ASEAN comprises of Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Viet Nam is home to more than 625 million people. With a GDP of almost USD 2.57 trillion, ASEAN is becoming an important economic force in Asia and a driver of global growth. In 2014, ASEAN economy was 3rd largest in Asia and the 7th largest in the world. The economic and population growth bring both great challenges and opportunities to ensure that energy could be distributed and accessed from clean supplies with affordable prices.
Source: ASEAN Secretariat, AEC 2015 Progress and Key Achievements.
ASEAN region is blessed with huge potential for the use of renewable energy (RE) and hence the role of RE becomes more important in a diversified energy mix. Indonesia and Philippines are blessed with its tremendous geothermal potential; Thailand with biomass; Vietnam, Cambodia, Lao PDR and Myanmar with hydropower and most importantly, the sun shines throughout the year in ASEAN region. Some ASEAN Member States (AMS) like Thailand, Philippines, Viet Nam and Indonesia has identified the significant potential of wind power and starting its deployment. However, only a small fraction of renewable energy has been developed. In 2014, the total installed power capacity of renewable energy in ASEAN, including large hydropower, reached only around 51 GW or 26% of total around 197 GW installed power capacity in the region. If the hydropower is excluded, the share of other renewable energy was only 5% in 2014.
According to the 4th ASEAN Energy Outlook (AEO4), during the period 2013 and 2035, the energy demand will grow at an average annual rate of 4.3%, reflecting the assumed 6.1% annual GDP growth and about 1% population growth in Business as Usual (BAU) scenario. The energy demand is projected to increase from 436.8 Mtoe in 2013 to 1,107 Mtoe in 2035. Renewable energy is expected to grow as the region diversifies its energy mix away from fossil fuels by tapping into the huge potential of renewable energy across the region. In 2035, renewable energy installed capacity will reach 149 GW in the BAU scenario.
ASEAN’s commitment to Renewable Energy
The AMS through the ASEAN Plan of Action for Energy Cooperation (APAEC) 2016-2025 realize the potential and has set a target of 23% for RE in the Total Primary Energy Supply by the year 2025. Most of the ASEAN Member States have set their own target in renewable energy, among others Malaysia with a target of 4 GW by 2030; Singapore with 350 MW of Solar PV by 2020; Indonesia with 23% of the total energy mix in 2025; Philippines with 15 GW in 2030.
Many ASEAN countries have introduced comprehensive regulatory frameworks for renewable energy, including financial incentives. Feed-in tariffs for various renewable energy are applied in Malaysia, Indonesia, Thailand, Philippines and Vietnam. Tax exemption, subsidies, revolving fund and many other incentives are offered for renewable energy investment. Nevertheless, despite those efforts, large-scale deployment of RE technologies for electricity generation still faces barriers, both technical and non-technical.
Current Status on RE Policies (as of 2015)
Source: ACE, 2015
The ASEAN still have many home works that still need to be done to further boost the deployment of renewable energy. For example, simplifying the permit procedure for RE projects, providing a sustainable and secure policy implementation, creating the conducive RE financing atmosphere and building capacity for related stakeholders.