Actions to Shape Renewable Energy Investment in ASEAN During COVID-19 Pandemic

Jakarta, 6 August 2020

The ASEAN Centre for Energy (ACE), an intergovernmental organisation representing the interest of 10 ASEAN Member States (AMS) on energy cooperation, released a series of analysis on renewable energy investment for ASEAN countries at a Launching Event that is held on 6 August 2020, entitled “RE Outlook and the Challenge on Investment in ASEAN during Covid-19 Pandemic”. Jointly organised with International Renewable Energy Agency (IRENA) and Norwegian Institute for International Affairs (NUPI), around 800 participants from wide range background: policymakers, business developers, etc.are registered to this public event.

Under the ASEAN Plan of Action for Energy Cooperation (APAEC), ASEAN has committed to an aspirational target of 23% Renewable Energy (RE) share in Total Primary Energy Supply (TPES) by 2025. Many ASEAN countries have put various efforts and measures to escalate their national progress on renewable energy. And as it wants to continue its efforts and compete globally for investment in renewable energy, it will need to further develop its investment climate. The competition is heating up in this area, and an increasing number of countries have similar conditions and frameworks for renewable energy investment. Therefore, every improvement may help boost a market’s relative attractiveness.

However, the unexpected and widespread COVID-19 crisis posed serious challenges to ASEAN member states on achieving such target. Many renewable energy projects and programs must be halted, amid the need to respond to the pandemic. However, it is important to note that some progress has been made as well. Feed-in-Tariff (FiT) policy in Vietnam for solar power continued, Malaysia and Myanmar announced bids for solar power projects, some green recovery measures are planned or in place.

“Armed with that positive progress, we are hopeful that the second half of 2020 would be positive for RE development in the region,” said Dr Nuki Agya Utama, the Executive Director of ASEAN Centre for Energy (ACE). “ACE is ready to support the government’s efforts to achieve these goals, starting with the recommendations contained within these policy briefs.”

Immediate measures to improve the situation could be to prioritise grid access for renewable energy; prioritise the dispatch of power projects based on renewable energy sources; create more attractive insurance mechanisms for renewable energy producers in case of curtailments or grid disruptions. To improve the competitiveness of renewables, Indonesia could raise the production tax credits in renewable energy projects. Also, renewable energy electricity generation costs remain high compared to subsidised electricity generation from coal and this would also need to be solved.

Dr Zulfikar Yurnaidi, Senior Officer of ACE highlighted that “As the global financing is become tighten during the Covid-19 pandemic, the country like Indonesia, domestic investors and the domestic banking system could be mobilised to support the renewable energy sector. Currently, local banks are reluctant to finance renewable energy capacity and generation projects”. It is thus important for the government to provide incentives for the local banking industry and domestic investors to finance renewable energy projects, which could become part of the green stimulus as well for a green economic recovery.

This event is organised under the initiative of ASEAN Climate Change and Energy Project (ACCEPT), the first integrated project of ASEAN on energy cooperation, supported by the Government of Norway through the Ministry of Foreign Affairs.

“Norway has been a Sectoral Dialogue Partner of ASEAN for 5 years this August,” said His Excellency Morten Høglund, Ambassador of Norway for ASEAN, “and will continue to support ASEAN to enhance, in particular on the efforts to provide sustainable energy as part of the economic recovery.”

Download here for the press release.

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Ms Nella N

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 ASEAN Centre for Energy (ACE)

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