Documenting Southeast Asia's Energy Transition: Insights from SIPET’s Project Mapping Tool

Background: 

Coral Life is a trailblazer in the provision of sustainable building solutions in Thailand, and the company has been making significant strides in the design and construction of energy-efficient buildings in Asia. The company was founded by James Duan, who has extensive experience in property development and wanted to address inefficiencies in traditional construction practices. Coral Life’s mission centers on creating innovative, energy-efficient buildings that not only minimize environmental impact but also enhance living and working conditions. The company’s pioneering efforts led to the development of the first house in Southeast Asia’s certified by Germany’s Passive House Institute (PHI), which sets a new standard for energy-efficient construction in the region.

Peter du Pont and Marc Tagub of SIPET recently sat down with Thien Juengwirunchodinan, Head of Marketing for Coral Life. In our conversation, Thien offered a candid look into the company’s evolution, its revolutionary technologies, and its aspirations for energy-efficient construction in Southeast Asia. This conversation offers a glimpse into how energy-efficient construction can be a key driver in achieving a sustainable energy transition.

The Context for Efficient Cooling

In a rapidly heating world, indoor cooling energy is a fast-emerging area of concern, and also innovation. According to the International Energy Agency’s (IEA) 2016 Future of Cooling report, “space cooling is the fastest-growing energy in buildings, both in hot and humid emerging economies were incomes are rising, and in the advanced industrialised economies”. Final energy use for space cooling in residential and commercial buildings worldwide more than tripled between 1990 and 2016, to 2020 terrawatt hours (TWh) per year. With the recent increase in temperatures, especially in Asia, which has been heating faster than the global average, this figure is going to continue to rise. However, innovations are underway to reduce cooling energy demand and the consequent energy costs, including in Southeast Asia. 

The Coral Life Approach

In Thailand, the Coral Life Group has been designing and building residential buildings that have lower indoor temperatures. It does so by eliminating heat transfer through effective building envelopes and low-flow ventilation strategies, which results in buildings with high thermal comfort and very low energy use.

Coral Life founder James Duan’s experience in property development in Greater Bangkok exposed him to the inefficiencies in residential construction. Determined to innovate, he committed Coral Life to the creation of energy-efficient, sustainable living spaces.

“It has always been our strategy to think about innovative buildings, innovative ways to introduce (quality of) living, and absolutely innovative ways to create living and working spaces,” said Thien Juengwirunchodinan, Head of Marketing at Coral Life.

This approach led the company to build a demonstration home in Thailand that meets the standard levels set by the Passive House Institute (PHI), which are the world’s most stringent standards for energy usage. Originating in Germany, these standards required adaptation for Thailand’s hot and humid climate. When Coral Life executed its cooling strategy in building a house near Suvarnabhumi Airport, the 200-square-meter residence became the first PHI-certified house in Southeast Asia. “This helped us understand what it takes and what can be achieved in being super energy efficient, given what was built,” Juengwirunchodinan said.

The results of this demonstration project were extremely encouraging.  “With a highly effective  building envelope and ventilation system, the energy bills for the house dropped from 15,000 baht (USD 415) per month to less than 2,000 baht (USD 55) a month, with most of the savings resulting from reduced cooling costs”, explained Juengwirunchodinan.

The Most Energy-Efficient Building in Thailand

In May 2023, Coral Life opened a new headquarters building in Sukhumvit 39 that executes these principles on a larger scale. It is now the most energy-efficient office building in Thailand, and uses  85% less energy than conventional structures. Juengwirunchodinan said that this is not only due to using the right materials, but also the techniques to assemble these materials. “The principles of a strong building envelope and proper ventilation strategies apply universally,” he asserted. 

A critical tool in Coral Life’s toolkit is its advanced humidity control system that maintains relative humidity within 40-60%. “When humidity is controlled, cooling a space becomes less energy-intensive, and people experience more thermal comfort as well,” Juengwirunchodinan said.

This approach leads to major energy savings, but the benefits do not end there. The building design also provides a high-quality indoor living experience. The electricity bills of Coral Life headquarters’ building are 70,000 baht (USD 1,900) per month, compared to 500,000 baht (USD 13,800) per month for a comparable commercial building.  These savings have been achieved without sacrificing comfort or functionality. The building is a functional office space, with lighting systems, ventilation and cooling systems, appliances and equipment, and plug loads, but the thermal comfort of the building is evident when one enters the space—with quiet, low-flow ventilation, relatively low-humidity levels and clean indoor air with near-zero levels of pollutants.

“It’s not about turning off everything that we don’t use, but about spending what (energy) we use efficiently,” Juengwirunchodinan pointed out.

The Challenges Ahead

One of the major challenges that Coral Life faces is to mainstreaming the design of efficient features into the construction of new buildings. “We are making some progress and are already developing buildings to high levels of efficiency for some of our clients”, says Juengwirunchodinan. " The biggest challenge is communication and awareness. It’s not a question of whether the efficient construction works. It’s a question of understanding how it works and convincing the client of the benefits and the win-win nature of this approach.”

Juengwirunchodinan also highlighted the importance of supportive government policies and financial incentives, such as green loans and tax breaks, which he says are crucial to facilitate much broader adoption of energy-efficiency building techniques. 

Coral Life’s journey underscores the huge potential of energy-efficient buildings in driving the energy transition. By demonstrating substantial cost savings, enhanced thermal comfort, and alignment with larger environmental goals, the company is setting a benchmark for sustainable urban living, and creating an inspiring vision for a future in which energy-efficient buildings will be the norm.

Peter du Pont is the Co-Founder and Co-CEO and Marc Tagub is the Team Leader – Knowledge Management and Stakeholder Engagement, for Asia Clean Energy Partners, a Bangkok-based company.

The 19th Asia Clean Energy Forum (ACEF) 2024, held from June 3-7 at the Asian Development Bank (ADB) Headquarters in Manila, gathered more than 1,200 clean energy practitioners from 71 countries under the theme “Accelerating the Clean Energy Transition and Ensuring Energy Security and Affordability – Time for Urgent Action Now.”

ADB President Masatsugu Asakawa opened the Forum by highlighting ADB's commitment to mobilizing $100 billion of financing for climate initiatives over the next decade. Keynote speakers reinforced the need for immediate climate action and shift to clean energy.

The forum featured 50 sessions, including 16 Thematic Track Sessions that discussed important aspects of the energy transition, particularly how we can triple renewable energy capacity and double progress in energy efficiency by 2030.

• Sessions in Thematic Track 1 (Renewable Energy) covered strategies for prioritizing renewable energy and accelerating investments to achieve this goal.

• Sessions in Track 2 (Energy Efficiency) outlined strategies to double progress on energy efficiency, focusing on regulations, incentives, and comprehensive policy packages to drive market transformation.

• Sessions in Track 3 (Electricity Transmission and Distribution) highlighted the need for significant investments in grid infrastructure to integrate renewable energy, emphasizing the importance of governance frameworks and financial planning.

• And finally, sessions in Track 4 (Hard to Abate Sectors) explored a range of innovative clean energy solutions, including green hydrogen; carbon, capture, utilization and storage (CCUS); and advanced digital solutions for industrial decarbonization. Speakers stressed the need for improved policy frameworks and effective financing mechanisms.

ACEF 2024 also featured Regional Sessions covering clean energy initiatives across the subregions of Asia and the Pacific. A significant area of focus was the role and importance of cross-border electricity trade to enhance regional energy security. Meanwhile, Spotlight Sessions covered emerging topics such as comprehensive energy planning, clean energy integration, and the role of women in bridging the clean energy financing gap.

The forum concluded with speeches and panel discussions on how we can achieve a clean energy transition that leaves no one behind.

As with previous ACEFs, this year’s event successfully fostered an environment for clean energy stakeholders to connect and share knowledge, innovative approaches, and financing solutions. The outcomes shared and the commitments made at ACEF set a strong foundation for achieving a just and inclusive energy transition for Asia and the Pacific.

For more details and insights from ACEF 2024, you can access the video recordings by visiting the session pages: https://asiacleanenergyforum.adb.org/agenda/full-agenda-2024/

There is a significant decline reported in production in Thailand’s major gas fields, primarily located in the Gulf of Thailand. Recent reports indicate that Thailand's gas reserves are depleting, leading to a need to re-evaluate the country's energy strategy (Global Energy Monitor, 2024).

The depletion of domestic gas reserves has the following implications:

1. Energy Security: Reduced domestic production increases Thailand’s reliance on imported energy, particularly liquefied natural gas (LNG). This dependence exposes the country to global market volatility and geopolitical risks.

2. Economic Impact: Higher import costs for LNG can lead to increased energy prices for consumers and businesses, straining the economy. Moreover, investing in gas infrastructure for long-term contracts diverts funds from renewable energy projects.

3. Environmental Concerns: Transitioning from domestic gas to imported LNG has environmental impact, including the increased carbon footprint associated with LNG transport and lifecycle emissions from gas-fired power plants.

To address the decline, the Thai government has outlined strategic responses through its National Power Development Plan (PDP) 2018-2037. The plan aims to enhance energy security by significantly increasing natural gas’ contribution to the energy mix, reflecting a 13% rise from previous projections (Global Energy Monitor, 2024).

The PDP includes expanding LNG imports to offset declining domestic production. Thailand is boosting its LNG import capacity with significant investments in new terminals and infrastructure to maintain gas’ share at about 60% of the energy mix by 2030. However, an expected revision of the PDP will incorporate Thailand’s carbon neutrality targets.

While the transition to LNG imports provides a temporary solution, it introduces challenges such as vulnerability to global market fluctuations and the need for substantial infrastructure investments.

This implies that investments in new gas-fired power plants should account for the evolving roles of gaseous energy carriers in the power sector. It is essential to ensure that these power plants are prepared to switch from fossil fuel-derived gas to hydrogen when it becomes economically feasible, as hydrogen-fueled power plants necessitate different technical designs from those using fossil gas.

The Climate Finance Network Thailand (CFNT) released its recent study on the valuation of stranded assets in Thailand’s oil and gas sectors on 21 June 2024.

Stranded assets are investments that have become obsolete or non-performing due to changes in the market, regulatory environment, or technological advancements. Our study focuses on coal and gas-fired power plants in Thailand, which may need to be decommissioned earlier than their intended lifespan due to the country’s shift towards renewable energy.

The study employs a comprehensive discounted cash flow model to forecast the financial impact of decommissioning coal and gas power plants under three scenarios: Business-As-Usual, Rapid Transformation, and 100% Renewable Energy. Utilizing data from the GEM and financial records, the study calculates the potential values and the net present value (NPV) of stranded losses.

The results indicate significant risks of stranded assets from 2025 onwards. Under the Rapid Transformation and 100% Renewable Energy scenarios, a substantial portion of coal and gas-fired power plants may be decommissioned early, resulting in potential stranded losses of up to 360 billion THB and 530 billion THB, respectively. These figures highlight the financial overvaluation risks for major energy utilities in Thailand.

The transition towards a low-carbon economy, while environmentally essential, poses significant financial challenges. For investors, particularly those involved in the stock market and bond issuances, this transition could lead to substantial stranded losses. Major energy companies in Thailand, such as BGRIM, EGCO, GPSC, GULF, and RATCH, could face downside risks ranging from 6% to 61% of their market capitalization.

For policymakers, these findings emphasize the importance of strategic adjustments, including the need for a credible fossil phaseout plan. Engaging in global initiatives like the Just Energy Transition Partnership (JET-P) could provide financial support and facilitate a just and equitable energy transition.

For more detailed insights, please refer to the full report.

Southeast Asia, the fastest-growing region in the developing world, is at a crossroads. On the one hand, it seeks to develop its economy and provide sufficient and affordable energy to power economic and social development, which has historically driven reliance on fossil fuels. On the other hand, the region is among the most vulnerable to the impacts of human-induced climate change – from deadly heatwaves to destructive floods – that are only intensifying with increased greenhouse gas emissions.

The key to balancing competing priorities in Southeast Asia -- energy security and economic development, and net-zero emissions -- lies in electrification, speedy renewables expansion and long-term energy system planning, experts from the region pointed out during a panel discussion hosted by NewClimate Institute and Agora Energiewende earlier this month. They particularly cautioned against the risks of relying on fossil fuels, especially fossil gas, which is considered a “transition fuel” in the region.

The event brought together regional experts to discuss findings from the research brief “Navigating the transition to net-zero emissions in Southeast Asia,” which compared net-zero pathways focused on reducing fossil fuel use through electrification versus using renewable gases like hydrogen. The brief examined Indonesia, Thailand, Viet Nam, and the Philippines as part of "Clean, Affordable and Secure Energy for Southeast Asia (CASE)” project.

The main challenge for Southeast Asia is to secure affordable and reliable energy supply to meet rising energy demand while decarbonising its energy sectors. Many of ASEAN’s 10 member states set their own climate targets and energy transition plans, with eight committed to net zero by 2050. The ASEAN region is on track to meet its collective target of expanding renewable generation capacity to 35% by 2025. However, governments also plan to increase the use of fossil gas, especially liquefied natural gas, viewing it as a less polluting alternative to coal during the transition to renewables.

Hidden costs of fossil fuel reliance

Angelika David, manager for energy policy at the Institute for Climate and Sustainable Cities in the Philippines, emphasised the “hidden costs” of relying on fossil fuels. Electricity prices in the Philippines are among the highest in Southeast Asia, largely due to its heavy reliance on imported coal for electricity generation. In 2021, about 59 percent of electricity was generated from coal, with nearly 65 percent of its coal supply imported, primarily from Indonesia, making it vulnerable to fluctuations in global fuel prices. 

“Recent power outages underscore the vulnerability of our dependence on fossil fuels in a centralized, baseload-heavy power grid,” David said during the panel discussion, referring to several power outages this year in the Philippines’ Luzon and the Visayas regions – the country’s two of three main island groups. These disruptions are attributed to issues linked to fossil fuel power plants, such as unplanned shutdowns due to technical failures, aging infrastructure, or soaring peak-time demands.

“To reach the climate targets in the Philippines, it's important to focus on necessary changes in power systems planning and policy making,” she said. “Transitioning to a more flexible and distributed power generation through renewable energy sources would be the solution.”

Expanding fossil gas infrastructure risks worsening the region’s import dependence, another expert pointed out, given rapidly declining gas reserves.

“Southeast Asia is highly cost-sensitive and will become a net gas importer in the next few years. Within the next decade, even some of the largest gas-producing countries in the region will start importing gas as their own resources deplete,” said Putra Adhiguna, managing director at the Energy Shift Institute. ASEAN countries are likely to be net importers of gas by 2025, according to the ASEAN Centre for Energy and International Energy Agency.

Adhiguna also noted that new gas infrastructure could become a costly stranded asset, as gas plants would need to retire before their economic lifespan to meet global and national climate targets. Furthermore, continued gas use could divert limited resources from investing in renewable infrastructure. “The lock-in risk is quite real. We need to look at it from a whole system perspective,” Adhiguna said.

To avoid these risks, it is crucial that renewables capacity and grid infrastructure are rolled out rapidly enough to prevent the influx of the gas sector and backtracking of the governments on their climate commitments, he added.

The way forward: electrification, renewables scale-up, and flexibility

In Vietnam, major challenges in achieving net zero arise from energy security and affordability, according to Dr. Pham Hoang Luong, director of the Vietnam-Japan International Institute for Science and Technology and a senior lecturer at Hanoi University of Science and Technology. 

“As the country’s power supply has relied mainly on fossil fuels, it is not easy to shift directly from fossil fuels to cleaner energy sources. It needs a roadmap and action plan to be implemented gradually to guarantee energy security, which is crucial to the nation’s development,” he said.

The new research brief offers key action points for the CASE countries to improve energy efficiency and affordability while reducing overall energy needs: electrifying energy end-use, such as switching to electric vehicles or heat pumps in industrial processes and using electricity sourced from renewables directly to replace fossil fuels.

“So we will need much more electricity. And for this to be carbon neutral, we need renewable electricity. And to align with net-zero targets, the speed of renewable electricity deployment must increase significantly beyond current government plans,” said Hanna Fekete from NewClimate Institute.

Rapid expansion of renewable infrastructure would require substantial investments, policy support and long-term energy system planning. And energy systems must become more flexible to accommodate shifts in energy carriers and changing patterns in electricity demand.  “The system flexibility becomes a cornerstone of energy security. Such a system requires much more electricity storage. It also requires much more demand-side responses,” Fekete added.

Fundamentally, to underpin such shifts, “energy security” should be redefined, according to Mathis Rogner, project leader at Agora Energiewende.

“How we view ‘energy security’ must shift from ‘securing fossil fuels through import contracts or domestic resources’ to one that emphasizes renewable energy, system flexibility and resilience,” he said – a system that minimises energy demand and supplies sufficient electricity efficiently without exacerbating the climate crisis.

“What we should focus efforts on now is really to build renewables and working to build systems that allow for those renewables to contribute most effectively. For example, by investing in improving system operations and in power grids not only in infrastructure, but also in processes and institutions that serve them,” Rogner said.

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Written by Hyunju (Laeticia) Ock, Writer and Editor at NewClimate Institute