Less talk, more action: five steps to achieve net zero

We’re getting to the time of year when people start to think about what they want to achieve with new year’s resolutions, from exercising more to learning a new language. But without a proper plan, many will not achieve their goals. If you want to make big changes it’s essential to do three things: set your goal, have a solid plan for reaching it and then commit to it. The net zero targets that most countries are setting are very similar to the resolutions made by individuals: they are important goals and commitments, but without a clear plan in place they will not be achieved.

Economic growth increases power demand

Nearly every economy in Southeast Asia has more than doubled in size since 2000, powered largely by fossil fuels. Power generation has almost tripled over the past two decades, driven by a sixfold increase in coal-fired generation, which now accounts for 40% of the region’s total power. This presents a significant risk across the region, with an average annual fossil fuel import bill over the past decade of USD 43 billion or 1.7% of GDP – a figure which the International Energy Agency (IEA) predicts will rise sharply year on year unless clear planning and decisive action is taken to accelerate the energy transition towards renewables.

The risk of energy security vulnerability and rising costs makes the transition towards net zero an economic necessity as well as an environmental one. Most countries across Southeast Asia have made net zero commitments, but clear transition plans are needed to realise them.

 Finding the right path to net zero

Every country is starting at a different point with different resources, so there is no one single route to net zero – every city, region and country has its unique path. That said, Wärtsilä has modelled over 190 power systems around the world, which has revealed consistent similarities that apply everywhere. These have been turned into a five-step roadmap that any country can start today and follow to reach their net zero target, adapting it according to their unique situation.

Most importantly of all, these steps use technologies that are both readily available and commercially feasible to deploy today – the price of electricity does not need to increase when power systems transition to net zero. In simplified terms, the capital investments needed to add renewables along with flexible balancing solutions to deal with intermittency are more than offset by the savings in fossil fuel use, especially when potential future carbon taxes are taken into account. Time is of the essence, however – around half of the necessary CO2 reductions must happen before 2030 in order to achieve the global climate targets of the Intergovernmental Panel on Climate Change (IPCC) and reach net zero by 2050.

The five-step roadmap to net zero

1.      Add renewables

The first step is to rapidly add large amounts of renewables, such as wind and solar, so they can become the main source of power. While this demands initial investment, investing in renewables can be seen as buying large amounts of power up-front, rather than betting against fluctuating oil prices and increasingly strict environmental regulation in the future.

2.      Add balancing solutions

Renewables are by their nature intermittent, so energy storage and balancing power plants are needed to ensure grid stability. Energy storage provides short-duration balancing, while balancing power plants provide reliable quick-start/stop dispatchable capacity. This flexibility creates conditions where renewable energy is the most profitable way to power a country, ensuring back-up power is available whenever there is insufficient wind or solar. Inflexible plants, like coal and combined-cycle gas turbines (CCGTs), cannot perform this role as they are too slow to ramp up and down alongside renewables, meaning renewable energy is curtailed and wasted.

3.      Phase out inflexible plants

As soon as there is sufficient renewable output supported by the flexibility of energy storage and balancing power plants, inflexible plants such as coal and CCGTs should be retired.

4.      Convert to sustainable fuels

To reach 100% renewable energy or net zero, governments and regulators should create the conditions to build new Power-to-X capacity to produce sustainable fuels like green hydrogen, and convert balancing power plants to run on those fuels. This provides economic long-term and seasonal energy storage, ensuring supply security even during extreme weather conditions.

5.      Phase out fossil fuels

Finally, any remaining fossil-fuel capacity should be permanently retired. 

Powering sustainable growth

The power sector currently produces 35% of global CO2 emissions, so it has a huge role to play in meeting net zero commitments. Thankfully the decarbonisation of this sector is quite straightforward, with the same five steps relevant to every country across Southeast Asia and indeed the world. The power sector will then be able to support the decarbonisation of other sectors, mainly through electrification and the production of green hydrogen and other sustainable fuels.

Now that the plan is clear it’s essential that action is taken sooner rather than later – moves made over the next five to eight years will be decisive in determining whether or not we can tackle the increasing intensity of climate change. Power producers and policymakers must work together to front-load investment in renewable and flexible capacity and that work must be started today. To find out more about the roadmap to net zero in Vietnam, the Philippines and Indonesia, read our report on Rethinking Energy in Southeast Asia.