How does the big picture of the situation on renewable energy in the ASEAN region look like?
In light of the current political situation, it is very difficult to predict a good future. Generally speaking, there are good prospects that renewable energy will become the cheapest energy resource in the ASEAN region as well. Countries like Vietnam, Indonesia, the Philippines and Japan which currently rely on fossil fuels will have a bright future to expand renewables in their country when willing to do so. However, at the same time and despite the huge potential on renewables, the government for example in Japan, is trying to stick on the use of fossil fuels. They see the ASEAN region as kind of a wider region for their energy use. Some countries still remain in relying on fossil fuels and state that some hydrogen and ammonia produced energies from fossil fuel power plants could be part of the Asian future. Such discussions sticking on conventional types of energies will affect policies in ASEAN countries as well. We have to carefully watch and also propose counterarguments. Due to the diversity of the ASEAN countries it is of course very difficult to outline one big picture. Moreover, contrary to the European Union, there is no super government decision-making body that gives direction to the national governments.
Which role plays the Energy Transition Mechanism of the Asian Development Bank (ADB) in accelerating a (just) energy transition?
Recently, the ADB published a principle to not fund additional fossil fuels. But still there are many voices requesting the ADB to stick on conventional energies. It is a matter of definition, I think. I do not simply believe that the ADB gave up to promote fossil fuels in the region. We have to track what is the kind of fossil or coal fire plant they say that they will no longer fund. This applies for international discussions as well, such as recent international climate talk discussions from G7 and COP26 that include the call of unabated coal. Unabated in Japan means the inclusion of efficient coal fire power plants. On the one side, the ADB policies will facilitate to deploy renewable energies in ASEAN countries. On the other side, we have to be careful that a non-applicable project will be financed by the ADB. However, when it comes to the promotion of fossil fuels or nuclear power there are bigger funds from the Japanese government than the ADB.
In light of the upcoming G7 Presidency of Japan next year: How is the current renewable energy situation in Japan? What are the political ambitions and its level of implementation?
There are two points to mention: First, it is a huge challenge for the G7 and other countries to convince Japan not to go for the continuing use of fossil fuels in the country and promoting it for other countries. There are also voices of promoting nuclear power coming up. The EU Taxonomy is also one of the reasons that questions are asked like: Why is the EU doing this and why can’t we do this? I think there is a very difficult and confusing discussion going on. And in light of the current situation in the Ukraine such voices are of course alerting. The current situation is a clear alert that shows us: We cannot rely on conventional energies, including nuclear.
The second aspect: Renewable energies in Japan are kind of a mixed feeling. Last year, Japanese set a new target for 2030 that is 36 to 38 percent of renewable energy. It is not a remarkable target by 2030. But at least, it is 1.5 times higher than the previous target, which was 22 to 24 percent for renewable energy. Nevertheless, there are many voices questioning how it is possible to achieve this low target. But at the same time in this new energy policy that the government adapted last year, the government included the first time the term “prioritising renewable energy”. We can see the bright future of the penetration of renewable energy in the power market but at the same time this proposal is met with huge resistance of the conventional energy sector.
What are the rate limiting factors for a Japanese energy transition and how can we overcome these barriers?
Of course there is not one barrier, but various. I will answer this question the other way around: What is needed to promote renewables in Japan? We need cheap and reliable renewables. What is the element that makes renewables in Japan cheap? We have to take out the artificial regulation barriers for renewables to facilitate their entrance into the market. There are so many regulations organising the power market system. And just to highlight one example: Renewables are one of the first energies to be carteled when the production of the electricity has a surplus. So the regional transmission system operator can cartel the renewable energy electricity when they think it is not stable in power system and request the facility to stop the production. This entails of course consequences for the producers of renewables in Japan. They don’t know when they are carteled and also there is no compensation mechanism.
There are many further small examples, that showcase the prioritisation of conventional energies. One further example is that conventional energy is prioritised to get access to the grid and renewable energy producers have to pay to get access to the grid. These mechanism artificially increase the price of renewables.
A second aspect that has to be considered is the reliability of renewable energy. If we have a big amount of renewables, mass production could be stabilised in the market. If there is a very small portion of renewable energy production, just as one solar rooftop, of course it is vulnerable. Further, the digitalisation of the transmission system itself is an important aspect to increase the reliability of renewables. There are many further examples for artificial hurdles that have to be overtaken. These very small things make it very difficult for renewable energy to get in the Japanese market.
What are the prospects for renewables in the upcoming years ? Can there be some major changes expected from the G7?
I think for the German G7 Presidency the discussion will be occupied with the current global situation. It is good that we reconfirm again that renewable energy is the only way to go. Current discussion is quite confusing and paradox: Fossil fuels are volatile-so we more and more rely on fossil fuels. For me it sounds like that. The only one way that we can give up relying on fossil is to promote renewable energy. It is the only way to go. I am scared about Russia entering the Ukraine being aware that 15 nuclear power plants are actively working. This is the first time in history that a real battle is going on in a country where nuclear power plants are still active. That kind of evidence shows us that renewable energy is the only future we can go for. Of course there are also the aspects of energy efficiency next to this. I hope that the G7 could be the place to deliver such kind of regulations.
The current discussion in Europe and Japan on renewable energy is dominated by only seeing the value of carbon unit. Energy is not only the carbon unit, it is also energy independence, energy efficiency and energy democracy. And of course the responsibility for future generations has to be included. We have to go back to these elements in the discussion on which energy we rely on.
Many thanks for the interesting interview, dear Mika!