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enormous potential for renewable energy generation, the region must deal with its ageing electricity infrastructure, outdated regulatory environment and other barriers to financing lowcarbon energy projects, while addressing the threats to energy justice during the transition.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).

The economic, political, strategic and culturaldynamism in Southeast Asia has gained addedrelevance in recent years with the spectacular riseof giant economies in East and South Asia. This hasdrawn greater attention to the region and to theenhanced role it now plays in internationalrelations and global economics.

The sustained effort made by Southeast Asian nationssince 1967 towards a peaceful and gradualintegration of their economies has had indubitablesuccess, and perhaps as a consequence of this, mostof these countries are undergoing deep political andsocial changes domestically and are constructinginnovative solutions to meet new internationalchallenges. Big Power tensions continue to be playedout in the neighbourhood despite the tradition ofneutrality exercised by the Association of SoutheastAsian Nations (ASEAN).

The Trends in Southeast Asia series actsas a platform for serious analyses by selectedauthors who are experts in their fields. It is aimedat encouraging policymakers and scholars tocontemplate the diversity and dynamism of thisexciting region.

THE EDITORS

Series Chairman:

Choi Shing Kwok

Series Editor:

Ooi Kee Beng

Editorial Committee:

Daljit Singh

Francis E. Hutchinson

Norshahril Saat

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).

INTRODUCTION

A decade after its last chairmanship in 2015, Malaysiaassumes the chairmanship of ASEAN for the fifthtimein 2025. This time, Malaysia has to navigate amore profound geopolitical climate characterized byintensifying US-China competition, uncertaintiessurrounding Trump 2.0, ongoing instability inMyanmar, and escalating tensions in the South ChinaSea. For Prime Minister Anwar Ibrahim, now in histhird year in office, leading ASEAN offers a chanceto strengthen Malaysia’s role in regional affairswhile raising his own profile at home and on theglobal stage.

Malaysia’s chairmanship theme, “Inclusivity andSustainability”, encapsulates its ambition tointegrate domestic priorities into ASEAN’s broaderagenda. The “Madani” concept—rooted in Anwar’svision of an Asian renaissance—aims to establishMalaysia as a forward-looking, progressive andcompassionate leader in regional affairs. Thisphilosophy emphasizes sustainability, inclusivityand a values-driven approach to governance,reflecting Malaysia’s aspirations to not onlybolster its leadership within Southeast Asia butalso to position itself as a bridge-builder andmediator in an increasingly polarized world.

Beyond symbolism, Malaysia’s chairmanship will beevaluated by its ability to make tangible progresson some of ASEAN’s most pressing issues. Thelong-delayed Code of Conduct (COC) in the SouthChina Sea, efforts to implement the Five-PointConsensus (5PC) on Myanmar, and initiatives like theASEAN Digital Economy Framework Agreement (DEFA) areall on the agenda.

Highlights

• ■ ASEAN envisions an interconnected regional power grid that can improve the security and affordability of energy.

• ■ Existing examples show that an open regional electricity market is a prerequisite for a regional grid.

• ■ This chapter examines the electricity supply industry structure of each ASEAN member state to determine the viability of open energy markets.

• ■ Based on this analysis, two countries have open markets, one is fully regulated and the rest sit in between.

• ■ This chapter provides recommendations that will improve the likelihood of having a fully functional and competitive power market at the regional level.

INTRODUCTION

Electricity is one of the main drivers of national economic growth. Thus, ensuring its security, affordability (equity) and sustainability—the energy trilemma (Yap, Gabriola, and Herrera 2021; Kang 2022)—is of utmost national importance. The continuously increasing demand for electricity has put pressure on energy resources in all ASEAN member states (AMS). Analysts projected the cumulative growth of AMS’ economies in 2018 to be upwards of 5.1 per cent (Gnanasagaran 2018), and according to the ASEAN Centre for Energy, electricity demand in ASEAN is expected to grow by approximately 5.5 per cent yearly between 2016 and 2020 (ASEAN Post Team 2018; ASEAN Secretariat 2021). To cope with this growth in demand effectively and efficiently, AMS can no longer work in silos. The energy resources of each AMS need to be optimized to benefit ASEAN as a whole through an integrated power grid, which can ensure regional electricity security, affordability and sustainability.

EXECUTIVE SUMMARY

• Malaysia’s ASEAN chairmanship in 2025, under thetheme “Inclusivity and Sustainability”, draws fromthe Madani concept and Prime Minister AnwarIbrahim’s long-standing vision of an Asianrenaissance. It reflects Malaysia’s aspiration topromote a forward-looking, values-based leadershipgrounded in sustainability, inclusivity and regionalsolidarity.

• Malaysia’s chairmanship takes place amid heightenedgeopolitical volatility, including intensifyingmajor power rivalry, ongoing tensions in the SouthChina Sea, and the deepening political andhumanitarian crisis in Myanmar. Malaysia is expectedto lead with a more pragmatic and action-orientedapproach to the South China Sea and more structuredengagement with Myanmar’s opposition groups andhumanitarian actors, while managing ASEAN’s internaldivisions and external pressures.

• The chairmanship coincides with key milestones,including the tenth anniversary of the ASEANCommunity and the adoption of the ASEAN CommunityVision 2045. Malaysia is expected to guide ASEAN inreviewing the region’s progress and finalizing thevision’s strategic plans. This will includestrengthening ASEAN’s institutional processes andenhancing cross-pillar coordination in support of aresilient and future-ready ASEAN.

• On economic integration, Malaysia is expected tosteer the conclusion of key deliverables such as theASEAN Digital Economy Framework Agreement (DEFA),the ASEAN Green Deal 2030,and upgraded agreements,including ATIGA and ACFTA, while promoting inclusivegrowth, sustainable finance, and digitaltransformation.

• Malaysia will also lead efforts to enhance ASEAN’sexternal relations by strengthening cooperation withtraditional dialogue partners and promotingSouth-South engagement, including through theproposed ASEAN-GCC-China Summit. These initiativeswill be pursued alongside efforts to reinforceASEAN’s commitment to multilateralism, strategicautonomy, and the ASEAN Outlook on theIndo-Pacific.

Southeast Asian countries face the complex challenge of providing affordable, accessible and secure supplies of energy while facilitating rapid decarbonization. Currently, 67 per cent of Southeast Asia’s electricity is generated from fossil fuels (ACE 2024) and the region is home to the world’s youngest coal power plant fleets. By 2040, Southeast Asia’s energy demand will reach 3,123 terawatt-hours—a threefold increase on current levels. If fossil fuels are used to meet future energy demand, the region’s CO2 emissions will increase by 2.5 times of existing levels to reach 4,171 million tonnes by 2040 (ACE 2021a). Unabated emissions from the energy sector will negatively impact Southeast Asia’s populations, economies and biodiversity ecosystems, as well as hamper global mitigation efforts.

Compounding Southeast Asia’s energy challenges is the region’s extreme vulnerability to climate change. Myanmar, Vietnam, the Philippines and Thailand are among the top ten countries in the world that were most affected by extreme weather events between 1999 and 2018 (ASEAN Secretariat 2021). In addition to exacerbating climatic impacts, the continued use of fossil fuels, particularly coal, will negatively affect the health of Southeast Asian citizens. Emissions from coal-fired power plants will increase the incidence of respiratory diseases and can potentially result in 69,660 annual excess deaths in the region by 2030 (Fossum Sagbakken et al. 2021; Koplitz et al. 2016).

HIGHLIGHTS

• ■ Hydropower has been central to the green transition in the Cambodia-Laos-Vietnam (CLV) countries and the wider region, but the socio-economic and geopolitical risks of hydropower dams, along with their growing unreliability, raise concerns about the long-term sustainability of this energy source.

• ■ All three CLV countries have recognized the need to diversify their renewable energy portfolios and reduce reliance on hydropower. They are increasingly exploring solar and wind energy, with Vietnam emerging as a regional leader.

• ■ However, this transition has been fraught with setbacks, and there is a growing risk that CLV countries may increase their dependence on coal as renewable energy capacities struggle to keep pace with rising demands.

• ■ The Cambodia-Laos-Vietnam Development Triangle Area (CLVDTA), as the subregional cooperative framework, has fallen short in addressing critical issues facing member states in terms of energy and decarbonization. This necessitates a new form of subregional leadership on renewable energy.

• ■ Recommendations include establishing a dedicated energy working group, developing a comprehensive strategy for sustainable hydropower, enhancing cross-border and national grid infrastructure through resource mobilization, and promoting knowledge sharing and capacity building.

INTRODUCTION

Green energy cooperation presents a promising avenue for collaboration between Cambodia, Laos and Vietnam (CLV) in the context of decarbonization in Southeast Asia. All three countries have drawn up national strategies to achieve their Nationally Determined Contributions (NDCs)—including net-zero emission by 2050—with green transition as a central component. Like other ASEAN countries, they face the daunting challenge of sustaining economic growth and meeting rising energy demands while transitioning away from fossil fuel-based energy sources.

INTRODUCTION

Without knowing the context, it is impossible to provide a credible explanation for any historical event. The event in this case is the transition in Myanmar/Burma from four decades of military rule to the two quasi-civilian governments elected in 2010 and 2015. The transition ended with the military coup on 1 February 2021.

Describing the geographical context can also be essential to explaining historical events. This is certainly true in the case of Myanmar’s transition. Myanmar is a land (maybe it has never been a “country”) on the Indian Ocean whose borders are in the mountain ranges that separate it from the territories of India, China and Thailand (and the much smaller territories of Bangladesh and Laos).

The great majority of Myanmar’s 2023 population of 54 million inhabits the valleys and deltas of rivers whose sources are in the Himalayan Mountains. Some two-thirds of this population belong to the Bamar language group and identify as Buddhist. The other third is scattered through the mountainous borderlands and consists of more than a hundred language groups following a variety of religions.

EXECUTIVE SUMMARY

• This historical note seeks to provide some markers for economists and policymakers interested in Myanmar’s woeful experience over seven decades when it fell from being one of the most prosperous and promising countries in East Asia at the end of World War II to one of the poorest now.

• The most encouraging period of economic progress after Burma’s independence in 1948 was the decade of quasi-democratic governance under the Thein Sein administration from 2011 to 2016 and the National League for Democracy (NLD) administration (led by Aung San Suu Kyi) from 2016 to 2021. On 1 February 2021, a military coup plunged the country back into another chaotic period of civil strife and economic suffering, with no end in sight.

• For people interested in Myanmar’s future, it is important to examine the foundations for the economic policy reforms that sparked Myanmar’s joyful economic rise beginning in 2011, assess these reforms as they were carried out during the two administrations, and consider how they may have contributed to the coup in 2021.

• This note begins by focusing on the period from 2003 to 2011 when a “Third Force” was active, mediating between the country’s military rulers and the democratic opposition growing out of the 1988 uprising that gained international support through the leadership of Aung San Suu Kyi and her party, the NLD. In this period, the roles of “Myanmar Egress” and the visit of Nobel-laureate economist Joseph Stiglitz are given special attention.

The economic, political, strategic and cultural dynamism in Southeast Asia has gained added relevance in recent years with the spectacular rise of giant economies in East and South Asia. This has drawn greater attention to the region and to the enhanced role it now plays in international relations and global economics.

The sustained effort made by Southeast Asian nations since 1967 towards a peaceful and gradual integration of their economies has had indubitable success, and perhaps as a consequence of this, most of these countries are undergoing deep political and social changes domestically and are constructing innovative solutions to meet new international challenges. Big Power tensions continue to be played out in the neighbourhood despite the tradition of neutrality exercised by the Association of Southeast Asian Nations (ASEAN).

The Trends in Southeast Asia series acts as a platform for serious analyses by selected authors who are experts in their fields. It is aimed at encouraging policymakers and scholars to contemplate the diversity and dynamism of this exciting region.

THE EDITORS

Series Chairman:

Choi Shing Kwok

Series Editor:

Ooi Kee Beng

Editorial Committee:

Daljit Singh

Francis E. Hutchinson

Norshahril Saat