To ensure a sustainable future, traditional power generation must transition to renewable sources
BY DANIAL FAUZI
Power is the primary currency used by humankind to develop and further progress its civilisation. It is the currency that drives innovation and development, producing and manufacturing new technologies and goods humans consume and often take for granted.
In this modern era, many power companies across the globe have managed to lay the foundations of power generation and distribution to their respective populations. Now known as traditional energy sources, many power plants worldwide have relied on fossil fuels for power generation, such as coal, petrol, and natural gases.
The continuous use of fossil fuels has noticeably affected the planet in more ways than one. One is the obvious and extreme changes in the Earth’s climate, where we see erratic weather patterns.
Another is the depletion of Earth’s fossil fuel deposits which takes countless lifetimes to replenish. As the human population grows, the continuous use of fossil fuels will inevitably lead to a shortage in the foreseeable future.
To address these pressing issues, the recently held World Power Plant Innovation Conference 2023 gathered power company representatives and experts worldwide to discuss matters and the role of the power plant in the transition to renewable energy in ASEAN States.
TRANSITIONING FROM TRADITIONAL FRAMEWORKS
Power generation via traditional methods has long been the framework for many power plants. With power grids providing vast amounts of electricity to power up a city or town’s infrastructure directly from power plants, there is no doubt that the transition from fossil fuels to renewable energy sources will not come without its own challenges.
“Power is essential for economic and social advancements, and the challenges in transitioning from hydrocarbons are substantial,” said Laura Ashton, Chief Executive Officer, Low Carbon Advisors (Singapore).
“Among the challenges we face are making power available in a sustainable and just way, transitioning to cleaner sources, embracing change and not allowing short-termism to prevent necessary transformation in policy, financing, infrastructure, technology and business models.”
Indeed, some organisations in ASEAN are slowly but steadily transitioning to renewable energy sources to meet the net zero carbon emission and ESG goals for a sustainable future.
However, we must not forget that other organisations still fall behind in making this transition, be it because they either lack the necessary infrastructure to change or they only seek short-term profits without realising the futility of it in the long run.
“Climate action is needed now,” Ashton expressed during the conference. “There is no long term without a strong medium term. Only 62 per cent of global businesses have made public commitments toward carbon emission reductions, but even more concerning, only 12 per cent are meeting or exceeding these challenging goals.”
“There are significant actions we need to take in this decade, and the responsibility lies in all of us,” added Narendra Asani, General Manager of GE Gas Power, Malaysia.
“Of course, the cost and the technology will play a major role, but we have to work together collectively to drive this energy transition forward.”
With the noticeable effects of climate change that threaten our way of life, power companies and organisations in ASEAN must shift their mindset to a renewable energy framework to ensure that the noticeable effects of climate change will not be permanent.
A TRANSITION WORTH INVESTING
Besides the mindset shift towards renewables, the renewable energy sector is ripe with investment opportunities.
“Energy transition may be the biggest investment opportunity of our lifetimes,” said Ashton. “While many people focus on the risks and compliance obligations of ESG and energy transition, I say the smart money focuses on the opportunities and the early mover advantages presented by the most significant investment opportunity of our times.”
Although investments in renewable energy sources were few and far between in the early 2000s, current investment opportunities for renewables offer a lucrative business prospect for investors that wish to dip their feet in renewables.
“To achieve the net zero ambitions by 2020, US$3-5 trillion in investment is required annually for the next two and a half decades,” Ashton added.
“IEA (International Energy Agency) Executive Director Fatih Birol told the Financial Times that global solar power investment is set to outstrip spending on oil production this year for the first time.
“This year, 1.7 trillion dollars is forecast to be spent across clean energies compared to one trillion on fossil fuels. Just five years ago, the total investment pool was two trillion, which was roughly half and half. Changes are happening.”
Indeed, with the current trend of climate change and the concerns of energy security, investors can and should seize the opportunity to invest in renewables to ensure a sustainable future not just for power companies but for the people and the planet. – @Green
SIDE STORY
Power in Leadership
The recent World Power Plant Innovation Conference (WPPIC) 2023 provided the stage for industry experts and power company delegates from ASEAN and the world over to discuss and tackle issues concerning power generation, carbon emissions and climate change.
As the effects of climate change become more apparent with each passing day and the dwindling of finite resources of fossil fuels on the planet, the need to transition to clean and renewable energy has become the forefront of tackling climate change and achieving net zero carbon emissions goals by 2050.
However, someone must pick up the torch to lead others down this noble but challenging road for a sustainable future to become a reality.
“The success of our clean energy transition depends on strong leadership at all levels,” said Laura Ashton, Chief Executive Officer for Low Carbon Advisors Singapore.
“Senior executives must lead by example, setting ambitious goals and fostering a culture of innovation and collaboration.”
The energy transition not only focuses on the types of renewables that can be used for power generation but also on the governance and the shift in the mindset of world leaders, company management and even the people in Southeast Asia.
Datuk Adam Yee, Managing Director, CEO and Strategic Advisor of Powerwell International Sdn Bhd Malaysia, attested to this notion of leadership on the road towards energy transition.
“ESG is a huge topic nowadays in recent years, and many people talk about ESG,” said Yee.
“Sustainability is important because of climate change. In Powerwell, we look into reducing the carbon footprint by taking steps to achieve that.
“We embrace total quality management,” added Adam on Powerwell’s stance on sustainability.
“We have a standard on total quality management with compliance to ISO. Our products and equipment are all tested according to IEC standards. We also have quality management to ensure that our products comply with all the technical and quality procedures before sending them out to our customers.”
Laura Ashton, Chief Executive Officer, Low Carbon Advisors (Singapore), was very optimistic about the energy transition with ASEAN States.
“What I hope for the most is that leaders will step up and seize this opportunity to recognise their role in their organisations to drive the energy transition, embrace sustainability as part of their core strategy and ensure that they have actions that are planned, that have science-based targets, that are linked to executive compensation and hard KPIs and they see it as their role to lead the energy transition,” said Ashton.
SIDE STORY
ASEAN Power Grid for distribution and sustainability
The Earth’s population will no doubt continue to grow over the coming decades. The United Nations Population Division stated that in 2022, the world population had reached a burgeoning eight billion. By 2050, the world’s population could reach a whopping 9.7 billion.
As the number of humans rises, so does the number of mouths to feed or, in this case, the consumption of fossil fuels to generate power through traditional means to sustain the growing population. Fossil fuels inevitable depletion means renewable sources must be sought.
“With the energy industry facing a growing population and economic well-being, there is a need for more energy to supply the requirements of more humans around the world,” said Laura Ashton, CEO of Low Carbon Advisors (Singapore), during the WPPIC 2023.
“But we need to do this in a sustainable way, bringing costs down and ensuring energy security for countries.”
During the conference, industry experts, delegates and ASEAN discussed the ASEAN Power Grid (APG) and its role in the future sustainability within the Southeast Asia region.
The APG aims to facilitate cross-border electricity trade and support the integration of renewable energy sources within the region. Although there has been some progress with the grid, the project has not yet come to fruition due to the many challenges that plague the project.
Ashton said: “The 10 member States of ASEAN showed great interest in the ASEAN Power Grid. To make the grid work, we require harmonisation and alignment on how to do it and how to do it effectively.”
Although Southeast Asia has abundant untapped renewable energy sources, technical, political, institutional and economic factors are only some of the challenges that hold back the APG from reaching fruition.
This is due to the diverse nature of the ASEAN Member States (AMS). One can look at the development of the ASEAN Connectivity Master Plan (ACMP), which attempts to improve infrastructure and connectivity within AMS.
However, due to the voluntary nature of the plan, participation and cooperation from other state members would prove difficult, and sometimes, the level of investment and involvement would not be the same among members.
Therefore, harmonisation of national regulations and technical standards is key for the AGP to become a reality.
Ashton added: “If ASEAN can activate this grid, we can have energy flowing from distant parts of the region – from the supply to where it’s required, unleashing commercial opportunities for governments and businesses and allowing populations all through ASEAN to have more access to reliable energy that is sustainable in the long-term.”
SIDE STORY
Finding common ground
THE ROAD to a green and sustainable future is not without its challenges. Regardless of whether someone is willing to pick up the torch and lead the flock or the abundance of natural renewable resources, gears will not shift if companies and organisations continue to act independently, disregarding harmonisation and collaboration.
As previously stated, ASEAN is a rich and diverse association with many cultural, geographical and political backgrounds. However, these traits, unfortunately, bear a weakness as the various regions of ASEAN and differing priorities, socioeconomic development, and regulatory systems of member States may hinder the progress of the ASEAN Power Grid (APG).
Besides the development of the ACMP, Indonesia, the nation that assumed the ASEAN chairmanship in 2023, delayed the carbon tax implementation until 2025, citing domestic energy security concerns.
On the other hand, Singapore, utilising a market-based economy whereby the market is fully liberalised and determined by market forces, starkly contrasts the other ASEAN member States (AMS), characterised by substantial government intervention to ensure that power remains affordable.
These differences in the mindsets of the member States would undoubtedly delay the implementation of the APG.
“Energy transition is not about politics, it is not about continents, it is not about flags, it is not about one person,” said Camilo Morales, Secretary General of Naturgas, Colombia, during the conference.
“When we talk about the energy transition, we talk about how policymakers, political leaders and industrial leaders can deliver affordable energy to the people. It is about ensuring affordable electricity to our people through introducing renewables using local natural resources.”
Therefore, common ground must be established by the member States to ensure the success of the APG. Harmonisation of regulatory frameworks, technical requirements and guidelines would be a good start on this task as it would enable a safe and reliable method for state members to work with minimal conflict.
Additionally, once harmonisation is in place, member States can appoint an independent regional regulatory institution. This regulator would ensure efficient and fair regional electricity trade and exchange.
This would hopefully enhance cooperation and collaboration amongst the AMS in establishing the APG. Policymakers must also consider installing regular, high-level regional dialogues amongst the AMS to ensure smooth communication for discussing challenges and opportunities.
Morales added: “I hope the energy transition will become a common goal for everyone. It should be a global purpose that allows us to become not only a low carbon emission civilisation, but also allow our future generations to have a prosperous world.”
