DNV Unveils Billion-Dollar Opportunity: Collaborative Decarbonization in ASEAN

DNV Unveils Billion-Dollar Opportunity: Collaborative Decarbonization in ASEAN

(IN BRIEF) A new study by DNV reveals that collaborative efforts towards decarbonizing the energy supply in ASEAN member states could lead to a staggering reduction of USD 800 billion in costs by 2050. The study contrasts three scenarios: individual decarbonization, moderate cross-border interconnection, and full regional cooperation involving interconnectors, hydrogen networks, and energy storage. The research underscores that regional collaboration not only minimizes the necessary levels of renewable generation and energy storage but also offers substantial cost savings and optimizes resource utilization. DNV’s recommendations aim to address technical, economic, and policy hurdles, emphasizing the importance of collective action in achieving the shared goal of net-zero carbon emissions by 2050.

(PRESS RELEASE) BÆRUM, 16-Apr-2024 — /EuropaWire/ — This compelling insight stems from the latest DNV white paper, titled “ASEAN Interconnector Study: Taking a Regional Approach to Decarbonization,” released. The paper meticulously evaluates the advantages of a unified regional strategy towards decarbonizing the power sector, while also addressing hurdles such as efficiently integrating the substantial influx of renewable energy.

The aspiration to achieve net-zero carbon emissions by 2050 is widely shared among the ASEAN member states. Alongside this vision, there exists a longstanding goal to establish an ASEAN Power Grid, aimed at meeting the region’s burgeoning energy needs while bolstering energy security. This ASEAN Power Grid could be used to support decarbonization efforts by transporting clean energy from countries with excess renewable power to countries with shortages. However, most decarbonization efforts to date remain confined to individual nations.

DNV models three scenarios for a decarbonized ASEAN power sector by 2050: In one (‘Individual Approach’), countries try to fully decarbonize alone from their own resources. In another (‘Moderate Interconnection’), based on the ‘ASEAN RE Target Case’ in the ASEAN Interconnection Masterplan Study Phase III, there are several cross-border power interconnectors but with limited transmission capacity and no hydrogen network. The third DNV scenario (Regional Cooperation) envisages full, unconstrained resource-sharing between countries, involving power interconnectors and hydrogen networks.

The study underscores that the primary advantage of Regional Cooperation lies in minimizing the necessary levels of renewable generation and energy storage to attain net zero, thanks to the enhanced utilization and sharing of resources from regions abundant in renewable potential.

The paper concludes, such collaborative efforts can yield substantial cost savings, optimize material resource utilization, and reduce the land footprint required for renewable energy development DNV estimates that Regional Cooperation can cut USD 800bn (approximately 11%) from the overall net present cost of ASEAN decarbonization by 2050 compared with the Individual Approach, and USD 300bn (approximately 5%) compared with Moderate Interconnection.

Drawing on its findings and on discussions with stakeholders, the study makes concrete recommendations on how technical, economic, and policy hurdles to decarbonization can be resolved in achievable chunks in the short, medium, and long terms.

“Decarbonization is a global challenge and ASEAN countries should not address this individually. With increased cooperation and resource sharing we can increase the speed of the energy transition while reducing the cost to consumers and the environment,” said Mats de Ronde, Team Lead, Energy Markets & Strategy APAC, Energy Systems at DNV.

Moderate interconnection can be a stepping stone

“At DNV we aim to support the energy sector with insights to realize a clean, affordable and reliable energy transition. We hope that stakeholders in the ASEAN power sector find the paper useful and helps them transition faster,” added Brice Le Gallo, Vice President and Regional Director APAC, Energy Systems at DNV. “Our study forecasts power flow between ASEAN countries and regions under different scenarios. A key finding is that Moderate Interconnection offers substantial cost savings and requires limited interconnectors, meaning less resources and investment. This can be seen as a moderate step towards decarbonization as key stakeholders recognize the benefits of cross-border interconnectors.”

Media Contacts:

Penda Sall
Media Relations, Energy Systems
Phone: +33 651 69 88 64
contact.energysystems@dnv.com

Neil James Slater
Head of Media Relations, Energy Systems
Phone: +44 2038165702
contact.energysystems@dnv.com

Michelle Gozum
Business Partner – Marketing, Communications & Public Affairs APAC
Michelle.Gozum@dnv.com

SOURCE: DNV AS