Written by Coleman Tappero, A Guest Writer
Southeast Asia is set to grow in almost every major metric over the next fifty years -- in population, GDP, CO2 emissions, and fossil fuel usage. For some context, the Association of Southeast Asian Nations (ASEAN) will together emit as much CO2 as the third-highest emitter in the world by 2040, India. These coming emissions are largely unavoidable as fossil fuels will continue to be used to generate electricity, but there are ways in which we can reduce the amount of emissions without hampering ASEAN’s ability to provide electricity. The key here is efficiency. If ASEAN nations can integrate their power grids and energy infrastructure, then overall emissions will decrease and their power grids and energy infrastructure will become more resilient to shocks.
Grid Integration Creates Advantages
Promoting energy integration and efficiency in ASEAN nations will mitigate climate change by reducing overall CO2 emissions while also making energy infrastructure more secure to external pressures. This efficiency starts with integration of ASEAN state’s energy grids, in an initiative called the ASEAN Power Grid (APG). The APG will bolster regional energy security by providing the structure for cross-border electricity trade. This enhances security because ASEAN states can look to neighboring states to sell excess electricity or buy needed electricity when their domestic production does not meet demand. Additionally, another integration infrastructure, such as the Trans-ASEAN gas pipeline (TAGP) is also being built. This promotes efficiency through integration in that not only is electricity shared on the grid (APG), but that natural gas too can be shared/shipped between member states to avoid fuel shortage/supply failures. Energy integration's advantages, namely efficiency and security, provide flexibility. With an integrated grid, rigid planning of how much energy to consume and when to consume it becomes more fluid due to the ‘insurance’ that the cross-border electricity trade and the TAGP brings. This in turn reduces overconsumption and production of energy and energy waste.
Barriers to Climate Security
The insurance that the APG and TAGP will bring to ASEAN nations fosters not only energy security as described above, but also climate security through the relative reductions in overall CO2 emissions brought forth by these initiatives. That is to say, Southeast Asia will industrialize further, and these projects are the most efficient (least CO2 emitting) ways to do so. There are several steps that must be taken to realize these goals; most important to this process is removing fossil fuel subsidies. These differing subsidies are the main barrier to the more energy-efficient cross-border electricity trade as they discourage electricity trade. Once this step has been taken, ASEAN nations can get more creative about how to increase energy security for their growing populations while reducing CO2 emissions.
Creativity & Leadership
In order to better illustrate this creativity, a focus on a few specific ASEAN countries is necessary. Indonesia (48%), Thailand (12%), Malaysia (11%), and Vietnam (10%) made up 81% of ASEAN’s CO2 emissions in 2018. Therefore, these nations should be tasked with leading the integration effort, primarily by diversifying ASEAN’s energy mix. Of course, coal will continue to be used by all ASEAN countries; but, by mandating that all new coal-fired power stations are “superultracritical” plants, which are up to 20% more efficient than coal plants of the past, CO2 emissions can be at least partially reduced. Additionally, these countries should look to continue developing and implementing renewable energy into the ASEAN energy mix. Specifically, these countries should invest in renewables where there is capacity to do so. Indonesia should look to develop geothermal energy, Vietnam to continue the implementation of hydro and more importantly wind energy, and Thailand to continue the development of wind energy.
The Role of LNG
Finally, liquified natural gas (LNG) has a role to play in the ASEAN energy mix. Current natural gas prices are extremely high due to increased worldwide demand coming out of the pandemic and also exacerbated by China’s gobbling up of available LNG on the market. In the effort of diversification, ASEAN states should still look to partner with large energy and specifically LNG companies to build regasification terminals (RGTs) throughout the islands that make up Southeast Asia. Investment in natural gas is the ultimate way to connect the most geographically hard-to-get-to places within ASEAN, in turn creating a truly integrated energy infrastructure. While prospects do not look good for investment in LNG now, this option cannot be abandoned yet. Instead, ASEAN states should look to develop aspects of their economies to become more ‘circular’ to enhance energy efficiency and stability. That is to say, ASEAN states should look to complement each other’s energy supplies, namely in developing a strategic reserve of natural gas. Thailand and Singapore are net importers of LNG, while Indonesia, Malaysia, and Brunei are net exporters. If the later states were to set aside some natural gas for an ASEAN-regional strategic reserve, other ASEAN states could turn to their strategic reserve in times of crisis like this one.
Realizing ASEAN’s Future
Ideas like integrating ASEAN’s grid and gas pipelines, creating an LNG strategic reserve, phasing out least-efficient coal plants, and investing into renewables will be paramount if ASEAN is to realize its bright future. Creating the APG and TAGP accomplish two key goals simultaneously; they integrate energy infrastructure allowing for more of ASEAN’s citizens to have access to electricity, and they provide for the most efficient and more importantly, most carbon-friendly way to do so. Depending on the success of these ideas and initiatives, we may be witnessing the blueprint for how other regions across the world can industrialize and electrify themselves sustainably -- a prospect the whole world will benefit from.