JAKARTA: Southeast Asian nations need to more than double their annual investment in renewable energy to meet climate goals, according to a new report.
Average annual investment of US$210 billion is needed on renewable energy, energy efficiency and to support technologies and infrastructure until 2050 to limit a global temperature rise to 1.5C, the report by the International Renewable Energy Agency (Irena) said.
The investment is more than two and a half times the amount currently planned by Southeast Asian governments to reach their goals, Irena said.
“Coal retirement, coupled with renewables and regional grid interconnection, is an indispensable step to aligning with net-zero targets,” said Francesco La Camera, the director-general of Irena.
Southeast Asia is home to 25% of the world’s geothermal generation capacity, but the region also has major coal reserves. The region’s biggest economy, Indonesia, is the world’s top exporter of thermal coal.
While half of the members of the Association of Southeast Asian Nations (Asean) have pledged to stop using coal in the power sector, La Camera said climate commitments required concerted and accelerated action “that must begin now to have a hope of success.”
The region aims to have 23% of its primary energy supplied by renewables by 2025, however, investments in recent years show mixed progress, Irena said.
“Accelerating energy transition is crucial in order to meet climate goals and support the region’s economic growth,” said Nuki Agya Utama, executive director of the Asean Centre for Energy, adding the bloc remained committed to its 2025 goals.
Irena said countries could by investing more in renewables reduce their energy costs and avoid as much as $1.5 trillion of costs related to health and environmental damage from fossil fuels up to 2050.
In a related development, Indonesia’s government has backtracked slightly on a total ban on new coal development.
Companies can develop new coal power plants under certain conditions, according to a new regulation that relaxes previous commitments to phase out development of the world’s dirtiest fuel in pursuit of a 2060 net-zero target.
According to a presidential regulation that took effect on Sept 13, companies can develop new coal power under three circumstances: if the plants will power refineries or metal smelters; if they’re nationally strategic projects; or if they can commit to cutting greenhouse gas emissions by 35% within 10 years of operation.
The rule also says that all coal plants must cease operations by 2050.
In 2021, Energy and Mineral Resources Ministry Director-General Rida Mulyana told Parliament that the government wouldn’t approve any new coal-fired power plants.
The new exceptions highlight the practical challenges in ending coal power, which contributes around half of Indonesia’s total installed power capacity and 70% of power sector emissions.