The ASEAN Centre for Energy (ACE), supported by Asia Carbonx Change and SuSca Group, hosted the Bilateral Meeting on Brunei Darussalam's Renewable Energy Certificate in Bandar Seri Begawan on 14-15 February 2024. The meeting aims to address gaps in the Renewable Energy Certificate (REC) market pract Contact online >>
The ASEAN Centre for Energy (ACE), supported by Asia Carbonx Change and SuSca Group, hosted the Bilateral Meeting on Brunei Darussalam''s Renewable Energy Certificate in Bandar Seri Begawan on 14-15 February 2024. The meeting aims to address gaps in the Renewable Energy Certificate (REC) market practice in Brunei Darussalam and seek potential alignment with neighbouring countries within BIMP (Brunei Darussalam – Indonesia – Malaysia – Philippines).
The two-day discussion encompasses six different sessions. These sessions cover the regulatory framework and current status of the REC market designs in Brunei Darussalam, best practices in ASEAN countries, the interplay between REC market drivers and corporate sustainability reporting, and identifying the immediate policy interventions for scaling up REC in Brunei Darussalam.
The event began with a warm and gracious welcome from Puan Shirley Sikun, Director of Energy Transition Division at the Department of Energy, Prime Minister''s Office (PMO) of Brunei Darussalam. Following that, Beni Suryadi, Manager of the Sustainable and Renewable Energy Department (SRE) at ACE, addressed the significance of discussing REC among Brunei Darussalam policymakers. This dialogue aims to enhance national market practices, paving the way for cleaner energy in both Brunei Darussalam and the broader ASEAN region.
The first session started with an introduction to the regulatory framework and current state of the REC market in Indonesia. Veronica Ayu Pangestika, Associate Research Analyst of SRE at ACE, provided an update on the 2024 work plan for RECAP. Following this, Puan Shirley Sikun, Director of the Energy Transition Division at the Department of Energy, PMO, presented an overview of REC in Brunei Darussalam and the UK-Brunei Green Economy Framework. The session concluded with Barry Jones, Market and Sustainability Analyst of SuSca Group, discussing REC market stakeholders and key principles. Monika Merdekawati, Senior Research Analyst of SRE at ACE, moderated the session.
The following session, moderated by Muhammad Ilham Rizaldi, Research Analyst of SRE at ACE, began with a presentation from Barry Jones, Market and Sustainability Analyst at SuSca Group. He discussed global and regional perspectives on REC market design, including best practices, case studies, and recommendations for Brunei Darussalam, referencing the EU and ASEAN. It was followed by a presentation from Ir. Nirinder Singh Johl, Founder and CEO of Asia Carbonx Change, about the role of utility in developing Malaysia''s REC market. This session was followed by a discussion among all participants. This session is all about understanding REC market designs and best practices in ASEAN Countries and beyond.
The second day began with a session about understanding REC market drivers concerning corporate sustainability reporting. Barry Jones, Market and Sustainability Analyst of SuSca Group, gave a presentation about unveiling the demand drivers for cross-border REC trading. The following presentation was about national, utility and private sector needs in shaping REC policy by Ir. Nirinder Singh Johl, Founder and CEO of Asia Carbonx Change. Lastly, Barry Jones presented cross-border RECs: why and how. He elaborated on the challenges of cross-border trading within ASEAN and how to address them.
In this session, participants engaged in a breakout discussion focused on Brunei Darussalam''s REC market designs. Additionally, they explored best practices within ASEAN countries and the EU. The discussion was both insightful and substantial, with all attendees actively contributing their perspectives on the advantages and disadvantages.
At the end of our bilateral meeting, Beni Suryadi, Manager of ACE, highlighted the significance of these discussions in advancing the REC system within Brunei Darussalam and the broader ASEAN region. He also pointed out that such cooperative dialogues are crucial for aligning regional energy policies to achieve our goals. He concluded with optimism that Brunei Darussalam would encourage corporate investment in clean electricity, advancing towards a sustainable future aligned with global goals that would benefit both Brunei and the broader ASEAN community.
ASEAN Centre for Energy (ACE) is an intergovernmental organisation within ASEAN structure that represents the 10 ASEAN Member States'' (AMS) interests in the energy sector.
Integrating renewable energy certificate (REC) markets in ASEAN into a credible regional market faces several challenges. Creating a regional system, however, is key to spurring investments in a just transition in Southeast Asia.
Initial findings from the ongoing Renewable Energy Certificate System in BIMP-EAGA Countries Project (RECAP) provide insights into how a regional REC market may be established. The 2-year project of the ASEAN Centre for Energy, which covers Brunei Darussalam, Indonesia, Malaysia, and the Philippines, is backed by grant funding from the BIMP-EAGA–Republic of Korea Cooperation Fund (BKCF).
At the 2nd RECAP Regional Workshop in Bandar Seri Begawan on 4 September, the project team identified challenges in three critical areas: "discrepancies in national standards, alignment with international requirements, and lack of coordinated efforts across the region."
As part of the study, the ASEAN Centre for Energy is developing a conceptual framework for a regional REC system for BIMP-EAGA countries. The project team discussed the key elements of the framework that will address the challenges. These include the following:
The workshop was held on the sidelines of the 11th BIMP-EAGA Power and Energy Infrastructure Cluster (PEIC) Official Meeting hosted by the Department of Electrical Services of Brunei Darussalam.
The RECAP project, which is expected to be completed in December, is seen as a catalyst for enhancing regional cooperation and dialogue on building a resilient and sustainable future for ASEAN. Southeast Asia, including the BIMP-EAGA subregion, has abundant energy resources. Its renewable resources include natural gas, hydropower, solar, biomass, wind, and geothermal energy. However, more than 90% of ASEAN''s renewable energy potential remains untapped.
Earlier in the year, the ASEAN Centre for Energy held bilateral meetings with Brunei Darussalam, Indonesia, Malaysia, and the Philippines on RECAP and discussed the market opportunities offered by RECs and the benefits of a regional system.
An REC is a type of energy attribute certificate that is issued when a 1 megawatt hour (MWh) of electricity is produced and delivered to the power grid from renewable sources (e.g., solar, wind). It is used to track renewable electricity generation and consumption, and it also enables end-users to claim reductions in carbon emissions.
RECs can help accelerate a country''s transition to clean energy and its progress toward decarbonization targets by helping make renewable energy generation economically viable. REC trading provides an additional revenue stream to support renewable energy generation and development.
The demand for RECs in the voluntary market is increasing because of the requirements of corporate sustainability reporting. For example, companies participating in the RE100 program have committed to switching to 100% renewable electricity. RECs play a key role in monitoring clean energy usage.
Demand will also come from enterprises exporting to European markets, who want to avoid high tariffs. The European Union will fully implement the Carbon Border Adjustment Mechanism (CBAM) in 2026, which imposes import charges on products, such as steel, cement, and electricity, based on the carbon dioxide emissions embedded in their production.
An ASEAN REC system that capitalizes on the strengths of each member country is expected to increase the collected bargaining power of the region in trade agreements.
A regional REC market is also expected to unlock ASEAN''s potential for multilateral renewable energy trading.
At the Asian Clean Energy Forum (ACEF) in June, Malchutar Kingnet, who heads the Renewable Energy Business Section at the Electricity Generating Authority of Thailand, said market integration can reduce the cost of RECs and make renewable energy more accessible and affordable.
The annual forum is organized by the Asian Development Bank.
"The ASEAN REC market is evolving with a strong push toward regional integration, supported by national initiatives and growing corporate demand," Kingnet said. "However, achieving a fully integrated and internationally recognized REC market will require overcoming technical, regulatory, and infrastructural challenges." Foremost is connecting national grids into a regional network.
Interconnecting national power systems to enable power trade is a key strategy of ASEAN to strengthen energy security and shift to renewables through efficient resource sharing. Along with market integration, it is seen as a critical component of a just and inclusive energy transition and for ensuring resilience and stability in the power grid and energy supply chains.
ASEAN is targeting to complete interconnection of the ASEAN Power Grid by 2045. One of the initiatives supporting this is the Brunei Darussalam-Indonesia-Malaysia-Philippines Power Integration Project (BIMP-PIP), which seeks to connect the four countries'' power grids and trade electricity by 2025.
The ASEAN Centre for Energy says enhanced integration through the ASEAN Power Grid could "avoid adding 154 MW of capacity, saving $1.87 billion, by 2025," citing estimates of a 2010 study.
The Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area, or BIMP-EAGA, is a cooperation initiative established in 1994 to spur development in remote and less developed areas in the four participating Southeast Asian countries.
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Syed Abdul Rehman Khanis a professor of Supply Chain and Logistics Management. He achieved his CSCP—Certified Supply Chain Professional certificate from the U.S.A. and completed his postdoctoral fellowship from Tsinghua University.
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