Understanding policy-based energy transition under rapidly growing electricity demand of developing and emerging economies: A case study of Indonesia, the Philippines, and Vietnam

Licentiate thesis, 2025

Energy transition is a crucial part of global climate change mitigation which needs to happen in both developed and developing countries. Different conditions between the two require a balanced understanding of energy transition in both contexts. However, the current literature on energy transitions does not reflect this requirement as the literature has primarily stemmed from studies of developed countries. Energy transitions in developing and emerging economies have been understudied despite the different sets of challenges they face. One such challenge is the rapidly growing energy demand. It complicates the ability of developing countries to replicate renewable energy transition, such as fossil fuel substitution and coal decline, which mainly occur in developed countries with stabilised demand growth. Simultaneously, cases of energy transition in developing and emerging economies show the critical role of policy in driving the transition, suggesting that policy may provide the key to energy transitions under rapidly growing demand.

This thesis aims to understand the interplay between renewable growth and fossil fuel decline, two key components of the energy transition, as aspired to by national-level policy along with their impacts on the decarbonisation process and carbon emissions. It also seeks to enhance the applicability of existing energy transition frameworks which have predominantly originated from studies in developed countries. This thesis examines the electricity supply of three developing and emerging economies in Southeast Asia—Indonesia, the Philippines, and Vietnam—as a case. These countries are chosen because they share similar socio-economic development, have low renewable penetration and high dependency on coal, and have set similar policies on energy targets and a moratorium on new coal power plants.

This thesis explores the dual aspects of energy transition: the growth of renewable energy and the decline of fossil fuels. For the former, this thesis focuses on the energy targets of the case countries and projects future electricity mixes as aimed by the targets. The decarbonisation pathway framework is then used to analyse the energy transition phases of each country as indicated by the projected electricity mixes. For the latter, this thesis focuses on peak coal, an important step towards coal decline and phase-out which has not been widely investigated in the electricity system context. The peak coal is further distinguished into peak coal capacity and peak coal generation, leading to the development of separate approaches for each. Peak coal capacity is determined by using coal pipeline data. Peak coal generation is determined by considering the growth of coal substitutes through the construction of policy-based and empirical scenarios.

This thesis contributes to the development of the literature on energy transition in developing and emerging economies. In particular, it raises discussion on the link between energy targets and future transition pathways as well as the importance of peak coal electricity in transitioning away from coal. Methodologically, this thesis provides complementary tools to extend the applicability of the decarbonisation pathway framework and proposes distinct methodologies to determine future peak coal capacity and generation. This thesis also provides policy insights on electricity system decarbonization in Indonesia, the Philippines, and Vietnam, which are likely to be applicable also to other developing and emerging economies facing similar challenges of rapidly growing energy demand and high coal dependency.