Why Southeast Asia needs to build climate-resilient energy systems

Stronger national climate commitments by the parties are anticipated at COP29 in Azerbaijan’s capital, Baku, as the Earth endured the two hottest days on record in July this year. This was only two months after the extended heatwave in May that hit many parts of Southeast Asia, including the Philippines, Thailand and Vietnam, with temperatures reaching well above 40°C.

As Southeast Asia is one of the region’s most prone to climate change, how can its energy systems become climate-smart, to withstand the extreme weather events such as heatwaves, cyclones, floods and droughts, and to protect social and economic activities?

Extreme temperatures, in addition to their detrimental impact on human health, increase the demand for electricity to power cooling equipment such as fans and air conditioning.

As demand for electricity rises during heatwaves, high temperatures reduce the efficiency of transmission infrastructure and limit the output of thermal power plants using fuels such as coal and gas, which presently provide most of the electricity to the Southeast Asian region.

In a recent workshop, held by the Asean Centre for Energy (ACE) and supported by the Australian government through the Partnerships for Infrastructure (P4I) initiative and the Monash Energy Institute, Asean energy policymakers and modellers stressed the urgency of creating enhanced energy systems, infrastructure and societal resilience in policy formulation, institutional support, financing and the promotion of best practices to address this major climate and energy issue at a regional level towards achieving carbon neutrality.

Dr Roger Dargaville and Dr Emi Minghui Gui, from Monash Energy Institute, launched the workshop and shared their views, summarised below.

Climate risks take shape from current electricity generation

Most energy systems in Southeast Asia are dominated by fossil fuel generation, which accounts for 70% to 80% of total energy generation in Indonesia, Malaysia, Thailand and Vietnam. The concentration and dependency on these fossil fuels make these countries’ energy systems vulnerable to disruptions in fuel prices and supply, water resources, and extreme climate events.

A study from the Asian Development Bank pointed out that 95% of energy and transport assets in Southeast Asia are exposed to three or more hazards, such as flooding, extreme heat, water stress, earthquakes and cyclones.

The exposure to these hazards requires extra consideration from energy system planners and policymakers to plan for resilience in energy systems and associated infrastructure in the region.

For example, heatwaves will impact the efficiency and operations of thermal power stations such as coal and gas that rely on a thermal gradient between the high temperatures in the boilers and the ambient atmosphere. When the atmosphere is warmer that gradient is smaller, and so the efficiency and total power output are reduced.

In addition, availability of water during heat extremes places another stress on power stations, as they often require extra top-up water in the cooling towers.

Economic and financial risk factors

Apart from operational risks, a range of economic and financial risk factors should also be considered, such as supply chain and asset-stranding risk. The supply of coal and gas can be subject to price volatility, as seen during the start of the Russia-Ukraine war, and increasingly more stringent financial covenants for coal assets and investments from international financial institutions that strive for net zero goals.

Increased asset risks also lie in the contradiction between the need for more hydropower capacity and the declining hydro outputs across Southeast Asia, which are impacted by more frequent droughts and floods.

When available water in the catchments is reduced, combinations of decreased rainfall with increased evaporation and uptake by vegetation and extraction for irrigation can mean that even modest droughts will lead to significant decreases in water available for hydro power generation.

Ironically, high rainfall events can also curtail hydropower stations. If downstream areas are flooded, a hydro plant cannot run without further exacerbating the flooding.

Hydro power is also prone to non-climate-related risks, with multiple nations using the same water resources for power on main river systems. If a nation upstream were to limit the flow of water through its hydropower systems, this could have an impact on the water availability for hydropower stations further downstream. Overflow from hydropower dams can also lead to damage in downstream areas, where farming activities and livelihoods can be put in peril.

Given the importance of the electricity system and its associated infrastructure that carry essential fuel and energy to power the growing economy and population in Southeast Asia, what strategies can be put in place to enhance energy system resilience and energy security, and minimise the risk of disruption due to climate change and other hazards?

Building climate-resilient energy systems

Speaking at the workshop on enhancing the energy system, infrastructure and societal resilience, Gui made the following points:

A secure and resilient energy system should be robust, integrated, redundant, inclusive, diverse and flexible. It should also be able to withstand, absorb and adapt to physical shocks and hazards ,and foreseen or unforeseen changes and uncertainties.

Energy planning and the long-term strategy formation process present the most significant opportunities for ASEAN countries to build resilience and enhance energy security and sustainability to address gender and just transition issues.

According to a study by the Council of Engineers for the Energy Transition (CEET), a number of key strategies can provide practical solutions for effectively enhancing resilience and flexibility in energy systems. These include:

• Provision of reserve capacity and flexibility through energy battery storage or a pumped hydro system

• Improved spatial planning for both supply and demand

• More accurate renewable energy forecasting

• More flexible and robust regional grid interconnection

• Diverse energy sources, supported by a sustainable supply chain

• Better coordination and utilisation of existing assets

• Efficient deployment of decentralised energy systems.

To achieve net zero goals by mid-century, as recommended by the UN, resilience needs to be embedded as an objective in all aspects of decision-making processes.

Resilience planning needs to be strengthened at all levels – national, regional, systems, and assets. Also, consistent approaches are needed to prioritise investment. This will also require effective involvement, strategies and risk communication to align actions at the policy and planning level, as well as the community level.

Beyond the prominence of “ASEAN connectivity and resilience” under Laos’ 2024 ASEAN chairmanship, ASEAN centrality calls for the development of climate-smart energy systems, supported by coherent transition pathways and development pathways to achieve a more secure and sustainable energy and economic future in the region.

This article first appeared in Forum, The Edge, Malaysia.

Monash is pioneering a path to a greener, smarter, more equitable and sustainable future, where emissions are lower and the natural environment and humans thrive. We look forward to participating at COP29, where we aim to accelerate global action on sustainability, empowering diverse voices from across the Indo-Pacific, and influencing superior policy outcomes across a broad range of issues.