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Responsive and Cohesive Energy Pathways for ASEAN amidst Covid-19 Recovery

Jakarta, 2 October 2020

ASEAN Centre for Energy (ACE) had a pre-event industry webinar, as a lead up to ASEAN Energy Business Forum (AEBF) 2020 that will be held on 18-20 November 2020, with a topic on “Responsive and Cohesive Energy Pathways for ASEAN amidst Covid-19 Recovery”. The webinar was participated by speakers from a diverse background in the energy sector, including Dr. Nuki Agya Utama, the Executive Director of ACE; Dr. Minh Khoi Le, Lead Analyst of Renewable in Rystad Energy; and Douglas Wharton, Vice President of Origination and Marketing of Asia Cheniere Energy. The session was moderated by Joseph Tomkiewicz, Partner of Tilleke & Gibbins.

The webinar began with Dr. Minh’s presentation on the current state of energy development in the ASEAN Member States (AMS), particularly in Renewable Energy (RE). He stated the transition process toward cleaner energy is still growing in AMS, despite the Covid-19 outbreak. Even though this proved to be a challenge because some AMS have a different priority on how to meet their energy demand, but in reality, many RE projects are continued.

The conversation then turned to Dr. Nuki regarding his optimistic view on RE transition in the region during the pandemic. Due to the Covid-19, the AMS’ energy demand has sloped about 3%, and additional 1.3% gap in the RE sector contributed to almost 5% gap in total for ASEAN to achieve their RE aspirational target, which remains unchanged to 23% share of RE in energy mix by 2025. In his view, although the AMS will not change the targets, ACE will continue to enhance its role to support AMS in taking more progressive actions to fill the gap and helping the economic progress.

In the LNG sector, the worldwide liquid natural gas (LNG) demand has also plummeted by 20% in the second quarter of 2020 as a result of the pandemic. This surely affected the global market and the price of LNG. However, if more countries become confident to swap their energy sources from coal to cleaner energy, such as LNG, the market will rebound and become more competitive as stated by Mr. Douglas.

Seconding the importance of cleaner sources, Dr. Nuki added that alternative energy to replace coal, such as LNG, played an important role in the AMS’ economic recovery. Furthermore, 40% RE penetration would be the priority in the long term as the price would become more competitive.

Near the end of the forum, Mr. Joseph asked Dr. Minh regarding the short-term and long-term view for RE development. Dr. Minh said that there were both negative and positive impacts in RE development amid the pandemic. On the positive side, several RE projects in Vietnam are still running, especially the Tay Ninh solar farm which was the biggest solar farm in ASEAN. The Vietnam government has also built the first major energy grid to connect the RE projects. Also as shown in Myanmar, despite of travel restrictions, the bid on a solar project in the country was successfully participated by many investors.

On the challenging side, the problem looming over the AMS on RE and energy enhancement programmes was the cross border political willingness. While some countries have completed an integrated grid programme, such as the recent project between Lao PDR, Thailand, and Malaysia, but more countries need to be integrated. Investors from the public and private sectors played important role in these actions as it could accelerate the energy integration progress.

(BA/HF/RN)

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