Nam Le, Asia Clean Energy Forum

Speech by Nam Le, P4I Energy Adviser

"Australia’s support to Southeast Asia’s clean energy transition"

Delivered during the Asia Clean Energy Forum's Deep Dive Workshop on United States and Australia Climate Action and Sustainable Infrastructure in Southeast Asia

16 June 2022

Thank you very much and good afternoon everyone. My name is Nam Le from the Australia Government’s Partnerships for Infrastructure (P4I) program.

It is a pleasure to be here alongside Chargé Feeney, USAID Mission Director Dr Steve Olive and USAID, DFC and USTDA colleagues for this Deep Dive Workshop on United States and Australia Climate Action and Sustainable Infrastructure in Southeast Asia.

As Chargé Feeney explained, an important priority for Australia in the region is to work with USAID and other partners to support the development of climate-smart and sustainable infrastructure.

One of the critical enablers of this is an energy sector that can provide cleaner, cheaper and more secure sources of energy.

In this session, I will provide an overview of Australia’s support to Southeast Asia’s Clean Energy Transition, covering what trends and issues in energy Australia observes in the region, how Australia structures its support through two important and complementary programs (Mekong Australia Partnership and Partnerships for Infrastructure), and what impact Australia aims for in Southeast Asia’s energy transition.

I welcome the opportunity to contribute to what should be an informative and important session. 

What are the key trends and issues that Australia observes in energy across the region?

Firstly, on the trends and issues that Australia observes. At a high level, the overall story and rationale underpinning the energy transition in Southeast Asia is relatively clear and has been well discussed, including very eloquently by many of my fellow speakers.

To put it simply, there can be huge benefits by providing access to cleaner and more affordable energy to improve all of our lives. But this requires huge investment across all countries in the region from a range of sources – government, investors and donors – and across all aspects of the energy sector.

Not just investment in physical infrastructure and assets like renewable generation sources and transmission grids, but also in human capabilities, processes, systems and tools, research and development, pilot projects and incentive programs and schemes (to name a few). And this requires huge international support – Australia, like many other international partners like the US, view energy and climate change as an urgent global challenge and will work with the international community to meet this challenge.

Australia is keen to step up its partnership within the region. Over the past 18 months, through programs like P4I and the Mekong Australia Partnership, Australia has been engaging with Southeast Asian partners to understand their sectoral priorities and where and how Australian expertise can best be harnessed to support the region’s clean energy transition.

Through this, there are a few recurring messages and trends that we have heard that have implications for how Australia can best provide its support.

It’s becoming increasingly difficult to look at the energy sector’s challenges and the opportunities of the energy transition in isolation. Energy is interconnected with every other part of the economy, society and community. Good energy outcomes, such as what could be possible as part of the energy transition, can have such an important and foundational impact on the development and growth of the region.

There is increasing demand for flexibility – different types of support, how and when it is delivered, drawing upon a range of tools and modalities. 

There is greater demand for longer-lasting and more meaningful partnerships, focusing on developing the people-to-people relationships, as well as sharing knowledge and skills, that lie at the heart of shared prosperity.

These recurring messages and trends have shaped the way Australia structures its programs to support the energy transition in Southeast Asia. 

How does Australia structure its support to the energy transition in Southeast Asia?

Australia has two main complementary programs focusing on various aspects of energy in the Mekong and Southeast Asian region.

Firstly, the Mekong Australia Partnership (MAP), which was announced in November 2020, is a $232m initiative building on Australia’s long-standing bilateral programs with Mekong states to enhance Australia’s engagement with the sub-region.

Comprises several pillars, including MAP Water Energy Climate (MAP-WEC) which focusing on building environmental resilience to strengthen water security, address riverine and marine pollution, promote cleaner energy and respond to climate change.

Supports Australia’s Partnerships for Recovery policy, which works with regional countries to respond to the COVID-19 pandemic by helping to build relationships and share knowledge and skills for a sustainable recovery.

Secondly, P4I is the Australian Government’s flagship program which commenced in January 2021, with the aim to foster inclusive growth through sustainable infrastructure in Southeast Asia, working across a range of sectors, including energy.

A hallmark of P4I is its speed, flexibility and breadth of tools, which we are already putting to good use with a pipeline of over 25 activities in energy across the region.

P4I’s key tools include:

• support for government-to-government engagement and partnerships between Australia and Southeast Asian counterparts to share experience, undertake secondments and navigate policy and technical challenges together
• collaboration, knowledge sharing and institutional twinning among other types of entities such as think tanks, universities and industry groups; and
• advisory services through our program partners EY and The Asia Foundation, including rapid response and longer-term technical assistance, policy and planning inputs, and capacity building.

P4I focuses on three core themes that are vital to quality infrastructure and sustainable development: planning and prioritisation, policy and regulation, and procurement.

Embedded across these areas are the following cross-cutting priorities that we all know are essential to quality infrastructure:

• Gender equality and social inclusion – we aim to embed gender and social inclusion practices across the energy and infrastructure lifecycle to support more inclusive and stable societies.
• Disaster risk reduction and climate change – to generate and safeguard growth, we seek to future proof communities, economies and infrastructure from growing climate and disaster risks.

P4I has a flexible, demand-driven approach, which has allowed it to quickly develop a significant pipeline of potential activities in the program’s first 12 months.

It’s important to note that P4I and MAP-WEC are just two examples of discrete initiatives that Australia uses to support the energy transition in Southeast Asia. An important feature of Australia’s broader strategy is the use of Government partnerships. Australia has been advancing its own rapid energy transition and the role of government in enabling this has been pivotal.

While Australia has a lot to share, we also have a lot to learn, and through P4I and MAP-WEC, we look for our own governments (as well as industries, academic and research community) – those that are actually at the forefront of the transition in Australia – to play a critical role in supporting the energy transition in Southeast Asia.

Australian energy transition and role of government

To illustrate, a recurring challenge that Australia hears is on the deployment of variable renewable energy, and how to safely and sustainably integrate this into the network and system.

In Australia’s own energy transition, we are seeing significant growth in all types of renewable energy, but particularly rooftop solar. Around 30% of all homes in Australia have rooftop solar (3 million) and if all rooftop solar in Australia was combined to form a single generator, it would total 17GW of capacity, which would be the largest generator in Australia by some margin.

In the State of South Australia, across 6.5 days in December 2021, 101% of electricity demand was met by renewable energy (combination of wind, rooftop solar and utility-scale solar).  Additionally, in April 2022, South Australia set a new record of instantaneous share of renewables at 136.6% of its domestic demand.

In addition, energy in Australia is seeing a substantial shift towards a more decentralised and dynamic model. Gone are the days when customers would purchase electricity from large coal and gas-fired generators transported through the grid. This is moving towards a very different model with smaller wind and solar farms, use of storage, and dispersed geographically.

This is a very substantial transformation that affects all parties – generators, grid operators, retailers, customers, policy-makers, and regulators.

As these trends accelerate, the Australian Government’s already substantial role in helping to enable the energy transition is increasing and getting more complex. This role not only includes regulation and policy-making, but also playing a critical role in facilitating and incentivising technology investment 

Australia’s national strategic decarbonisation roadmap focused on developing low-cost and low-emissions technologies - with the main objective of the strategy being to invest and develop these technologies so they become the cheapest and most economic source of energy.

Overall, the Australia Government is investing a lot of resources and effort to enable this in Australia – and recognises the equal importance of collaborating in the energy transition globally, and in particular efforts in Southeast Asia, through programs like P4I and MAP-WEC

What impact Australia aims for in Southeast Asia’s energy transition?

What this means is that for Australia, programs like P4I and MAP-WEC are well placed to draw upon practical experience in our own energy transition to help improve decision-making, strengthen capabilities, and attract investment to provide cleaner, cheaper and more secure sources of energy across the region that can improve the lives of all.

Through P4I, MAP-WEC and other programs, Australia aims to achieve this and support the energy transition in Southeast Asia by: 

• Focusing on establishing longer-term and more meaningful partnerships
• Offering a full suite of flexible ways of providing support across programs
• Taking a coordinated approach within Australia and with international partners

That concludes my remarks on Australia’s support to Southeast Asia’s clean energy transition.  Thank you very much for the opportunity to contribute and look forward to further discussions and work together in future on this important challenge.