Powering Southeast Asia’s Energy Transition

Southeast Asia, a region experiencing rapid economic growth, faces an urgent challenge of meeting its surging energy demand while accelerating decarbonisation. This critical issue took centre stage at the Indonesia International Sustainability Forum (ISF) 2024 during a panel titled “Green Industry: Transitioning the Power Sector to Zero Emissions”, where leading industry experts and business leaders convened to discuss strategies for achieving net zero emissions in the region’s power sector.

The panellists included Anderson Tanoto, Managing Director at RGE; Jon Moore, Chief Executive Officer at Bloomberg New Energy Finance; Wiluyo Kusdwiharto, Director of Project Management and New Renewable Energy at PT PLN (Persero); Wu Fei, Chairman of Suntech Power Holdings; Dennis She, Senior VP of Global Sales and Marketing at LONGi Solar; and Toru Yoshioka, President Director at PT. Mitsubishi Heavy Industries Indonesia. The discussion was moderated by Phillip Cornell, Global Practice Lead for Energy and Sustainability, The Economist.

Power sector trends

Jon kicked off the session by outlining three key trends driving the power sector’s green transition: the expansion of renewable energy, the electrification of transport and advancements in energy storage technologies like hydrogen and Carbon Capture and Storage (CCS).

Echoing Jon’s insights, Fei and Dennis highlighted China’s leadership in solar technology, attributing it to significant government support and continuous innovation. They agreed that decarbonisation requires bold investments in cutting-edge technologies.

Wiluyo pointed out that Indonesia has already taken steps to decarbonise its power sector, with infrastructure development plans aimed at supporting its national energy transition.

Powering through renewables

Anderson underscored the company’s commitment to renewable energy, sharing that one of RGE’s largest factories in Indonesia’s Riau province already derives 88% of its energy from biomass, with plans to increase this figure to 95%. He also shared that RGE has installed 26 megawatts of solar panels across its landfill sites, yielding strong returns on investment.

In addition to solar and biomass, Anderson discussed RGE’s innovative use of alternative renewable resources such as using agriculture waste and residue and used cooking oil as feedstock for producing Sustainable Aviation Fuel (SAF). RGE’s integrated sustainability model, which emphasises traceability, certification and landscape conservation, is central to its operations and long-term strategy, said Anderson.

Accelerating the energy transition

Toru emphasised the need for a diverse range of technical solutions to decarbonise Indonesia’s energy system, leveraging its rich renewable resources including solar, wind, hydrogen and ammonia. He highlighted the vast potential for CO2 reduction, particularly through collaboration between businesses, governments and stakeholders, which is key to achieving these goals.

Dennis noted that while solar power has become increasingly affordable in regions like China, Europe and the U.S., challenges such as intermittency remain. He suggested that Southeast Asian countries might need to look beyond their borders to ensure stable solar energy supply. Fei cautioned against potential short-term volatility in solar pricing due to economic factors, while predicting long-term declines in cost.

Best practices in facilitating renewable energy

During the discussion, Anderson outlined three critical factors in renewable energy procurement and usage: price, security and source. He acknowledged that consumers might need to pay a premium for cleaner energy but proposed dynamic pricing mechanisms, supported by innovative financing, as a way to reduce costs over time. Anderson also called for greater innovation in battery storage to address energy storage issues, a key hurdle in the broader adoption of renewable energy.

Southeast Asia’s potential in the green transition

Despite the challenges, the panellists were optimistic about Southeast Asia’s potential to lead the renewable energy revolution. The region’s combination of rapid economic growth, abundant natural resources and a growing commitment to sustainability positions it well for a successful transition to a green power sector.

Furthermore, the ISF 2024 panel highlighted that Southeast Asia’s path to net zero emissions requires collaboration, innovation and bold investments in renewable energy technologies. As the region looks to decarbonise its power sector, businesses, governments and financial institutions must work together to create a sustainable and resilient energy future.