1.5°C-Aligned Coal Power Transition Pathways in Indonesia

Purpose - The paper systematically examines the capacity building needs of energy and climate stakeholders in the Association of Southeast Asian Nations (ASEAN). It looks at conditions and opportunities for improvements in institutional, organisational, technological, innovation and financing capacities. This paper provides a guide to concrete capacity building programs and implementations to accelerate the implementation of National Determined Contributions (NDCs) and low-carbon energy transition in the ASEAN region.

Design/methodology/approach - This paper proposes a comprehensive capacity-building framework, drawing on transition management theory and the interactive systems framework for capacity building. The assessment is based on interviews with representatives of the ministry responsible for energy policy and the ministry responsible for climate policy in each ASEAN country, as well as a survey among a broader set of Southeast Asian energy and climate experts from academia, think tanks and international development partners.

Findings - The paper identifies the priority areas for capacity building for each ASEAN country and the region as a whole. Each country has a unique set of needs and priorities. At the regional level, the widest capacity gaps were observed in institutional capacity, technical capacity, human resources capacity, financing capacity and the capacity to develop policy and legislation. Specific gaps for capacity building are discussed in delivering strategic areas of energy transition, such as electrification of transportation, development of the green supply chain, deploying renewable energy, energy efficiency, strengthening finance and investment and reducing dependencies on fossil fuels.

Originality/value - This paper helps fill the gap for detailed capacity needs analysis and facilitates long-term plans/strategies and their implementation. The insights help to increase ASEAN energy and climate stakeholders’ understanding of the interaction between energy and climate, therefore enhanced capability in developing more effective action maps and intervention points in achieving NDCs and sustainable development goals.

Authors: Emi Minghui Gui, Indra Overland, Beni Suryadi, Zulfikar Yurnaidi

Common-use transmission assets are those that provide widespread benefits across a market area, rather than serving only the countries or jurisdictions hosting the infrastructure.

In ASEAN, several potential common-use transmission projects could progress with the support of development banks, aligned with efforts to develop a multilateral power trade (MPT) market. There are several initial conclusions that ASEAN can draw regarding common use assets, including lesson learned from other regions employing this concept:

Advancing Infrastructure: Given its potential for optimal cost allocation, the regional common-use asset concept should be examined by ASEAN stakeholders as a way to accelerate ASEAN Power Grid (APG) infrastructure development and to unlock MPT opportunities.

Identifying Assets: In the absence of regional market structures, a region-wide technical study is essential to assess how interconnections can benefit multiple countries. The AIMS process could be tasked with this analysis.

Regional Market Benefits: Regional market structures would provide mechanisms for identifying common-use project benefits while allocating costs fairly for new assets.

Collaborative Financing: It’s critical to work with development finance institutions (DFIs) and partners to create a financing model tailored to the region’s needs, including for common use assets.

Agreement on Cost Allocation: For the common-use asset model to succeed, participating countries must agree on cost allocation and recovery methods, potentially through a standardized wheeling charge methodology.

Authors: Nadhilah Shani, Marcel Nicky Arianto, Akbar Dwi Wahyono, Beni Suryadi, Putri Apilia Maharani

Discover how policy and regulatory reforms can unlock the potential of solar and wind power in Indonesia, Thailand, Vietnam, and the Philippines. This new report assesses the barriers hindering renewable energy development in Southeast Asia and proposes practical solutions to accelerate the transition to clean energy. Learn about the essential steps to design de-risking mechanisms, enhance planning certainty, and revise power purchase agreements to incentivize flexibility. Explore the proposed strategies for phasing out coal and gas power in a just and equitable manner, including the "Retire, Reserve, Repurpose" approach.

Thailand has huge rooftop solar potential that could offer both benefits of diversifying the country's renewable energy sources and enabling distributed generation at the consumer level through behind-the-metre installations.Despite a surge of rooftop solar PV installations in 2023, driven by high electricity prices, the current adoption rate of rooftop solar PV systems inThailand is still much lower than its vast potential. This gap is due to several policy, regulatory and financial risk barriers. This study systematically identifies the risks associated with rooftop solar PV investment in Thailand  and quantifies these risks’ impacts on financial costs (i.e., the cost of equity and the cost of debt). In addition, the study highlights suggested policy and financial de-risking instruments that can support rooftop solar PV deployment in Thailand.

This inaugural Jelajah Energi was conducted in Central Java as part of our collaboration with the Central Java Provincial Government. The Institute for Essential Services Reform (IESR) has been working with the Provincial Government of Central Java to accelerate the utilization of solar energy through the Central Java Solar Province initiative since 2019. Through various research activities, capacity building, and information dissemination, solar energy is encouraged to become one of the main sources of energy fulfillment in Central Java. In this province, various stories of energy transition can also be found, with many types of renewable energy and stories of people feeling the benefits.