JAKARTA - South-east Asian nations need to more than double their annual investment on renewables to accelerate energy transition and to meet climate goals, a report released on Thursday by the International Renewable Energy Agency (Irena) showed.
Irena said in the long term, average annual investment of US$210 billion (S$296 billion) was needed on renewable energy, energy efficiency and to support technologies and infrastructure in the period to 2050 to limit a global temperature rise to 1.5 deg C.
The investment is more than 2½ times the amount currently planned by South-east Asian governments to reach their goals, said Irena, an inter-governmental agency and UN observer body.
"Coal retirement, coupled with renewables and regional grid interconnection, is an indispensable step to aligning with net-zero targets," Irena's director-general Francesco La Camera said.
South-east Asia is home to 25 per cent of the world's geothermal generation capacity, but the region also has major coal reserves. The region's biggest economy Indonesia is the world's top exporter of thermal coal.
While half of the members of the Association of South-east Asian Nations (Asean) have pledged to stop using coal in the power sector, Mr La Camera said climate commitments required concerted and accelerated action "that must begin now to have a hope of success" .
The region aims to have 23 per cent of its primary energy supplied by renewables by 2025, however, investments in recent years show mixed progress, Irena said.
"Accelerating energy transition is crucial in order to meet climate goals and support the region's economic growth," said Dr Nuki Agya Utama, executive director of the Asean Centre for Energy, adding the bloc remained committed to its 2025 goals.
The agency said renewables have become the cheapest power option in much of South-east Asia and that renewable capacity additions can cost-effectively increase up to 40 per cent of total power capacity by 2030 compared to one-quarter now.
This means around 300 gigawatts (GW) of new renewable capacity installations, most of it solar and wind.
Significant investment is needed to boost renewables in the national energy mixes, but overall costs are balanced by substantial savings on supply and fuel costs.
Investment opportunities include renewable power, transmission, biofuels, energy efficiency and hydrogen, and can amount to over US$6 trillion cumulatively to 2050.
Countries can reduce their energy costs by as much as US$160 billion to 2050, Irena said, and Asean could, by investing more in renewables, reduce their energy costs and avoid as much as US$1.5 trillion of costs related to health and environmental damage from fossil fuels up to 2050.