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74 C L I M AT E
G r e e n p l u s T M
| J u n e - J u l y 2 0 1 5
I
t is true though that the EU
relationship with ASEAN i...
75C L I M AT E
G r e e n p l u s T M
| J u n e - J u l y 2 0 1 5
implementation of the ASEAN
Plan of Action for Energy
Co-...
G r e e n p l u s T M
| J u n e - J u l y 2 0 1 5
76 C L I M AT E
Guidelines, clearly stated that the
main obstacles for s...
77C L I M AT E
G r e e n p l u s T M
| J u n e - J u l y 2 0 1 5
For Laos, the government aims to
electrify 90 percent of ...
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Renewable Energy Milestone Act as Reference in Climate Change Partnership of ASEAN-EU

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Published in Green Plus magazine June/July 2015 issue.

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Renewable Energy Milestone Act as Reference in Climate Change Partnership of ASEAN-EU

  1. 1. 74 C L I M AT E G r e e n p l u s T M | J u n e - J u l y 2 0 1 5 I t is true though that the EU relationship with ASEAN is rel- atively young compared to other regions in the world. Yet the EU needs to advance towards the next diplomacy and international rela- tionship phase with ASEAN, focus- ing not only on dialogue but also translating dialogue into concrete actions. Certainly, climate change could be one of the areas of common interest for both parties. In order to bringASEAN member states on board, the EU needs to:  understand ASEAN’s posi- tion and concerns related to climate change and economic development  commit substantive finan- cial support to assist ASEAN to implement its climate change priorities. Starting with climate finance, it is no longer a secret that the EU has increased its financial cooperation package to ASEAN for the period of 2014-2020 and that climate change is one of the components of future cooperation. Yet, such a committed financial flux might not be enough to develop the green economy that the ASEAN region is pursuing. From this point of view, the EU should think of proposing addi- tional financial tools for ASEAN such as the increase of financial lines that the European Investment Bank is channelling today towards ASEAN countries. For instance, an EU-ASEAN facility to promote low carbon economic activities in ASEAN countries could be created. This could facilitate not only the implementation of climate change policies inASEAN but also to foster the participation of EU private sector in the region, as well as the transfer of EU technology. European Countries have gone through a very long process from heavy industrialisation with massive environmental costs including anthropogenic climate change. Looking at cumulative emissions (Fig1), Europe is still one of the main sources of GHG in the atmosphere: It is of great concern, ASEAN countries are changing dramat- ically with rapid increment of cumulative GHG emission. This could be the main reason for the current “donor” and “recipient” sit- uation. Hence, it is a fundamental interest for EU countries to help ASEAN countries to streamline the long transition towards low carbon economy. Specifically in the view of the current climate change adaptation, it will only work if ASEAN countries are working towards the mitigation strategies at the same time. If the two degree Celsius target of reduc- tion cannot be reached, Europe will be faced with a massive loss of adaptive capacity. Likewise, ASEAN countries are also mas- sively impacted by climate change and need to develop our own climate adaptation strategies where we can benefit from European knowhow. Hence, the partnership benefits are leapfrogging for the high emis- sion pathway in ASEAN countries towards a low carbon economy and at the same time transfer- ring the bottom up knowledge on adaptation from Europe to ASEAN countries. RENEWABLE ENERGY (RE) REALISATION IN ASEAN The EU has been supporting ASEAN in the energy sector for over 25 years. One program is the EC-ASEAN Energy Facility (EAEF) coordinated by theASEAN Centre for Energy (ACE) from 2003 to 2007. The objectives of the EAEF were:  increasing the security of energy supply of ASEAN coun- tries and indirectly of Europe,  increasing the economic exchanges between European Union and ASEAN countries,  improving the environment at local and global level, and  f a c i l i t a t i n g t h e  By KENNETH WONG Renewable energy milestones act as reference in climate change partnership of Asean-EU The EU needs international allies to advance with her ambitious international agenda at the upcoming 2015 Paris Climate Conference and ASEAN States could fulfil those needs. By the end of 2015, the ASEAN Socio- Cultural Community (ASCC) will be embarking on a new course which will be based on an ASCC Community 2025 vision. These two entities have tried hard to find a common ground. Clichés such as the lack of experience, funding, data, as well as policy barriers have handicapped the development of renewable energy (RE) realization in ASEAN. Economic growth, job creation and poverty alleviation remain the overriding objectives in most of the ASEAN countries. If the EU and its member States are to support a green transition within ASEAN, perhaps the first and most important question to ask will be: How can green initiatives contribute to economic growth and jobs? It is also hoped that through the history of long ties in the renewable energy sector between the EU and ASEAN, we can witness its milestone and brainstorm EU-ASEAN climate change partnership. Delegates gather for the Lima Climate Action High-level Meeting
  2. 2. 75C L I M AT E G r e e n p l u s T M | J u n e - J u l y 2 0 1 5 implementation of the ASEAN Plan of Action for Energy Co-operation (APAEC) 1999- 2004 and subsequently 2004-2009. The EAEF is the single biggest source of fund for both period of APAEC mentionedi. For the APAEC 2010-2015, the strength- ening of the Senior Officials Meeting in Energy (SOME) with EU consultations is expected to bring mutual benefits to both ASEAN and EU. The overall strategic directions of energy cooperation in ASEAN are set out in APAEC 2010-2015 which defines the regional policy objectives, strategies, and action plans for the different sectors rep- resented by the sub-sector net- works and industry associations, across seven program areas, namely: 1. ASEAN Power Grid; 2. Trans-ASEAN Gas Pipeline (TAGP); 3. Coal and Clean Coal Technology; 4. Renewable Energy; 5. Energy Efficiency and Conservation; 6. Regional Energy Policy and Planning; 7. Civilian Nuclear Energy. ACE’s mandate is to initi- ate, coordinate and facilitate regional, as well as joint and collective activities on energy. For (3), (5) and (6), the main sources of funding are ASEAN dialogue partners: the EU, Japan, Australia, China, Korea, and India. Not to overlook, the original TAGP aims to develop a regional gas grid by 2020, by linking the existing and planned gas pipeline networks of the ASEAN Member States. The updated TAGP Masterplan 2000 involves the construction of 4,500 km of pipelines mainly undersea, worth USD7 billion. Eight bilateral gas pipeline inter- connection projects, with total length of approximately 2,300 km, are currently operatingii. It is observed that there is a growing realisation within ASEAN that, it will be necessary to promote alternative energy supply/diversifi- cation if the countries are to main- tain (and in some cases even increase) recent impressive eco- nomic growth rates. ASEAN will continue to be heavily dependent on fossil fuels in the coming years and the increase in electricity demand in the next 15 years (estimated at around 3-4 % yearly) will further enhance the dependence on fossil fuels, espe- cially coal. No doubt there is a growing focus on RE technologies as part of the solution. RE and energy efficiency is of course also high- lighted by ASEAN as part of the response to climate change (e.g. in the recent ASEAN joint statement on Climate Change from Nay Pyi Taw, November 2014). The ASEAN Institute of Green Economy (AIGE) was also launched for overhauling the economy in a way that synthesizes economic growth with the environ- mental protection for sustainable economy. However, there is still quite an “implementation gap” on the ground. For example, Indonesia, has set an ambitious target of 23 % renewables in the energy mix by 2025iii. From the humble start of 6% today, in order for Indonesia to reach (or come close to) the target, there is a need for large scale investments. These investments are not only RE technologies such as thermo, wind, solar, bio, hydro; but also in energy infrastructure, grid connec- tivity and political support for reg- ulations which allow renewables to become an economically viable alternative to fossil fuels based electricity production (e.g. agree- ments on feed in tariffs between private and public stakehold- ers etc.). This demands not only capital flows but also a conscious political decision to prioritise RE. In the case of Indonesia, this question has evidently become even more important with the new government led by the reform-ori- ented president Joko Widodo. Widodo has clearly stated key pri- ority is to sustain and even accel- erate economic growth. Some economists predict that even the 7-8 % economic growth that the government has set is an ambi- tious target. The result will be in the low end in terms of creating enough jobs to accommodate up to 2 million new job seekers every year. It is therefore not a surprise that focus is on reforms and initiatives which will advance economic growth – not least infrastructure invest- ments, facilitating foreign invest- ments and increasing productiv- ity – but also longer term invest- ments in health and education. Green and sustainable measures will be welcomed if they can con- tribute to this. This is where we need to be able to argue that green growth is part of the solution. Another issue is the limited experiences in effective public-private cooperation mech- anisms which can drive green growth. There is a growing realisa- tion of the necessity for public and private sector to work in tandem, in order to promote specific sustain- able solutions and technologies. It is not yet clear exactly how this could and should be modelled in this areaiv . Expertise Transfer/ Exchange between EU-ASEAN ASEAN countries have made considerable effort to tap the vast RE resources in the region. Several countries introduced feed- in-tariffs or regulations for RE as well as other supportive policies, for example, tax and customs exemptions or tax holidays. Despite those efforts and some promising developments, a large scale market for RE applica- tions has not yet been in place in the region. The publication of Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), ASEAN Renewable Energy
  3. 3. G r e e n p l u s T M | J u n e - J u l y 2 0 1 5 76 C L I M AT E Guidelines, clearly stated that the main obstacles for successful large scale implementation of RE in ASEAN, are quite similar to the problems Europe faced in the early day of renewables. In particular, complex adminis- trative procedures, lack of trans- parency in the project cycle and permitting procedures as well as insufficient access to finan- cial resources, are identified as important encumbrance to an effective RE market and industry developmentv. The ASEAN RE Guidelines are developed to facilitate the increasing private sector activity and investment in the RE sector of ASEAN. Since the confidence of the project developers and inves- tors is the prerequisite to boost the region-wide RE deployment, the transparency of the project devel- opment and permit procedures is indispensable. To this end, the Renewable Energy Support Programme for ASEAN (ASEAN-RESP), jointly implemented by the ACE and GIZ, is developing a comprehen- sive, easy-to-access and regularly updated online tool which includes complete information on ideal RE project development cycles in the respective countries. Against this background, ASEAN-RESP developed guide- lines for biomass/biogas, and mini hydropower (MHP) project devel- opment in Indonesia in cooperation with the Least Cost Renewables Project Indonesia (LCORE) are developed. In a next phase, guide- lines for PV in the Philippines, Thailand, Malaysia, and biomass/ biogas in Vietnam are envisaged. By now, we shall recognise the EU brings something real to the table of RE, not only because of EU’s climate change commit- ments, but also least in terms of their longstanding experiences and proven technologies. The EU is not the only player but they are certainly among the most import- ant ones: from regulations and policy, to capacity building, tech- nical solutions, planning and spe- cific technology transfer, the EU and its member States have con- crete experiences to share with ASEAN. Certainly, the fact that ASEAN member states do not share the same energy profiles, economic development strategies or politi- cal realities represent a challenge for any international organization to formulate a unique RE plan for ASEAN. Identifying common areas of interest in RE in ASEAN is thus a key for the EU, same applicable to climate change initiatives. Given the exponential growth of cities in ASEAN, topics such as energy efficiency in buildings is probably an area of common interest for all ASEAN countries. Equally biofuels are also a topic of interest for a good number of ASEAN countries. For Malaysia, the implementation of the National Biofuel Policy is spearheaded by the Ministry of Plantation Industries and Commodities. In addition, the EU could support ASEAN countries in engaging the regulatory reforms to promote RE and share with them, the results of the different policies and incen- tives undertaken by EU member states over the last 20 years. There is not a single EU stra- tegic approach to promote RE in ASEAN member states, at least compared with initiatives and actions initiated by the EU on RE with other regions such as China, Central Asia or Russia. The EU has focused its inter- national energy cooperation on those countries and regions that have an impact on the state of the energy market worldwide, such as China, or that affect the secu- rity of the EU energy market itself, such as Russia. Promotion of RE tends to be an item included in the package of the cooperation agree- ments signed with such countries/ regions. Baseline in Place with Bilateral Support Under Denmark’s Development Cooperation (DANIDA), Denmark has a longstanding Environmental Support Programme which sup- ports the government of Indonesia in developing inclusive and sus- tainable growth through improved environmental management and climate change mitigation and adaptation. Focus has been very much on regulation and capacity building. That remains the case today. Another kind of activity is helping to evaluate the environmen- tal impacts of large scale infra- structure projects as well as support Indonesia to map out its actual potential for renewables. For instance, DANIDA has been supporting a ‘wind atlas’ cover- ing several provinces, identifying the specific locations where the highest wind potential is. Likewise, under DANIDA Renewable Energy/ Energy Efficiency Project in Malaysia with Economic Planning Unit (EPU), several studies have been conducted: Study on Clean Development Mechanism (CDM) Baseline Methodologies for Palm Oil Mill Effluent (POME) Methane recovery project, CDM Capacity Building Programme, Policy Analysis in Waste to Energy Projects (landfills, palm oil waste as well as biodiesel), Barrier Analysis of Biomass Supply Chain as Renewable Fuel in Malaysia etcvi. In Malaysia, although RE resources such as biomass and solar are abundant, policy frame- work, mechanisms, technologi- cal development, human capac- ity etc. are necessary to facilitate the development of the RE market. Cambodia has set a country target achieving 100% electrifi- cation in rural communities by 2020, using renewable sources.
  4. 4. 77C L I M AT E G r e e n p l u s T M | J u n e - J u l y 2 0 1 5 For Laos, the government aims to electrify 90 percent of households by 2020, increase the share of RE to 30 percent by 2025, and make biofuels substitute 10 percent of oil imports by 2025vii. In terms of energy efficiency, however both countries are just at the initial stage, building capac- ity in energy management and energy auditing, mostly under regional cooperation and bilateral projects. The ASEAN-German Cooperation is currently on-go- ing with the implementation of the 5-year project onASEAN - German Mini Hydro Project (AGMHP). The project aims to improve the pre- conditions for sustainable utiliza- tion of mini-hydropower (MHP) sources in Cambodia, Lao PDR and Vietnamviii. Added to what is already in place at the national level, more ASEAN stakeholders and decision makers ought to visit the EU to inspect some of the solutions that have been successfully implemented. Denmark has established a pub- lic-private agency called ‘State of Green’, as a professional visit organiser whereby such delega- tion visits are considered useful in showcasing the benefits of green investments. The direct cooperation and dia- logue between our relevant sec- torial ministries and authorities in ASEAN and EU is also significant. Getting experts to talk and share experiences can help in solving both the regulation and technical issues. One milestone which we could witness from Denmark is, the Frederikshavn Municipality has pre- pared a strategy plan on RE 2030, to implement the energy policy of Frederikshavn Municipality for the entire Municipality as geograph- ical boundary and aims towards a 100% RE supply and optimum energy consumption by the year 2030. Way Forward Global energy supplies have become a scarce commodity. The thirst for energy of upcoming industrial nations in South-East Asia and dwindling resources in Europe make the issue even more pressing. The EU-ASEAN dialogue on Energy was launched in the margins of the ASEAN Senior Officials Meeting on Energy (SOME) in 2007, pro- gressively until today’s READI dialogue on Energy, the aim is to further enhance EU-ASEAN Energy co-operation and to further enhance linkages, trade, invest- ment and economic co-opera- tion through the preparation and implementation of a package of mutually beneficial policies, pro- grammes and activities designed in particular to promote transition to a low-carbon economy. Two objectives of APAEC agreed collectively by the ASEAN ministers were to reduce regional energy intensity by 8% by 2015 from the 2005 level, and to increase the total regional power installed capacity of RE to 15% by 2015. In ASEAN, the share of RE in primary energy consumption was 28.1% in 2005 equivalent to 133 MTOE and is expected to grow annually at a rate of 9.1% to reach 185 MTOE in 2030ix. The APAEC recognizes global and regional issues and chal- lenges on energy and climate change including inter-related issues on food and energy security as well as the impacts of energy development on health, safety and environment. In addition, the APAEC recognizes the importance of establishing an efficient, trans- parent, reliable and flexible energy markets in the ASEAN region and improvement of access to afford- able energy to eradicate energy poverty. Although some cross-bor- der energy projects have been designed for the Greater Mekong Subregion (GMS), implementation and progress have not been sat- isfactory. The reasons identified include: the lack of infrastructure to facilitate intraregional energy trading; concerns over externali- ties which are inherent in energy distribution networks; and an absence of regional frameworks to share costs and benefits from energy tradingx. Hence, there are still significant barriers to imple- ment energy trading in the GMS. So, we truly hope that the READI dialogue on Energy could further enhance the implementa- tion of APAEC, in particular in the areas of energy efficiency and conservation, biofuel, investment framework, and energy security. And subsequently, supportASEAN in the use of RE for rural devel- opment, regional energy trading, research and development in clean energy production, and exchange of energy policies infor- mation, including policy formula- tion and initiatives. It is also useful to keep in mind that even if ASEAN states are cooperating in environmental issues and ASEAN has developed several joint statements on climate change issues, ASEAN does not yet act as a formal group in climate change negotiationsxi. In other words, there is not per se an ASEAN position in the climate change arena as each country continues to have its own position and are many times inte- grated in different climate change negotiation coalitions. ASEAN do urge the developed countries to accelerate their contributions to the Green Climate Fund, to mobil- ise it as a matter of priority, noting that the distribution process should be effective, predictable and easy to access. It is interesting to observe on side track that, a coalition formed by Greenpeace, Oxfam and WWF, ASEAN for a Fair, Ambitious and Binding Global Climate Deal (A-FAB) aims to sharpen and strengthen ASEAN’s position as a regional bloc at the UNFCCC. This might suggest that to a certain extent, the civil society in ASEAN is more advanced than the politi- cal front in reaching a single view on regional climate change. For ASEAN member states, the EU has not yet developed a comprehensive approach towards cooperation in the area of energy, although the region has achieved a significant role as a demand energy market key player. In setting up an effective climate change strategy for ASEAN, the EU should not propose an action plan focusing only on the techni- cal or economic aspects related to climate change. Instead, it would be better to forge a link with the ongoing ASEAN’s Regional Energy Policy and Planning efforts, development and poverty policies. There is no doubt that gaining support for RE policy in ASEAN in the past implies that EU is not only contributing to national energy independence but most importantly that RE will also help to achieve social and eco- nomic goals in ASEAN states. Only if linked to poverty mitiga- tion and economic goals, the indi- vidual national stakeholders – con- sumers, private sector, institutions — can feel the real advantages of evolving towards an energy para- digm transition and support their governments in adopting the climate change policies. i. ASEAN PLAN OF ACTION FOR ENERGY, APAEC 2010-2015 report, by ASEAN Centre for Energy, item 58. ii. APAEC 2010-2015 report, ACE, item 35. iii. http://www.thejakartapost.com/ news/2013/07/13/indonesia-told-focus-renew- able-energy.html iv. http://www.thejakartapost.com/ news/2015/03/20/private-public-partner- ship-key-sustainable-new-city.html v. http://re-guidelines.info/ vi. http://ecoideal.com.my/services/ renewable-energy-and-energy-efficiency/ vii. Li. L & Vijitpan T. (2014), Energy, Economy, and Climate Change in the Mekong Region. In Lebel L. (Eds.), Climate Risks, Regional Intergration, and Sustainability in The Mekong Region (pp. 21). Bangkok: Stockholm Environmental Institute. viii. APAEC 2010-2015 report, ACE, item 62. ix. APAEC 2010-2015 report, ACE, item 44. x. Li. L & Vijitpan T. (2014), Energy, Economy, and Climate Change in the Mekong Region. In Lebel L. (Eds.), Climate Risks, Regional Intergration, and Sustainability in The Mekong Region (pp. 24). Bangkok: Stockholm Environmental Institute. xi. Chan N. (2015), “The regional origins of international coalition formation: developing countries in the UN climate negotiations”, paper presented at ISA Global South Caucus International Conference, pg. 8.

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