The feasibility rapid energy transitions on the technology periphery: a comparative analysis Indonesia, the Philippines, and Vietnam

How can rapidly growing emerging economies meet their rising energy demand in a sustainable way when they lie on the technological periphery? We explore that question with a comparative case study of Southeast Asia. Even though the region has diverse political and socio-economic systems, in terms of development and energy, three countries, Indonesia, the Philippines, and Vietnam, stand out in their similarities with respect to the overall level of development, geographic context, and high dependence on coal yet diverge in their progress and plans with renewable energy. This presents two puzzles. First, why do all three countries still plan for an expansion of coal in spite of falling costs of renewables? And second, what explains the rapid growth of solar energy in Vietnam but similar expansion in other countries in the region? To answer these questions, we analyzed the historical and planned developments of the power system in the three countries along with a set of reference cases of top-performing early adopters of solar and wind. Our result shows that Indonesia, the Philippines, and Vietnam have ambitious targets to expand the share of wind and solar power in their electricity system which break from historical trends. Our model result also indicates that the required growth rates to achieve the targets are comparable to, even in some cases exceed, the growth rates achieved by early-adopting countries. Yet, even if the targets are achieved in the future, they will be insufficient to fulfill future electricity demand, requiring the three countries to still expand on coal power. However, meeting the targets is still a crucial step on energy transition for the three countries, and, by using Vietnam’s experience of expanding solar power capacity between 2018 and 2020, we provide a peek into what needs to be done to accelerate the wind and solar power growth in the region.