INTERVIEW: IEA aims to boost SE Asia power trade, renewables via new Singapore office

The International Energy Agency aims to grow cross-border power trade and integrate more geographically concentrated renewable energy resources in Southeast Asia following the inauguration of the IEA Regional Cooperation Centre -- its first overseas office in Singapore outside of its Paris headquarters -- in October 2024, regional head Sue-Ern Tan told Platts in an interview March 27.

Platts is part of S&P Global Energy.

Southeast Asia is expected to contribute to a quarter of the global energy demand growth over the next decade, primarily fueled by the expansion of its electricity sector, driven by economic growth and increased use of air conditioning and refrigeration, Tan said.

The center will also offer assistance in areas such as policy guidance and capacity building to enhance renewable energy deployment and integrate these sources into power systems, while also encouraging the region to adopt transition fuels like gas.

"[We will] engage in discussions around the role of gas as a transition fuel, alongside exploring the potential of technologies such as hydrogen and its derivatives, nuclear, geothermal and battery storage," Tan said.

"These are challenging issues," she said, adding that the IEA will collaborate with regional organizations such as the ASEAN Centre for Energy to ensure that Southeast Asian countries can transition without jeopardizing energy security.

The IEA decided to open its Singapore office in February 2024 and inaugurated it in October, with the city-state serving as a meeting point for international business activities and a regional hub for sustainable financing and innovation.

Singapore has been collaborating with the IEA on regional energy initiatives through programs such as the Singapore-IEA Regional Training Hub, which was established in 2016 when Singapore became an IEA association country.

Regional opportunities

Southeast Asia has the potential to become a key producer and supplier of alternative transport fuels such as ammonia and synthetic methanol; however, achieving this will require investments in new supply chains and infrastructure, Tan said.

"Regions with abundant resources could potentially produce these alternative fuels at relatively low costs, creating new export opportunities," she said.

Ports in Southeast Asia -- particularly those along important shipping routes -- have the potential to become competitive bunkering hubs for these new fuels.

Singapore, the world's largest bunkering hub, has been working to establish green and digital shipping corridors with other ports to promote sustainable fuel use.

Tan said the center intends to support these initiatives by engaging in discussions on green shipping pathways that utilize low-emission fuels such as ammonia and hydrogen, as well as biofuels and synthetic fuels, drawing on data from the IEA's forthcoming annual Global Hydrogen Review report.

The IEA projects that ammonia will emerge as a dominant fuel for shipping by 2050, partly because it is regarded as the most cost-effective synthetic fuel that does not depend on potentially expensive CO2 feedstock.

According to the IEA's Net Zero by 2050 scenario, ammonia is anticipated to represent 44% of the marine industry's final energy consumption.

Other alternatives, such as biofuels, are likely to take a backseat due to the limited biomass supply and conflicts with land use for food production and biodiversity, Tan said.

The feedstock supply crunch is expected to intensify due to increasing demand from competing industries such as aviation, she said. Projections indicate that aviation could account for over 35% of global sustainable liquid biofuel consumption by 2050, while shipping is expected to represent only 10%.

Indonesia partnership

The IEA has continued its engagement with the Indonesian government on priority projects in areas such as growing renewables and sustainable critical minerals mining, Tan said, in response to Platts' query regarding how the nation's energy transition might be affected by US policies.

Earlier in March, the US withdrew from its Just Energy Transition Partnership (JETP) agreements with countries such as Indonesia. Launched in 2022 with support from the US and Japan, the initiative has been seen as a crucial enabler in financing Indonesia's energy transition.

Under JETP, an international coalition of developed countries is anticipated to mobilize $20 billion in public and private funding to assist Indonesia in financing the early phaseout of coal and the deployment of renewables.

The Indonesian government said earlier this week that the JETP financing would proceed despite the US withdrawal, with support from several international organizations, including the Glasgow Financial Alliance for Net Zero (GFANZ), the World Bank and the EU.

The IEA joined the JETP as a strategic technical adviser in 2023 at the request of the Indonesian government. Tan said the agency has supported the development of a Comprehensive Investment and Policy Plan for Indonesia's clean energy transition and conducted analyses on decarbonizing the country's captive power sector.

"The IEA also continues to work closely with key energy stakeholders in Indonesia, including the state utility PLN and the national energy company Pertamina, to support secure, affordable and clean energy for everyone," she said.