The case for an Asean Energy Union

Boston, Massachusetts—Bringing together disparate national energy systems in Southeast Asia should be high on the agenda of Asean integration. The time is ripe for establishing an Asean Energy Union. Regional connectivity opens up considerable gains for energy security, decarbonization, and sustainable development. A regional approach also bundles measures to improve the control of systemic risks and security of supply, and substantially lower energy prices.

Energy is one of the many areas where it makes great economic sense to do more at the regional level. A consolidated energy market can be a boon to Southeast Asian countries. If done well, it could open up new opportunities for businesses, particularly for small-scale renewable energy generators, including households, whose excess energy can be accommodated in microgrids that are consecutively connected to a smart regional Asean grid. Citizens are also poised to harvest its benefits. With a regional energy market designed for affordability and reliability, households should be able to purchase their energy needs at minimal cost. This has cascading benefits in terms, for example, of productive use of energy service that could increase household savings, allowing new opportunities for improved access to health and higher education.

But the Asean Energy Union can also be a new governance apparatus of a centralized infrastructure that prohibits a democratized energy infrastructure. This is a possibility if its institutional design follows the traditional utility-oriented business model: large-scale, grid-focused, and utility-driven. This approach has serious consequences especially given the promise of decentralized, community-oriented, and mini-grid-connected energy systems that harvest wind, water and solar energy in distributed contexts.

The Asean Energy Union, therefore, has to be a modern institution, a venue where small meets big, where interactions between community- and utility-scale systems are made fairly and transparently. It should become a platform for ensuring fair prices, in addition to it being an anchor point for Asean energy markets.

It is imperative that its design go beyond the needed interconnections among producers and consumers through the physical connectivity of energy infrastructures, toward common regulatory frameworks for grid access and common accounting bases for charging. Thus, new policy is necessary, and it has to be harmonized across the 10 countries that will make up the Asean Energy Union.

The Union has to take energy policy seriously, and with decarbonization now an international normative goal, sustainable development has to be factored into its design and implementation. In short, energy policy has to be complemented with policy on the environment and climate. But the objective of lowering the carbon footprint should not come at the price of much slower development for the region; it has to be the reverse. This implies that climate change policy has to be developed in congruence with energy and economic policy that would deliver sustainable development for all. Since this would entail significant tradeoffs, the Asean Energy Union will be best positioned to facilitate its deliberation.

With merged climate and energy policy germane in the Asean Energy Union, the design of new policies has to follow a careful reflexive process that puts premium on what the member-countries can deliver first. Energy policy instruments, such as renewables and efficiency targets, that are already universal across Asean, have to be included in the design of the regional energy market. Energy security, understood here in terms of reliability of supply, needs to be strongly built onto this market. This means that energy dependency and relationships with fuel providers outside the region have to be recalibrated in favor of locally generated supply.

Favorable treatment of indigenous energy—perpetually available renewable energy, in particular—also has to be first in the policy of the Asean Energy Union. This would include a more positive reassessment of the contribution of local fossil fuels—such as Indonesia’s coal and Myanmar’s natural gas—to Asean’s regional emissions profile. A comprehensive review of subsidies supporting the energy industry, particularly toward fossil fuel, is likewise in order. A strong collaboration in energy efficiency is crucial.

For its messiness and complexities, the Asean Energy Union requires collaborative, structured, and systematic approaches that heed the challenges of our time, while projecting opportunities and hopes and preparing for tradeoffs and risks.

———— Dr. Laurence Delina (ldelina@bu.edu), of South Cotabato, is a sustainability scientist at Boston University where he leads the future of energy project. His latest books are “Strategies for Rapid Climate Mitigation” and “Accelerating Sustainable Energy Transitions in Developing Countries.”