Clean energy future for Southeast Asia
Project overview
The switch from coal-based to clean energy is particularly important in South-east Asia as the region is one of the few to continue to build new coal-fired capacity, a challenge to the long-term ambition of keeping regional emission levels on a trajectory consistent with the goals of the Paris Agreement as well as achieve national emission reduction targets.
KPMG was appointed by ADB to lead the feasibility study into the ETM. Mott MacDonald was selected by KPMG as its technical advisor on the early retirement of coal-fired power plants in Indonesia, Philippines and Vietnam, and to identify suitable renewable energy replacement options. The study remit included delivery of ‘Just Transition’ planning to address the social impacts from the early retirement of coal plants and ensure affordable, reliable and equitable access to energy services.
We developed a framework for coal plant selection for retirement and produced technical analyses of power generation system impacts. Our team also contributed to engagement with key stakeholders.
Identifying the best options
Our team of energy sector and advisory specialists assessed thermal power, renewable energy, battery storage, power systems modelling as well as social impacts for the feasibility study. This included:
- Generation plan modelling in energy simulation software (PLEXOS) to identify the potential benefits of ETM in terms of carbon reductions. It also identified general system, investment costs and transition pathways.
- ‘Just Transition’ study into the social impacts of ETM identified key measures and strategies to manage anticipated impacts for coal plant workers and surrounding communities during the away from fossil fuels.
- Collaborative stakeholder engagement approach enabled ADB to illustrate the technical feasibility of ETM to government stakeholders, non-governmental organisations, and other donors.
- Initial strategic environmental and social assessment enabled ADB to align ETM with its safeguarding policy and identify broad environmental mitigation strategies.
Our separate technical feasibility and Just Transition reports for Indonesia, Philippines and Vietnam were included in the wider feasibility study produced by KPMG for the ADB. The study has enabled ADB to discuss effects of ETM with stakeholders and commence the process of structuring pilot transactions with selected plant operators to facilitate the energy transition in the three countries.
The feasibility study for Indonesia found that retiring half the coal fleet in just two regions (Java-Bali and Sumatra), almost 14GW of coal plant capacity, could result in emission savings of more than 540MtCO2.