ASEAN faces mainly economic and institutional barriers and challenges in achieving energy transition and net zero goals, such as the high cost of renewable energy, lack of sustainable business models and financial incentives to attract renewable energy and energy efficiency investments, market distortions and inefficiencies due to fossil fuel subsidies and non-monetised carbon externalities.
Technical and technological assistance are greatly needed to strengthen grid connections and the capacity of transmission lines. They are also required for the development of energy efficiency and demand-side technologies and approaches, local supply chains for renewable energy and for more energy efficiency projects.
International collaboration, combined with financial and technical assistance, is critical in addressing both the challenges and opportunities to support the low carbon energy transition and net zero goals. It can help bridge gaps and strengthen capacities, both financial and human capital, and assist the ASEAN Member States (AMS) in achieving their energy and climate objectives.
Regional cooperation can help establish regional standards across ASEAN, as well as best practices. It can also help introduce greater transparency, thereby increasing resource allocation efficiency, and system and economic efficiency.