Clare Richardson-Barlow

Inextricable from discussions of climate change are conversations about energy. Fossil fuels featured heavily in the industrialization and development of the West, and the same is true in the East. As Clare Richardson-Barlow, a Ph.D. candidate in East Asian Studies and the Sustainability Research Institute at the University of Leeds, explains in the interview below, developing countries in Asia have huge potential for sustainable growth but the realities are difficult to balance between day-to-day energy demands and long-term climate concerns. Richardson-Barlow walks us through Asia’s energy quandaries, the implications of cross-border electricity trade, and China’s role as both a top-user of coal and leader in clean energy development.

Asia has immense development needs, and consequently huge energy demands. What energy resources does Asia most rely on?

If we are to look at East Asia as the region, and Northeast Asia (China, Japan, the Koreas, Mongolia, and Taiwan) and Southeast Asia (the 10 member states of the Association of Southeast Asian Nations: Brunei Darussalam, Cambodia, Indonesia, the Lao People’s Democratic Republic, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) as two subregions of East Asia, there are a number of similarities in energy use and trends among East Asian economies.

That being said, patterns in East Asia’s energy use are generally reflective of energy use elsewhere in the world – a historic reliance on traditional hydrocarbons for development, but a lot of potential and interest in growth in renewables and a move away from hydrocarbon fuels. While there is a history of hydropower use across the subregion of Southeast Asia, particularly in the Greater Mekong Subregion, growth in renewable energy use has historically been limited based on economic, geographic, physical, and policy constraints. Northeast Asia is quite widely known for its reliance on coal, gas, and oil; however, there is a lot of investment and interest in diversifying the energy mix in the subregion and among its neighbors. While the broader East Asian region has a history of fossil fuel powered development, the region definitely has a future in renewables and clean energy use.

Up to now, development has always come hand-in-hand with reliance on cheap fossil fuels. What prospects are there for Asia's developing countries to pave a different, more sustainable path for growth?

Developing economies in Asia have huge potential for sustainable growth – there is public and policy incentive, reflected in Southeast Asia’s energy targets. Each member economy of ASEAN has set their own emissions reductions targets as well as renewable targets aimed at increasing renewable energy sources in the primary energy mix. ASEAN as a whole is aiming for 23 percent of primary energy from clean, renewable sources by 2025. ASEAN has also committed to growth in cross-border electricity trade, aiming to connect the subregion’s national electricity markets and increase the subregions use of intermittent renewable energies.

There is investor interest in clean energy development in the subregion, and nations from within and outside Southeast Asia are actively committing to development of projects that will improve quality of life and increase the use and impact of renewable energy in the subregion. USAID (the United States Agency for International Development), GiZ (the German Corporation for International Cooperation), and other national development programs and regional development banks like the Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB) have contributed financial and technical support to energy program development and clean energy transitions in the subregion. On paper the growth potential and drive for a new pattern of development are there. Where financing has historically been a barrier, many innovative business models and development initiatives are available to see renewable projects take off, and as a result electricity access and quality of life will be further improved.

However, I do think it is imperative to note that the continuation of fossil fueled development is understandable from a development and quality of life perspective. It is very easy for me, in an industrialized, Western country to judge the energy choices of those who have less affordable and reliable access to electricity. So while the goal is increased renewable energy use and further development of the global clean energy transition, there are aspects of this transition that remain hard to balance on the ground, in the region, where day-to-day choices are not as black and white as they may be for me or readers in America and Europe.

When it comes to the cross-border electricity trade, how has its development impacted the trajectory of renewable energy development? Is it propping up coal power generation or helping expand hydropower and other renewable options? A little of both?

On paper the cross-border electricity trade provides a very appealing solution to multiple energy and environmental concerns. It increases access, diversity, and reliability of supply. It has the opportunity to reduce reliance on traditional fossil fuels, increase integration of variable clean energy sources, and also improve access for communities. However, like many energy policy tools its usefulness and impact hinges on the policy response and its implementation.

But let’s begin with the basics: In the case of electricity production, regardless of the source, the power created provides improvements to quality of life; it aids in responding to global development needs; and it is recognized as a necessary requirement for modern life. Sixty-five million people in Southeast Asia remain without access to reliable electricity, and the power sector continues to be the primary focus of clean energy policy support among regional and subregional governments. In urban communities it is the poorest that remain without access, and in rural locations the cost of building new infrastructure and connecting to the grid can be prohibitive. In East Asia the growth of electricity consumption has put pressure on supply side demand for both power generation and transmission capacities.

Integrating clean energy sources into global power grids and markets is challenging for three main reasons: variability, uncertainty, and flexibility. This includes variability, uncertainty, and flexibility of resource supply, financial support, physical infrastructure, and policy mechanisms. In the broader East Asia region, cross-border electricity trading would aid in managing diversity in loads and resources; it would increase supply security and efficiency, reduce electricity prices, and encourage further deployment of clean energy technologies. Energy Market Integration (EMI) through power connectivity is one way electricity trading could be encouraged, and cross-border electricity trading has received high priority in not only national energy policy but also subregional energy policy via ASEAN. Southeast Asia is a prime place for interconnectivity to be encouraged given the availability of clean energy resources, multilateral institutions, and governance structures that operate there, plus the economic and physical geography of countries within the region.

The concern, however, is whether or not governments will really utilize cross-border electricity trading to increase renewable energy use, or whether this will simply provide an opportunity for continued use of, and indeed profit from, excess coal or other fossil fueled power. This is impossible to predict accurately; however, it does look as though without full commitment to renewable integration ASEAN will see continued business as usual with coal fired power generation and energy intensive fossil fuels.

Given the effects of climate change across Asia and the interplay between energy and environment issues, are there efforts to prioritize renewable energy resources? What are the challenges in that pursuit?

The growing consumption of traditional hydrocarbon energy fuels (coal, gas, oil) as a result of global rises in electricity consumption has been linked to climate change. The deterioration of air quality, environmental degradation as a result of over reliance on fossil fuels for electricity generation, industrialization, and heavy industries, rising CO2 emissions, and a growing range of energy security fears top the list of energy and environmental concerns in East Asia. Public policy and research organizations throughout East Asia have increased their focus on synthesizing public policy to address CO2  emissions in a variety of industries and policy areas. Governments are responding to such demands by increasing focus on alternative energy development, encouraging diversification of energy resources used for electricity generation, strengthening national electricity markets, funding research and development (R&D) into indigenous energy sources as a means to meet energy demand, circumventing supply disruptions, and tackling further environmental degradation.

There is a lot of room for improvement in a variety of areas – including distributed renewables for energy access, the subregional policy landscape, and investment flows. But I will focus on two interconnected areas:

The first is the policy level – national policies need to reflect regional goals. There is progress, of course, but still work to do at the national policy making level. For example, deregulation and liberalization of power sectors is one such area – regional goals highlight the need for deregulation of utilities, yet there is only incremental progress across Southeast Asia.

Second, regional cooperation initiatives are quite strong. And this ties into the first point. Regional cooperation, between and among nations, is quite high for renewable energy targets and integration goals. The reflection of these targets at the national level is, again, limited. This is true in a variety of sectors but, again, specifically in the first example used, liberalization of power sectors.

I’ll illustrate this example with details from a common reform recommendation: deregulation of power utilities is necessary to enable power producers to utilize energy efficiently and within competitive markets while encouraging FDI. In the case of Southeast Asia there is some unbundling, but it is complicated in rural areas. One of the unique features of the ASEAN community is that its highly populated areas are coupled with rural, unconnected areas. This is where regional interconnections can play a role, and ASEAN member countries are developing and implementing plans for growth in regional interconnections and cross-border power trade. In addition, subnational and municipal policies to promote sustainable energy through localized solutions are an aspect of this municipal vs rural dichotomy within the region. And, ultimately, this is one of the strengths that regional cooperation can bring to the table.

In trying to be a world technology leader, China has made a huge push into the renewables sector, but the country continues to reply on coal power. Can China actually wean itself off coal? What does that say about the viability of renewables?

It is undeniable that China’s contribution to global greenhouse gas emissions and the effect of the environment on its economic success and public health have, in part, driven the surge in clean energy investment in the region and innovative policy solutions for addressing clean energies shortcomings, including cross-border electricity trade. China has led the rest of the world in clean energy development – China is the global leader in new investment in renewable power and fuels, total contributions to installed renewable electricity capacity, and net additions to world-wide power generating capacity. Today China is also the largest consumer and producer of solar photovoltaics (PV). In addition, in line with its Paris climate commitments China has also committed to 20 percent of its energy supply coming from non-fossil fuels by 2030 and carbon neutrality before 2060.

However, the thorn in China’s side is its continued reliance on coal. In addition to being the world’s largest investor in renewable energy, China also consumes the most energy, emits the most carbon globally, and is the largest consumer and producer of coal. Coal contributes to more than half of China’s rural household emissions, and coal remains a staple of energy consumption in China’s rural communities. The affordability of coal is one issue – it is cheap – but another issue is the enmeshment of coal plants in China’s energy production and industrialization.

In the case of China this reliance and enmeshment of the economy with coal needs to be seen as a part of the whole. China has brought millions out of poverty in the last decade, in part with its fossil fueled industrialization, and as a result has a huge domestic energy need that requires filling. China’s domestic coal production is not enough – imports of coal also fuel domestic demand, despite overcapacity in the domestic coal sector. The coronavirus pandemic has put added pressure on the domestic economy and propping up economic growth post-pandemic may have a negative impact on overcapacity controls. China’s 14th Five Year Plan will tell us more about how the country plans to transition further away from coal dependence; however, more details will not be available until early 2021. Now, we have to hope that China’s energy transition will meet its climate targets; at the moment they do not quite match up. However, reducing the share of coal in its energy mix to 50 percent or less is absolutely necessary, as is phasing out its reliance on coal. Suspending all new coal fired power plants would go a long way towards achieving this goal, but at this point in time that’s to be seen.

However, China’s experience should not be used as the end-all measure for the rest of Asia. In many cases, China’s experience is unique. We must also account for the change in times and the global awareness of the impact of fossil fueled industrialization on our natural environment. Can China wean itself of coal now, today? No. But, with a transition toward gas, continued investment in carbon capture and storage (CCS) technology, clean energy R&D, a phase out of coal reliance, suspension of new coal fired power plants, and innovative financing, China can continue leading Asia in the clean energy transition. It’s China’s role to lose.

Aside from China, which Asia-Pacific countries are leading the pack on renewable energy?

Led by China, Northeast Asia is playing a significant role in the regional energy transition, with Japan and South Korea investing time, money, and policy in growth in renewables and alternative sources of energy production.

However, I would like to focus on emerging Asia, and Southeast Asia and ASEAN specifically, where the energy transition is in full swing. ASEAN itself plays an important role in bringing together the 10 member economies of Southeast Asia to synthesize and coordinate the regional transition to cleaner energy. The ASEAN Center for Energy (ACE) is leading the subregion in both policy and technical research into energy use and a subregional transition to cleaner fuels. ACE is an intergovernmental organization of ASEAN, and ACE itself works closely with energy authorities in all 10 ASEAN member states, playing a role in monitoring subregional projects and encouraging the energy transition.

In addition to ACE, institutes throughout Southeast Asia are leading in R&D, including many universities and research institutes in Indonesia, Malaysia, and the Philippines (for example – there is work happening everywhere, to be clear). Indonesia, Malaysia, and the Philippines are three interesting examples given their geographical challenges as nations with many small islands and rural populations that remain unconnected to the grid, coupled with varied energy systems and natural resource endowments. The Center for Energy Studies at Gadjah Mada University (Indonesia), the UiTM Solar Research Center (Malaysia), and the Institute for Climate and Sustainable Cities (Philippines) all offer valuable research and expertise on the progress and continued development of the subregion’s energy transition, with unmatched on-the-ground expertise and insight into local transitions.

On the international side, in addition to the previously mentioned USAID, GiZ, ADB, and AIIB, there is also regional cooperation on renewable energy development under the umbrella of organizations like UNESCAP (the United Nations Economic and Social Commission for Asia and the Pacific), the APEC (Asia-Pacific Economic Cooperation) Energy Working group, and PCREEE (the Pacific Center for Renewable Energy and Energy Efficiency), among many others .

While all of the ASEAN member states have clean energy policies and transition plans on paper, the actual implementation is varied, so its important to examine the national level work with subregional targets and climate commitments.