.Thisexpansioncanbeachievedwithpoliciesthatpromoteawideruseofbiomasssources,coupledwithstrong,evidence-basedsustainabilitygovernanceproceduresandregulations.IntheASEANregion,allrenewableenergysourceshavearoletoplayintheenergytransition.However,whenitcomestothepotentialforsustainablebioenergytoserveSoutheastAsia’senergydemand,arecentstudyfromIRENAidentified13sustainablebioenergypathways(seeTable15)thatwillenablebioenergytocompeteeconomicallywithfossilfuelsintheregion’senergymarkets(IRENA,2022e).TheanalysisdemonstratesanabundanceofuntappedbioenergyinSoutheastAsia,withatleast7.1EJofselectedfeedstockperyearby2050inthefivecountriesstudied.ItalsoidentifiesimmediateopportunitiesforadoptingbioenergyinSoutheastAsia’senergymarkets,demonstratingthepotentialfortheselectedsustainablebiomasstoeconomicallymeet2.8EJoftheenergydemand.Theeconomiccostsandbenefitsofanenergymarkettransitiontosustainablebiomasswereappraisedforthe13potentialpathways,revealingpotentialbenefitsofUSD144billionofnetpresentvalueofsocio-economicbenefitsin2050,creatingover452000newresilientjobsandsavingaround442MtCO2eqofGHGemissionsperyear.TOWARDSAREGIONALENERGYTRANSITION95Bioenergycanbeutilisedinseveralwaysintheenergytransitionscenario.Table15Summaryof13potentialpathwaysforIndonesia,Malaysia,Myanmar,ThailandandVietNamTYPEOFPROCESSTOTALAPPLICABLEPOTENTIALBIOENERGYEQUILIBRIUMIN2050(PJ)TYPEOFFEEDSTOCKAgriculturalresiduesfrommajorcrops,rubberandacaciaDirectcombustionforindustrialheatgeneration696Directcombustionforcombinedheatandpowergeneration1065PalmoilmilleffluentandcassavapulpAnaerobicdigestiontogeneratebiogasforbothheatboilersandcombinedheatandpower(CHP)plants32Agriculturalresiduesfrommajorcrops,rubberandteakDirectcombustionforindustrialheatgeneration8Directcombustionforcombinedheatandpowergeneration449CassavapulpAnaerobicdigestiontogeneratebiogasforbothheatboilersandCHPplants6SugarcanemolassesandcassavastarchandchipstobioethanolFermentationandblendtoproducebioethanol98Agriculturalresiduesfrommajorcrops,rubberandeucalyptusDirectcombustionforindustrialheatgeneration188Directcombustionforcombinedheatandpowergeneration145CassavapulpAnaerobicdigestiontogeneratebiogasforbothheatboilersandCHPplants4SugarcanemolassestobioethanolFermentationandblendtoproducebioethanol4AcaciaandrubberDirectcombustioninCHPforheatandpowergeneration106WoodyresiduesDirectcombustionforindustrialheatgeneration17Source:(IRENA,2022e).Sustainablebioenergypathwaysmustlinkdemandinenergymarketswithsecurebioenergysupplies.Therearefourkeymarket“pushandpull”factorsthatdecisionmakersmustconsiderinthisregard:availability,sustainability,accessibilityandmarket.ThehighproductivityofSoutheastAsia’sagriculturesectorgeneratesconsiderablevolumesofunder-utilisedresidues.Table15providesestimatedenergyvaluesforunderutilisedfeedstocksinthestudy’sselectedcountriesofIndonesia,Malaysia,Myanmar,ThailandandVietNam.TheseASEANmembercountrieswerechosenastargetcountriesduetotheirlargeagriculturalindustriesandsubsequentpotentialintermsofuntappedbiomassfeedstock.Privatefinanciersofrenewableenergyprojectsoftencitesecurityofbioenergysupplyasoneofthebiggestobstaclestoinvestinginbioenergyprojects.Variousfactorsdeterminethetotalavailablevolumesofbioenergy,includingbiomassscalabilityandseasonality.Onewaythatgovernmentscanmitigatetheseasonalityof96RENEWABLEENERGYOUTLOOKFORASEANbiomassoutputsisbyformingacentralcollectionagencytomapthecollectionofresidualsfromvariousagriculturalpracticesandcropsthroughouttheyearanddistributethemsystematicallyaccordingtodemand.SustainablebioenergyTheuseofbioenergycanbringGHGreductionsalongwithothercontributionstosustainabledevelopmentobjectivesintheASEANregion.However,theproductionanduseofbioenergymustbemanagedwithcare,mainlybecausesustainabilityconcernsaboutproductionandconsumptionarerelevanttopicsinthebioenergyindustryintheregion.Thepotentialimpactsofnon-sustainablebiomassintheASEANregionincludecompetitionforland,emissionscausedbyland-usechange,deforestation,biodiversityloss,competitionwithfoodproduction,lackofmanagementofbiowasteandairpollution.Theseimpactsposeriskstoinvestorsandalsodiscouragepolicymakersfrommakingbioenergyamajorpillaroftheirstrategiesforreaching1.5°Ctargets.Thisisalsointerlinkedwiththeassessmentandestimatesofbiomasspotentialsandavailability.Appropriatesolutionsandmeasurestoensuresustainabilityofbioenergyintheregionareavailable,butinsomecasesarenotfullyimplemented.Inseveralcases,thesolutionsarehighlycontext-specificandcorrespondtolocationsalongtheregion,includingsocialconditionsandlocalpoliticalandregulatorycapacities.Inthefollowingsection,somegeneralconsiderationsareoutlinedtopromotefurthersustainablebioenergyproductionintheASEANregion.Sustainability-basedtargetsettingandlong-termplanningBioenergytargetsettingshouldemergefromasoundunderstandingofsustainabilitywherethetargetsapply.Thisincludesspatialandtemporalcharacteristicsofdifferentoptions–thetypesandavailabilityoffeedstocks,supplychainsandenduses–inallenvironmental,socialandeconomicaspects.Along-termstrategyforbioenergydevelopmentintheregionshouldbuilduponasoundunderstandingofsustainability.Suchastrategycanprovideaconsistentpolicysignaltoguidepolicymakersandbuildconfidenceamonginvestorsandprojectdevelopers.Cross-sectoralco-ordinationforbioenergyBioenergypolicymakingrequiresstrongcross-sectoralandcross-countrycollaborationamongrelevantinstitutions,includingenvironment,agriculture,forestry,industryandenergydepartmentsatvariousgovernancelevels(frominternationaltolocal)toalignbroaderplanswiththoseoftheenergysector.Complexinstitutionalstructuresandmisalignmentindealingwithsustainabilityissuesacrossmultiplepolicydomainshavebeenakeybarrierinmanycountries.Aconceptof“bio-economy”canbeintroducedtocoverallbio-basedsectorsupstreamanddownstreamandfromlandusetoenduse(Fritscheetal.,2020).Itintendstolinkagriculture,forestry,energyandindustrialdevelopment,astheyhavesimilarsupplychains,technologiesand,mostimportant,sustainability.SustainabilityregulationsandcertificatesNationalandregionalregulatoryframeworkshelptoensurethesustainabilityofbioenergy.Theycansetconditionsandrequirementsaspartofthepermittingprocessforprojectsandmonitorthepost-projectperformancetoensurecompliance.Regulatoryframeworksshoulddefinethecriteriaforsustainabilityrequirementsbasedonlocalcontext,withcertificationbodiesconductingsustainabilityauditsonthebioenergyproductsorprojects.Theregulatoryframeworkcanbeintegratedwithfinancialincentives.Forexample,intheNetherlands,theMinistryofEconomicAffairsandClimatePoliciesprovidessubsidiestobiomassprojectsthroughTOWARDSAREGIONALENERGYTRANSITION97theStimulationofSustainableEnergyProduction(SDE++)scheme.Projectsreceivingsubsidiesmustmeetcomprehensivesustainabilitycriteria,includingrequirementsrelatedtoGHGemissionsaving,soilmanagement,land-usechange,sustainableforestmanagementandothers(NEA,2022).SomewidelyknowninternationalplatformstopromotesustainablebioenergyincludeFoodandAgricultureOrganizationandtheGlobalBioenergyPartnership(GBEP).The24sustainabilityindicatorsagreedbyGBEPhavebeenappliedortestedbymorethanadozencountries,includingbioenergyproductionpowerhouseslikeArgentina,Brazil,Indonesia,VietNamandothers,tohelpnationalandlocalstakeholdersmonitoranddevelopsustainablebioenergypolicies(GBEP,2020)Voluntarycertificationschemescandemonstratecompliancewithsustainabilityregulations.Forexample,numerousschemesareemployedortailoredfortheRenewableEnergyDirectiveoftheEuropeanUnion(RED)sustainabilitycriteriasocompaniesandproducerscanprovethattheirbioenergymeetsthesecriteriawithevidence,especiallyintracingthefeedstockorigins.Anindependentvoluntarycertificationbodyusuallyestablishesasetofpracticableindicatorsonsustainabilityandthenauditsthesupplychain.Bioenergycertificationschemesareoftenalignedwithsystemspioneeredbyotherbio-basedindustries.Mostarebuiltuponexistingschemesinagricultureandforestry.Therearemanycertificationbodiesandschemes.Someschemesareestablishedasroundtablesormultistakeholderinitiatives,includingtheRoundtableonSustainableBiofuels,RoundtableonSustainablePalmOilandRoundtableonSustainableSoy.Someschemesaresupportedbyindustries,suchasBonsucro,aninternationalschemeestablishedforthesugarcaneindustry,orgovernment,suchasInternationalSustainabilityandCarbonCertification,whichissupportedindirectlybytheGermangovernment,andtheRenovaBioProgrammedevelopedbytheBraziliangovernment.Someschemesarespecifictoforestrymanagement,includingtheProgrammefortheEndorsementofForestCertification,theSustainableForestInitiative,theForestStewardshipCouncilandtheSustainableBiomassProgram(IRENA,2022c).FortheASEANregion,asetofenvironmentalandsocialcriteriathatcompaniesmustcomplywithtoproduceCertifiedSustainablePalmOilshouldcontinuetobeenforced.Whenthesecriteriaareproperlyapplied,theycanhelptominimisethenegativeimpactofpalmoilcultivationontheenvironmentandcommunitiesinpalmoil-producingregions.Thegrowthintheinternationalbioenergytradehastriggeredthedevelopmentofgovernanceofbioenergythroughinstrumentslikecertification,forexample,theGreenGoldLabel,RoundtableofSustainablePalmOil,andRoundtableonSustainableBiomaterialsandtheSustainableBiomassProgramme.Theseformpolycentric,transnationalregimesthatinvolvearangeofactors.Thesetransnationalsustainabilityregimesmayincreasethecostsofbioenergy,buttheyalsorepresentanimportantwaytoensuresustainability,whichiskeytoaccomplishclimatetargetsintheregionalongwithsustainabledevelopment.FomentingbiomassmarketsIntheASEANregionitisimportanttoidentifyaccessiblebiomassfeedstocksintheshorttermtodemonstratetheviabilityofthissourceforenergymarkets,beforeevenmovingontoaddresspolitical,legal,socialandenvironmentalconcerns.Infrastructureconstructiontoincreasebiomassaccessibilityinthemediumandlongtermswilldirectlyimpactthescalabilityoffeedstockanddeliversocio-economicbenefits.Volumesofaccessiblebioenergyresourceswillgrowovertimewithincreasedmarketawareness,improvedlogisticschains,technologyenhancementsandmountingprivatefinancingappetite.Privatefinanciersofrenewableenergyprojectstypicallyhaveanegativeviewofbioenergysupply,butthisisduetooutdatedperceptionsonissuesthatnowhavearangeofcommerciallyproventechnicalsolutions.Thereis,therefore,anurgentneedtobuildawarenessamongdecisionmakersofcommerciallyproventechnicalsolutions.98RENEWABLEENERGYOUTLOOKFORASEANBasedonanumberoflessonsfromsuccessfulprojectsinestablishedmarkets,decisionmakersinSoutheastAsiashouldseekto:•Explorehowagriculturalandindustrialsectorscancollaboratetoestablishsupplyandlogisticsnetworksforcreatingsecureandsustainablebiomasssupplies.•Determinewhichfuelenrichmenttechnologieswouldbeappropriateforthesustainablebioenergyresourcesavailableandwouldmeetthespecificationsoflocalenergymarkets.•Identifyknowledgeandtechnologygapsthatrequirefurtherresearchanddevelopment(R&D)andpilotprojectstotestthe“first-of-a-kind”risksofdeployingsuchtechnologiesinSoutheastAsia’smarkets.•Formministerial-levelcollaborationtounlockfurtheropportunitiesandensurethesmoothexecutionofbioenergystrategiesineachcountry.Decisionmakerscanalsoacceleratetheadoptionofsustainablebiomassbyaddressingnegativesentimentamongprivatefinanciers.Thiscanbeachievedbydemonstratingthecommercialsuccessesachievedinmarketsthathaveadvancedthedeploymentofsustainablebioenergy.Atthesametime,decisionmakerscanfacilitatetransitionsintheenergymarketsbyregulatingtherequirementforindustrial,commercialanddomesticuserstoprogressivelyreducefossilfuelreliance;seekgreaterefficiencyinfacilities,plantsandequipment;andprogressivelyincreasetheproportionofsustainablebioenergy.Tofomentthis,thefollowingcanbepromoted:•Influenceenergymarketdynamicsbyincreasingtaxationonfossilfuelswhilereducingthetaxburdensonsustainablebiomass.•GivetaxincentivesforR&Dandinvestmentsinnewfacilities,plantsandequipmentthatarefuelledbysustainablebioenergy.•Providefeed-in-tariffstoincentiviseprivatesectorparticipationinthemarket(whichisproveninSoutheastAsiaandelsewhere).However,carefuldesignneedstobeconsideredtoensuretherightlevelofincentivewhilenotaddingtoomuchburdentotheenergyoff-takersorgovernmentfiscalsupport.HYDROGENHydrogenusesinASEANInthePES,zero-carbonhydrogendemandseeslimitedusewithintheregion.Inthe1.5-Scase,zero-carbonhydrogendemandisexpectedtogrowsignificantlyto1.5EJor11Mtby2050.Zero-carbonhydrogeniseitherconsideredgreen,producedfromelectrolysisusingcarbon-freeelectricity,orblue,producedgenerallyfromnaturalgasutilisingCCStocapturethesignificantCO2emissionsproducedduringproduction.IRENA’sstudyonglobalhydrogentradetomeetthe1.5°cclimategoal(IRENA,2022g)discussesinmoredetailtheeconomicsandgreenhydrogenproductioninthefuture.Hydrogencanbeuseddirectly,oritcanbeusedasafeedstockusedtoproducederivates.Overall,mostoftheuseofthefuelisexpectedtobeintheindustrysector–forexample,intheproductionofironandsteel–andalsoasfeedstockfortheproductionofammoniaandmethanol,whicharekeyfuelsrequiredtodecarboniseinternationalshipping.ThemajorityofthedemandisexpectedtocomefromIndonesia,Malaysia,ThailandandVietNam,wheretherewillbeastrongerbaseforhydrogenproduction.Inthe1.5-Scase,theexpectationisthattwo-thirdsofthehydrogendemandwillbegreenhydrogensourcedfromrenewableelectricityfrom2030onwards.Theadditionalelectricitydemandinthesectorisexpectedtobe40TWhin2030and340TWhin2050.However,theASEANregionasawholehasfurthertechnicalpotentialtobecomeahydrogenhub.Itisestimatedthatbetween6EJand60EJoflow-costgreenhydrogen(lessthanUSD2/kilogramme[kg]),canbeproducedintheregion(IRENA,2022g).TOWARDSAREGIONALENERGYTRANSITION99Greenhydrogenwillplayarolemainlyintheindustrialsectorandtosomeextentinlong-haultransport.Figure51Hydrogenconsumptionbysubsectorandscenario00.501.001.50PES2030TES20301.5-S2030PES2050TES20501.5-S2050EJAmmonia&MethanolproductionOtherIndustrySteelTransport(excl.bunkering)ASEANhydrogenstrategiesWorldwide,theadventofgreenhydrogenasafeasible,cost-effectivesolutiontodecarbonisethehard-to-abateandhard-to-electrifysectorshasspurredpoliticalandindustrialactivitytotransformitfromanichetoamainstreamoption.Inparticular,inEurope,EastAsia,LatinAmericaandOceania,policymakersandindustrialstakeholdershavekickstartedseveralnationalandinternationalinitiatives(IRENA,2020).Whilepoliciestosupportlocalhydrogenproductionandconsumptionarestillnotlargelyadopted,countriesarealreadyforgingbilateraldealsthatcouldpavethewayfornewhydrogentraderelations(IRENA,2022d,2022h).Inthisregard,theASEANregionisnotprogressingatthesamepace.Countriesintheregiondonothaveproperstrategies,andonlyafewmentionhydrogenintheirpoliciesandtargets(seeTable16).Mostoftheprojectsplannedintheregionareexport-oriented,missingtheopportunitytousehydrogenproductionforthedecarbonisationoflocalconsumptionfirst.Thisexport-orientedfocuscouldbeaffectedbytheimport-orientedstrategiesofJapanandtheRepublicofKorea.TheJapaneseandKoreanstrategiesarecharacterisedbyatechnology-neutralapproachtohydrogenproductionthatdoesnotaccountforthecarbonemissionfactorsofproductionandtransportofhydrogen.Instead,thestrategiesstresstheimportanceofhydrogenuseinfuelcellsinstationaryandmobileapplicationsandammonia-basedpowerproduction.ThisisincontrastwiththestrategiesinEuropefocusingoncarbonemissionreductionandhard-to-abatesectors.Japan'sgovernment,inparticular,hasbeenworkingoninternationalhydrogentradingsincethe1990s,whenitallocatedUSD41.5million(JPY4.5billion[Japaneseyen])tothisgoal.Thiscountryhadthefirst-in-their-kindblueandgreyhydrogen(hydrogenproductionthatisnotcarbonneutral)andproductsshipmentsfrompilotordemonstrationprojectsinAustralia,BruneiandSaudiArabia(IRENA,2021b).However,withoutastrongfocusongreenhydrogenfromtheonset,theASEANregionrisksbeingcutoutfromtheexportmarket.AustraliaandtheGulfCooperationCouncil(GCC)regionholdthepromisetobecomemajorexportersofgreenhydrogen,withpricesaroundUSD1.5/kg,belowcurrentgreyhydrogenprices(IRENA,2022h).Moreover,currentimport-orientedcountriesinEastAsiahavetheopportunitytoupdatetheirrules,introducingcarbonemissionlimitstohydrogenproductionsimilartothoseofEuropeancountries,makingthebusinesscaseforbluehydrogenlessstrong.100RENEWABLEENERGYOUTLOOKFORASEANToimprovethebusinesscaseforgreenhydrogenintheregion,governmentswouldhavetoassessthenationalhydrogenusesandincludethemintheirdecarbonisationefforts.Developingsomelocalproductionwouldhelpdriveacceptanceofthisnewenergycarrier.Import-orientedcountriesintheregionshouldconsidercarbonfootprintsintheirpolicymakingtoavoidgivingalifelinetounabatedfossil-basedsolutions(IRENA&WEF,2021).AMSshouldinitiatehydrogendevelopmentprogrammessoonerratherthanlater.Table16HydrogenprojectsinASEANMAINACTIVITIESINTHECOUNTRYCOUNTRYBruneiDarussalam•Japan'sAdvancedHydrogenEnergyChainAssociationforTechnologyDevelopmenthaslaunchedademonstrationprojectforasupplychainofby-producthydrogenshippedusingliquidorganichydrogencarriersbetweenBruneiandJapan.ThefirstshipmentwascompletedinApril2020.Cambodia•Cambodia’sLong-TermStrategyforCarbonNeutralityannouncedsomehydrogen-relatedmeasures,includingstudiesandallocationofbudgetforR&D.Indonesia•PertaminaislookingtoinvestUSD11billiontohelpaccelerateitscleanenergytransition,includinghydrogendevelopments.•Mitsubishiisplanningabrownfieldblueammoniaproject,convertinganexisting338tonneperdayhydrogenproductionplanttoserveanammoniaplantincentralSulawesi.Malaysia•SarawakEnergyhasdevelopedapilothydrogenelectrolysisplantandrefuellingstationandhydrogen-fuelledbuses.Sarawakalsoplansafuelcelllightrailtransitsystemby2024.•H2biscusisaprojectdevelopedbyKoreanandMalaysiancompaniesfortheproductionofgreenandblueproducts–hydrogen,ammoniaandmethanol–forexporttotheKoreanmarket.•PetronasandEneosofJapanaredevelopingfeasibilitystudiesfortheproductionofblueandgreenhydrogenproductionandthetransportof50kilotonnes(kt)/yearofhydrogenintoluene.Singapore•MultiplememorandaofunderstandingarebeingsignedbySingaporewithgovernmentsworldwide(Australia,Chile,andNewZealand)tocollaborateonhydrogentechnologies.Thailand•UndertheAlternativeEnergyDevelopmentPlan,hydrogenisincludedaspartofthe"AlternativeFuels"categorywithasettargetgoalof10ktofoilequivalent(3.5ktofhydrogen)consumedby2036.•TheEnergyRegulatoryCommissionhasincludedhydrogeninthedefinitionof"renewableenergy"tobepurchasedbytheProvincialorMetropolitanElectricityAuthoritiesandtheElectricityGeneratingAuthorityofThailand.VietNam•Germany’sTGSGreenHydrogenisplanningagreenhydrogenproductionplant(24kt/yearhydrogen,150kt/yearammonia)intheMekongDeltaprovincewithatotalinvestmentofUSD847.8million.•HydrogenismentionedinVietNam'sPowerDevelopmentPlan8asatechnologytobedeveloped.Sources:Seereferencesintext.HydrogensupplyinaglobalcontextTheASEANregioncouldsatisfytheburgeoningAsianhydrogenmarket.In2020,thehydrogendemandinAsiawasover40%oftheglobalhydrogendemand.By2050,thenetdemandcouldincreasenearlysixtimestoreachalmost190MtH2/yr.China,IndiaandJapanareexpectedtobethelargestmarketsinthisregion.ASEANcountriesandAustraliaarewellplacedtosatisfythislargemarket.IRENA’srecentreportGlobalHydrogenTradetoMeetthe1.5°CClimateGoal–part1outlinesaperspectiveofthehydrogentradebymid-centurybasedonthescenariosfromIRENA’sWETOreport(IRENA,2022b).Giventhewideglobalscopeofthereport,somerestrictionsingranularityhadtobemade;therefore,G20countriesarerepresentedindividuallywhilenon-G20countriesareaggregatedundertheirrespectivemacro-regions.ThatmeansIndonesia’spotentialisrepresentedseparatelyfromallotherASEANmembers.Althoughthatapproachproduceslimitations,itstillbringsvaluableinsightsintotheregion’srolebasedonassumptions.TOWARDSAREGIONALENERGYTRANSITION101However,aforthcomingreportfocusingontheASEANregionwillgointomoredetailonhydrogensupplyintheregion.IRENA’sWETOshowshowcleanhydrogenwillneedtobescaledupsignificantly,andsourcinggreenhydrogen,whichisexpectedtomakeuptwo-thirdsofsupply,willdependonmatchingsourcesoflow-costproductionwithdemandcentres.Theanalysisshowsthathydrogenwilllikelybeexportedthroughpipelines,asliquifiedhydrogen,orembeddedinammonia.Pipelinesarecost-effectiveforregionaltrade,suchaseventuallyacrossASEANorbetweenASEANandsouthernChineseprovinces.Ammoniaisthemostattractivecarriertocoverlong-distancetransportgiventheexistinginfrastructureandanexpandingmarketasfuelforshippingandpowergeneration.Thatwouldavoidhavingtocrackammoniabacktohydrogen,whichiscostlyandoverallchallenging(equals13-34%oftheenergycontainedinthehydrogen)(IRENA,2022i).Nevertheless,thestudyputalloptionssidebyside,consideringproduction,conversionplants,transports,reconversion(whereneeded)andfinalcarrieruse.Forinstance,someoftheammoniatobetransactedmaybeconsumedasammoniaitself,avoidingtheammoniacrackingstage,whichisstillcostlyandoverallchallenging.Hydrogenwillbeincreasinglytradedglobally.Figure52Globalhydrogentradeflowsin2050underIRENA’sGlobalHydrogenTradetoMeetthe1.5°CClimateGoalreport4771PJ2382PJPJ1606136PJ1094PJPJPJEuropeSouthEastAsiaAustraliaChinaIndiaSouthAfricaJapanRepublicofKoreaUnitedStatesNorthAfricaMiddleEastLatinAmerica0–100NHFlow(PJ)101–300301–8000–100LHFlow(PJ)101–600601–90038LOHCFlow(PJ)ExporterImporterHFlowwithinregionNHFlowwithinregionImporter/Exporter0–100HFlow(PJ)101–600601–900Source:IRENA(2022g).LookingattheAsianregionsupplymorebroadly,Australiahasvastlandof7millionsquarekilometresforrenewableproduction,which,combinedwithalowcostofcapital,enablestheproductionofgreenhydrogencompetitivewithfossilfuels-based.So,theAustraliancasereliesonthecountry'scapabilityofproducingrenewableelectricityatverylowcosts,whichmakesthebulkofhydrogentotalcosts.ComparedtoASEAN,thatmightbeenoughtocompensatefortheextradistancefromdemandcentreslikeChinaandJapan.AfactorfavouringASEANsupplycouldbethathydrogenpipelinescouldconnectneighbouringcountriestoChina,theexpectedlargesthydrogendemandatthegloballevel.Thatpathwayonlyrequirescompressionandwouldpreventtheenergylossesassociatedwiththeconversion/reconversionofhydrogencarriers,whichcansumupto30-40%(IRENA2022i).However,theuncertaintyremainsastowhichChinawillproducehydrogendomestically,givenitsvastrenewablepotential.Eventhoughresourcesarefarfromthedemandcentres,itcoulddeveloptheinfrastructuretoreducerelianceonimports.102RENEWABLEENERGYOUTLOOKFORASEANThecostofcapitalforsolarandwindprojectsinAustraliarangesfromaround2.9-3.7%,whichissignificantlybelowthatofASEAN(Figure53).Incombinationwithrelativelylowinvestmentcosts,Australiahasthepotentialtoproduceabout378EJ/yrofgreenhydrogenbelowUSD1.5/kg.Forillustration,thatishigherthanJapanandChina'sprimaryenergysupplies(PES)in2020at16EJand126EJ,respectively(blue/redverticallinesinthefigure).TheaveragedifferenceintheproductioncostbetweenAustraliaandASEANisaroundUSD0.5/kgofhydrogen(Figure54),whichcanbenarrowedifcapitalcosts,andinvestmentcostsofrenewablesaretobereduced.ThecostofcapitalrelatedtosolarandwindnewprojectsissignificantlyhigherinASEANcountriesthaninotherpotentialworldhydrogenexporterslikeAustraliaandChile.Figure53Averagecostofcapital(WACC)ofsolarandwindprojectsinASEANandselectedcountries0%2%4%6%8%10%MyanmarIndonesiaIndiaPhilippinesVietNamMalaysiaThailandSingaporeChileAustraliaChinaWACCSource:(IRENA,2022f).Changesintransportcostsnaturallyimpactcostsatthedestination–whichcouldbeadvantageoustoincreasingproductionwithinASEAN–andexports,giventheproximitytothosemainpotentialimportersinAsia.Forinstance,increasesinshippingcostswouldseeareductioninthelargestexporters,Australia,ChileandNorthAfrica,by30%,15%andalmost50%,respectively(IRENA,2022i).ThismeansthatAustraliaexportslesstoChinaandSoutheastAsia.Asaresult,themajorimportersproducemorehydrogendomestically.Productioncostsriseconsiderablyinsomecountriesasvolumeincreases.Figure54Hydrogencostcurvepotentialbasedon2030values0.00.51.01.52.02.53.03.54.04.55.00102030405060708090Hydrogenproductioncost(USD/kgH2)Hydrogenpotential(EJ/year)100110120130SoutheastAsiaAustraliaOceaniaIndonesiaPrimaryEnergySupplyofJapan(2020)PrimaryEnergySupplyofChina(2020)TOWARDSAREGIONALENERGYTRANSITION103ENERGYINTENSITYANDCONSUMPTIONAccordingtothelatestTrackingSDG7:Theenergyprogressreport,SoutheastAsiawasoneoftworegionsthatsurpassedSustainableDevelopmentGoal(SDG)7.3onenergyintensityimprovement.Between2010and2019,averageannualenergyintensityimprovedby2.7%asaresultofsubstantialimprovementinenergyefficiencyandrapideconomicgrowth(IEA,IRENA,UNSD,WorldBank,WHO,2022).IntheTESand1.5-Sin2030,energyintensitymeasuredbythepercentagedropintheratiooftotalenergysupplyperunitofGDPimprovessteadily.Thiscanbeattributedtoariseinenergyefficiency,economicexpansionandadeclineinthefinalenergyconsumption.Energyintensityimprovedfrom7.9megajoules(MJ)perUSD(2015)constantin2018to5.1MJ/2015USDinthePES2050.Thisvaluefurtherdecreasedby26%to3.9MJ/2015USDinthe1.5-S2050withintheASEANregion.Acrosstheregion,primaryenergyintensityvariesamongthecountries.Indonesiahadanaverageenergyintensityof7.9MJ/2015USDin2018thatwillreduceto4.3MJ/2015USDinthe1.5-S2050owingtoconcentratedeffortstoincreaseenergyefficiencyintheindustrialsectorandareductioninfinalenergyconsumptionacrossallsectors.ThevariationsintheenergyintensitywithintheregionarealsoaffectedbytheGDPstructureandsocietalqualityoflife.PercapitaconsumptionvariesgreatlyacrosstheASEANregion.Figure55FinalenergyconsumptionpercapitainASEAN050100150200250300BNSGMYVNIDLATHPHKHMMASEANEUGlobalPerCapitaconsumption(GJ/capita)20182050PES20501.5-SSource:IRENAanalysis,(UNSTAT,2020).SoutheastAsia'sfinalpercapitaenergyconsumptiondecreasesslightlyfrom63GJinthePES2050toroughly51GJinthe1.5-S2050.Thefinalenergyconsumptionintheregioninthe1.5-S2050decreasedasaresultofincreasedelectrificationandrenewableenergyshares.104RENEWABLEENERGYOUTLOOKFORASEANGlobally,percapitaconsumptionwasaround80GJin2018,alevelsimilartoSouthAfrica.However,thisglobalaverageincreasedsignificantlyduetoindustrialisedeconomiesandChina.ComparingbaseyearpercapitaconsumptionintheASEANregionwithdevelopingcountries,itisclearthatSouthAfricahasalmosttriplethevalueofASEAN’spercapitaconsumption,whileIndiaandColombiahavevaluesincloserangewiththeregion.Thisvariationreflectstheeffectthatenergyaccess,GDPstructureandanincreaseinenergyservicesandsocietalqualityoflifehaveonbothpercapitaconsumptionandenergyintensityratherthanenergyefficiency.CO2REMOVALInASEAN,someenergy-relatedCO2emissionsremainin2050fromfossilfueluseandindustrialprocesses,asisthecaseinIRENA’sglobalscenarioinWETO.Inthequesttoreachnet-zeroemissions,therewillthusbeaneedforbothCCStechnologiesandCO2removalmeasuresandtechnologiesthat,combinedwithlong-termstorage,canremoveCO2fromtheatmosphere,resultinginnegativeemissions.Asofearly2021,24commercialfossilfuel-basedCCSfacilitieswereinoperationgloballywithaninstalledcapacitytocaptureabout0.04Gt/yearofenergy-andprocess-relatedCO2emissions.Threeoperationalcommercialfacilitiesusebioenergywithcarboncaptureandstorage(BECCS)andsevencommercialplantsareindevelopment.ThecurrentcapturecapacityofoperationalcommercialBECCSplantsisverysmallat1.13Mt/year(IRENA,2022b).InWETO,withthe1.5-S,theuseofCCSinindustryandCCSforfossilfuel-basedhydrogenproductionwouldexpandfrom0.04Gt/yearofcapturedCO2todayto3.4Gt/yearofCO2in2050.Therearenearly30CCSprojectsunderdevelopment,adding0.06Gt/yearofCO2capturepotential;however,currentlevelsfallshortofwhatisneededina1.5°C-consistentpathway–i.e.between1Gt/yearand2Gt/yearofCO2capturedby2030(IRENA,2022b).CO2removalmeasuresandtechnologiesincludenature-basedmeasuressuchasreforestationaswellasBECCS,directcarboncaptureandstorage(DACCS),andsomeotherapproachesthatarecurrentlyexperimental.InIRENA’s1.5°CScenario,thepotentialforCO2captureperyearfromprocessesthatusebiomass–andtowhichCCScouldbeappliedinprinciple–isabout10Gtperannumby2050.However,thescenarioassumesaround5Gtperannumwillberequiredgloballyinthe1.5-S.Thescenariodescribeshowthiscouldincludeacombinationofremovalmeasures,fromBECCStoDACCS,reforestationandothermeasures.Thisreachesacrossmultiplesectorssuchaspower,heat,chemicals,biorefineries,cement,pulpandpaper,andsugarproductionandpossiblyalsoironandsteelproduction(IRENA,2022b).InASEAN,residualenergy-relatedCO2emissionswillamounttoaround0.7Gtofenergy-relatedCO2.Therefore,ofthe5GtASEANwillrequirearound14%ofthattotaltoachievenet-zeroemissions.CRITICALMATERIALSFORTHEENERGYTRANSITIONANDASEANAmaterialisclassifiedascriticalwhenithaseconomicimportanceassociatedwithaproduct,whentheriskassociatedwiththesupplyofthematerialisatstake,ortheavailabilityofviablesubstitutesofthematerialisscarce.Criticalmaterialsintheenergytransitionplayavitalrole,especiallywhenitcomestomanufacturingkeytechnologiessuchassolarpanels,windturbinesandbatteries,whichrequirenickel,copper,lithium,andrareearthelements(REEs).13Theimportanceofacriticalmaterialvariesaccordingtoitsusagesandproperties.13The17rareearthelementsare:lanthanum(La),cerium(Ce),praseodymium(Pr),neodymium(Nd),promethium(Pm),samarium(Sm),europium(Eu),gadolinium(Gd),terbium(Tb),dysprosium(Dy),holmium(Ho),erbium(Er),thulium(Tm),ytterbium(Yb),lutetium(Lu),scandium(Sc)andyttrium(Y).FromtheseREEsthemostrelevantare:neodymium,praseodymium,dysprosiumandterbium,whicharekeytotheproductionofthepermanentmagnetsusedinEVsandwindturbines.Neodymiumisthemostimportantinvolumeterms.Yttriumandscandiumareusedforcertaintypesofhydrogenelectrolysers,whileeuropium,terbiumandyttriumareusedinenergy-efficientfluorescentlighting.ConventionalenergyalsoreliesonREEs,forexampletoproducecarexhaustcatalysts.However,themixofenergy-relevantREEsthatareneededgoingforwarddiffersfromthatofthepast.TOWARDSAREGIONALENERGYTRANSITION105Someexamplesoftheirusesare:•Copperforelectricwiringplaysakeyrolethroughoutpowerproduction,transportationanduse.Electricitydemandwillincreasesubstantially,andthiswillraisecopperdemand.Althoughthecopperresourceisadequate,thequalityofcopperoreresourcesisdecreasing.•Nickeldemandmayincreasesubstantiallyduetoitswidespreaduseinbatterycathodes.Lithium-ionbatteriestypicallycomposebetween30-80%nickel.Already,producersareconsideringalternativebatterychemistries(notablylithium-iron-phosphatecathodes),buttheproductperformanceisinferior.However,suchalternativescanreducethegrowthinnickeldemandsubstantially.•Lithiumisacriticalcomponentoflightweightbatteriesforvehicles.Asbatteryusedominatestotallithiumuse,theforeseenrapidgrowthofbatterymanufacturingwillrequirearapidupscalingoflithiumproduction.Electriccarsaccountedforaround4%ofglobalcarsalesin2020;thissharemaygrowfivefoldtotenfoldinthisdecade,andlithiumproductionneedstogrowaccordingly.•Neodymiumanddysprosiumplayakeyroleinpermanentmagnets,whicharewidelyusedinhighperformanceelectricmotors(includingEVs)andingenerators(windturbines).Thekeychallengeisthatminingandprocessingofthesematerialsisdominatedbyonecountry,whereasthesupplyofothercriticalmaterialsismorediversified.•Cobaltsupplyiscriticalforbatteries.Demandmaydoublebetween2020and2030,andvehiclebatteriesmayaccountfor60%oftotalcobaltdemandin2030.However,batterydesigninnovationscanreducethisdependencysubstantially.•Today,aroundatenthofallsilverisusedforsolarPVmodules.ThissharemayrisefurtherasdemandforsolarPVgrows.Tosomeextent,thiscanbebalancedbymorematerial-efficientcelldesign.•Demandforothermineralsandmetalswillgrowbutseemslesscritical.Suchmineralsandmetalsincludealuminium,chromium,graphite,indium,iron,lead,manganese,molybdenum,titanium,vanadiumandzinc.Forsomeofthese,theresourceisabundant;forothers,alternativesexist,suchassubstitutionofmaterialsandchangesinproductdesignthatprovidesimilartechnicalperformance.Whenitcomestocriticalmaterials,especiallynickelandRREs,selectedcountriesintheASEANregionplayakeyrole:IndonesiaandPhilippinesfornickel,andVietNam,MalaysiaandMyanmarforselectedRREsareafewexamples.Forinstance,globally,thetopthreecountriesproducingcopperareIndonesia(33%),thePhilippines(12%)andRussianFederation(11%).ThetopthreecountriesprocessingnickelareChina(35%),Indonesia(15%)andJapan(8%).Whenitcomestoneodymium,themostimportantRREinvolumeterms,mostproductioniscentredinChina,accountingfor59%ofglobalproduction,followedbytheUnitedStates(14.5%)andMyanmar(11.5%).Chinadominatesinprocessingneodymium,accountingfor88%ofthemarket,followedbyMalaysiaat11%andEstoniaat1%.Globalreservesofneodymium,acriticalREEusedinEVsandwindenergytechnologies,areestimatedat8Mt.Theresourceisfoundinadequateamounts,butshort-andmedium-termgrowthinsupplymayposeachallenge.MostproductionandprocessingofneodymiumcomesfromChina.ConsideringtherelevanceoftheASEANregionintheglobalmarketofcriticalmaterials,itseemsrelevanttohighlightsomeconsiderationforthecaseofnickelandRREs.Figure56summarisesthetopproducingandprocessingcountriesforselectcriticalmaterialsneededfortheenergytransition.ManycountriesinASEANarekeyplayers,includingIndonesia,Malaysia,thePhilippinesandMyanmar.106RENEWABLEENERGYOUTLOOKFORASEANIndonesia,MyanmarandthePhilippinesaccountforabout45%ofglobalnickelproduction.Figure56Topcountriesprocessing(left)andproducing(right)copper,nickel,cobalt,rareearthelementsandlithiumPercentoftotal020406080100ChileAustraliaIndonesiaDemocraticRepublicoftheCongoChinaRussianFed.PeruUnitedStatesPhilippinesMyanmarLithiumCobaltRareearthsNickelCopperPercentoftotal020406080100FinlandArgentinaJapanEstoniaIndonesiaMalaysiaChileBelgiumChinaSource:(IRENA,2022b).NickelGlobalnickelconsumptionamountedtoabout2.4Mtin2019.TheleadingconsumerswereChinaandIndonesia.Nickeldemandisprojectedtogrowsubstantiallyinthenextfewdecadesbecauseofitswidespreaduseinbatterycathodes.Forinstance,lithium-ionbatteriesaretypicallycomposedofbetween30-80%nickel.Alternativestonickel,includinglithium-iron-phosphatecathodes,couldreducedemandfornickel.However,thetechnicalperformanceoftheavailablealternativebatterychemistriesisinferior.Therearetwomaintypesofnickeldeposits:sulphideorebodiesandlateritesoils.Theimportanceofhydrometallurgicalprocessingoflateritesoilsisprojectedtoincrease.Nickelreservesareestimatedat89Mt;resourcesinclassicalsubsoiloredepositsareestimatedat300Mt.Thereisanadditionalestimated290Mtinsubseanickeldeposits.Nickelproductionfromundergroundandopen-pitmineswas2.54Mtin2019.Nickeldemandisprojectedtoexceedsupplyby2025.Severalfactorswillaffectthesupplyanddemandbalance.TheyincludetheextentandpaceatwhichEVsareadopted,thebatterytechnologythatbecomesdominantintheindustry,andthewaysuppliersrespondtothesechanges.Approximatelyone-thirdofglobalnickelsupplyisderivedfromrecycledmaterials(NickelInstitute,2022).Morethan2000nickelproductionprojectsarecurrentlybeingdeveloped.In2019,productiontookplacein27countriesacrossallcontinents.Thelargestnickel-producingcountriesareinSoutheastAsiaandOceania,whichtogetheraccountedfor62%ofproductionin2019.Indonesiahastheworld’slargestshareofnickelproduction,andChinadoesmostoftheworld’snickelprocessing(DERA,2022).Indonesiaismakinglargeinvestmentsinnickel-processingfacilities,however,whichwillshiftsomeprocessingawayfromChina.TheseinvestmentsstemfromIndonesia’srecentpolicymandatingthedomesticprocessingofnickelbeforeexport.NickelwillbeessentialforEVsinthecomingyears.MostoftheglobalnickelsupplywillbesourcedfromIndonesia,wherenickelminingandrefininghaveworseeffectsontheenvironmentthantheydoinothercountries,mainlybecauseelectricityissourcedfromcoal-poweredplants.Decarbonisingtheelectricitysupplyischallenging,becauseresourcesarelocatedinremoteareas(Huber,2021).TOWARDSAREGIONALENERGYTRANSITION107REEsREEdepositsarewidelydistributed.Itiseconomicallyviabletoexpandmininginmanyplaces,butprocessingcapacityislessreadilyexpandable.Increasedminingneedstobealsocombinedwithcirculareconomyconceptssuchasrecyclingandreuse,aswellasinnovationstomitigatedemandgrowth.Asmentionedbefore,somecountriesintheASEANregionarealreadyproducingorprocessingneodymium.However,therearealsocomparativelyhighconcentrationsofdysprosium,whichoccurinionicclaydepositsinSouthChinaandMyanmar.OthercountriesintheregionsuchasVietNamholdsimilartypesofresourcesthatareyettobeexploited.IonabsorptionclaysinSouthChinaandMyanmaraccountedfor17%oftheworld’sproductionin2020(around35kt).TheseclaysareimportantbecausetheyareenrichedwithheavyREEsincludingdysprosium.InMyanmar,productionisconcentratedintheKachinandShanstates,andproductionreportsareunreliable.Ionabsorptionclaysareprocessedthroughleachingwithammoniumsulphate.INDONESIA’SNICKELPRODUCTIONANDAMBITIONSTOBESOUTHEASTASIA’SEVBATTERYHUBIndonesiaissettoproduceover1.2Mtofnickelpigiron(NPI)thisyear,andby2025Indonesiawillbeproducingwellover1.5Mt/year.Theworldwillnotrunoutofnickelanytimesoon,asidentifiedland-basedresourceswith0.5%nickelorgreatercontainatleast300Mtofnickel,withabout60%inlateritesand40%insulphidedeposits.Toextractnickel,lateriteoresrequireextensiveandcomplextreatment,whichhasbeenhistoricallymoreexpensivethansulphideores.SofarmarketsforNPIandbatterygradenickelhavefunctionedindependentlywithbatterygradenickelbeingmuchmoreexpensive.TsingshanhasdevelopedarevolutionarynewtechnologytoprocesslateritenickelwithasubstantialreductionofprocessingcostandpioneeredtheproductionofNPIfromnickellateriteores(Metal.digital,2021).Theworld’slargestnickelproducerisIndonesia,andithasproductionbasedonethelateriteresourcetype.Thelateriteresourcevastlyexceedsthesulphideresource,areasonwhyIndonesiaiscurrentlyexpandingitsproductionsignificantly,withUSD42billionofplannedinvestmentsbyFortescueandTsingshan.OtherpartiesarealsoinvestingintheIndonesianickelminingandprocessingsector.IndonesiawantstodevelopanintegratedEVsupplychainandbecomeanEVbatteryproducerandexporter.Lithium-ionbatteriestypicallycomprisebetween30-80%nickel.SoutheastAsia’slargesteconomyhastheambitiousgoaltomakebatterieswithacapacityof140GWhin2030,whichisnearlyasmuchasglobalEVbatteryproductionin2020(CSIS,2022)Thecountry’sambitionsaremotivatedfromupstreamanddownstreamthesupplychain:theworld’sbiggestnickelproducerwantstocapitaliseonitsmineralresourcesbutalsoaimstoreduceemissionsbycreatingadomesticEVmarket.NotallnickelminedisusedforEVbatteriesortradedontheLondonMetalExchange(LME).Minednickelcanbesplitintotwobroadcategories:lowandhigh-gradeprimarynickel.High-gradenickel(ClassI)accountsfor55%ofallnickelmined,whilelow-gradeprimarynickel(ClassII)accountsfortheremaining45%.ClassInickelcontainsatleast99.8%nickel.ClassIInickel,suchasNPIoriron-nickel,actuallycontainsarelativelysmallamountofnickel–from8-16%and15-55%,respectively(Metal.digital,2021).BatterytechnologyexclusivelyusesClassInickelforcathodeproduction.OnlyClassInickelistradedontheLMEduetothehighpuritystandardoftheminedmetal.SuchLMEexchange-tradedClassInickelsatisfies108RENEWABLEENERGYOUTLOOKFORASEANspecificdeliverystandards(thisaccountsforlessthan25%oftotalfinishednickelsupply).HydrometallurgicalprocessesuseClassInickelsulphidestoproducebatterygradesulphateNiSO4(Metal.digital,2021).TsingshantakesNPIandprocessesitfurthertohigh-mattenickelproductsthatcontain75%nickel.Saproliteore(fromlateritesoils)isrefinedandturnedintoNPI,whichisinturnrefinedintonickelmatteandthenfurtherprocessedtomakeClassInickel.Providedthatthisnewprocessbecomesthenorm,growingEVbatterydemandcouldmeanNPIsupplybeingdivertedawayfromstainlesssteelmaking.Throughthenewprocessthesupplybottleneckfornickelsulphatehasbeenbroken,andtheexpectationisthatClassIandClassIInickelpriceswillconverge,takingintoaccountthatconversionofNPItonickelsulphateaddsaroundUSD5500-6500/tonneofnickel.Thisprocesswouldincreasethecarbonfootprintsubstantially,contributing50-70tonnesofemissionspertonneofnickelminedneededtoconvertNPItomatteandthenfurtherintoNiSO4.Analternativeprocessuseshigh-pressureacidleachtechnologytorecovernickelandcobaltseparatelyfromeachotherfromlow-gradenickel-oxidelateriteores.ThenickelthatisrecoveredisClassI,batterygradenickelsulphate.ThetechnologyhasbeendeployedinNewCaledonia.However,highcapitalexpenditureandenvironmentalcostshavecausedittolagbehindcurrentmethods(Metal.digital,2021).Inaddition,39%ofglobalnickelreservesarefoundinlocationsthatareexposedtohighorextremebiodiversityrisks–andbecausenickeltypicallycomesinthinoredeposits,theseareasareoftendestroyed.Proactiveenvironmental,socialandgovernance(ESG)effortsarecriticalforwidespreadacceptanceoftheproduct.Valehasconditionallyapprovedthelong-awaitedBahodopinickelprojectinIndonesia.TheprojectisajointventurewithChinesefirmsTiscoandXinhaiandwillproduce73000tonnesofnickelinNPIforthestainlesssteelmarket.ItwillbeIndonesia’smostexpensiveplant,withacapitalintensityofUSD31500pertonneofnickel,whichis320%higherthanotherplantsinIndonesia.TheBahodopiprojectwillinvolveanewgas-firedpowerplant.ThiswilllikelymakethisthemostexpensiveoperatingcostinIndonesianNPI(ontopofitbeingthehighestcapitalexpenditureplant).OtherNPIplantsuseacombinationofcoalandsolarpower.TheotherNPIproducersarealsonowshiftingtobuildtheirnewplantsinKalimantan,wheretheywillbeabletoaccesshydropowerinthefuture,providingahugecostadvantage.Inrecentyears,acombinationofrapidtechnologicalprogressandscaled-upproductionrateshasledtoimprovedperformanceand–mostly–afallinproductioncostsforbattery-electricvehiclesbatteries.Thisismainlybecauseofrisingrawmaterialcostsandtherecentsemiconductorshortagecausingpricestotemporarilyriseagainoverthelasttwoyears(RolandBerger,2022).Basedonfiguresfrommid-2021,anaverageNCM811batterypack(80%nickelcathode)costsaroundUSD130perkWh.Batterycostsareheavilyinfluencedbythecelltechnologyused,theproductionlocationandthepriceofrawmaterials.Cellcostscompriseapproximately75%ofthetotalcostofthebatterypack.Materials,suchascathodeandanodeactivematerials(CAMandAAM),accountfor70%ofthecostofeachcell,withrawandrefinedmaterialslikecobalt-andnickel-sulphatesandlithiumsaltsaccountingformorethan30%ofcellcosts.SouthKoreaninvestmentsarecurrentlybuildingIndonesia’sfirstEVbatteryplant,scheduledtostartproductionin2024,aswellasitsfirstEVplant.Nickelprocessingforuseinbatteriesstartedin2021,withmoreprojectsinthepipeline,mainlyduetoChineseinvestments.Furthermore,ReutershasreportedthatTeslahassignedanestimatedUSD5billioncontractfor5yearswithanIndonesiannickelprocessingcompanyformaterialsusedinitsbatteries(Electrive,2022).TOWARDSAREGIONALENERGYTRANSITION109SOLARPVINDUSTRIALISATIONOPPORTUNITIESIn2021around257GWofnewrenewablepowergenerationcapacitywasaddedworldwide.Morethanone-halfwassolarPV:about133-140GWofnewlyinstalledsystemswascommissionedduring2021alone(AC),withmorethan180GWmodulesatDClevel.IRENA’sWETOshowstheneedtohave10TWofrenewablepowerinplaceby2030worldwideaccordingtoa1.5-Spathway,comparedto3TWinstalledcapacityattheendof2021.Tomeetthatgoal,annualcapacityadditionsneedtoincreasetoover800GWperyear,athreefoldincrease(IRENA,2022b).SolarPVhasakeyroletoplayworldwide,includinginASEAN.Solarisalotcheaperthanfossil-ornuclear-basedpowergeneration.In2021,theglobalweighted‑averageLCOEofutility‑scalesolarPVfellby13%toUSD0.046/kWh.Theglobalweighted-averagetotalinstalledcostofutility-scalesolarPVwasUSD857/kWin2021.Over843GWofPVwasinoperationinACtermsbytheendof2021,and1000GWinDCterms.AccordingtoIRENA’s1.5-Spathway,weneedaround16TWofPVby2050.SomeotherscenariossuggestthatmuchmorePVwillbeneededinthecomingdecades.Utility-scalePVdominates,butrooftopPVaccountsforaroundone-thirdofglobalinstallations,withasmallerroleforfloatingandbuildingintegratedPV.ThetypicalcostofasolarPVprojectcanbesplitintomodulesandothercosts.Whilealotofattentionisfocusedonmodulemanufacturingopportunities,othercostsdoinfactdominate.Theseincluderacks,inverters,gridconnectionandothercomponents,aswellasprojectpreparation.Theseothercostsalsorepresentasignificanteconomicopportunity.Chinadominatestoday’sglobalPVproduction:polysilicon(66%),wafers(>95%),cells(78%)andmodules(72%).Bytheendof2022,Chinaisexpectedtohave500GWofannualmoduleproductioncapacityand550GWofwaferproductioncapacity.Incontrast,ASEANsharesarestillmodest.Tobecompetitive,afullsupplychainmustbedevelopedatscale.Today’soperationsmustsustainanindustryinthe10GWperyearscale.Deployingthelatesttechnologyisonewaytocreateanentry.Theaverageefficiencyofcrystallinemodules–thedominanttechnologyin90%ofmarket–increasedfrom14.7%in2010to20.9%in2021.FurtherefficiencyincreasesareexpectedwithTOPCon(60GWofproductioncapacitywereaddedthisyear)andtandemcellsproductionstartinginGermany,andMultijunctionfurtherdowntheroad.ESGisalsoontheradarofthePVindustry’sdevelopment.Eco-designiscritical,asisreducingcriticalmaterialuse,notonlyforsustainabilitybuttoscaleupproductionwithlimitedresources.Criticalmaterialsminingandprocessingareotherareasthatcreateneweconomicopportunities.Theproductionofmodulesrequiressignificantamountsofglassandaluminium,inlinewithplansforIndonesiaGreenIndustry.Solarisavariablesource.Powersystemsneedflexibilitytodealwiththisvariability.Thisrequiresnewtechnologybutalsonewmarketdesignsandregulations,newoperationalpracticesandnewbusinessmodels.Innovationsacrossthesefourpillarsneedtobecombinedtocreatenewsolutions.AgoodexampleissmartchargingofEVs.Weneedtoensurethereissufficientflexibilityinpowersystemstodealwithsolarvariability.Thatincludesbatteriesforday/nightstorage,newsolutionsforseasonalstorageandlong-rangehydrogentrade.Theseflexibilitymeasuresalsoconstituteanimportanteconomicopportunity.ENERGYSECURITYINTHEASEANREGIONASEANcountriessharethecommonchallengeofenergysecurity,whichconsistsofmeetingrisingdemandforenergyinasecure,affordableandsustainablemanner.Asthisoutlookshows,overallenergydemandwillcontinuetorise,morethandoublingovertheperiodto2050.Therefore,supplyingthisenergysecurelyisofparamountimportance.Inthisregard,energysecurityimpliesgreateruseofindigenousresources,inparticularrenewableenergy,andafocusonreducingdemandgrowththroughenergyefficiency.110RENEWABLEENERGYOUTLOOKFORASEANAsoutlinedinthisoutlook,thePEScaseshowsgrowinglevelsofenergydemandandincreasingdependenceonfossilfuelsthroughhigherlevelsofconsumptionforthesefuels.EconomicallyviablerenewableenergypotentialsareavailableintheASEANregionthatcansignificantlylowerrelianceonfossilfuels.Countrieswithintheregionarecurrentlyheavilydependentonfossilfuelimports,whichcanbereducedbybuildingrenewablesupplywhilealsoreapingstrategicandeconomicbenefits.ThisisanongoingprocessintheASEANregionasexemplifiedbytheregionalaspirationaltargetofachieving23%renewableenergyinprimaryenergyby2025,anincreasefromaround17%today.However,asthePESshows,theregionisnotontracktomeetthataspirationaltarget,andthequestionremains:howwilltheregionfurtherdiversify,andsecure,itsenergyasitmovestowardsthemiddleofthecentury?Instrategicterms,fossilfuelimportingcountriesarevulnerabletorisksofsupplydisruptionandpricevolatilitycausedbypoliticalinstabilityorarmedconflictsthatmayoccurinoilandgas-exportingnations.Smallerenergy-importingcountriesmayalsobesubjecttopressureorcoercionabouttheirenergysupplyandthereforehavelessfreedomtodeterminetheirownstrategicprioritiesandgoals(VandeGraaf,etal.,2019).ASEAN’sTPESin2050willbedominatedbyrenewablesunderthe1.5-S.Figure57RenewableenergyshareinASEANTPESNonRERENonRE(2ndaxis)RE(2ndaxis)0%10%20%30%40%50%60%70%80%90%0102030405060702018PES2030TES20301.5-S2030PES2050TES20501.5-S2050TotalPrimaryEnergySupply(EJ)Note:RE=renewableenergy.Incontrast,countriesthatcandeveloptheirownrenewablesourcesofenergyarebetterplacedtoachieveenergysecurity.Renewablesenablecountriestostrengthentheirenergysecurityandachievegreaterenergyindependencebyharnessingthevastindigenousrenewableenergysourcesthatcanbefoundacrosstheirterritories(VandeGraaf,etal.,2019).Theneededshiftisevidentwhencomparingthesharesofrenewableenergyinprimaryenergybetweentodayat18%to26%inthePES,andthe1.5-S,whichincreasesthatshareto60%.Inabsoluteterms,demandfromfossilfuelsdeclinesfrom13EJtodayto12EJinthe1.5-S,comparedtoanincreaseto30EJinthePESin2050.Addingtothiscontext,energysecurityisalsoakeydenominatorforsustainableeconomicgrowth.Thisoutlookhighlightsthevitalneedtoprepareproactivelyfortheenergytransitionbyencouragingenergyefficiency,renewableenergytechnologiesandgreensolutionsbyfosteringinnovation,aligningsocio-economicstructureswithgreenjobs,andinvestmentwithinternationalco-operation,allbyimplementinglong-termenergyplanningtowardsenergysystemsthatareflexible,sustainable,justandinclusive.Forward-lookingchoicesthatleadersingovernmentandindustrymaketodayintheASEANregionwillcreateamoreprosperousfuturethatcanpromoteregionalsustainableeconomicgrowth,improvelivelihoods,andfostersocialcohesionandstability.Thiscanonlybeachievedbypromotingthetenetsofenergysecurityalignedwithrenewables,energyefficiencyandfosteringgreaterregionaleconomicintegration,includingthesustainedgrowthofsecureandresilientgreenenergymarkets.TOWARDSAREGIONALENERGYTRANSITION1115INVESTMENTS,COSTSANDBENEFITS112RENEWABLEENERGYOUTLOOKFORASEAN5.INVESTMENTS,COSTSANDBENEFITSINVESTMENTNEEDSAsubstantialincreaseininvestmentsisrequiredtoacceleratetheenergytransitioninASEAN.Policysupportforenergysectorsandco-operationamongtheASEANcountriesarecrucialtoenablethereallocationofcapitaltowardssustainablesolutionsandtoensureactiveparticipationfromawiderangeofinvestors.Intheshortertermupto2030,somecrucialenergytransitiontechnologieswillseesignificantinvestment.SolarPVisagoodexample,asitwillbekeytotheregion’sshort-termenergytransition.Theadditional240GWofinstalledcapacitywillneedinvestmentofaroundUSD150billion.InvestmentrelatedtothedevelopmentofEVswillalsoplayanimportantroleintheoverallenergytransitioneffortintheregion.Electricchargersarecrucial,withtheinstallationofnearly4millionunitsnecessaryby2030,requiringnearlyUSD50billion.Investmentsinenablinginfrastructurewillalsobecrucial,asplanningprocessandconstructiontaketime.AroundUSD105billionneedstobeinvestedininternationalanddomestictransmission,withanotherUSD69billionneededinlocaldistribution.InvestmentinthepowersectorandEVinfrastructureinthisdecadeiskeytotheenergytransition.Table17ASEANshort-termenergytransitioninvestmentneeds,1.5-S,2018-2030PARAMETERTOTALINVESTMENT(BILLIONUSD)SHORT-TERMINVESTMENTREQUIREMENT1.5-S(2018-2030)POWERSolarPVInstalledcapacity(GW)241156Otherrenewableenergy(non-hydro)Installedcapacity(GW)5690HydroInstalledcapacity(GW)7356GRIDANDFLEXIBILITYTransmission(international)km(thousand)3513Transmission(national)km(thousand)24792Distributionkm(thousand)273969StorageGW158Biofuelsupplymillionlitres5747566ELECTRI-FICATIONEVchargersmillionunits3.747EVcarsalesmillionunits13349TOWARDSAREGIONALENERGYTRANSITION113Inthelongterm,anaverageannualinvestmentofUSD210billionwouldbeneededupto2050intheregiontoachievethe1.5-S.ThisismorethantwoandahalftimestherequiredinvestmentinthePESduringthesametimehorizon.Iftheregionpushesfurtherfor1.5-SRE100,anaverageinvestmentovertheperiodwouldneedtototalUSD230billionperyear.Manytechnologiesinthe1.5-Shavehigherupfrontinvestmentsbutarecriticalmainlytoenabletheaccelerateddeploymentofkeyrenewableenergytechnologiesinthepowersectorortoscaleuptheelectrificationoftransport,buildingsandindustriesaswellasgreenhydrogenprojects.Thetotalrequiredinvestmentinthe1.5-Scaseoutto2050issizable,equaltooverdoublethetotalregion’sGDPin2018andabout60%of2050values.However,itisspreadoutovermultipledecades,andonanannualbasisitisonlyaround2-7%ofASEAN’sGDP,dependingontheyear.Onasectorlevel,investmentinthebuildingsectorismostlyrelatedtoenergyefficiencyimprovementmeasures.Thisincludesawiderangeofrenewableandenergyefficiencytechnologies,includinglight-emittingdiode(LED)lamps,moreefficientappliancesandthedevelopmentoflowenergybuildings.Thebuildingsectorwillaccountfor10%oftheregion’stotalenergytransitioninvestmentuntil2050,requiringanannualinvestmentofUSD21billion.Thetransportsectorwillseehigherinvestmentneeds,includingUSD14billionannuallyforEVchargers.TheconstructionofEVcharginginfrastructuretakesupoverhalfoftotaltransportinvestment.Thisinvestmentisfront-loaded.Itneedstogrow60%annuallyintheshort-termheadingintothe2030sandthenwilldeclineto8%annuallyinthelattertwodecadesaswenear2050.Additionally,andinitially,therewillbeanincrementalcostofEVs.TheenergyefficiencyinvestmentinthetransportsectorinASEANwillrequireUSD13billionannuallyuntil2050underthe1.5-S.InvestmentsinbiofuelsupplywillneedtoaverageUSD7-8billionperyearunderthe1.5-Supto2050,whichisroughlydoublewhatwouldbeinvestedunderthePES.TheindustrysectorwillneedtoinvestoverUSD500billionuntil2050underthe1.5-S,overdoublethePESlevelorequaltoUSD9billioninadditionalannualinvestment.Industryinvestmentwillneedtofocusonenergyefficiency,includingbestavailabletechnologies,practicesandprocesses,aswellascirculareconomyandrenewable-basedgenerationtechnologies.Thepowersectorwillrequirethelargestinvestment.Investmentingeneratingcapacity,gridsandstorage,andotherflexibilitymeasuresgenerallymakeuparoundtwo-thirdsofenergysysteminvestmentinthetransitionscenarios.InthePES,totalinvestmentswillreachnearlyUSD1780billion2050,withthemajorityoftheseinvestmentsbeinginsolarPV,coal(includingbothabatedandunabated)andhydro.IntheTES,1.5-Sand1.5-SRE100,however,investmentisconsiderablyhigheratnearlyUSD2900billion,USD4050billionandUSD5120billion,respectively.Generally,capacityinvestmentsmakeuparoundtwo-thirdsofpowersectorinvestment,withtheremainingone-thirdgoingintogrids,infrastructure,storageandotherenablingtechnologies.114RENEWABLEENERGYOUTLOOKFORASEANHigherup-frontinvestmentisneededinthe1.5-Scase.Table18TotalASEANenergytransitionrequirementbysectorandscenario2018-2030(USDBILLION)2018-2050(USDBILLION)PESTES1.5-SPESTES1.5-SRE901.5-SRE100INVESTMENTREQUIREMENT(BILLIONUSD)POWERRenewableenergySolarPV719615655583611041245Wind5610056561437391474Hydro565656163313367368Geothermal15242432739699Biomass10101018504467Nuclear90000CCSNaturalGasCCS0202201091040CoalCCS13230700BiomassCCS00231341FossilfuelNaturalGas393939103395939Coal1189090118909090GRIDANDFLEXIBILITYTransmission(national)668392266367461461Transmission(intl.)627296228246285Distribution506269200275346346Storage3584371161306RENEWABLEENDUSESBiofuelsupply38.366.366.3112197235235ENERGYEFFICIENCYBuildings58.367.777.4343523688688Industry30.646.7115.7208248509509Transport12.918.931.1116298419419ELECTRI-FICATIONEVchargers63147.248278419419TOTALINVESTMENTREQUIREMENT(USDBILLION)6368439892609444563187391Note:Investmenttotalsfor2050intheTESand1.5-SRE90andRE100forcoalandnaturalgasarealreadycommittedinnationalplansanddonotrepresentadditionswithinthosescenarios.Theseconsistofprojectsthathavebeenbuiltsince2018orareinthepipelinethatoccurby2030inthePES.Thevaluesthuscarriedoverascumulativeinvestmentarefrom2018-2050.TOWARDSAREGIONALENERGYTRANSITION115COSTSANDSAVINGSInvestmentprovidesaviewofthescaleofcapitalthatmustbemobilisedforthevariousscenarios,butitdoesnotpaintafullpictureofthetotalcostofthemixoftechnologiesdeployedinascenario.Forthis,acalculationofenergysystemcostisused.Thisgenerallyincludestheinvestmenttotalsforenergygeneratingtechnologies,costofcapitalforinvestment,costsforfueldemand,O&Mand/oradditionalcosts.Additionally,complementaryinfrastructureandsupplytechnologiesarealsoassessed,suchasforgridsandstorage,biofuelsupply,EVcharging,etc.Costsarecalculatedforeachend-usesectorandforthepowersector.Fortheend-usesectorscostvary.Theoverallcostsoffuelandelectricityusedinallend-usesectorsreachesmorethanUSD20trillioninthe1.5-Sfortheperiodto2050,anumberequalto71%oftotalenergysystemcostinthesector.Overall,theenergysystemcostsfromthetransportsectorinthe1.5-Swhenincludingfuel,O&M,vehicledisposalandequivalentannualcostsaccountformorethanone-quarterofthetotalenergysystemcostsofthedemandsectors,orUSD240billioneveryyear.However,becauseofreducedoildemand,the1.5-SisaboutUSD9.6billioncheaperannuallythanthePES.ThetotalenergysystemcostsfortheindustryandbuildingsectorsareexpectedtoreachUSD270billionandUSD190billionperyear,respectively,inthe1.5-S.TheseequalstosavingsofUSD30billionandUSD60billionannuallyoverthePES,alsolargelyduetofuelcostsavingsandenergyefficiency.Thepowersectortotalenergysystemcostvaries,butthetotalcostofthepowersystemincreasescomparedtothePESbecausethesectorisgeneratingmoreelectricity,andinmanycasesthatelectricityistakingtheplaceofthefossilfuelsthatarenolongerusedinend-uses.Thelowest-costcaseforpoweristheTES,whichhasthelowestlevelofgenerationexpansionofthetransitionscenariosandconsiderslessambitionandlowerrenewableenergydeployment,butattheexpenseofhigheremissions.TheTESresultsintotalpowersystemcostsabout40%higherthanthePES.Inthe1.5-Scases,whichhavehighergenerationandhigherrenewables,thecostofRE90isjustlessthandoublethatofthePES,andRE100is2.6-foldhigher.Thetransitionscenariosaremoreexpensivemainlyduetomoreinvestmentbeingneededupfrontforgeneratingcapacityandinvestmentincomplementaryinfrastructure.Whenlookingatthetotalcostforenergyprovisionovertheperiodto2050,inthePESUSD28.3trillionwillbespentacrossASEAN.Ofthetransitionscenarios,theTEShasthelowestcost,atUSD27trillion,butitalsohasthehighestemissions.Ofthe1.5-Scases,RE90isthelowestcostatUSD28.1trillion,aroundUSD0.16trillionlowerthanthePES.The1.5-SRE100hasthehighestcost,atUSD29.4trillion,orUSD1.1trillionhigherthanthePES.Thetotalenergysystemcostforthe1.5-SRE90islowerthanthePES,andtheRE100hasslightlyhighercosts.Figure58ASEANtotalenergysystemcostupto2050,byscenario051015202530PESTES1.5-SRE901.5-SRE100TrillionUSDPower&StorageIndustryBuildingsTransportTransmission&DistributionNote:Energysystemcostsincludetotalinvestmentininfrastructureandenergyefficiency,O&M,annuitiesandfuelcosts.Thetotalenergysystem’scostexcludesthepurchaseofvehiclesacrossallscenarios,includingEVs.Ifincluded,the1.5-SwouldcostanadditionalUSD9.9trillioncomparedtoUSD9.1trillioninthePES.116RENEWABLEENERGYOUTLOOKFORASEANThecarriertransitionawayfromfossilfuelinthedemandsectorsalsohelpsinreducingtheexternalitycostassociatedwithhealth,airpollutionandclimatechange.Abroadviewofthebalancebetweenthecostsandbenefitsoftheenergytransitioncanbeobtainedbyusingestimatesofexternalitiesrelatedtopollutionandclimatechangeandcomparingthemwithtransitioncosts,includinginvestments,O&Mexpendituresandsubsidies.Thereducedexternalitiesassociatedwiththe1.5-SyieldanavoidedcostofbetweenUSD16billiontoUSD49billionannually,orincumulativetermsto2050rangingfromaroundUSD508billiontoUSD1580billion.The1.5-SRE90islessexpensivethanthePES.The1.5-SRE100isslightlymoreexpensivethanthePESinenergycostterms(aroundUSD1100billioncumulativelyto2050).However,whenconsideringavoidedexternalities,suchasthehighestimateofUSD1580billionavoided,thenetcostof1.5-SRE100couldbeconsiderednegativeandresultinwideroverallcostsavings.Transitioningtowards1.5-SRE90isconsideredthemosteconomicalandclimate-friendlypathwayfortheASEANregiontopursue.Figure59Totalenergytransitioncostsavingsandreducedexternalities,1.5-SvsPES,cumulativeto2050IncrementalenergysystemcostsavingsReducedexternalities-climatechangeReducedexternalities-outdoorairpollutionReducedexternalities-indoorairpollutionCumulativeenergysystemcostsavings1.5-SRE90vsPESCumulativeenergysystemcostsavings1.5-SRE100vsPESSavingsfromreducedexternalities(low)Savingsfromreducedexternalities(high)160Cost(savings)979208393Upto10xaddedsavingsUpto1.4xsavings-1500-1000-500050010001500200029974135Over3xaddedsavings45%avoidedtotalenergycostCost-1131(1.5-SRE90)(1.5-SRE100)(1.5-SRE90)(1.5-SRE100)TOWARDSAREGIONALENERGYTRANSITION1176ACTIONSNEEDEDNOW:END-USESECTORFOCUS118RENEWABLEENERGYOUTLOOKFORASEAN6.ACTIONSNEEDEDNOW:END‑USESECTORFOCUSInthissection,keytransitionmetricsforthemainenergytransitionscenario,the1.5-S,arepresentedforthethreeend-usesectorsofbuildings,transportandindustry.Thisisaccompaniedbyasetofproposedmeasuresthatcouldbeconsideredtohelpachievethetransitionoutlinedinthe1.5-S.Thesemeasuresserveasanoverviewofthedifferentactionsthatneedtobetakenassoonaspossibletofosterthedecarbonisationoftheenergysectorandenablethesustainableenergytransition.Table19Buildings:Indicatorsofprogress–statusin2018andviewto2030and2050201820302050KEYACTIONSTOACHIEVETHE1.5-SPES1.5-SPES1.5-SBUILDINGSECTORFinalenergyconsumption(PJ)40935080425699837318•Developandreviseenergyefficiencyrequirementsforairconditionersandrefrigerators.•Mandatetheuseofthemostefficientappliancesinthecommercialsector.•MandatethesubstitutionofLEDlightbulbsforincandescent,halogenandfluorescentbulbs.•Increaseefficiencystandardsinbuildingcodesfornewconstructionandretrofitting.•Implementbuildingcertifications(e.g.LeadershipinEnergyandEnvironmentalDesign[LEED]).•Deploydistrictcoolingsystemsthatrunrenewableenergy.Electricitysharesinbuildings(%)46%62%67%78%85%•IntroduceelectricstovesassubstitutesfortraditionalfuelwoodorLPGcookingstoves.•IntroduceelectricwaterheatersassubstitutesforLPGorfuelwoodboilersforwaterheating.Cleancooking(%)64%77%89%84%92%•Developincentivesforthepromotionofcleancookingtechnologies.•Revisecurrentsubsidiestofossilfuelsforcookingenergycarriers.Solarwaterheaters(units)42500314555106654124192268663335•Developincentiveprogrammesandbuildingstandardstopromotelow-carbonsolarwaterheatingtechnologiestosupplyheatedwaterintheresidentialandcommercialsectors.TOWARDSAREGIONALENERGYTRANSITION119Table20Transport:Indicatorsofprogress–statusin2018andviewto2030and2050201820302050KEYACTIONSTOACHIEVETHE1.5-SPES1.5-SPES1.5-STRANSPORTSECTORTotalenergyconsumption(PJ)6444893383621558311353•Improvetheefficiencyofinternalcombustionvehicles,e.g.throughfuelefficiencystandards.•Reducetransportvolumeandcongestionbymodalshiftthroughintegratedtransportplanning.Shareofelectricityconsumption(%)-2%7%5%30%•IntroduceEVstothefleet,particularly:motorcycles,cars,sportutilityvehicles(SUVs),minibuses,buses,andlight-andheavy-dutytrucks.•Increaseeffortstofinanceinvestmentinelectromobility(e.g.currentinitiativesbybanksandgovernmentsprovidingclientswithspecialbankloansconditionsforEVacquisition).•Deploysmartchargingsolutionsanddesigntariffframeworkwithlocalandregionalfunctionalities.•EnablebusinessmodelsandaccommodatingregulationforEVcharging.•AcceleratetheshifttoelectromobilitybygivingEVspriorityincityaccessandvariousincentivesBiofuelshareintransportfuels(%)4.8%10.9%15.2%10.4%24.7%•Mandatehigherlevelsofbiofuelblending,particularlybioethanol,biodieselandbiojetingasoline,dieselandjetfuel,respectively.•Requireincreasesinbiofueltobesustainabilitysourcedandlinksustainabilitycriteriatomandates.120RENEWABLEENERGYOUTLOOKFORASEANTable21Industry:Indicatorsofprogress–statusin2018andviewto2030and2050201820302050KEYACTIONSTOACHIEVETHE1.5-SPES1.5-SPES1.5-SINDUSTRYSECTORTotalenergyconsumption(PJ)642011237104641986416972•Reduceenergyintensitythroughimprovementofinfrastructuredesignandmaterialsforenergyrecovery,betterpracticesinO&M,improvementofproductionprocesses,etc.•Increaseefficiencybyadoptingindustrybestpracticesandimplementingmeasurable,reportable,verifiable(MRV)systemstotracktheperformanceofenergyefficiencymeasures.Electricityshare(%)29%27%37%26%52%•Electrifyindustrialprocessheatingapplications.Renewableenergydirectuse(PJ)(biomass+solarthermal)10112031199940462978•Maximisetherecoveryanduseofbiogasandresidues.•Usebiomassforhigh-temperaturethermalprocesses(i.e.cementproduction).•Acceleratelow-carbontechnologydeploymentforindustrialprocessheating,particularlyofsolarwaterheatingandgeothermalsolutions.•Providefinancialhelptofinancetheupfrontcostsofthesetechnologies.Hydrogen(PJ)-6832393•Mandatethathydrogenproductioncomefromlow-andzero-carbonsources.•Supportpilot-scaleand,later,commercialisation-scalegreenhydrogenproductionandrelatedderivatives.Hydrogeninnon-energyuse(PJ)974703TOWARDSAREGIONALENERGYTRANSITION121REFERENCESREPORTREFERENCESACE(2020a),The6thASEANEnergyOutlook,ASEANCentreofEnergy,https://aseanenergy.org/the-6th-asean-energy-outlook/ACE(2020b),"(2021-2025)ASEANPlanofActionforEnergyCooperation(APAEC)2016-2025PhaseII",AseanCentreforEnergy.ACE(2022a),ASEANEnergyin2022:OutlookReport,ASEANCentreforEnergy.ACE(2022b),ChallengesandImplicationsofCoalPhase-downtotheASEANEnergyLandscape,ASEANCentreforEnergy.ADB(2015),"WestKalimantanPowerGridStrengtheningProject:GuidelinesfortheEconomicAnalysisofProjects",AsianDevelopmentBank.AGEP(2021),"Countryprofiles2021",ASEAN-GermanEnergyProgramme,https://agep.aseanenergy.org/country-profiles-2021/Amante,C.,andEakins,B.W.(2009),"ETOPO1arc-minuteglobalreliefmodel:procedures,datasourcesandanalysis".Amatulli,G.,etal.(2018),"Asuiteofglobal,cross-scaletopographicvariablesforenvironmentalandbiodiversitymodeling",Scientificdata,vol.5/1,pp.1–15.,NaturePublishingGroup.ASEAN&UNCTAD(2021),ASEANInvestmentReport2020-2021,ASEANSecretariat,UnitedNationsConferenceonTradeandDevelopment.BloombergNEF(2022),EnergyTransitionInvestmentTrends2022,BloombergNewEnergyFinance.Climateactiontracker(2021),Netzerotargets:Indonesia.CSIS(2022),Indonesia’sBatteryIndustrialStrategy,CentreforStrategies&InternationalStudies,https://www.csis.org/analysis/indonesias-battery-industrial-strategyDERA(2022),Securingrawmaterialsupply:Benchmarkingofmeasuresofforeignmanufacturingcompaniesandrecommendationsforaction,GermanMineralResourcesAgency(DERA).DGEetal.(2021),"TechnologyDatafortheIndonesianPowerSector",DirectorateGeneralElectricity,DanishEnergyAgency,EmbassyofDenmarkinJakarta,EaEnergyAnalyses.Diewvilai,R.,Audomvongseree,K.(2022).“PossiblePathwaystowardCarbonNeutralityinThailand’sElectricitySectorby2050throughtheintroductionofH2blandinginnaturalgasandsolarPVwithBESS”.Energies,Vol.15,no.3979.122RENEWABLEENERGYOUTLOOKFORASEANECJRC(2017),Costdevelopmentoflowcarbonenergytechnologies,JointResearchCentre(JRC),EuropeanCommission,pp.77.Electrive(2022),"TeslatobuybillionsworthofnickelinIndonesia",https://www.electrive.com/2022/08/10/tesla-to-buy-billions-worth-of-nickel-in-indonesia/Friedl,M.A.,etal.(2010),"MODISCollection5globallandcover:Algorithmrefinementsandcharacterizationofnewdatasets",RemotesensingofEnvironment,vol.114/1,pp.168–82,Elsevier.Fritsche,U.,etal.(2020),Futuretransitionsforthebioeconomytowardssustainabledevelopmentandaclimate-neutraleconomy-Knowledgesynthesis:Finalreport,PublicationsOfficeoftheEU.Gao,J.(2017),"Downscalingglobalspatialpopulationprojectionsfrom1/8-degreeto1-kmgridcells",NationalCenterforAtmosphericResearch,Boulder,CO,USA,vol.1105.GBEP(2020),Globalbioenergypartnershipsustainabilityindicatorsforbioenergy:Implementationguide,GlobalBioenergyPartnership.GCEEP(2020),ElectricityAccess2020Report,TheGlobalCommissiontoEndEnergyPoverty.GMS(2022),"GreaterMekongSubregionProgram:Energy",https://greatermekong.org/energyHandayani,K.,etal.(2022),"MovingbeyondtheNDCs:ASEANpathwaystoanet-zeroemissionspowersectorin2050",AppliedEnergy,vol.311,pp.118580,https://doi.org/10.1016/j.apenergy.2022.118580Huber,I.(2021),"Indonesia’sNickelIndustri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