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1、October 2024Powering the Digital Future:Renewable Energy forBusinesses in ASEANA Report BySupported ByContentsExecutive Summary 11.Establish ASEAN as a Digital Hub for Future Growth 32.Accelerate R&D and Investment in Emerging Energy Sources 63.Develop Cross-Border Energy Infrastructure and Smart Gr

2、ids 114.Conclusion and Recommendations 16References 17About the Special ReportThis Special Report explores the energy needs of ASEAN in the context of the rapid development of datacentres in the region,in response to the generative Artificial Intelligence(AI),blockchain,and other innovations that ar

3、e supporting future economic growth.The report is based on research conducted by the Singapore Institute of International Affairs(SIIA).This report was sponsored by Equinix.The report was directed by Simon Tay,Chairman,SIIA and Associate Professor,Faculty of Law,National University of Singapore.The

4、authors are Aaron Choo,Theodorus Ng,and Stephanie Heng,who are respectively Senior Assistant Director(Special Projects and Sustainability),Research Intern(Policy Programmes),and Senior Policy Research Analyst.All views expressed in the report are those of the authors,unless otherwise credited.The au

5、thors would like to thank the following for their assistance and insights(in alphabetical order):aNew Energy,Coordinating Ministry for Maritime and Investment Affairs(Indonesia),EDP Renewables,Equinix,French Agricultural Research Centre for International Development(CIRAD),GoImpact Capital Partners,

6、Prabowo-Gibran Expert Council,Hydrogen and Fuel Cell Association of Singapore,Maybank,Ministry of Trade and Industry(Singapore),Sembcorp,StarHub,ST Telemedia Global Data Centres,and Sun Cable.Established in 1962,the SIIA is a non-profit and independent think tank committed to fostering in-depth dial

7、ogues around politics,economic policy,and sustainability in ASEAN and the wider region.The SIIA has been working on sustainability issues since 1997,when we organised Singapores first haze dialogue in partnership with the Singapore Environment Council.Following the severe transboundary haze in 2013,

8、the SIIA established the Singapore Dialogue on Sustainable World Resources(SWR)in 2014 which has since become a leading platform for discussion about key sustainability challenges in the region.Executive SummaryGenerative AI,blockchain,e-commerce,and other digital technologies will be the worlds mai

9、n growth drivers in the decades to come.This is resulting in a rapid demand for data centres across the world,including in the Association of Southeast Asian Nations(ASEAN)where countries are well-placed to capitalise on this boom.But data centres have high energy demands,adding to the already incre

10、asing energy consumption in ASEAN.ASEAN is already collectively the fourth largest energy consumer in the world,and the regions energy consumption is expected to triple between 2020 and 2050.In order to keep ASEAN competitive in the global economy,there is a need to ensure that ASEANs data centres a

11、nd other growth industries are powered by green rather than brown energy.Countries around the world are introducing carbon border adjustment measures that will impact trade in goods and services.Multinational companies(MNCs)are making decisions on where to site their operations based in part on the

12、availability of renewable energy in order to meet their corporate net-zero commitments.This Special Report by the Singapore Institute of International Affairs(SIIA)outlines pathways for powering future growth,based on our research and engagement with businesses,governments,and civil society.1.Establ

13、ish ASEAN as a Digital Hub for Future GrowthStrengthen ASEAN as a Digital Hub:Digital technologies are fuelling innovation,enhancing productivity,and creating new competitive advantages.ASEAN must secure its position in this digital future.Currently,some 60 per cent of data centre capacity in the re

14、gion is in Singapore,but Malaysia and Indonesia are rapidly emerging as the next major locations for data centres,using the same subsea data cables going through Singapore.Singapore,Malaysia,and Indonesia should work together to strengthen ASEANs collective position as a preferred digital hub for gl

15、obal businesses a win-win outcome for all parties.Build Green Data Centres in ASEAN:Energy consumption for heat management by data centres in ASEAN is higher than the global average,due to the hot climate.In 2023,Singapore introduced a standard with recommendations for data centre operation in tropi

16、cal climates.ASEAN can explore harmonisation of national standards and certifications as well as the sharing of best practices,ensuring that the regions data centres are world leaders in PUE(Power Usage Effectiveness)and other forms of resource efficiency.2.Accelerate R&D and Investment in Emerging

17、Energy SourcesAccelerate Renewable Energy Development in Malaysia and Indonesia:As more data centres are built in Malaysia and Indonesia,increasing the demand for renewable energy,both countries can consider market mechanisms and other measures to reduce costs for buyers and project developers.Devel

18、op Solar and Wind Energy:Solar and wind energy are currently the most attractive to buyers,developers,and investors.The intermittency of solar energy is being addressed by better battery technology.Geothermal and hydropower can provide large amounts of reliable baseload power,but are only possible i

19、n some locations and require more capital to develop,so there are limits to how much their deployment can be accelerated.1Increase R&D in Biogas and Hydrogen:More effort is needed to make biogas and hydrogen commercially viable.Indonesia and Malaysia have a great deal of biogas potential from their

20、large agri sectors,but it is not clear if production and transport is cost effective.The use of hydrogen faces similar scalability and transfer pricing issues.Create Frameworks for Nuclear Safety,Security,and Safeguards:Nuclear energy is still seen as high-risk by investors,even with the advent of s

21、mall modular reactors(SMRs)using newer technology.Several ASEAN countries are aiming to have operating nuclear power plants by the 2030s,and as such the region needs to develop a high standard of regulatory frameworks that are aligned with international best practices.3.Develop Cross-Border Energy I

22、nfrastructure and Smart GridsPromote Renewable Energy Imports into Singapore:Much like how data centres in Malaysia and Indonesia are making use of the subsea data cables going through Singapore,Singapore will in turn need to access more renewable energy by connecting to power grids in the region.Si

23、ngapores neighbours will receive increased investment into energy projects as well as their renewable energy industries such as solar photovoltaic panel and battery manufacturing.Build Connectivity and Smart Grids in ASEAN:More effort is needed to build electricity transmission and fuel transport in

24、frastructure,not only within ASEAN countries but between borders.The ASEAN Power Grid(APG)needs to be fully realised,and ASEAN must prioritise the signing of the new APG Framework Agreement by 2025.Alongside grid development,more can be done to strengthen interoperability of REC markets.Digital tech

25、nology should also be used to ensure grids are smarter and more resilient,allowing more effective energy trading across borders.Explore New Investment Models and Blended Finance:Financing cross-border energy infrastructure will require large amounts of capital.The International Energy Agency(IEA)est

26、imates ASEAN will require US$21 billion(S$27 bn)in investment annually between 2026 to 2030 to connect and upgrade its electricity grids.ASEAN countries must explore new investment models and options for blended finance.Enhance Regional and International Partnerships:Platforms such as the Indo-Pacif

27、ic Economic Framework(IPEF),Just Energy Transition Partnership(JET-P),and Belt and Road Initiative(BRI)could help mobilise capital for infrastructure development in ASEAN.21.Establish ASEAN as a Digital Hub for Future GrowthDigital technologies,such as generative artificial intelligence(AI),blockcha

28、in,e-commerce,and cloud computing,are emerging as the chief drivers of economic growth fuelling innovation,enhancing productivity,and creating opportunities.The digital boom has created a corresponding demand for computing capacity,necessitating a rapid buildup of data centres worldwide.The global d

29、ata centre market is expected to show a compound annual growth rate of 8.45 per cent over the next five years between 2024 and 2029,with annual revenue going from US$416.1 billion(S$535.2 bn)in 2024 to US$624.1 bn(S$802.7 bn)in 2029.1 Currently,the majority of data centres in the world are located i

30、n the United States,but the Association of Southeast Asian Nations(ASEAN)is emerging as an attractive destination for data centres in tandem with its economic growth.The opening chapter of this report examines ASEANs rise as a digital hub and what can be done to promote the region as a preferred loc

31、ation for data centres.Digital technologies are emerging as the chief drivers of economic growth fuelling innovation,enhancing productivity,and creating opportunitiesStrengthen ASEAN as a Digital HubSingapore is currently the preferred location for data centres in the region,and will remain a major

32、hub for the foreseeable future.Singapore is a nexus for the subsea cables that carry the worlds internet traffic and possesses a skilled workforce alongside a robust tech and finance company ecosystem.However,Singapores nature as an island city-state places constraints on the amount of available gre

33、en energy and space for new data centres.As the global appetite for digital services expands,much of this demand will need to be met by data centres in Singapores neighbours.Malaysia,Indonesia,and Singapore can collaborate in establishing themselves as a competitive and efficient location for data c

34、entres,via sharing best practices for data centre construction and operation,strengthening ASEANs collective position as a digital hub.Malaysia,Indonesia,and Singapore can collaborate to strengthen ASEANs collective position as a digital hubFigure 1:Singapores Role in Digital ConnectivitySources:Fed

35、eration of Business Information Services and Infocomm Media Development Authority(Singapore)(2024)Singapore accounts for60%of Southeast Asias total data capacity26subsea cables pass through Singapore,across3landing sitesSingapore plans to double the number of landing sites,which will requireS$10 bni

36、n investment over the next 10 years3Across all of ASEAN,investments in the data centre market are forecasted to grow 9.59 per cent annually from 2024 to 2029.2 Malaysia and Indonesia are the two leading contenders for new data centre development,as data centres located in Johor,the Riau Islands,and

37、Sumatra can tap on the subsea cable connections located near Singapore.Data centre development in other ASEAN economies such as the Philippines,Thailand,and Vietnam is also picking up speed,though not as quickly.Figure 2:Recent Data Centre Development Policies in SingaporeSource:IMDA(2024)2019Singap

38、ore introduces a moratorium on new data centre development2022Economic Development Board(EDB)and Infocomm Media Development Authority(IMDA)allow companies to submit bids for new data centres2023Ministry of Communications and Information(MCI)and IMDA launch Digital Connectivity Blueprint targeting be

39、tween S$10 bn and S$12 bn in investment for green data centres2024IMDA launches Green Data Centre Roadmap to provide at least 300 MW of power capacity for green data centres in near termBuild Green Data Centres in ASEANAlthough the boom in data centre development is beneficial for ASEAN economies,da

40、ta centres are energy-intensive facilities.Around half the energy consumed by a typical data centre is for cooling,and ASEANs hot climate means that this ratio will likely be higher for data centres located in the region.Data centres account for 7 per cent of Singapores energy use,and this could inc

41、rease to 12 per cent by 2030.3ASEANs energy consumption is currently expected to quadruple between 2020 and 2050,according to the groupings own projections,due to the increasing demand for digital capabilities coming together with the regions continued urbanisation and industralisation.4 Seven out o

42、f the ten ASEAN member states have committed to achieving net zero greenhouse gas emissions by 2050 in their Nationally Determined Contributions(NDCs)under the global Paris Agreement.The ASEAN region will need to ensure that its energy use is managed and that there is sufficient low-carbon energy to

43、 meet its needs.Data centre operators are working to find solutions for enhancing energy efficiency,including the use of modular and streamlined server designs,use of AI and automation,and use of new building materials in data centre construction.National regulators are likewise increasingly requiri

44、ng that new data centres achieve better power utilisation effectiveness(PUE),or are introducing certifications to encourage this.There is presently no ASEAN-wide regional framework on energy,water,and carbon standards for data centres.ASEAN could potentially explore harmonisation of existing nationa

45、l standards and certifications,working with the private sector to share best practices and ensure that the regions data centres are world leaders in efficiency.ASEAN could explore harmonisation of national standards and certifications to ensure that the regions data centres are world leaders in effi

46、ciency4Figure 4:National Standards to Promote Energy Efficiency in Data CentresSources:Infocomm Media Development Authority(IMDA),Economic Development Board(EDB),Malaysian Technical Standards Forum Berhad(MTSFB),Tenaga National Berhad(TNB),Ministry of National Development Planning of the Republic of

47、 Indonesia(Bappenas)Singapore Standards for Sustainable Data Centres(SS 564)(2011,updated 2020)Modelled after ISO 50001 standard,covering energy and water usage,and other best practicesGreen Mark for Data Centres(2012,updated 2019)Recognises data centres that meet energy,water,construction,and manag

48、ement criteriaSingapore Standard for Deployment and Operation of Data Centre IT Equipment under Tropical Climate(SS 697)(2023)Recommendations for optimising energy efficiency in data centres in hot tropical climatesSpecification for Green Data Centres(2024)Certification system based on energy,coolin

49、g,and space managementGreen Lane Pathway(2023)Streamlines power approvals for data centres and reduces implementation durationGreenship Data Centre(2022)Assessment tool and certification system covering multiple stages from design to deploymentFigure 3:ASEANs Growing Data Centre IndustrySource:Mayba

50、nk,“ASEAN Data Centre:Ride The Multi-Year Data Centre Wave”(2024)5ASEAN is70%underpenetrated in data centre supply per capita compared to more evolved markets like the US,China,South Korea,and JapanAI will drive30%of incremental data centre demand growth between 2023 and 2028Geopolitics and US-China

51、 trade tensions favour ASEAN as a destination for data centresCost to build a data centre in ASEAN is20%below the global average(excluding Singapore)ASEAN countries have announced around6 GWof theoretical new data centre capacity,a 3.5x increase in supply-40%of this is financed52.Accelerate R&D and

52、Investment in Emerging Energy SourcesAt present,around 75 per cent to more than 85 per cent of ASEANs energy supply is derived from fossil fuels,depending on estimates,with coal accounting for over half this amount.6 In theory,most ASEAN countries have sufficient energy supply to support their econo

53、mic growth based on fossil fuel sources.The issue is ensuring that this growth is sustainable,which means shifting the regions energy mix from brown to green.The second chapter of this report takes a look at the possible pathways to accelerate renewable energy deployment in ASEAN,including discussio

54、n of the potential of different renewable energy sources and what is needed to bring them online in the coming years.Over 75 per cent of ASEANs energy supply is from fossil fuels the region must shift its energy mix from brown to greenAccelerate Renewable Energy Development in Malaysia and Indonesia

55、Coal plants in ASEAN have an average age of less than 15 years old,making it costly for ASEAN countries to retire these plants early and to phase down the use of coal,especially when there are still power purchase agreements(PPAs)with power generation companies in place.This is particularly problema

56、tic for countries with large domestic coal reserves,such as Indonesia,where there is strong pressure from the coal-fired power industry and mining interests to keep coal power plants in service.However,the expected increase in data centre construction in Malaysia and Indonesia means that there is a

57、particular need to further accelerate the deployment of renewable energy in both countries to ensure that data centres are green,and that data centre operators can meet their corporate net zero targets.Both Malaysia and Indonesia have large government-owned companies,Tenaga Nasional Berhad(TNB)and P

58、erusahaan Listrik Negara(PLN)respectively,that have an effective monopoly on the transmission and distribution of electricity.Critics argue that liberalisation is needed to reduce costs for electricity buyers and to make renewable energy projects more attractive to both developers and investors.Comp

59、lete electricity market liberalisation for Malaysia and Indonesia is likely not practically or politically feasible in the near term.But policymakers and regulators can consider implementing reforms where possible.In September 2024,Malaysia launched a Corporate Renewable Energy Supply Scheme(CRESS),

60、which enables large corporate consumers to purchase renewable energy directly from independent power producers.Indonesian regulations do not currently allow for such direct purchases,but Indonesias parliament is considering a Draft Law on New and Renewable Energy which would allow“power wheeling”whe

61、re independent producers can transmit electricity directly to customers via PLNs grid.The increase in data centre construction in Malaysia and Indonesia means that there is a need to accelerate the deployment of renewable energyDevelop Solar and Wind EnergyIn the International Energy Agencys(IEA)Wor

62、ld Energy Balances scenario projections for 2030 to 2050,solar,wind,hydropower,geothermal,biomass,hydrogen,and nuclear power could make up half of the ASEAN regions energy mix by 2050 in an advanced technology scenario assuming both advancements in energy efficiency as well as renewable energy techn

63、ology(see Figure 5).6However,only a few locations are suitable for hydropower and geothermal projects,and both energy types require large amounts of capital expenditure to develop.There are also increasing concerns both internationally and within ASEAN about the environmental and social impact of an

64、y future hydropower projects in the region,as the creation of hydropower dams and reservoirs may change the landscape and displace populations.There are therefore limits to how quickly hydropower and geothermal development in the region can be accelerated beyond its current pace.In this context,more

65、 investment is needed to accelerate the deployment of solar and wind power,which can be deployed in more locations and require less capital expenditure as well as operating expenditure.United Overseas Bank estimates that energy generation from solar and wind in ASEAN has surged almost 12 times betwe

66、en 2015 and 2022,8 and this trajectory can continue.In addition to solar panels and wind turbines themselves,the development and deployment of better battery technology to address intermittency issues is crucial for ASEANs future.Hydropower and geothermal provide large amounts of reliable baseload p

67、ower.Vietnam is the regions leader in hydropower,with over 18.5 gigawatts(GW)of capacity,while Laos,Malaysia,Indonesia,the Philippines,Thailand,Myanmar,and Cambodia are all already home to major hydropower projects.7 Indonesia is already the worlds second largest producer of geothermal energy after

68、the United States,with around 2.3 GW of installed capacity,while the Philippines is also a major geothermal producer with 1.9 GW of capacity.More investment is needed to accelerate the deployment of solar and wind power,which can be deployed in more locations and require less capitalNote:Y-axis show

69、s energy mix in million tonnes of oil equivalent(Mtoe),x-axis shows years and International Energy Agency(IEA)estimates for baseline and advanced technology scenarios for 2030-2050Source:Authors visualisation,based on IEA World Energy Balances(2024)Figure 5:Energy Mix in ASEAN(1990 to 2050)CoalOilNa

70、tural GasNuclearHydropowerGeothermalSolar,WindBiomass,WasteHydrogen140001300120011001000900800700600500400300200100BaselineAdvanced Technologies19902000201020212030204020502030204020507Increase R&D in Biogas and HydrogenSoutheast Asian economies are already generating electricity from biomass,in the

71、 form of burning wood pellets or chips and other forms of agricultural waste and residues such as palm kernel shells.This form of power generation still produces greenhouse gas emissions,though lower than coal-fired power plants.There is some interest in developing even more efficient forms of elect

72、ricity generation from biomass,for instance,via the production of biogas using biomass as a raw material or feedstock.This involves collecting the biogas released when agricultural waste and residues decompose,either naturally or within an industrial anaerobic digester.Biogas is a mix of various gas

73、es,though its methane content is what has value as an energy source.Biogas can be further refined into 100 per cent biomethane.Biogas is already commonly extracted on-site at agricultural mills and used to power mill operations,and some biogas power plants are already operational in Indonesia,Malays

74、ia,and Thailand,which have large agricultural sectors.However,current installed capacity for biogas power plants is relatively low,only amounting to an estimated 1 GW across all of ASEAN.9Some government policymakers and experts are optimistic that biogas capacity in ASEAN can be scaled up,but the r

75、egions final biogas potential is unclear.Many agricultural businesses contend that their industries are already using most of their waste and residues,meaning there is not a great deal of excess feedstock to meet demand for electricity.The IEAs projections,even in the IEAs advanced technology scenar

76、io,do not foresee much increase in electricity generation from biomass by 2050.The use of hydrogen faces similar questions of scalability,as well as challenges related to transport and transfer pricing.The IEA only expects hydrogen to be a significant part of ASEANs energy mix by 2050 in their advan

77、ced technologies scenario and even then it is only projected to be around 1 per cent of the regions energy supply.To date,Singapore is the only ASEAN member state to have established a comprehensive National Hydrogen Strategy,with hydrogen envisioned as possibly supplying half of Singapores energy n

78、eeds by 2050 if technology continues to advance and international efforts to build hydrogen supply chains remain strong.10 Other ASEAN member states are actively exploring hydrogen development from the supply side.Hydrogen features in Malaysias National Energy Transition Roadmap released in 2023,wit

79、h the state of Sarawak poised to become a major hydrogen exporter.Green hydrogen is produced using excess energy from solar,wind,hydropower,and other renewable sources to create hydrogen gas or ammonia.11 Arguably,hydrogen is not a source of renewable energy itself but a transport medium for green p

80、ower that complements other renewables.Hydrogen is difficult to store and ship as it is the lightest element with low volumetric energy density,and compression and liquefaction of hydrogen for shipping itself requires a large amount of electricity.This is why there is also interest in ammonia,which

81、is produced by mixing hydrogen with nitrogen,as ammonia is easier to store and transport.But the production of ammonia alone does not solve all the complexity and cost concerns that are holding back the hydrogen economy.Hydrogen,ammonia,and biogas are therefore promising sources of renewable energy

82、for ASEAN,but they have not yet fulfilled this promise,and there is no certainty that these two renewables will reach sufficient scale between 2030 and 2050.More research and development is required to address current technical challenges and to determine whether biogas and hydrogen are truly cost-e

83、ffective and scalable.More R&D is required to address technical challenges and to determine whether biogas and hydrogen are truly cost-effective and scalable8Create Frameworks for Nuclear Safety,Security,and SafeguardsDue to the uncertainties surrounding several forms of renewable energy,nuclear ene

84、rgy should still be considered as a possible element of ASEANs energy mix because it can provide large quantities of reliable baseload power without emitting greenhouse gases.Nuclear energy is projected to contribute to ASEANs energy mix from 2035 onwards under most scenarios in the 8th ASEAN Energy

85、 Outlook(AEO8)endorsed by the groupings energy ministers in September 2024.The grouping has also committed to regional cooperation on civilian nuclear power generation under the ASEAN Plan of Action for Energy Cooperation(APAEC).Prior to the Fukushima nuclear accident in 2011,several ASEAN countries

86、 were working towards the development of nuclear power projects.In the immediate aftermath of the Fukushima accident,nuclear power plans were delayed,part due to concern from both policymakers and the public about the safety of nuclear power plants,and partially due to the high financing requirement

87、s of nuclear projects and the perception among banks and investors that such projects are high risk.The advent of a new generation of small modular reactors(SMRs)has revived interest in the deployment of nuclear power projects.SMRs are designed to deliver output of 300 MWe per unit and below,compare

88、d to a typical conventional reactor which outputs around 1 GWe.Several smaller reactors could theoretically be added to a site to achieve higher total output.Because SMRs can be built at a factory before being shipped to their destination,they are expected to reduce on-site construction costs.Newer

89、technology should also make these reactors safer than their predecessors.12Figure 6:Nuclear Energy Development in ASEANSources:World Nuclear Association(2024)Indonesia has been operating research reactors since 1964,and is now home to three such reactors.Indonesia aims to generate 8 GW of nuclear po

90、wer by 2035 and 35 GW by 2060.Indonesia will be establishing a nuclear energy programme implementing organisation(NEPIO)by the end of 2024.Malaysia has been operating a research reactor since 1982.Malaysia previously planned to begin constructing two nuclear power plants by 2021 with the aim of havi

91、ng them operational by 2030,but these plans were postponed in 2018.Thailand has been operating a research reactor since 1977.In 2015,Thailand set the goal of building two 1 GW nuclear plants by around 2036,though this is expected to be replaced with revised plans for the deployment of SMRs by 2037.V

92、ietnam has been operating a research reactor since 1963.Vietnam planned to have its first nuclear power plant operational by 2024,but construction was cancelled in 2016.Vietnam is currently planning to include SMRs in the countrys energy mix after 2030.The Philippines has been operating a research r

93、eactor since 1963 and completed construction on a 621 MW nuclear power plant in 1984 though it was never activated.In 2023,the Philippines conducted a feasibility study with Korea on the activation of the mothballed plant.The Philippines currently plans to generate 1.2 GW of energy from nuclear powe

94、r by 2032,2.4 GW by 2035,and at least 4.5 GW by 2050.9In October 2024,Google announced the purchase of six or seven SMRs built by Californias Kairos Power,intended to power data centres in the United States.However,it remains to be seen if the use of SMRs by data centre operators in ASEAN,or by ASEA

95、Ns power producers,will be viable in the near term.Although SMRs are expected to be cheaper than existing large nuclear power plants once SMR technology is fully commercialised,as well as safer,SMR-based projects are still currently seen as high-risk by financial institutions and will continue to be

96、 challenging to finance in the near term.As several ASEAN member states are aiming to deploy SMRs by the 2030s,policymakers will need to establish effective governance systems and ensure that the region has a competent workforce,so that nuclear energy can be deployed in a safe and secure manner that

97、 addresses the concerns of both investors and the public.Many ASEAN countries lie on the Ring of Fire,the path along the Pacific Ocean with several active volcanos and frequent earthquakes.Coastal areas may also be prone to tsunamis.Effort will be needed to ensure that any operational nuclear power

98、plants in the region,even those using SMRs,are properly protected.The ASEAN region will need effective regulations and mechanisms to create a resilient supply chain for nuclear technologies and fuel,as well as the capacity to respond to nuclear emergencies and manage nuclear waste safely.Nuclear ene

99、rgy development in ASEAN must respect the international principles of ensuring nuclear safety,security,and safeguards.Nuclear energy development in ASEAN must respect the international principles of ensuring nuclear safety,security,and safeguardsFigure 7:Nuclear Safety,Security,and SafeguardsSource:

100、International Atomic Energy Agency(2024)Safety:Prevention of accidents involving nuclear materials.Security:Preventing intentional acts that might harm nuclear facilities or result in the theft of nuclear materials.Safeguards:Technical measures and independent verification to ensure that nuclear fac

101、ilities are not misused and nuclear material is not diverted from peaceful uses.103.Develop Cross-Border Energy Infrastructure and Smart GridsBeyond the generation of renewable energy,ASEAN needs to ensure that electricity and fuel is able to flow across the region to where it is needed.The third ch

102、apter of this report examines the dimensions of cross-border energy connectivity across ASEAN and what can be done to enhance the regions resilience while also encouraging cross-border investment and international cooperation.Promote Renewable Energy Imports into SingaporeEven as a new generation of

103、 data centres enter service in Malaysia and Indonesia,making use of the subsea data connections running through Singapore,green energy should ideally flow into Singapore.Singapore is currently aiming to import 6 GW of low-carbon electricity by 2035,up from the original target of 4 GW set in 2021,acc

104、ounting for over a third of Singapores projected power needs.Currently,Singapore has granted conditional licenses for five large-scale projects to import electricity from Indonesia.Two other Indonesian projects,as well as projects in Cambodia and Vietnam,have been granted conditional approvals,the s

105、tage before a conditional license.In addition to these large-scale projects,Singapore will be importing up to 200 MW from Laos and Malaysia via the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project(LTMS-PIP)on a smaller-scale trial basis.Malaysia plans to supply a total of 100 MW to Sing

106、apore via an auction on the new Energy Exchange Malaysia(ENEGEM)Platform.13If all these electricity imports are fully realised,Singapore will be importing around 5.6 MW of electricity from renewable sources,only slightly short of the 6 GW goal.It is likely that Singapore will meet its low-carbon ele

107、ctricity import targets for 2035.The question for the long term is whether green electricity imports can scale up further beyond 2035,in response to future energy needs.It is likely that Singapore will meet its electricity import targets for 2035 the question is whether electricity imports can scale

108、 up further beyond 2035Indonesia is set to be the leading source of electricity imports into Singapore in the near to medium term.Electricity trading between Indonesia and Singapore was spotlighted at the 2nd Indonesia International Sustainability Forum in September 2024.Coordinating Minister for Ma

109、ritime and Investment Affairs Luhut Pandjaitan,whose ministry convened the forum,noted that the seven energy import projects going between Indonesia and Singapore will bring some US$20 bn(S$25.7 bn)in investment to Indonesia.14 These projects are therefore win-win for both Indonesia and Singapore,wh

110、ile also benefiting broader efforts to build energy connectivity across the region.Investment flows from Singapore to Indonesia are supporting the construction of solar farms and cable connections between both countries,while also boosting Indonesias manufacturing of solar panels,batteries for energ

111、y storage,and other technology.It is logical for projects in the Riau Islands and Sumatra to supply Singapore in exchange for partnerships and investment,as Singapore is the closest node of major energy consumption far closer than Java,where the majority of Indonesias population is based.Indonesia i

112、s set to be the leading source of electricity imports into Singapore in the near to medium term11Malaysia is also close to Singapore,and there is interest in exporting low-carbon electricity to Singapore as the creation of ENEGEM indicates.Sarawaks states energy company Sarawak Energy Berhad(SEB)has

113、 proposed the export of 1 GW of electricity,mostly from hydropower,to Singapore by 2032.15 This will require the construction of a new 720 kilometre(km)undersea power cable to link Sarawak with Singapore and potentially also peninsular Malaysia.This is technologically feasible as a longer power cabl

114、e has already recently been constructed between Denmark and the United Kingdom.The project is still in a preliminary study stage involving SEB and TNB,with surveys being done of the proposed cable route.Australian company SunCable is developing the Australia-Asia PowerLink(AAPowerLink),transmitting

115、approximately 2 GW of green electricity from a solar farm in the Northern Territory of Australia to Singapores grid,via an undersea cable running through Indonesian waters.The Australian government has given major environmental approvals to the project,and SunCable is presently engaging with Singapo

116、res EMA to secure a conditional approval.It is also working with the Indonesian government regarding regulatory and permit matters for the proposed subsea route,including knowledge and hydrographic data-sharing.16 Sun Cables project is a more ambitious undertaking than SEBs,as the undersea connectio

117、n will span 4,300 km,making it the longest such cable in the world.The project is expected to cost some A$35 billion(S$31 billion)and a final investment decision is expected in 2027.Build Connectivity and Smart Grids in ASEANASEAN has been working towards the establishment of an ASEAN Power Grid(APG

118、)since 1997,when the concept was first included in the ASEAN Vision 2020.ASEAN could save up to US$800 bn(S$1.03 tn)in decarbonisation costs if a fully interconnected grid is established across the region.17 However,connecting electricity grids in ASEAN will require significant investment.The IEA es

119、timates that an overall grid investment of US$21 bn(S$27 bn)annually will be needed in ASEAN from 2026 to 2030.18 Some progress has been made in connecting grids on a subregional basis,for instance with the LTMS-PIP.But only nine out of the 18 key connections needed to properly achieve the APG have

120、been completed.19 Though efforts are needed to strengthen connectivity among mainland ASEAN countries along the Mekong,the largest remaining gaps in the region are between the mainland and ASEANs island nations.ASEAN is paying increasing attention on how to facilitate the development and passage of

121、subsea power cables in the region.ASEAN must address roadblocks standing in the way of grid connectivity and cross-border electricity trading,including political,regulatory,and technical issues.ASEAN currently has a memorandum of understanding(MOU)on the development of the APG,which is set to be rep

122、laced by a stronger APG Framework Agreement in 2025.Notably,the new agreement under discussion includes possible provisions for the creation of a permanent coordinating body or secretariat for the APG,as well as market mechanisms to govern the sale and payment of electricity transfers.ASEAN must add

123、ress roadblocks standing in the way of the ASEAN Power GridIn conjunction with the creation of regional mechanisms to govern electricity transfers,the ASEAN region can strengthen cross-border and international recognition of RECs,by coordinating between different registries and developing common fra

124、meworks to make markets interoperable.Most ASEAN countries are engaging with the global International Renewable Energy Certificate(I-REC)standard,which is commonly used by multinational companies to report their energy consumption and emissions reduction.However,the RE100 initiative does not recogni

125、se cross-border procurement of RECs in ASEAN only cross-border purchases in Europe and North America are recognised by RE100,which limits the ability of businesses in ASEAN to claim purchases towards their RE100 commitments.More can therefore be done to strengthen the REC market in ASEAN,making the

126、region a more attractive location for businesses.2012Electricity grids within ASEAN countries and cross-border grid connections must be as smart as possibleWhile renewable energy is needed to power ASEANs green data centres,digital technology can in turn make electricity generation and grid manageme

127、nt smarter,improving resilience and efficiency.Smart grid systems can monitor power consumption and control power flow across electricity grids in real time.Digital technologies can be used to manage the battery storage systems that are being deployed to address the intermittency of solar energy gen

128、eration.ASEAN can devise incentives to help smart grid systems create returns and make them more bankable for investors,alongside establishing policy frameworks to make smart grids interoperable across the region.21Beyond electricity trading,ASEAN countries should cooperate further on the cross-bord

129、er trading of sustainable fuels that could be part of the regions future energy mix,such as biogas,hydrogen,and ammonia.The ASEAN Strategy for Carbon Neutrality adopted in 2023 includes calls to create an ASEAN feedstocks pathway for biofuels and to enable hydrogen infrastructure interoperability,bu

130、t these recommendations are focused on fuel for vehicles rather than electricity generation.22Explore New Investment Models and Blended FinanceIt is estimated that ASEAN requires approximately US$1.5 trillion(S$1.9 tn)in investment to support its green transition through to 2030.23 It is often argue

131、d that there is no shortage of capital globally to finance the green transition,and that the green economy is the largest investment opportunity the world has seen in decades.This may be true,but investors and financial institutions have limits on their liquidity at any one time.There are bottleneck

132、s in how fast the pace of renewable energy deployment can be sped up.Policymakers will need to work with private investors and banks to free up balance sheets in order to accelerate the green transition.,and to mitigate the perceived or real risks faced by investors.Figure 8:Existing and Proposed Co

133、nnections for the ASEAN Power GridSources:Asian Development Bank(2024),based on data from the government of Lao PDR,ASEAN Centre for Energy,IEA,and other sourcesMalaysiaMyanmarLaoPDRViet NamThailandCambodiaPhilippinesBruneiDarussalamMalaysiaSingaporeIndonesiaSumatraBatamSarawakWest KalimantanJavaNor

134、thEastSouthExisting transmission linesPlanned transmission lines13At the inaugural Indo-Pacific Economic Framework for Prosperity(IPEF)Clean Economy Investor Forum held in Singapore in June 2024,Singapores President Tharman Shanmugaratnam noted in an in-conversation session with SIIA Chairman Simon

135、Tay that there is a need to utilise all forms of capital to support the energy transition.“We have to bring every source of investment capital together,from early stage,growth capital,venture capital,commercial banks,public sector money,philanthropic money,each with their different risk and return p

136、references.”24Figure 9:Policies in ASEAN Member States to Encourage Renewable Energy DevelopmentSources:EU-ASEAN Business Council(2023)and official government informationFeed-in tariffs,auctions,and premiums Net metering,billing,direct consumptionBiofuel targetsRenewable quotas and standardsTradable

137、 RECsBrunei CambodiaIndonesiaLao PDRMalaysia Myanmar PhilippinesSingaporeThailandViet NamRegulatory PoliciesTax incentivesProduction tax creditsPublic investments,loans,and grantsTendersEnergy production paymentsBrunei CambodiaIndonesiaLao PDRMalaysia Myanmar PhilippinesSingaporeThailandViet NamFisc

138、al Policies14“We have to bring every source of investment capital together each with their different risk and return preferences.”Mr Tharman ShanmugaratnamPresident of the Republic of Singapore,at the inaugural IPEF Clean Economy Investor ForumASEAN member states have deployed a range of regulatory

139、and fiscal measures to promote the adoption of renewable energy(see Figure 9).However,these are not as extensive or cohesive as the Inflation Reduction Act(IRA)in the United States and the policies China has implemented for green technologies.ASEAN countries must find ways to incentivise renewable e

140、nergy investment and projects,while at the same time ensuring that these measures are not inavertently protectionist.Enhance Regional and International PartnershipsThis report has focused on renewable energy development and financing within ASEAN,but the grouping will need to work together with coun

141、tries beyond the region to achieve its green economy ambitions.In the wake of the 2021 United Nations Climate Change Conference(COP26)in Glasgow,new multilateral sustainable financing platforms have been launched to support the worlds energy transition.ASEAN countries should leverage international p

142、latforms to secure financing and technical assistance for their energy transitions.The ASEAN grouping as a whole can explore how cooperation with international platforms and multilateral development banks can be used to enhance the groupings own initiatives such as the APG.The establishment of the I

143、EA Regional Cooperation Centre in Singapore,the IEAs first office outside of Paris,will help ASEAN and Asia access green financing.The Centre will also serve as a hub for the IEAs policy guidance,technical assistance,and capacity building activities.Risk-tolerant capital in the form of public,multil

144、ateral development bank,and philanthropic funding is needed to nurture green energy pilots and startups,so they can demonstrate that their technologies are scalable.Other sources of investments can come in once better risk-return ratios and volume guarantees have been achieved.For cross-border elect

145、ricity transmission and grid infrastructure,projects require large upfront capital expenditure with a long tail.Private financing can lead the way,but there is still a role for sovereign support.Figure 10:Recent International Partnerships for Energy Transition FinancingSources:Ministry of Energy and

146、 Mineral Resources(Indonesia)and Ministry of Trade and Industry(Singapore)(2024)Just Energy Transition Partnership(JETP)(2021)Supported by the International Partners Group(IPG)of developed economies co-led by the US and Japan JETP agreements for climate financing are signed between the IPG and count

147、ries outside the grouping Indonesia,Senegal,South Africa,and Vietnam have signed JETP agreementsIndo-Pacific Economic Framework for Prosperity(IPEF)Clean Economy Agreement(2024)Part of the IPEF initiative that was initially launched in 2022 IPEF now includes 14 countries,including 7 ASEAN member sta

148、tes Supports the green transition in IPEF countries via innovation partnerships,matching investors with projects,and a capital fund to pool resources for climate project financing154.Conclusion and RecommendationsASEAN economies must ensure that their growth is sustainable not only for environmental

149、 reasons,but also to ensure that their digital economy remains competitive globally.In order to attract global businesses and consumers of high-value digital services to the region,ASEAN countries must ensure that the regions data centres are green and that operators are able to meet both their own

150、net-zero targets as well as those of their downstream clients.To grow and thrive as a digital hub,ASEAN needs to accelerate renewable energy deployment,especially in Malaysia and Indonesia as both countries emerge as leading destinations for new data centre construction.At the same time,efforts must

151、 continue to ensure a sufficient supply of low-carbon electricity imports into Singapore,which will continue to be a major node for data centres and subsea cable connections.Government and industry action to accelerate renewable energy deployment must be combined with action to upgrade and connect e

152、lectricity grids across the region.It is crucial for ASEAN to fully realise the ASEAN Power Grid,along with the market mechanisms needed to support electricity trading across the region.ASEAN must also build transport infrastructure for fuels such as hydrogen and ammonia.Blended finance will be need

153、ed,drawing on all sources of capital,in order for ASEAN to achieve its potential.Recommendations:Strengthen ASEAN as a Digital HubAccelerate Renewable Energy Development in Malaysia and IndonesiaIncrease R&D in Biogas and HydrogenPromote Renewable Energy Imports into SingaporeExplore New Investment

154、Models and Blended FinanceBuild Green Data Centres in ASEANDevelop Solar and Wind EnergyCreate Frameworks for Nuclear Safety,Security,and SafeguardsBuild Connectivity and Smart Grids in ASEANEnhance Regional and International Partnerships1.Establish ASEAN as a Digital Hub for Future Growth2.Accelera

155、te R&D and Investment in Emerging Energy Sources3.Develop Cross-Border Energy Infrastructure and Smart Grids16References1 Statista.(n.d.).Data Center-Worldwide.https:/ Arizton Advisory&Intelligence.(2024).Southeast Asia Data Center market Landscape 2024-2029.https:/ DataCenterNews.(2020,November 10)

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169、Newsroom/Speeches/2024/06/05/Transcript-Of-In-Coversation-With-President-Tharman-Shanmugaratnam17About the Singapore Institute of International Affairs(SIIA)Insights Networks AccessEstablished in 1962,the Singapore Institute of International Affairs(SIIA)is a non-profit,independent think-tank commit

170、ted to policy-relevant research,analysis,and discussions on regional and international politics,economic policy,and sustainability.Our work serves as a bridge between policymakers,business leaders,and other stakeholders to nudge policy change through dialogue and collective action.We provide insight

171、s and perspectives for businesses in navigating a complex world and help Singaporeans with sense-making and responding to issues they care about.We aim to contribute to a region that is inclusive,peaceful,and prosperous An integrated,sustainable,and globally competitive ASEAN and a Singapore that is

172、 an open,dynamic hub and responsive node.We have been consistently ranked as one of the leading think tanks in Southeast Asia and the Pacific,in the Global Go-To Think Tank Index by the University of Pennsylvania.Since 2017,the SIIA was ranked the No.1 independent think tank in Asia.We were recognis

173、ed as one of the top 50 think tanks globally,excluding the United States of America.In 2019,we were recognised as the No.1 think tank in South Asia,Southeast Asia,and the Pacific(excluding India).In 2020,we were also recognised as one of the think tanks with the best policy and institutional respons

174、e to the COVID-19 pandemic.2024 Singapore Institute of International AffairsAbout the SIIAs Sustainability ProgrammeOur Sustainability Programme began in 1997 when we organized Singapores first haze dialogue with the Singapore Environment Council on the critical haze problem.The programme has evolve

175、d to address a broader range of sustainability issues like agribusiness and forestry supply chains as well as the leveraging of green finance to advance ASEANs climate action and carbon neutrality goals.Since 2014,the Singapore Dialogue on Sustainable World Resources(SWR),our annual flagship confere

176、nce,provides a platform for discussion in the region about key sustainability challenges.Ranked No.1 Independent Think Tank in AsiaASEAN-ISIS Network of Think Tanks Asia Society(USA)Strategic Partner UN ECOSOC Consultative StatusFor further information,contact the SIIA at:60A Orchard Road,#04-03 Tower 1The AtriumOrchard,International Involvement HubSingapore 238890 t|+65 6734 9600 f|+65 6733 6217 e|membershipsiiaonline.org w|www.siiaonline.orgSingapore Institute of International Affairsthink.siiasiia_sgsiia_tweet