CASE’s Activities Addressing Key Regional Energy Transition Challenges

CASE has identified nine activities to address key challenges in the energy transition at the country level. This approach involves implementing a regional framework locally, engaging key stakeholders, and addressing specific local circumstances and concerns.

1. Energy Transition Pathway and Power Sector Tracking Tool

To achieve ambitious climate and economic development goals, Southeast Asian power systems must transition from fossil fuels to clean, affordable, and secure energy systems. This transition requires a fundamental shift in how power is supplied, used, bought, and sold across the entire economy. The envisioned future power system will primarily rely on wind and solar energy, supplemented by other renewable technologies for dispatchable balancing and non-energy services.

In a power system dominated by wind and solar, flexibility becomes paramount, rendering traditional ‘baseload’ operations obsolete. Power generators, electricity storage, and demand sectors must rapidly adjust operations to meet system needs, ensuring stable and reliable power services. This necessitates greater interconnectivity within and between power systems, including sector coupling, where the electrification of transport, industry, and buildings can provide new flexibility sources. Modern, interconnected transmission and distribution grids will facilitate resource sharing over larger areas.

The transition pathways will vary by country, reflecting each system’s unique circumstances and characteristics. The power sector tracking tool measures progress across several indicators, applying the archetype pathway of the energy transition in a country-specific manner. This tool allows both energy and non-energy stakeholders to assess the status and progress of the energy transition.

2. Developing a Long-term Vision for the Power Sector with Key Stakeholders 

Advancing the clean energy transition presents a significant challenge for policy makers but also for other non-state actors. Long term energy scenarios can trigger productive policy debates and help shape long-term visions for a successful transition to sustainable energy systems aligned with the goals of the Paris Agreement. Exploring long-term (25+ year) transition pathways can help policy makers and other stakeholders understand the depth and breadth of actions required to achieve the energy transition, while aiming to increase and align their political ambitions towards decarbonising the ASEAN energy system and to devise strategies to manage the transition.   

The CASE consortium, working in close cooperation with local political partners, will jointly envision and develop a range of long-term energy and power sector scenarios, with accompanying co-benefits analysis, based on discussions with key stakeholders.  

The scenario building exercise, which brings together potentially divergent stakeholder positions and interests, is a foundation for a constructive debate about the long-term energy future of the country, ensuring that all interests and concerns are heard and reflected.

3. Assessing the Socio-economic Impacts of the Energy Transition

Evidence of wider socioeconomic impacts (positive or negative externalities) of the power sector transition is an important narrative to drive change as such evidence speaks to public policy goals and interests that more directly impact peoples’ lives. To date, these wider impacts are often the drivers of change. The research narrative of co-benefits connects the objectives of non-energy ministries and departments concerned with finance, health, environment, labour, and others, empowering them to use research-based evidence to engage on national energy strategy consultations. Such evidence also helps policymakers to align strategies and policies at national and sub national geographical scales to manage the transition to maximise co-benefits and counteract potential trade-offs (e.g. just transition). 

Building on the long-term visions of the power sector that were developed with key stakeholders, this activity aims to provide robust evidence—quantitative and qualitative—on the impacts of the decarbonisation of the power sector on, for example, employment, health, energy security, poverty alleviation and other SDGs in order to enable a more inclusive debate on long term decarbonisation.  

To create optimal national impact, CASE will engage with non-energy stakeholders on the most appropriate mode of co-benefits discourse at the country and regional levels. Power sector stakeholders and disadvantaged industries will be ‘brought along’ in a joint fact-finding process to establish buy-in of research results, thus utilising its policy implications for energy planning and consultation. 

4. Power Sector Review to Shape the Energy Transition Narrative in the Region

The power sector is one of the key contributors to climate change, being responsible for a large proportion of global greenhouse gas (GHG) emissions. Decarbonising the power sector therefore plays a major role in efforts to mitigate climate change. Through the yearly provision of open-source power sector review information and domestic electricity generation data, progress is tracked, and key areas of intervention highlighted. These publications also raise awareness on the energy transition and can shape the narrative on ambition and the energy transition in the region. This activity seeks to trigger both policy and public debates and help policy makers and other stakeholders understand the depth and breadth of required action and to adapt their practices accordingly.

5. The Future Role of Fossil Fuels in the Region

6. International Support Needs under the Paris Agreement

International (financial and technical) support will play an important role to enable countries to get on a transformation trajectory and achieve the Paris goal. Technical support to build the evidence on the level of investment needed and realistic domestic action vs required international support can help a constructive dialogue on the power sector transformation with key stakeholders, in particular political decision makers. It can be an opener for discussions on long term transformation also with previously sceptical stakeholders. At the same time, credible evidence on investment and support needs embedded in a clear transformative vision of domestic action makes countries attractive for international support providers and serves as a basis for “negotiations” in this regard.   

This activity will provide the evidence and insights on the finance needed to bridge what is available today and the level required to get the power sector in a country onto a Paris aligned pathway towards full decarbonisation in the long term. The analysis will focus on the concrete needs in the short and medium term (2030) regarding capacities, investments in assets and infrastructure as well as technologies. It will also include a long term perspective to provide a broader outlook on the type and scale of potential capacity, technology and financial resources needed for the full transition. 

Such evidence is expected to help break and assess the credibility of one of the counter arguments to the transformation of limited financial and technical resources. It will also help countries negotiate international finance and support in concrete and substantiated terms to bridge the finance gap.  Finally, the activity will also map potential sources of finance (domestic and international), as to assess existing and upcoming financial instruments (available resources, structure, governance). By mapping investment needs as well as potential sources of finance the activity can be a step toward brokering roles and responsibilities of different actors to support the power sector transition in the country.

7. De-risking Renewable Energy Investments

Renewable energy investments are necessary for driving the energy system transformation that is called for by both the Paris Agreement and Sustainable Development Goals. The volume of investment needed is significantly larger than is currently forecasted, and a large proportion of the required investments will need to come from the private sector.  Higher financing costs for renewable energies in Southeast Asia reflect the associated risks that come from a number of perceived and actual policy and financial barriers which discourage the private sector from accessing existing investment opportunities. These barriers largely impact financing costs and the competitiveness of renewable energies.   

This activity aims to facilitate increased private sector investment into renewable energy technologies in the region. By first systematically identifying the main risks and underlying barriers that lead to increased financing costs for renewable energy projects, the activity seeks to improve the knowledge and awareness of key stakeholders on how existing and potential policy derisking instruments could increase the risk-return profile of a renewable energy investment. Policy makers are thus faced with a suite of options, each with varying levels of success, depending on specific local contexts, market structures, policy and regulatory frameworks. Many specialist institutions already focus on these topics, notably Asian Development Bank and the World Bank group, and each take their own approach.  

This activity adds value on top of existing work by exploring the different pathways and packages of existing and potential policy and financial de-risking instruments that are available to the individual CASE countries.  As identifying and prioritising an optimal mix of de-risking instruments poses a difficult task for policy makers, this activity seeks to provide guidelines to practically promote existing de-risking instruments available/under considerations in the country and identify potential new instruments for the country, leveraging other countries’ experience and global/regional instruments.

8. Regional Grid Integration Assessment

9. Good Practice Learning and Exchanges for VRE Market/Grid Integration 

These activities aim to create a comprehensive and tailored approach to the energy transition in Southeast Asia, leveraging local expertise and addressing specific regional challenges.