Have Policies Issued in Q1 2019 Effected Clean Energy Transition in ASEAN?

Analysing the collected news in first quarter of 2019, we learned that energy policies development in ASEAN has been focused on boosting renewable energy (RE) deployment and energy efficiency and conservation (EE&C) measures.  ASEAN governments updated their financing regulations, among others in the transportation sector to deploy electric vehicles utilisation. The ASEAN Member States (AMS) also embarked on an energy deregulation journey to increase sustainability. The energy sector is forced to become more efficient and greener to generate power in a socially, economically, and environmentally sustainable manner using market-based price.

In this energy insight, we would like to provide you with an analysis of ASEAN’s energy policies during the first quarter (Q1) of 2019. The analysis is based on information collected from the weekly news clippings, with a focus on progress in policies related to financing schemes in ASEAN.

AMS issued new incentive regulations for scaling up RE

Vietnam Ministry of Industry and Trade (MOIT) issued a policy draft to extend the solar feed-in-tariff (FIT) eligibility until 30 June 2021, and abandon net-metering method for rooftop solar projects. It is issued based on Decision No. 02/2019/QD-TTg, which amends some points in Decision No. 11/2017/QD-TTg. The government has proposed lower FIT rates for regions with better solar resources and higher rates for poorer irradiance regions. These differentiated rates aim to spread out solar development more evenly across the country.

Inversely proportional with Vietnam, Malaysia is introducing new policies like the net energy metering (NEM) programme instead, the government hopes such policy can catalyse and scale up the RE growth in the country, as stated by Yeo Bee Yin, the Minister of Energy, Science, Technology, Environment, and Climate Change (MESTECC). The NEM programme is a solar photovoltaic (PV) initiative by MESTECC to encourage Malaysia’s RE uptake. The strategies include a peer-to-peer energy trading where the solar prosumers can sell their excess electricity to consumers, enabling those who have rooftop constraints to enjoy the NEM scheme.

Indonesia has also put efforts in accommodating public participation to deploy RE by issuing the Regulation No. 49/2018 on utilisation of rooftop solar panel. However, the regulation seems not to currently attract consumers. According to the Indonesia Rooftop Photovoltaic Users Association, the regulation has forced consumers to pay more, instead of benefiting from lower electricity bills. Under the regulation, the State Electricity Company (Perusahaan Listrik Negara/PLN) only pays for 65 per cent of the electricity produced by a solar panel. For example, if one panel produces 100 kilowatt hours (kWh), PLN only pays for 65 kWh. This has caused consumer’s electricity bills to soar by up to 100 per cent.

RE in transport is on the rise thanks to new regulations

According to the statistics in the newest ASEAN publication, ASEAN Fuel Economy Roadmap for Transport Sector 2018-2025: with Focus on Light-Duty Vehicles, car ownership in Brunei Darussalam is saturated and the sultanate stands to benefit from fuel economy policies over time.  Through that fuel economy policies, it is revealed that Brunei Darussalam saved more than BND 1.4 million (USD 1.04 million) in subsidies and reduced carbon dioxide emissions by 4,361 metric tonnes after the introduction of hybrid vehicles. With its new regulations, Brunei Darussalam plans to establish a pilot project to increase the availability of electric vehicles up to 100 percent by 2023.

Similar to Brunei Darussalam, the Government of Indonesia (GoI) also set a new regulation to deploy electric vehicles after a long discussion on a roadmap for the electric vehicles industry. The discussions involved the Ministry of Finance and the Ministry of Industry, with the objective to achieve 20% share of all domestic manufacturers of electric vehicles. At this time, several companies have expressed their readiness to manufacture and market electric vehicles although the GoI has not yet finalised the regulation.

Indonesia also planned to improve its energy efficiency in transportation sector by increasing the biofuel usage or consumption as well as cutting the imports.  Presidential candidate Joko Widodo plans to implement a B100 programme—requiring 100% use of bio content in biofuel–to boost the share of palm oil to 30% in the energy sector. Previously, with the B20 programme, the GoI has required the industry to have 20% mandatory content of bio content in fuel products.

ASEAN is putting initiatives on low-carbon development and EE

The GoI published a report on low carbon development Initiatives that shows how the country could have economic benefits by transitioning to a low-carbon economy which could grow up to 6 per cent of its GDP per year until 2045. This strategy would also cut the country’s greenhouse gas emissions by nearly 43 per cent by 2030, exceeding Indonesia’s international climate target and would require Indonesia to cut coal dependency despite the continuation of building coal power plants.

This is similar to what the Philippines did early this year. Through the Resolution No. 3-2019, the Municipal of San Juan in the Philippines declared itself a coal-free area, which means that electrification in such area would not be fuelled by coal.  Numerous anti-coal activists welcome this gesture and assist in the advocacy to combat coal-fired plants. This resolution was made against the planned construction of the 670-MW coal plant in Luna town which was heavily opposed by the residents.

On the other hand, after the EE&C act has been ratified by the Philippine government, members of Philippine Energy Efficiency Alliance, Inc (PE2) start to plan their human and capital resources based on the potential of the proposed energy efficiency law to ‘catalyse’ investments in both the private and public sectors. PE2 will step up its partnerships with relevant government agencies as they formulate standards, guidelines and regulations in support of the law. (MRK)

If you wish to follow ASEAN’s journey in the energy sector, please subscribe through this link  so we can extend our energy insights & weekly news clippings to you!