Between 2050 and 2065, the South-East Asia (SEA) area has set ambitious objectives to achieve net-zero emissions. Because most SEA nations depend on fossil fuels to supply their power needs, achieving these goals will undoubtedly necessitate significant work from the region’s power industry. Coal-fired power accounted for more than half of South-East Asia’s electricity supply in 2020, with Indonesia (61%) leading the way, followed by the Philippines (57 percent), Malaysia (51 percent), and Vietnam (50 percent). Although several South-East Asian countries depend less on coal, natural gas is still a major source of energy, with Singapore accounting for 96% and Thailand for 53%.
SEA power, as well as the renewable market report for the very first quarter of the year 2022 (Q1-2022), was just issued by IHS Markit, and it highlighted the newly announced policies in four SEA countries that are relevant to their new renewables target.
The National Grand Energy Strategy (GSEN), suggested by Indonesia’s Energy and Mineral Resources (ESDM) Ministry, aims to achieve net-zero emissions by 2060 or sooner. Renewables are going to account for 100 percent of capacity growth starting in 2030, as per the GSEN, with cumulative built renewable capacity hitting 587 GW by 2060. The state-owned utility PLN’s coal units will be shut down earlier than expected.
Indonesia has increased its objectives to achieve net-zero emissions by the year 2060, but there are still doubts about how well it will be implemented. The GSEN approach does not address fundamental challenges like grid reliability and stability with a 100 percent penetration of intermittent renewables, nor does it address how to overcome financial impediments to renewables development. As a result, until a proven model is provided and explicit policies are implemented to enforce that model, the market is unlikely to convert to 100 percent renewables.
In order to meet its climate commitments, Thailand plans to increase renewable energy’s contribution to the energy mix to 50% by 2050. Thailand’s Ministry of Energy announced intentions to boost renewable energy’s contribution to 50% by 2050, as well as a goal of net-zero greenhouse gas emissions and carbon neutrality by the year 2065 and the year 2050, respectively. Thailand’s power fuel mix will expand to incorporate additional imports from Laos, with the PPA growing from 9GW to 10.5GW, as well as sophisticated clean technologies like floating solar and storage, hybrid hydro, as well as CCS (carbon capture and storage) systems.
Vietnam’s plan focused on providing clean, inexpensive power, with the objective of attaining net-zero emissions by the year 2050. The final Power Development Plan VIII (PDP8) is expected to be submitted to the PM for approval in May, following various revisions to the draft PDP8 (Power Development Plan VIII). In the March 2022 edition of the draft PDP 8, two plans were suggested. The initial plan planned for a cumulative installed capacity of about 146 GW by the year 2030 and 352 GW (containing 7.8 GW of the rooftop solar power) by the year 2045, with the lowest fossil fuel proportion of any of the draft versions at 48.5 percent and 40.2 percent, respectively, by 2030 and 2045.
Given the lack of national grid expansion planning to handle power expansion as well as the significant expenditure required to modernize the transmission network, the second strategy with higher generation capacity, 151 GW by the year 2030 and 427 GW by the year 2045, is unlikely to result.