Decarbonising the power industry is of paramount importance, but equally significant is the drive to make sure that this decarbonisation is a just one, with no one left behind in the energy transition.

That was the purpose behind the energy talk titled “Achieving a Just Energy Transition in ASEAN”, which was held at the recent Enlit Asia conference in Jakarta, Indonesia. The panel discussed the challenges and opportunities of achieving a just energy transition in the ASEAN region, with specific focus on coal-heavy regions.

Moderated by Jane Tay, Head of PPA Origination and Energy Offtake, IB Vogt, the discussion was attended by Yuki Yasui, Managing Director of the Asia Pacific Network at the Glasgow Financial Alliance for Net Zero (GFANZ), Kazunari Fukui, Decarbonization Leader at GE Gas Power, and Dr Edo Mahendra, Head of Secretariat at JETP Indonesia.

Together, they shared insights on best practices for developing a strategic framework tailored to the ASEAN region, building the right partnerships, and attracting clean energy investment.

Said Fukui, “Decarbonising the power sector has the potential to decarbonise other industries such as the transportation sector, and the good news is that most of this new energy capacity is being addressed by renewables such as solar, wind or hydro. But the other side of the coin is that the gas and coal portion of the energy mix is still going to be there by 2030. Hence, there is growing importance in decarbonizing thermal assets.”

One major challenge posed to the decarbonisation drive is the fact that different countries are simply in different stages of the energy transition, he further explained, with these stages largely defined by three segments.

Segment one, with low-quality supply of power and low consumption per capita, holds a large focus on the affordability of reliable electricity.

Segment two, where, according to Fukui, many ASEAN countries currently are, is when reliability improves and the demand for more power and reliability starts to grow.

Segment three is where there is now an increased importance of sustainability with regard to demand and resources.

“We’re in a situation where we’re moving from segment one to segment three, and we’re really trying to address the challenges of affordability, reliability and sustainability.” said Fukui. “That’s why each country’s situation is important, and why consideration for a just energy transition is so important.”

Moving from one segment to another

So how is the industry to transition from a fossil fuel-powered industry to one that is more renewable? As it turns out, quite a lot hinges on proper planning and execution between stakeholders.

Mahendra shared, “One of the biggest challenges is justification… It is the most complicated part, and the challenge is in the conceptual level and how to implement this, how to synchronise the synergies.”

Adding on to this point, Yasui noted the significance of proper financing, introducing the idea of four “buckets” to illustrate where financing would be most needed for the energy transition.

“The first bucket is climate solutions like electric vehicles (EVs), or renewable energy… The second bucket we call ‘aligned companies’, meaning those that are already aligned to the energy transition. The third one is really supporting the brown companies to go green, and bringing everyone along, which is very much part of the energy transition – there are many members of the finance community that are passionate not to leave any of their clients and investing companies behind!” She explained.

“And the last one is talking about the existing high-emitting assets already sitting in our economy, that won’t be naturally retiring within the timeframe that we need for the energy transition.”

Said high-emitting assets refer to some 5000 generators and coal-fired power plants that exist within Asia, Yasui said. With an average age of 13 years, and more of such plants planned, these plants will need to be retired much earlier if the region is to achieve its goal to completely phase out coal by 2040.

“The idea of ‘phase-out’ used to mean that you can’t touch any of the existing coal power plants, or you can’t finance any new coal power plants on the way… But it’s really not about supporting the prolongation of coal power, rather to accelerate its retirement.” She said.

This relies on finding the balance between supporting decarbonisation and keeping processes financially viable – which requires a hefty amount of support from public financing or carbon credits.

Besides that, financiers also have to grapple with the question of how they can ensure the energy transition is a just one, stressed Yasui. “It’s not just about workers or communities, but also about accessibility and affordability of energy – we need to make sure that managing the phase-out does not disrupt the energy supply.”

No one left behind

The issue on the table, said Fukui, was that everyone wants to have an instant solution, but things aren’t that simple, and multiple aspects have to be considered.

“When you think about energy generation, you need a portfolio of solutions for different countries to look at and address,” he said, “and we have to talk about the short-term solutions as well as the long-term ones. On top of that comes the talent and then gender equality piece – and GE is on the right path of developing and training female leadership.”

When it comes to diversity and inclusion, organisations may balk at the mammoth task of including everyone – but it is an important change to be introduced regardless, said Yasui, noting that minority communities in the field are still at a distinct disadvantage.

“Currently, our fossil fuel-dependent economy has very unequal access to resources,” she said, “and I think diversity brings about innovation and creativity, and inclusive decision making really does add value to companies and communities.”

At the end of the day, the energy transition holds the potential for a tonal shift in the sector, with Fukui sharing that an estimated six million people will likely lose their jobs by 2030 as a result of shifting out of fossil fuel use.

“At the same time,” he shared, “there will be the creation of an estimated 18 million jobs in the sectors related to creating a clean energy environment; In other words, there is an opportunity to be heard if we manage the fair balance of these opportunities.”

Watch GE Gas Power Decarbonization Leader Kazunari Fukui’s panel presentation here!