USAID ASEAN Policy Implementation (API) Regional Trends Analysis Report

The 6th ASEAN Energy Outlook estimated demand for primary energy doubling from 625 million tons of oil equivalent (MTOE) in 2017 to 1,589 MTOE in 2040. However, taking the COVID-19 pandemic into account, the estimates might be reduced by 3% in 2040. The region's energy demand is expected to be met through various sources, including the ASEAN Power Grid (APG) program, Trans-ASEAN Gas Pipeline, installation of super critical and ultra-super critical coal-fired power plants, and sources of renewable energy. ASEAN has considerable potential for energy transition and renewable energy. However, currently, only 15% of the region's energy comes from renewable sources, excluding the traditional use of solid biomass. Since 2000, the use of hydropower has significantly risen, and the use of bioenergy in heating and transport has also increased rapidly. The contribution of solar photovoltaics (PV) and wind remains small, though some markets in the region are now adopting policy frameworks to better support these energy sources. The ASEAN Plan of Action for Energy Cooperation (APAEC) Phase II: 2021-2025 addresses the ASEAN Comprehensive Recovery Framework strategy, especially Broad Strategy 5: advancing towards a more sustainable and resilient future. ASEAN plans to develop the ASEAN Power Grid to provide affordable and sustainable electricity under APAEC Phase II. Other program areas include Trans-ASEAN Gas Pipeline, Coal and Clean Coal Technology, Energy Efficiency and Conservation, Renewable Energy, Regional Energy and Policy Planning, and Civilian Nuclear Energy. The ASEAN Power Grid (APG) program initiated the first multilateral power trade during APAEC Phase I: 2016-2020. By August 2020, Laos, Thailand, Malaysia, and Singapore had successfully traded a total of 30.2 GWh of electricity. ASEAN plans to continue the project by increasing the maximum "committed energy capacity" from 100 MW to 300 MW during the two-year period from January 2020 to December 2021. This is the capacity that needs to be available when providers are called upon by Singapore at any time during the contracted period. The current plan for the Trans-ASEAN Gas Pipeline links six ASEAN Member States—Indonesia, Malaysia, Myanmar, Thailand, Vietnam, and Singapore—through 13 interconnected pipelines with a total length of 3,631 km and nine LNG regasification terminals (RGT) with a total combined capacity of 38.75 million tons/year (MTPA) as of 2020. Since the demand for natural gas and LNG is estimated to rise from 27% of ASEAN's power generation shares in 2015 to 22% in 2030, ASEAN plans to build at least one new LNG regasification terminal or a cross-border natural gas pipeline as well as to develop a common gas market for ASEAN to enhance the connectivity and accessibility of LNG. ASEAN plans to facilitate the transition to clean coal technology for sustainability and lower carbon emissions. This will involve the development of clean coal technology and the implementation of policies to promote its adoption. The region also aims to increase energy efficiency and conservation through the implementation of energy-efficient technologies and practices. Additionally, ASEAN plans to promote the use of renewable energy sources, such as solar and wind power, to reduce dependence on fossil fuels and mitigate climate change. The ASEAN region has significant potential for energy transition and renewable energy. However, currently, only 15% of the region's energy comes from renewable sources, excluding the traditional use of solid biomass. ASEAN plans to increase the share of renewable energy in the region's energy mix through the implementation of policies and programs to promote the adoption of renewable energy technologies. This will involve the development of infrastructure, such as solar and wind farms, and the provision of incentives to encourage the adoption of renewable energy technologies. ASEAN plans to accelerate the progress of APG projects by completing at least the review of four APG projects as well as expanding multilateral electricity trading to other ASEAN Member States (AMS) or other sub-regions. Building institutional frameworks as well as harmonizing the minimum technical requirements and integrating renewable energy are also part of the plan to improve the implementation of multilateral electricity trading in ASEAN.