Southeast Asia looks to renewable power for energy security

Southeast Asia is home to some of the world’s fastest-growing economies. As energy demand grows, the region is turning to renewable energy to safeguard its energy security.

Energy demand in Southeast Asia has increased by an average of 3% each year over the past two decades — a trend that will continue to 2030 under current policy settings, according to the International Energy Agency.

But fossil fuels still dominate the region’s energy mix, making up about 83% in 2020 compared to renewables’ share of 14.2% in the same period, research from the ASEAN Center for Energy showed.

By 2050, oil, natural gas and coal will account for 88% of the total primary energy supply, the center said.

This “huge dependence” on fossil fuels increases the region’s vulnerability to energy price shocks and supply constraints, said Zulfikar Yurnaidi, manager of energy modeling and policy planning at the ASEAN Center for Energy.

Global events such as the pandemic and Russia’s invasion of Ukraine have driven up prices in recent years, with benchmark oil prices reaching its highest level in over a decade in March last year. Just last week, oil prices popped nearly 6% as Middle East tensions soared following Hamas militants’ air, sea and land assault on Israel.

“Our fiscal capacity is different from Europe. We can’t outbid everyone to get our own gas supply,” said Yurnaidi.

In particular, Southeast Asia’s gas and coal power sectors have expanded as power grows, increasingly exposing these markets to volatile fossil fuel prices on the international market, said David Thoo, power and low carbon energy analyst at BMI Fitch Solutions.

If Southeast Asian nations do not make significant discoveries or add to existing production infrastructure, the region will become a net importer of natural gas by 2025 and coal by 2039, the ASEAN Center for Energy estimated. That’s going to raise fossil fuel prices and exert further strain on consumers.

To prevent this, the region must diversify its energy sources for economic growth and security, said Yurnaidi.

Most, if not all, Southeast Asian markets have taken strides to announce renewable energy targets and formulate their low-carbon energy transition plans, said Thoo.

“Overall, the region’s policies and trends show countries are eager to transition to clean energy,” said Yurnaidi.

Malaysia launched its National Energy Transition Roadmap in July, which will scale up its renewable energy capacity and reduce its growing dependence on natural gas imports, according to the Ministry of Economy.

The roadmap identified 10 flagship projects, including plans to…