Highlights

• ■ The Greater Mekong Subregion (GMS) has undertaken regional power connectivity for three decades, becoming one of the most advanced regional energy trade and integration programmes in the world.

• ■ A review of the policy process sheds light on how GMS established cross-border power trade and explains the successes and limitations experienced by member countries.

• ■ The initial consensus-building was possible due to honest brokers as well as the rapid implementation of a small representative project before the design of the larger programme.

• ■ Physical construction has moved faster than institutional development, leading to an array of bilateral projects that may narrow the scope of cooperation.

• ■ Institutional construction requires longer periods of negotiation, including failures, compared to the development of interconnections. However, this process allows further development and exchanges that expand cooperation.

• ■ Energy transition offers an additional incentive to pursue regional power trade in the GMS.

INTRODUCTION

Energy cooperation has been at the core of the Greater Mekong Subregion (GMS) Economic Cooperation Program since its launch in 1992 by Cambodia, China (autonomous region of Guangxi and province of Yunnan), Lao PDR, Myanmar, Thailand and Vietnam, with the support of the Asian Development Bank (ADB) as the secretariat (Yu 2003; del Barrio Alvarez and Horii 2017). It is possible to trace the roots of this programme to an energy cooperation project between Lao PDR and Thailand: the relatively small 40-megawatt (MW) Xeset dam. This became the anchor for the regional agenda for economic cooperation among neighbouring countries (Cruz-Del Rosario 2014). From this example of power connectivity, the GMS programme was launched as a multisector cooperation project spanning transportation, telecommunications, energy development, environmental management, human resource development, and trade and investment.

Highlights

• ■ Countries including those in Southeast Asia are exploring lowcarbon hydrogen to achieve carbon-neutrality. This current interest in hydrogen is the fourth wave since the 1970s.

• ■ In this latest wave, major Southeast Asian economies have unveiled low-carbon hydrogen strategies, driven by enthusiasm for its potential to drive decarbonization, create jobs and improve energy security. However, they risk creating targets and policies based on hype.

• ■ Low-carbon hydrogen is competing not only with fossil fuels but also with other renewable-based alternatives for market share in Southeast Asia.

• ■ Given the region’s renewable energy potential and unique endowments, there are other existing and emerging low-carbon solutions that can perform as well as, if not better than, low-carbon hydrogen in Southeast Asia.

• ■ Southeast Asian governments need to be clear-minded on whether the low-carbon hydrogen they plan to produce is for local consumption to decarbonize the national economy, or for export to gain foreign revenue.

INTRODUCTION

The prospects of low-carbon hydrogen are enticing for Southeast Asia (ASEAN Centre for Energy 2022). The region has abundant renewable energy, natural gas reserves and carbon capture, utilization and storage (CCUS) potential (ASEAN Centre for Energy 2021), which are required for its production. As such, the common understanding is that low-carbon hydrogen can potentially be tapped to accelerate the region’s energy transition (ibid.). This excitement came to the fore after 2016 when the International Energy Agency (IEA), Japan, the European Union and other key international organizations started emphasizing the importance of low-carbon hydrogen in achieving net-zero emissions by 2050.

Highlights

• ■ This study investigates justice in Indonesia’s energy

• transition policies and financing using the energy justice

• concepts.

• ■ Justice in most energy-related laws in Indonesia is narrow, focusing on access, inclusivity, affordability and cost efficiency.

• ■ Financing policies do not adequately focus on building the capacities of impacted stakeholders.

• ■ Indonesia needs to develop a legally binding just transition framework outlining transition principles and policies.

INTRODUCTION

There are multiple challenges facing the contemporary global energy regime: providing energy for everyone, including the poor; minimizing negative externalities and the unequal burden of energy provision; and implementing deep decarbonization of energy systems. These challenges require the transformation of socio-technical systems comprising a mix of technologies, infrastructures, organizations, markets, regulations and user practices that have developed over decades (Geels 2017). Since energy systems have been embedded in people’s lives, resistance to the transition is unavoidable. At the community level, resistance may come from workers and communities who rely on carbon-intensive industries such as coal mining (Healy and Barry 2017).

As a result, transitioning to a low-carbon economy is contentious. It is estimated that the entire coal industry value chain, from mining to power generation, employs 8.4 million people globally, a majority of whom will be impacted by the transition to a low-carbon system. The impact of the transition will also be concentrated in coal-dependent developing countries such as China, India, Indonesia, Mongolia, South Africa and Vietnam (Diluiso et al. 2021; International Energy Agency 2022a).

This volume is an attempt to provide a multifaceted overview of Southeast Asia’s efforts towards decarbonization and the associated challenges that impede progress. The chapters highlight some progress made by countries in the region in terms of financing renewable energy and facilitating energy trade. Regional countries have developed policies that aim to accelerate decarbonization in a just and equitable manner and incorporate the use of new technologies in mitigation efforts. However, the in-depth critique of regional decarbonization efforts by the contributors of this volume reveals the inadequacy of the current pace of progress in meeting renewable energy targets, and the shortcomings of existing domestic frameworks to address the social, environmental and political challenges of decarbonization. In addition, significant gaps between policy and implementation—resulting from the lack of capacity, poor governance, and political challenges—remain.

The slow rate of progress on decarbonization is concerning, but it does not invalidate the goal of developing environmentally sustainable economies in Southeast Asia. Decarbonization and energy transition are nonlinear processes that are likely to be impeded by socio-political resistance as well as economic and technical limitations, while also being facilitated by international and domestic mobilization of climate finance, technical innovation and increasing political will to fast-track mitigation efforts. Accelerating decarbonization in a dynamic environment marked by simultaneous and often contradictory flows of progress and backtracking requires identifying key intervention points that can have a significant influence on the future development of energy systems (Kanger, Sovacool, and Noorkõiv 2020; Huda 2024).

Highlights

• ■ Grid digitalization can enhance cross-border interconnections and accelerate renewable energy integration.

• ■ Cross-border initiatives for smart grid development compel a rethinking of the governance of transboundary energy commons.

• ■ An imperative for the ASEAN Power Grid is investment in a unified regulatory framework for smart grid development governed by regional mechanisms.

INTRODUCTION

The world’s most critical climate imperative is the decarbonization of the electricity sector by 2050 (IRENA 2022). This requires a dual strategy: (1) innovation where renewables deployment is massively scaled up, inclusively shared and efficiently utilized; and (2) exnovation where fossil fuel assets, particularly coal power, are decisively phased out. In Southeast Asia, amid the continued expansion of coal-fired power generation, the Association of Southeast Asian Nations (ASEAN) aims to help member countries maximize their significant renewable energy (RE) potential and expand regional trade, while strengthening energy security (ADB 2022a; ACE 2022). Given the severe economic and power reliability implications of the coal phase-out, the region is compelled to deploy large-scale renewables and develop stable electricity grids (Demoral et al. 2022).

The imperative for grid digitalization is highlighted in the 7th ASEAN Energy Outlook (ACE 2022, p. 78): “Energy supply trails behind installed capacity by almost half of its value, indicating the efficient utilization of renewables is a priority … smarter and more flexible grid infrastructures, are required to address higher penetration of RE in the future.”

Highlights

• ■ This chapter reviews the distributive, procedural and recognized dimensions of environmental justice in the decarbonization of development projects in Malaysia.

• ■ The analysis of two case studies—Kota Damansara Community Forest Movement and Ampang Forest Park Movement—highlights existing forms of environmental justice and injustice.

• ■ The study suggests that Malaysia’s climate mitigation efforts must be grounded in environmental justice principles.

INTRODUCTION

The concept of sustainable development was introduced internationally in 1987 in the Brundtland Report by the World Commission on Environment and Development (Brundtland 1987), which stated, “Humanity has the ability to make development sustainable to ensure that it meets the needs of the present without compromising the ability of the future generations to meet their own needs” (p. 16). The publication of the report offered a “political entrance” for the emergence of sustainable development (Daly 2014) by integrating economic growth and environmental conservation.

Sustainable development is a “shifting discourse” (Blowers, Boersema, and Martin 2012), and the term has changed organically since its inception (Daly 2014; Swain 2018; Pope et al. 2017; White 2013). The 2002 World Summit on Sustainable Development aimed to address the restricted framework of sustainable development that overlooked human, or social, concerns including equality and social justice. This led to a broader interpretation of sustainable development based on three pillars: social, economic and environmental (Enders and Remig 2014).

As with many other subjects, the academic and policy discourse on climate and energy transitions is dominated by the Global North. Yet, it is clear that different parts of the world face different challenges in tackling climate change, and therefore call for tailor-made solutions that are relevant to the regional context.

Southeast Asia is one of the fastest-growing regions in the world while also being one of the most vulnerable to the impacts of climate change. Its emissions are projected to more than double in the next few decades under a business-as-usual scenario, largely due to increases in population and economic growth.

While Southeast Asia has enormous potential for renewable energy generation, the region must deal with its ageing electricity infrastructure, outdated regulatory environment and other barriers to financing lowcarbon energy projects, while addressing the threats to energy justice during the transition. Diversity of energy market structures and growing resource nationalism may also pose challenges for the realization of the ASEAN Power Grid, a long-standing shared goal for a regional power network that offers the potential to greatly accelerate the integration of renewable sources.

To address region-specific energy and decarbonization issues, we need platforms that encourage knowledge generation and exchange within the Southeast Asian context. As a modest step in this direction, this book is the second volume in the Climate Change in Southeast Asia Compendium Series, which provides opportunities for early and midcareer academics and practitioners to explore current topics and develop policy-relevant recommendations under the guidance of experts in the field.

Highlights

• ■ Indonesia’s political commitment towards exporting renewablegenerated electricity to Singapore is driven by Jakarta’s nationalist preference in governing its resource potential.

• ■ Jakarta was initially reluctant to export renewable-generated electricity to Singapore. It changed its stance after securing an agreement that allowed the development of an integrated solar power industry in the country, thereby retaining the most value-added part of the electricity export business within the country.

• ■ Among the five political institutions that contributed to the development of the export plan, the Coordinating Ministry of Maritime Affairs and Investment (MARVES) appears to be the most influential actor. It exerted bureaucratic and economic influence, while its minister became the final decision-maker on the matter due to his political background.

INTRODUCTION

Renewable-generated electricity has emerged as one of the most prominent tools for decarbonizing the energy sector. Aside from its declining cost and low-carbon nature, renewable-generated electricity entails minimal security and geopolitical risks compared to its counterparts. According to the International Energy Agency’s net-zero roadmap, if the world is to achieve net-zero carbon emissions by 2050, almost 90 per cent of electricity generation will have to come from renewable sources (IEA 2021). Therefore, many countries have committed to increasing their renewable electricity production, but unfortunately, not all countries have the required geographical conditions or sufficient resources to do so.

Highlights

• ■ Indonesia has undertaken a series of steps to facilitate the development of low-carbon and sustainable energy.

• ■ Carbon capture and storage (CCS) as well as carbon capture, utilization and storage (CCUS) are useful tools for facilitating energy transition.

• ■ The risks of CCS/CCUS perpetuating the use of fossil fuels need to be acknowledged and addressed.

• ■ It is no longer possible for the government to choose between renewable and non-renewable energy; rather, a policy that connects and integrates both types of resources more directly may be useful for achieving the goal of providing sustainable and affordable energy to the people.

INTRODUCTION

In the last couple of years, Indonesia has been embracing, if not experiencing, what is officially termed as energy transition (or energy transformation) (MEMR 2022d; Ministry of Finance 2022). In 2022, the Ministry of Energy and Mineral Resources (MEMR) released hundreds of articles, press releases and news on its official website disseminating information on how the national government aims to implement the transition. Such initiatives are important because the potential of renewables in Indonesia is huge, accounting for more than 400 GW, but utilization has remained at only 2.5 per cent (Safi 2020).

Despite the development of policies and outreach programmes, Indonesia’s energy transition agenda has met with concerns about energy security. Following the COVID-19 crisis, the MEMR argued that providing continuous and affordable energy access to low-income communities was of utmost priority (MEMR 2020b).

Highlights

• ■ This chapter analyses more than US$209 billion invested in Southeast Asia’s energy sector between 2010 and 2021.

• ■ Conventional energy accounted for more than 65 per cent (US$135 billion) of the total investments in the energy sector. Coal was the most financed fossil fuel technology with more than US$91 billion in investments.

• ■ Renewables accounted for a much smaller share of total energy sector investments at 24 per cent (US$51 billion). Hydropower was the most financed renewable energy technology with more than US$22.5 billion in investments.

• ■ Indonesia (US$74 billion) and Vietnam (US$54 billion) are the largest recipients of investments in the energy sector. This is related to the massive expansion of coal-fired power capacity in the two countries in the last decade.

• ■ A significant portion of the capital for the expansion of conventional power generation was provided by credit and financial institutions, as well as private and state-owned companies from Japan, China and South Korea.

INTRODUCTION

Southeast Asia remains one of the fastest-growing regions in the world despite the severe impact of the COVID-19 pandemic. Total energy demand in the region has increased by 70 per cent since 2000, driven by steady economic and demographic growth (IEA 2022). Rapid industrialization and urbanization led to a 26 per cent increase in per capita electricity consumption in 2020 compared to 2010, and a 6 per cent average annual increase in electricity generation (ADB 2022). However, the impact of the pandemic led to a slight decrease (0.6 per cent) in regional electricity consumption (2020 compared to 2019), following a fifteen-year growth period (ACE 2022).