Vientiane, 23 September 2024: ERIA, in collaboration with the Ministry of Energy and Mines of Lao PDR, successfully hosted the 7th East Asia Energy Forum in Vientiane. Themed ‘Energy Policy Directions for Inclusive and Sustainable Development for ASEAN,’ this year’s forum brought together energy experts from various ASEAN countries to discuss energy security policies that support sustainable development.

Tetsuya Watanabe, President of ERIA, emphasised that the forum is a crucial platform for sharing solutions to global energy challenges. ‘This forum is an opportunity for Lao PDR and ASEAN countries to collaborate and develop policies that promote energy security and energy sustainability in the region,’ he said.

H.E. Phoxay Sayasone, Minister of Energy and Mines of Lao PDR, opened the forum with a message about the importance of collaboration and cooperation to foster Lao PDR’s energy security. ‘In the face of global challenges of addressing climate change while maintaining economic growth, collaboration on all levels is essential for Lao PDR and ASEAN to achieve energy security and a more sustainable energy future,’ he stated.

Dr Han Phoumin, Senior Energy Economist at ERIA, presented a white paper on energy policy directions, highlighting the need for a rapid transition to clean technologies and renewable energy. ‘With rising energy costs, growing energy demand, and the impacts of climate change, it’s crucial for countries in the region to adopt clean technologies, leveraging renewable energy, and securing investment and financing for these technologies,’ explained Dr Phoumin.

‘Implementing environmentally friendly technologies, developing an integrated regional energy market, and implementing sustainable financing will be key to achieving energy security and carbon neutrality,’ he added.

The forum addressed several key issues, including energy supply security, energy access, and renewable energy development. Discussions focused on how ASEAN countries can enhance energy resilience by diversifying energy sources and strengthening existing infrastructure.

ASEAN has committed to becoming carbon-neutral by 2050, yet its growing population and diverse economies are driving a surge in energy demand. Most power plants are expected to adopt CCS technology from 2030, yet even if the carbon neutrality goal is achieved, coal and gas will still make up over 40% of the power mix. The continued reliance on coal and gas by 2050 is attributed to the relatively young age of coal-fired power plants in Southeast Asia, which have an average age of only 11 years.

The growing demand for electricity, coupled with the urgent need to reduce greenhouse gas emissions, necessitates significant investments in renewable energy and power system expansion. A key strategy is the development of the ASEAN Power Grid, which can help meet electricity demand at the lowest possible cost. The shift to cleaner energy will also depend on smart grid technologies, such as real-time monitoring and AI-driven predictive analytics.

Funding for clean technologies and innovation is crucial for transitioning to a more sustainable energy system. The forum explored how public and private partnerships are encouraged to finance new and emerging technologies in the foreseeable future, and how de-risking mechanisms along these technologies' value chain is key for financing and bankability.

Sustainability in renewable energy development was also a major focus of the forum. Countries in the Mekong subregion (Thailand, Myanmar, Lao PDR, Cambodia, and Viet Nam), along with other ASEAN nations like Indonesia and Malaysia, have significant potential in hydropower and biomass resources. This potential can be maximised through energy connectivity and trade across the region, including for hydroelectric, solar photovoltaic, wind, and biomass power.

In terms of policy instruments, establishing a comprehensive measuring, reporting, and verification (MRV) system to generate accurate and reliable data is fundamental for carbon pricing policies and carbon trading mechanisms is necessary. ASEAN countries such as Indonesia, Malaysia, Singapore, and Thailand have launched carbon trading platforms, with Viet Nam expected to follow suit in 2025. It is highly recommended that the region strives for the ASEAN common carbon market soon.

The discussions also highlighted the importance of energy efficiency in end-use sectors, the role of innovation and technology in reducing energy consumption across various industries, and the development of electric vehicles (EVs). EVs play an important role in reducing carbon emissions and dependency on fossil fuels, yet there have been challenges in building infrastructure to support EV adoption across the region. Apart from EVs, it is essential to develop biofuels, improve public transport and intercity rail systems, and advance logistics and distribution centers as part of a comprehensive approach in building a sustainable transportation system.

Additionally, the forum discussed the need to strengthen emergency and energy reserve institutions, with the ASEAN Petroleum Security Agreement (APSA) being a key solution. Though vital for regional energy security during supply disruptions, APSA remains non-operational due to the absence of an operational manual and defined roles for the Secretariat. Once implemented, APSA could bridge ASEAN and Asian-Pacific Economic Cooperation (APEC) on oil stockpiling and emergency response measures.

The 7th East Asia Energy Forum reaffirmed ASEAN’s commitment to addressing global energy challenges with sustainable and collaborative solutions, providing valuable guidance for member countries to formulate more effective and innovative policies.