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Multistakeholder Dialogue for Formulating Green Recovery and Vehicle Grid Integration in ASEAN

25 March 2022

ASEAN Centre for Energy (ACE) and Energy Foundation China (EFC) have convened a closed Multistakeholder Dialogue Workshop to present the findings of two joint studies to the ASEAN Member States (AMS)’ policymakers and related parties in the region. Opened by Dr. Dong Yue as the representative of EFC and Dr. Nuki Agya Utama as Executive Director of ACE, the workshop was conducted in a hybrid meeting, attended physically by the Indonesian delegates and virtually by other AMS’ representatives. The event was held on 24 March 2022 and was divided into two sessions.

During the first session, Ms. Silvira Ayu Rosalia, Data Visualisation Officer of the Modelling and Policy Planning Department at ACE introduced the first study funded by EFC regarding “The COVID-19 Impact on Energy Sector Development”. She mentioned that this study aims to assist AMS in the regional collaborative effort to enhance energy resilience during the COVID-19 recovery period, analyse the overall impact of COVID-19 in the region’s energy sector and potential pathways of economic recovery and energy transition agenda by providing policy recommendations. This study has produced one academic paper titled “COVID-19 and the Energy Sector Development in ASEAN Countries: Assessing the Role of Fiscal Measures for Green Recovery Trajectory” that has been published in the IOP Conference Series: Earth and Environmental Science, as well as two opinion articles published by Eco-Business and The Jakarta Post. The study will also publish several other deliverables in due course, including one technical report, one policy brief, and another academic paper.

The findings of the study were presented by Mr. Imaduddin Abdullah from the Institute for Development of Economics and Finance. He elaborated that the Covid-19 pandemic had triggered mobility restrictions, which lowered economic activities and resulted in the reduction of energy demand vis-à-vis energy production. Although the AMS’ authorities have introduced some policy measures that may have indirect implications for the energy sector in the region, the number is still limited. The model simulations performed in the study then showed that a green fiscal stimulus could lead to a double dividend: (1) smooth the negative impact of the pandemic on the economy (GDP and household income) and the energy sector, and (2) reduce carbon emission.

He also explained in the second presentation entitled “ The State of Green Recovery in the Energy Sector: Case Studies of Indonesia and Vietnam” that this health crisis had impacted both countries, although Vietnam recorded economic growth in 2020. The pandemic had also negatively impacted the production and investment in Indonesia’s energy sector. Several policy recommendations were provided to increase the financial resources of AMS, including utilising green fiscal consolidation, leveraging private participation, and mobilising global and regional funding.

The first session also offered knowledge-sharing about similar research undertaken by Dr. Han Xue from the Development Research Center of China’s State Council. In her presentation entitled “The State of Green Recovery in the Energy Sector in China: RE Policy and Market”, Dr. Han concluded that Renewable Energy (RE) has played a vital role in China’s energy transition, having developed a cumulative capacity of 328.5 GW wind power and 306 GW solar power by 2021 due to several market and policy instruments, such as green certificate and green electricity trade.

Meanwhile, in the second session, Ms. Rika Safrina, Modelling and Policy Planning Officer at ACE introduced the second ACE-EFC joint study on Smart Microgrid Planning for Variable Renewable Energy (vRE) and Electric Vehicle (EV) Integration. She mentioned that this study aims to assist ASEAN in formulating a theoretical smart microgrid focusing on EV deployment and vRE integration by creating a guideline to kickstart a smart microgrid project and to improve AMS’ understanding of the possibility of EV and vRE integration. It is part of the support to implement the ASEAN Plan of Action on Energy Cooperation 2016-2025 Phase II: 2021-2025 Programme Area No.5: RE, Action Plan 2.1: Conduct in-depth analysis to increase RE deployment.

This study has resulted in two academic papers entitled “Electric Vehicle Adoption in ASEAN; Prospect and Challenges” published by Chemical Engineering Transactions, and “Integration of Variable Renewable Energy, Electric Vehicle, and Smart Microgrid in ASEAN: A Focus Group Discussion Approach” published by IOP Conference Series: Earth and Environmental Science. This research will also result in one technical report, one policy brief, and two opinion articles in due course.

The findings of the study were presented by Dr. Zarina Muis, Dr. Ho Wai Shin, and Prof. Ir. Haslenda Hashim from Universiti Teknologi Malaysia. Based on the online public survey conducted from August to November 2021 through sampling respondents, the main factors to be considered by prospective users in Southeast Asia before purchasing an EV include purchasing cost, maintenance cost, charging time, and charging infrastructure. Moreover, most of the respondents said that they would buy EVs in the next 5-10 years.

Dr. Ho in his presentation entitled “vRE-Smart Microgrid-EV Modeling – Case Studies in AMS” further concluded that vRE, such as solar and wind, can substantially penetrate the current grid share. The modeling result suggested that the requirement of battery energy storage (BES) starts at 40% vRE-Microgrid penetration. In addition, in order to power up islanded vRE microgrid, 30% of the electricity demand needs to be supplied by BES.

Next, Prof. Haslenda concluded that: (1) vRE can be cost-effectively adopted in ASEAN at significant penetration rates, thus reducing the requirement of the grid, (2) higher shares of vRE penetration will enhance the requirement of BES, but making the electricity cost expensive due to the high price of the current battery system, and (3) other types of RE, such as biomass, hydropower, geothermal, municipal solid waste, and tidal energy can be also mobilised to minimise the intermittency problem of vRE. She also introduced the concept of Vehicle-to-Grid with potential financial frameworks. For example, EV users can purchase electrical energy at a lower price from the grid at the time of off-peak demand, and they can sell it at a higher price during on-peak.

During the second session, there was also a presentation from a Chinese expert related to a study on Vehicle Grid Integration (VGI) Roadmap in China, undertaken by Dr. Li Lili from Sichuan Energy Internet Research Institute at Tsinghua University. By considering the carbon peaking and neutrality goals, several countries and regions developed synchronous VGI policies that have a balance and synergy between the national target for zero-emission transport and zero-emission power system. Dr. Li also pointed out the key barriers in VGI, including battery life and warranties, grid interconnection, and retail wholesale market reform. However, he believed those challenges will be resolved in 5 years time.

The ongoing and future collaborative efforts between ACE and EFC could assist ASEAN in accelerating the energy transition agenda and enhancing energy resilience.