Energy transition has gained rising attention globally, driven by countries’ commitment to sustainability while ensuring energy security and meeting the rising energy demand. This imperative extends to ASEAN, where the term “energy transition” appeared 15 times in the 2023 ASEAN Ministers on Energy Meeting statements, compared to being invisible in 2017. A recent ACI study examines ASEAN’s energy structure amid increasing policy attention to energy transition at both regional and national levels. It finds that policy efforts have not significantly altered the energy structure, with fossil fuels still dominant and the share of renewable energy stagnant. Moreover, national policies in ASEAN member states are misaligned with regional plans, necessitating more coordinated regional efforts.

At the regional level, the ASEAN Plan of Action for Energy Cooperation (APAEC) 2016-2025 serves as a blueprint for regional energy cooperation. It sets specific goals for energy transition, notably renewable energy growth and reducing energy intensity. It also has seven prioritized programs, focusing on promoting multilateral power and gas trade in the region, expanding the adoption of renewable energy and enhancing energy efficiency. The programs come with outcome-based strategies and relevant action plans to achieve the goals under individual program. To achieve these regional goals and implement the strategies, national and sub-nation levels of efforts by AMS are at the core. However, most AMS have less ambitious goals for renewable energy expansion and reducing energy intensity than the APAEC. For instance, Table 1 compares the policy goals for renewable energy expansion at the ASEAN and member states’ levels. It shows that six out of ten AMS have goals for renewable energy expansion that fall short of the APAEC’s targets. Indonesia is the only AMS having an equal level of commitment to the ASEAN. Yet, the Indonesian government plans to update its National Energy Policy in 2024. The policy draft under discussion in the House of Representatives shows that Indonesia will downgrade the goal to include 23% of renewable energy in the total primary energy supply (TPES) by 2025 to 17% – 19%. If this is launched, it means that not a single AMS has an equal level of commitment to renewable energy adoption as the regional goal.

Additionally, the seven prioritized programs in the APAEC rarely received attention in the national energy transition policies of AMS. Only Malaysia and the Philippines mentioned two of the seven prioritised programmes (ASEAN Power Grid, APG and Trans-ASEAN Gas Pipeline, TAGP) in their national energy transition policy plans, and even then, without specific actions on how to deploy national resources for these programs.

This misalignment between the regional and national levels constrains the achievement of the ASEAN’s regional goals outlined in the APAEC. Fossil fuels continue to maintain their dominance in ASEAN’s energy structure, despite the policy efforts. According to the data from the ASEAN Centre for Energy and the International Renewable Energy Agency (IRENA), fossil fuels accounted for 86% of ASEAN’s total primary energy supply in 2021, up from 83% in 2015. They made up 68% of ASEAN’s total electricity installed capacity in 2023, only five percentage points less than in 2015. Fossil fuels will continue their dominance in ASEAN’s energy structure, as some AMS have recently initiated new fossil fuel projects, and their national policies suggest a reluctance to phase out fossil fuels in five to ten years.

According to the 7th ASEAN Energy Outlook, even if all AMS can hit their national energy goals on time, the share of renewable energy in ASEAN’s TPES will be 17.5%, 5.5 percentage points lower than the goal of 23%. The 23% goal will be met in 2050, much later than expected. For the multilateral energy trade initiatives, APG and TAGP, there is only one multilateral project under APG and none under the TAGP. To better implement the APAEC and meet the regional energy transition goals, AMS need to accelerate collective and coordinated actions, aligning their national goals and policies with the regional ones.

By HUANG, Yijia

Researchers: HUANG, Yijia and TAN, Kway Guan