The ASEAN Energy Outlook

The ASEAN Energy Outlook (AEO) is the cornerstone of energy information, analysis, and projections within the ASEAN region, offering regular updates on regional energy outlooks and strategic reports on key thematic areas. The AEO evaluates the feasibility of meeting national and regional goals related to energy access, affordability, efficiency, security, and environmental sustainability. It provides insights into the necessary policies, measures, and technologies required to achieve these targets.

The AEO is identified by its strong foundation in robust data and modelling insights derived from extensive cooperation and integration between the ASEAN Centre for Energy (ACE) and the ten ASEAN Member States (AMS). The AMS with direct coordination under the AEO Working Group contributes significant data for the AEO, and all modeling results undergo thorough review to ensure they accurately represent local contexts and regional development plans. As a result, the projections in the AEO reflect the official expectations of the countries regarding future energy development. This collaborative approach fosters ownership and understanding among stakeholders and enhances the relevance of the results for the entire region. Recent editions of the AEO have adopted a new bottom-up modelling approach, which is better suited for assessing the implications of national and regional policies and providing a detailed overview of how ASEAN’s energy systems will evolve in the coming years. The AEO expands on this bottom-up modelling approach, incorporating improved and more detailed energy modelling for the commercial and industrial sectors, thereby offering deeper insights into how national and regional targets can be achieved, considering the unique characteristics of each AMS.

To ensure that the coherencies between energy trends, data, and energy models are achieved, the AEO team is working hand in hand in organising country visits to each AMS. The country visit is a crucial agenda for country engagement and alignment with the current policies, targets, and implementation which will be translated and projected into the AEO8 scenarios. Insightful discussions and inputs were made during the country visit, showing a strong commitment of ASEAN to move towards the energy transition. Aside from that, the country visit also introduces several key points to accelerate energy transition through the explanation of energy investment and strategy.

Furthermore, ASEAN energy sector is evolving and aligning with the global commitment to achieve the net zero target in future years. This significant improvement is also supported by the launching of ASEAN Strategy for Carbon Neutrality through the 55^th ASEAN Economic Ministers Meeting in August 2023 to accelerate an inclusive transition towards a green economy, fostering sustainable growth and complementing national efforts as part of a regional collective effort. The document also stated specific analysis and roadmap initiatives to encourage ASEAN’s journey toward carbon neutrality.

ACE, as a think tank, discovers the disparity between the energy and climate nexus in ASEAN region. To fill in the gap, ACE together with the Norwegian Institute of International Affair (NUPI) implemented the ASEAN Climate Change and Energy Project (ACCEPT), the first integrated project of energy and climate in ASEAN. Since its first endorsement during the 37^th ASEAN Ministers on Energy Meeting (AMEM) in 2019, ACCEPT continuously running its mission until the second phase (ACCEPT II) was welcomed during the 40^th AMEM in 2022. In ACCEPT II, the project aims to encourage ASEAN to have advanced knowledge sharing on energy and climate nexus, enhanced ASEAN’s capacity as low carbon economy towards carbon neutrality, and strengthened regional structure, capacity and gender equality on energy-climate nexus.

Having two interlinked projects in energy and climate, therefore, a regional initiative has been made to consider carbon neutrality scenario in the 8^th ASEAN Energy Outlook (AEO8). In total, there will be four scenarios namely Baseline Scenario, AMS Target Scenario (ATS), Regional Approach Scenario (RAS) and Carbon Neutrality Scenario (CNS). The Carbon Neutrality Scenario will further assess the trajectories of emissions reduction journey of each AMS through technological approach. The technology that is included in the scenario is the result of a preliminary survey within the AEO8 Working Group in determining potential net zero technologies that will be useful to support the country’s target.

Together, AEO8 and ACCEPT tailored a carbon neutral model based on intensive discussion within the AMS. As the first milestone for regional carbon neutrality scenario, ACCEPT initiated its first country model with Lao PDR, the ASEAN Chairmanship for 2024.

Dr Zulfikar Yurnaidi, Manager of ACE acknowledged that “There is a significant need for ASEAN to accelerate its energy transition towards low carbon development, in line with their national, regional and international commitments. The ASEAN Energy Outlook (AEO), as the primary and official reference of ASEAN energy, will include a scenario called Carbon Neutrality Scenario, to explore the pathways towards net zero future of the region, supported by ACCEPT II. Detailing this further is the Net Zero Model and Roadmap for Lao PDR, also in support of the ASEAN Chairmanship this year.”

The country visit to Lao PDR was held on 5 March 2024 in Vientiane. The session was very insightful, highlighting Lao PDR’s commitment towards the renewable energy. The country is planning to increase the amount of RE share and ensure that it will be aligned with the energy model. Moreover, the discussion session discovers the current challenges that has been facing by Lao PDR, stressing on limited, unstable, and seasonal renewable energy market demand. Moving forward, Lao PDR aims to have better energy security and energy mix that is parallel to achieve the national net zero target.

Lao Net Zero Study: An Energy Sector Roadmap to Net Zero Emissions in Lao PDR

The carbon neutrality scenario for ASEAN is established to support the attainment of the Nationally Determiner Contributions (NDC) that has been set by each country to achieve net zero emissions targets in the future. In a landmark move towards a sustainable energy future, ACE, through ACCEPT II, has joined hands with the Ministry of Energy and Mines (MEM) of Lao PDR to conduct a study titled, “An Energy Sector Roadmap to Net Zero Emissions in Lao PDR” with technical support from Stockholm Environment Institute (SEI), setting a precedent for the region as the first ASEAN Member State to embark on a country-level low-carbon economy model.  This joint study is paramount importance in strengthening collaboration between the Ministry of Energy and Mines of Lao PDR and the ASEAN Centre for Energy. They play a vital role in shaping Lao PDR’s energy sector roadmap and are integral to Lao PDR’s ASEAN Chairmanship Energy Priorities in 2024.

With Lao PDR’s Nationally Determined Contribution (NDC) includes an emission reduction target of 60% by 2030, thus, this study is one of the country’s steps toward realising the net zero target. The study aims to be launched at the 42^nd ASEAN Ministers on Energy Meeting (AMEM) in September 2024, during Lao PDR ASEAN Chairmanship 2024.  The study consists of several capacity buildings including two workshops, a report, and the net zero report to be launched at the 42^nd AMEM in 2024.

Beni Suryadi, Project Manager of ACCEPT II & Manager of ACE, said that “This study and workshop will unlock a new scenario for Lao PDR’s journey towards net-zero emissions. The study’s findings will also contribute to the 8^th ASEAN Energy Outlook (AEO8), shaping the energy trends in supply and demand for the country.” 

The study is distinguished into two forms of workshops and capacity buildings in energy modeling. Prior to the agreement, a workshop titled, “An Energy Sector Roadmap to Net Zero Emissions in Lao PDR,” organised by ACCEPT II and MEM of Lao PDR, was conducted twice to discuss the construction of a net zero scenario for Lao PDR–this study goes beyond broad regional models; it dives into the specifics of individual nations’ low-carbon economies, driving them towards their net-zero targets. The cornerstone of this study is an in-depth analysis of energy supply and demand at the national level.

The first commenced workshop in Lao PDR was held on 30-31 October 2023 in Vientiane. This workshop marked the beginning of Lao’s national study journey on net zero and delivered current challenges that has been facing by the government in the energy sector. During the first workshop, Lao PDR addressed their serious intention to achieve 30% renewable energy share by reducing fossil fuel utilisation through 106 MW solar energy utilisation, 400 MW small hydropower, 145 MW bioenergy for electricity, 75 MW wind energy, and biofuel utilisation in the country. Meanwhile, in the power sector, Lao PDR through the Electricite du Lao delivered the mission to supports the implementation of cross-border power trade which will involve several countries namely Cambodia, China, Malaysia, Myanmar, Singapore, Thailand, and Vietnam. Despite the optimist target and vision that has been shaped by the government, Lao PDR is still facing some challenges including lack of financial support, uneven distribution of electrification, and barriers to implement and upscale the renewable energy technologies.

The output of the first workshop then continue to discuss in the second workshop. Back-to-back with the AEO8 Country Visit to Lao PDR, the second workshop was also held in Vientiane on 6^th March 2024 aiming for data verification and discussion towards the net zero model. Moreover, Lao PDR also emphasised the new target of electric vehicle in the country that will increase up to 10% in 2030. In between the workshop, ACCEPT also acknowledged the importance of having capacity buildings to ensure the sustainability and knowledge dissemination of forming a national net zero model. Therefore, ACCEPT facilitated the Ministry of Energy and Mines of Lao PDR specific capacity buildings using Low Emission Analysis Platform (LEAP) assisted by the SEI. During the first workshop, the participants were given the opportunity for hands-on experience using simple exercises in LEAP focusing on existing country conditions.

As a way forward, the input and suggestion from Lao PDR will be considered to be written in the report, underlining Lao PDR’s current energy conditions and reliable way to achieve the national NDC target through technological approach. Furthermore, the result will also be potential as recommendation or insights for the next NDC of Lao PDR. Align with the Lao PDR’s role as ASEAN Chairmanship 2024, the result of the workshop will be launched as the national report of Lao PDR’s roadmap toward net zero target upon the endorsement at the 42^nd ASEAN Ministers on Energy Meeting (AMEM) in 2024. The study on Lao Net Zero will support the establishment of the 8^th ASEAN Energy Outlook for the carbon neutrality scenario. The result on AEO’s scenarios will become inputs for ASEAN in determining the regional target for the next cycle of APAEC and the entry point to set up the regional carbon neutrality target.

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Detailed information on ACCEPT II can be found at https://accept.aseanenergy.org/

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