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Energy Transition in Southeast Asia

Decarbonizing while growing: Energy Transition in Southeast Asia’s power sector

Like most countries in the world, Southeast Asia’s economies have made their own nationally determined commitments during UN climate conferences, most recently updated in 2021 during the Glasgow negotiations. Southeast Asia will face an uphill challenge as they embark on energy transition toward net-zero, which will take place alongside continued strong economic growth as well as electrification.

Our power team highlights and identifies the key opportunities and risks for market participants along the energy transition roadmap of this region’s power sector. Please watch this space for periodic updates of strategic reports that will answer some of the thorniest questions on energy transition in the region, drilling deeper into each of the markets we follow.

Upcoming featured topics

Supporting the development of ASEAN economies: Understanding the strong power demand growth in the region - Video

Southeast Asia's power demand growth has averaged an impressive 4.7% annually in the past decade, making it one of the fastest growing markets in the world. The region will quickly pick up the pace post pandemic, with a robust 3.2% power demand growth rate to 2050 to support the development of economies. Which sectors will drive this continued growth in the region, and is this a result of electrification, structural changes or other reasons?

The electric vehicle revolution: The impact on power systems in Southeast Asia - Blog Article

Governments across Southeast Asia are promoting the shift from internal combustion engine (ICE) vehicles to electric vehicles (EVs). Although the timing of the shift from ICE to EV will differ, the overarching plan is for the gradual adoption of electric vehicles. How will the adoption of more electric vehicles affect the power system in terms of demand and the demand profile?

The role of coal-fired power plants in Southeast Asia accelerated energy transition - Webinar

Phasing out coal-fired power has been a common strategy in developed countries' energy transition roadmap. Given the large share of coal generation (42%), young age profiles (avg 11 years), growing demand for baseload power and affordability concerns, will acclerating coal-fired capacity retirement be feasible? Will biomass/ammonia co-firing or carbon capture be adopted in the region to maintain the coal-fired capacity be an option? What role would the coal capacity play in a net-zero scenario?

Securing natural gas supply to power Southeast Asia's energy transition - Blog Article

The power sector’s switch away from coal is a key driver in gas demand growth in Southeast Asia. But as governments plan to accelerate coal retirement, will there be enough gas supply to meet the growing demand? Domestic production has been in decline and development of more difficult domestic gas fields continue to face delays. In order for LNG to be able to fill the gap, the regasification infrastructure must be developed in time. Considering the global LNG supply outlook, how affordable could these supplies be?

Post coal-to-gas switch, what's the next fuel option for Southeast Asia? - Blog Article

Southeast Asia governments have been revising their power development plans to reduce the reliance on coal, switching to gas and renewables. Gas-fired generation capacity is estimated to grow by 30% to 130 GW by 2030. However, natural gas-fired generation whether standalone or with carbon capture, is still not a zero-carbon source. This opens up the opportunity for hydrogen—which is zero-carbon—to fuel gas turbines. But will this be an economical option in a region where affordability is a paramount concern?

Southeast Asia's continued reliance on fossil fuel generation: Is carbon capture the solution? - Strategic Report

As fossil fuel generation still remains an important part of the fuel mix over the coming decades contributing to almost 70% of the generation mix by 2030, the journey to net-zero will require carbon capture. When will adding carbon capture be cost competitive enough to be adopted more widely? Which countries will be the early adopters?

Lofty renewable targets in Southeast Asia: How to attract more private investments - Webinar

Across Southeast Asia, governments target to add more than 200 GW of solar and wind capacity. However, there are still gaps in policies and regulations for the proliferation of more renewable capacity. In addition, the returns are significantly lower than the earlier FIT times when equity IRR was at least in the high teens. Against this backdrop, is the renewable sector able to attract sufficient investment to meet the targets?

Seizing offshore wind investment potential in Southeast Asia - Webinar

Philippines and Vietnam are looking to grow their offshore wind sector to meet their growing power demand and transition away from fossil fuels. However, access to low-cost capital remains challenging, owing to the uncertainty surrounding this infant sector with limited government revenue support, lack of local financial capital and shortfalls in the existing renewable PPA structure. Despite these challenges, there are potential risk mitigation instruments which can help to facilitate access to diversified sources of capital and allow the proliferation of the offshore wind sector in the region. Learn more in our upcoming webinar.

One missing key enabler: How to price carbon in Southeast Asia? - Webinar

The majority of countries in Southeast Asia have no carbon pricing mechanism in place. This is one missing key enabler to achieve net-zero. Without a carbon pricing mechanism, the odds are stacked against the more costly low-carbon and carbon abatement technologies, creating an unlevel playing field for them. What is the current carbon pricing policy gap in the region, and what carbon price levels will better support the energy transition?

Balancing affordability and the power sector energy transition in Southeast Asia - Video

Governments in Southeast Asia will be faced with a balancing act, between energy transition and keeping power prices affordable. This is inevitable as energy transition will involve fuel switching, carbon pricing, grid enhancements and the adoption of low-carbon and emission abatement technologies, all of which run counter to keeping power prices low.

Which ASEAN country will be the front runner for net-zero? - Video

Each country in Southeast Asia will begin their journey towards net-zero from different starting points, depending on earlier decisions and policies. Taking an in-depth look into the current plans/roadmap for emission peaking timing, future fuel mix, power supply options, etc., can these net-zero targets be achieved, or will the countries progress even faster or face delays?

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Experts

Xizhou Zhou

Xizhou has expertise in power and renewable market fundamentals analysis and forecasting, power market design and policy analysis, renewable energy business models, and company strategies, among other areas. He previously headed the firm's Power, Gas, Coal, and Renewables practice in Asia Pacific while based in Beijing, where he significantly expanded the group's research and consulting coverage across the region with new teams established in Singapore, Seoul, Tokyo, Delhi, Penang, and Brisbane. Xizhou began his career at S&P Global through one of its predecessor companies, Cambridge Energy Research Associates (CERA), as part of its Emerging Markets and Global Power groups in Cambridge, Massachusetts. Before that, he worked as a consultant on regulatory economics for Industrial Economics, Inc. in Boston and as a research analyst at the World Resources Institute in Washington, DC. Fluent in Mandarin Chinese and proficient in Spanish. He serves as an editorial board member of China Petroleum Society's official journal, Guoji Shiyou Jingji (International Petroleum Economics). He is currently based in Washington, DC.Xizhou holds a Bachelor of Arts and a Master of Environmental Management, both from Yale University in the United States.

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Allen Wang

Dr. Wang leads Southeast Asia power and renewables research and is the research manager for Asia Power and Renewables Analytics. He is a highly experienced energy market consultant with 10 years of experience in power and gas markets in various countries. He is also responsible for providing consulting advisory to commercial clients in energy market planning, regulation, operation, and policies. Prior to joining S&P Global, Dr. Wang was the R&D manager and lead consultant at Energy Exemplar, working on PLEXOS development team management; various utility industry consulting assignments; and system implementations, workshops, and trainings for worldwide clients. Dr. Wang is a member of the Institute of Electrical and Electronics Engineers and the Australian Institute of Energy.He holds a Bachelor of Science and a Master of Science from Huazhong University of Science and Technology, China, and a Ph.D. from the University of Technology Sydney, Australia.

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Joo Yeow Lee

Mr. Lee is part of the Gas, Power and Climate Solutions team. He leads the renewable research for Southeast Asia, covering the fundamental analysis of government policies, targets, regulations, competitive landscape, market players, pricing, market screening and market entry strategies. He helps clients assess and investigate the strategic issues facing Southeast Asia's energy market development and navigate an exciting yet highly uncertain market landscape. He has experience in policy making and regulating for the electricity and gas sector, from his time at the Energy Market Authority (Singapore). This includes market regulations for the competitive sector, comprising licensing frameworks for entry into the sector, market surveillance and monitoring, and market rules development and administration; and economic regulation for the monopoly sector, encompassing revenue and tariff setting for transmission and distribution companies. Mr. Lee holds a Bachelor of Arts and a Master of Science from the Nanyang Technological University, Singapore. He is based in Singapore.

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Cecillia Zheng

Cecillia has extensive work experience and a deep understanding of the power and renewable markets. She helps clients develop holistic view toward in Southeast Asia's power and energy market and provides valuable insights in this regulated and highly uncertain market. Her consulting engagements have covered a broad range of issues, including market entry strategy for power players, power assets assessment and valuation, commercialization strategy for natural gas resources, and energy supply-demand outlooks. Prior to joining S&P Global, Cecillia worked with Alstom Power (now GE Power) , where she was responsible for market intelligence on power generation fuel competition for both thermal and renewable resources.Cecillia holds a Bachelor of Science degree from Nanjing University, China, and a master's degree from ESCP Europe, France.

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Vince Heo

Vince focuses on power and renewable market development and LNG demand analysis. He has more than 12 years of experience in consultancy and industry, with a strong background in policy research, strategy development, and financial analysis in the energy sector. Prior to joining S&P Global, Vince was a senior manager at Ernst & Young, where he led the Power & Utilities consulting practice and assisted clients in the government, power and utilities, financial services, and technology companies in the areas of renewables, energy storage, and other emerging technologies. He also served as an advisor to South Korea's Ministry of Trade, Industry and Energy and the Korea Electric Power Corporation on new energy businesses. Prior to that, he held posts at the Global Green Growth Institute, Bloomberg, and Procter & Gamble.Vince holds a Bachelor of Arts in agricultural economics from Seoul National University, South Korea, and a Master of Science in environmental policy and regulation from the London School of Economics, United Kingdom.

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