The topline story
The ASEAN region is a place where green energy should be blazing but it’s facing a gloomier outlook.
- Siemens Energy’s “2023 Global Energy Transition Readiness Index” raises the curtain, revealing that Asia Pacific is only 25% ready for the energy transition, ranking among the lowest globally. The unreadiness is compounded by rising demand, slated to grow by approximately 3% annually until 2030.
- Unravelled: A staggering 75% of this soaring demand is projected to be met by fossil fuels.
Clean and Green Hiccups
As we dig deeper into this realm of transition, a series of factors is causing hiccups in Asia’s clean energy journey.
- Picture this: electricity grid infrastructure and system planning are struggling to keep up with the surge in capacity demand. Complex and snail-paced authorisation procedures are leading to delays and limited participation in renewable energy auctions, effectively boosting project risks and costs, while undermining the bankability of power plants.
- Topping it off: the US Inflation Reduction Act is siphoning off funding that might have otherwise flowed into Asia, diverting the green tide.
- Meanwhile, businesses looking to diversify away from China into other Asian havens like Vietnam are driving up energy needs, keeping them tethered to existing fossil fuel lifelines.
Green (and Gold) Opportunities for Australian Firms
Amidst these challenges lies a generational – and golden – opportunity for Australian business:
- Southeast Asia’s clean energy transition necessitates a whopping US$10 billion annually until 2030, and that’s music to the ears of Australian service providers.
- From project engineering, design, and construction to advisory services, not to mention technology, there’s plenty of room for collaboration on solar, electric vehicles, and battery storage supply chains.
The road ahead
Upcoming policy reforms are set to cast a spotlight on ASEAN renewable projects.
- Brace yourselves for the ASEAN’s Renewable Power Grid roadmap, expected to unveil its clean energy integration plan toward the end of 2023.
- But don’t get too comfortable: even with this roadmap, the region’s support for energy storage appears to be trailing behind, as per the experts.
- There’s talk of export-oriented investments in renewables generation and grid infrastructure across Laos, Vietnam, Indonesia, Cambodia, and perhaps even as far as Australia and Singapore. These nations are crafting the blueprint – or, ‘greenprint’ – for cross-border electricity trading under the bilateral Green Economy Agreement.
- And let’s not forget our neighbours in Indonesia, who are taking a step forward in their clean energy transition with the “Indonesia Acceleration of Renewable Energy Development for Electricity Generation.” It’s not just another policy; it’s got the pricing regulations for renewable energy projects baked right in.
ASEAN’s green transition might be taking its time, but the opportunities for Australia are bright.
This is one of a six-part series looking at the business opportunities for businesses across the Australia – Southeast Asia corridor. The insights are powered by Via Communications Group: a communications agency focused on supporting international businesses with their cross-border communications needs across Asia. You can check them out at wearevia.com
See other stories in this series
- Australia elevates ASEAN as a key corridor region: what you need to know
- ASEAN’s Digital Economy: Unleashing Hidden Potential
- ASEAN’s lagging green transition is an opportunity for Australian business know-how
- Australian companies have the tools to fill ASEAN’s infrastructure gaps
- Asian governments step in for start-ups amid private capital downturn
- Getting in with the Singapore Family Offices