Summary:

Access to clean and affordable energy is critical for ASEAN to fulfill its commitments to sustainability and economic development. Energy transition is a way to bridge both objectives, given the region’s heavy reliance on fossil fuels. ACI’s webinar, “Navigating ASEAN’s Energy Transition: Disentangling Policies, Technologies, and Supply Chains,” held on 15 November 2024, examined ASEAN’s energy transition efforts through three perspectives: policy, supply chains, and technology.

The webinar began by examining the alignment between ASEAN’s regional-level energy transition policies and the national policies of individual member states, shedding light on progress toward meeting regional energy transition targets. Complementing the policy discussion, an empirical study analyzed ASEAN’s strategic positioning in the complex global clean-tech supply chains, focusing on electric vehicles (EV), energy storage and solar panels. The webinar also discussed how renewable technologies support ASEAN’s energy transition, emphasizing emerging solar technologies and their deployment across the region. The final presentation detailed Indonesia’s political economy of energy transition, highlighting the challenges faced during this process.

Key Highlights:

1. There are policy plans for the energy transition at both the ASEAN and national levels, with explicit goals on renewable energy expansion and energy efficiency improvement. However, policy efforts at the two levels are misaligned with each other and the plans did not translate into tangible progress.

2. Among the clean-tech products studied — electric vehicles, energy storage systems, and solar panels — ASEAN is globally competitive in solar panel exports, primarily directed to the U.S. market, with China being the dominant source of input materials.

3. ASEAN’s renewable energy growth is fueled by national policy efforts to achieve carbon neutrality, the declining costs of solar PV and battery storage, which allows them to be cost-competitive compared to fossil fuels, and advancements in grid-forming and intelligent energy technologies enabling broader adoption.

4. Limited fiscal space is a fundamental challenge for Indonesia’s energy transition. The government budget for low-carbon programs has decreased from 2018 to 2020, constraining investments in renewable power plants in high-demand provinces and reducing the financial support available for the state-owned electricity company to generate more low-carbon electricity.

By HUANG, Yijia

1. ASEAN’s Energy Transition Policy Landscape

2. Unpacking ASEAN’s Role in the Global Clean-Tech Supply Chains