Authors: Margareth Sembiring and Julius Cesar I. Trajano, Nanyang Technological University

The Southeast Asian region is now viewed as an oasis of socioeconomic development. But the region’s vibrant economic growth has led to a corresponding increase in energy consumption, an issue recognised by ASEAN as a key shaper of the post-2015 agenda. In order to reduce the region’s over-reliance on imported fossil fuels and build a more sustainable and environmentally friendly power system, ASEAN member states are exploring the use of alternative energy sources such as nuclear and renewable energy.

Despite the 2011 Fukushima disaster, nuclear remains a viable alternative energy source due to its mature technology and its capacity to produce a stable power supply. By contrast, renewable energy technologies are still being perfected and their intermittent power-generating characteristics make them appear less reliable.

However, the nuclear option has been considered but not implemented for decades, and meanwhile more recent renewable energy sources have already made inroads in the region. In 2011, renewable energy power sources, particularly hydropower and geothermal plants, made up about 15 per cent of total power generated in the ASEAN region. This was the third-largest amount after gas-fired and coal-powered power plants. Nuclear power is projected to enter the region’s energy mix only after 2023, assuming that nuclear plants are successfully commissioned in Vietnam.

Although countries in the region have set higher targets for renewables’ share in their national energy mix, overall the use of renewables in the region is still limited relative to their potential. In Southeast Asia, wind and tidal energy are largely untapped, with the huge solar potential in the region remaining underdeveloped.

As mechanisms of power generation from renewables are different from those of conventional energy sources, adopting renewable energy into existing national energy systems is indeed a challenging undertaking. Renewable energy developments are capital intensive and are far less economically competitive than the dominant fossil fuel-based energy sources.

In addition, renewable energy sources are often located in remote areas, rendering their connection to main power grids a significant technical hurdle. Cumbersome administrative processes arising from overlapping and uncoordinated regulations between relevant authorities further hinder renewable energy penetration. Limited access to financing and insufficient financial incentives dissuade investors from participating in renewable energy development in the region.

Apart from technical and financial barriers, renewables also have a completely different set of environmental and socioeconomic costs. Although hydropower has fuelled the power trade in the Greater Mekong Subregion, helping Thailand and Vietnam meet their rapidly growing demand for energy, hydropower dams have displaced communities, undermined the quality and quantity of the water supply, and continue to disrupt the livelihood of people living in the Mekong River Basin. In the Philippines and Indonesia, land acquisitions for geothermal developments are often met with strong opposition from local populations.

Realising the multiple challenges facing its member states in getting renewable energy on board, ASEAN has come up with a number of supporting initiatives. The ASEAN Plan of Action for Energy Cooperation (APAEC) 2010–15 envisions a collective target for renewable energy of 15 per cent of total power capacity by 2015. To this end, ASEAN has spelled out action plans directed towards enhancing awareness of renewable energy, and preparing the region as a renewable energy hub.

The ASEAN Centre for Energy (ACE) in cooperation with German Development Cooperation (GIZ) conducted a study to investigate the opportunities and challenges of renewable energy development in Southeast Asia. The resulting report noted that ASEAN member states currently stand at different stages of renewable energy market development with different sets of challenges. Thailand is the most advanced, followed by Malaysia, Indonesia, and the Philippines.

ASEAN cooperation with GIZ has also resulted in an online platform that facilitates the sharing of information, best practice, and progress updates among ASEAN member states. Such a platform is very useful to monitor renewable energy development in each country, although countries in the region need to become more proactive in supplying relevant information to the system.

Commendable initiatives taken by ASEAN must be supported by strong commitments from member states. As renewable energy is a relatively new form of energy source, governments need to establish investors’ trust in its profitability and people’s trust in its utility and reliability. Efforts to create a conducive environment for the renewable energy market are only a part of the equation, as public buy-in is equally important for supporting governments’ substantial spending on renewable energy and the ensuing infrastructure changes that come with it.

Creating an enabling environment for renewable energy investments by implementing policies, enacting reliable regulations, and simplifying administrative processes needs to take place at a national level.

When it comes to cooperation, governments need to identify priorities. Of the various recommendations made at the regional level, there are three collaborative initiatives that countries should collectively undertake to accelerate renewable energy development.

First, countries should conduct research to strengthen ASEAN’s capability to manufacture and operate renewable energy technologies and products, making them significantly cheaper. Second, innovative financing instruments and mechanisms should be established, with more secure finance better supporting the early stages of renewable energy development.

Third, ASEAN-made renewable energy products should be standardised and harmonised before the renewable energy market is fully developed, laying the groundwork for future cooperation. Getting things right from the outset, after all, will cost less than refurbishing them later. To this end, governments in the region need to stay strongly committed to renewable energy development.

Margareth Sembiring and Julius Cesar I. Trajano are energy security analysts with the Centre for Non-Traditional Security (NTS) Studies at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University.

This article was first published here by S. Rajaratnam School of International Studies.

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ASEAN should flick the switch to renewables