Wärtsilä Modelling Southeast asia - insights article

Rethinking Energy in Southeast Asia

Can countries grow and decarbonise simultaneously? New modelling shows how Southeast Asia can lead the way as they achieve net zero emissions.

Can countries grow and decarbonise simultaneously? New modelling shows how Southeast Asia can lead the way as they achieve net zero emissions.

Southeast Asia has a fantastic opportunity to build the power systems of the future by emphasising renewables and flexibility. Wärtsilä’s new research has determined how these countries can enjoy economic and environmental benefits on their paths to net zero power systems.

“The study covers Indonesia, the Philippines and Vietnam, three countries with different geographies, socioeconomic dynamics and power systems, but advanced power system modelling provides a clear roadmap for each to reach net zero. They can reduce the levelised cost of electricity, increase system reliability and improve sustainability,” says Frederic Carron, Vice President, Middle East and Asia, Wärtsilä Energy.

The study, Rethinking energy in Southeast Asia, uses data to optimise the power systems and the least cost path to net zero with a leading energy modelling and forecasting software. The modelling considers the goals of each country and the least-cost technologies available to achieve their goals.

How to meet the net zero commitment

Southeast Asia currently relies heavily upon fossil fuels to generate power, but prices have soared, energy security is a concern, and climate change is increasing the threat of extreme weather conditions in the region.

Some people might think that reaching net zero is unattainable, or at least much more expensive than continuing to generate power using traditional fossil fuels. Wärtsilä’s modelling shows that not only is net zero achievable, it can be done economically, while using technologies already available.

Companies, cities and entire countries are working to decrease their dependency on fossil fuels and have made commitments to reach net zero. Vietnam has a target to be net zero by 2050, while Indonesia is aiming for 2060. The Philippines aims to have 35% renewables by 2030 and 50% by 2040. Yet commitments are one thing; a concrete roadmap with tangible actions is another.

“The study shows how proactive and forward-thinking countries can model the optimum path and adopt an actionable net zero plan,” Carron explains. “The results show that countries can benefit from adding more renewable energy as their economies grow. Over time, inflexible fossil fuel plants are phased out and replaced with renewables, such as solar and wind, and with flexible capacity to balance renewable intermittency.”

Renewables demand flexibility and balance

The intermittency of renewable generation increases instability in power systems. Modelling shows that adding enough flexibility and balancing solutions can solve this problem. Balancing can be provided by fast-starting engines and energy storage. Engines can be used only when needed, such as when demand is high, but generation is low. Excess renewable power can be stored in batteries and used later, or for grid stability.

Once there is enough renewables in the system, excess electricity can also be used to create other forms of fuel, like green hydrogen. These sustainable fuels can then be used for long term energy storage. The balancing engines can then use hydrogen or other sustainable fuels as they become commercially available.

Building flexible renewable power systems also has an economic benefit. The levelised cost of energy can be lower under a net zero system than current power systems, especially when factoring in the price of likely future carbon taxes. In most countries around the world solar and wind already provide less expensive electricity than that generated by fossil fuels, and a flexible grid uses minimal levels of balancing fuels and requires low maintenance. The modelling shows a cost-optimal path to net zero, using power system optimisation to maximise efficiency at every step of the way.

“Net zero is not a distant dream, it is possible,” says Carron. “The modelling shows a clear roadmap for reaching net zero: by rapidly expanding renewable energy and adding flexible assets in the next decade we can build carbon-neutral power systems by mid-century. The same key steps can be applied throughout Southeast Asia to decarbonise our power and societies."

Written by
David J. Cord