As ASEAN continues to shift away from fossil fuels towards renewable energy, the region will inevitably face new challenges. Although the necessity of diverting to renewables is highlighted everywhere, the transition is not as simple as switching the power source.  

Becoming carbon neutral does not come magically and requires a lot of money to move away from where the world is today. For ASEAN member states, an estimated USD 213 billion needs to be invested between 2021 and 2030 in the power sector alone under its most ambitious scenario to reduce emissions. Balancing out increasing clean energy demand and maintaining economic growth is especially important for the emerging markets of ASEAN, which are becoming more industrial economies from agrarian ones. With limited public fiscal, ASEAN countries need innovative financing and international support, proven by the conditional targets set in seven Member States’ Nationally Determined Contributions, which reflect their additional actions to accelerate climate change mitigation subject to international aid.   

The focus on spending needed should be directed not only towards the actual expense of deploying low-carbon technologies but also the unexpected costs of implementation from poorly designed systems, as well as human and environmental costs of transitioning away from fossil fuels. There are always two sides of a coin, and in this case, the costs to becoming net zero emissions. Addressing these costs should be done to ensure that global warming is stemmed in a just manner and the world has a positive outlook for the future. 

With the large number of resources and funds being diverted towards renewable energy innovations, ensuring those resources are allocated properly is a must. Avoiding inefficiencies and unexpected costs should be examined in every process of energy transition. One of the main factors of unforeseen costs is poorly designed systems, which can come from a large variety of sources, such as poor geological conditions or inefficient power grid designs.  

Many examples throughout sustainable energy implementation exist to show some past mistakes that should not be repeated in the future. For instance, in Canada, poor systems planning ends up causing the project to be over budget and fail. The USD 12 million solar project was built in an area with significantly fewer solar hours than other more suitable locations. In another case, after spending massive investments to increase the renewables share in its installed capacity in the last two decades, Germany’s capacity rose 2-fold between 2002 and 2022, but its total power generation declined due to lower capacity utilisation of wind and solar. Unexpected events could reveal additional flaws in energy systems, as Germany’s overreliance on Russian gas caused the supply shortage, forcing the government to recommission or extend the life service of several coal power plants, especially during the winter period.  

Another example from South Africa shows the overreliance on renewable energy investment without proper balance for other energy sources, resulting in only half of the 2,583 MW solar and wind power capacity expected to work. Late failure detection can also harm the local population, as is the case in the rockslide incident at Vajont Dam in Italy, which caused 2,056 fatalities. These lessons show that appropriate feasibility studies and exhaustive assessment of geotechnical risks are necessary and should be learned for the transition in ASEAN. 

The human element of the transition should also not be forgotten. Attention needs to be paid to the workers in the fossil fuels industries, such as oil workers, coal miners, and gasoline-car factory workers, whose livelihoods depend on these jobs. It is estimated that 2.7 million jobs related to fossil fuel industries globally will be lost. This does not mean that green energy should be abandoned, rather, a fair transition should be ensured for all.  

Providing adequate education and financial incentives for fossil fuel workers to shift their skills is an imperative step to protecting a seamless and equitable transition for all.  

Even with the job loss from the reduction of fossil fuel industries, employment will be gained through the emerging low-carbon market and its associated supporting industries as well, such as energy efficiency and renewables production. In some estimates, around 5.5 million jobs will be created in ASEAN by 2050 for the renewable energy sector only. Making sure of a just transition would also remove resistance from opponents of fossil fuels and could increase the acceptance and, thus, the speed of becoming net zero emissions.  

Another cost to consider is the waste produced by renewable energy technology and its supporting infrastructure. The waste from renewables globally is expected to increase by 3,000% for solar, 200% for wind and 600% for energy storage by 2030 from 2020. The waste would accumulate from the replacement of end-of-life systems. It was reported that Vietnam would potentially generate 3.1-3.5 million tonnes of solar PV waste and 1.5-5.1 million tonnes of wind turbine waste by 2050.  

Over 90% of renewable energy waste is recyclable and contains high-value minerals. However, the current issue with renewable energy waste is the lack of recycling infrastructure, making it economically unfeasible. Through investment, these challenges can be overcome, and a circular system of clean energy components can be created. Renewable energy recycling will be a large market, with solar alone estimated to be worth 2.7 billion USD by 2030. With the large investment towards sustainable energy systems, investing in infrastructure to minimise waste in green energy is also mandatory. In addition, forcing environmental policy and regulation on the renewable energy industries, such as Extended Producer Responsibility (EPR), can drive products’ life cycle management. Singapore is the first ASEAN country to introduce EPR for e-waste, including batteries. 

Despite all the challenges facing net zero, the return on investment (ROI) will be beneficial, both in terms of economic and environmental factors. By the end of 2050, it is expected that the ROI from the USD 131 trillion global investment in energy transition will be about USD 61 trillion. It is critical to safeguard the future systems in ASEAN in a good place. Resources that are not properly used could be utilised for other projects. Investment in energy transition should be scrutinised as more and more resources are pooled into development, warranting they will reach where they are most needed.  

The speed of transformation is paramount to limit the adverse effects of global warming. Still, it is also essential to ensure that it is as efficient as possible regarding economic costs. In addition to a monetary cost, there will be a social cost during the transition. Assuring that the environmental and human costs are not forgotten is vital to secure equity towards becoming net zero. It is crucial to keep this integrated life cycle mindset to make the transition to cleaner energy in ASEAN faster and fairer for all.