Southeast Asia’s Energy Transition: A Call For Support And Realistic Solutions

Amid the global push for energy transitions, Southeast Asian power leaders have voiced the need for support from developed countries, highlighting the region’s unique challenges and continued reliance on coal.

ASEAN Power Leaders Discuss Coal's Role in Energy Transition: From left to right, Vinacomin's Dinh Quang Trung, AboitizPower's Ronaldo Ramos, Taipower's Sam Huang, Aditya Birla's KK Gupta, and panel moderator John Howland during Coaltrans Asia 2024 in Bali, Indonesia. | Photo: AboitizPower

At the recently concluded Coaltrans Asia 2024 in Bali, Indonesia, industry experts underscored the critical role that coal still plays in stabilizing energy grids across the region and called for a balanced and pragmatic approach to decarbonization.

Indonesian Coordinating Minister for Maritime and Investment Affairs, Luhut Binsar Pandjaitan, emphasized the disparity between the developed and developing world in terms of emissions and economic capabilities.

“Developed nations have been the biggest emitters and need to provide real support for the energy transition in the Global South,” he said, stressing that energy transitions are significantly more challenging for developing countries.

Pandjaitan pointed out that while Indonesia and its neighboring countries are committed to decarbonization, baseload sources like coal remain essential to grid stability.

He further cited Germany as an example, noting that coal-fired power plants still play a crucial role in balancing the electricity output of variable renewable energy sources such as wind and solar.

“Each country is different, and solutions from developed nations cannot be fully applicable due to varying fiscal capacities and access to technology,” he added, urging for a more nuanced approach to energy transitions that considers local realities.

The economic outlook for the Association of Southeast Asian Nations (ASEAN) remains robust, with a projected compound annual growth rate of 4.6% from 2020 to 2050.

However, the Asia Pacific Energy Research Centre (APERC) projects that coal consumption in the region will continue to rise under most scenarios.

APERC Senior Researcher Phung Quoc Huy highlighted the significant funding gap for the region's energy transition, estimating a need for $263 billion in investments, with only $74 billion currently committed.

Ronaldo Ramos, AboitizPower Chief Operating Officer for Thermal Operated Assets, echoed these concerns in the context of the Philippines.

The country’s energy plan targets a 50:50 mix of renewable and non-renewable sources by 2040, yet achieving this will require an estimated $550.2 billion investment.

“We need reliable and reasonably-priced baseload power to address the inherent intermittency of renewable energy and the geographical challenges of injecting these intermittent capacities into our present grid,” Ramos explained.

The leaders called for a phased approach to the energy transition, stressing the need for substantial investments in grid infrastructure and clean technologies, as well as international support to bridge the funding gap.

Their message was clear: while the transition to cleaner energy is essential, it must be grounded in current realities to ensure that it is both sustainable and equitable for all.