Southeast Asia looks to renewable power for energy security

Key Points

• Energy Demand and Fossil Fuel Dominance: Energy demand in Southeast Asia has been growing at an average of 3% annually over the past two decades, a trend expected to continue until 2030. However, despite this growth, fossil fuels still dominate the region’s energy mix, accounting for approximately 83% in 2020, while renewables made up only 14.2% during the same period.
• Vulnerability to Energy Price Shocks: Southeast Asia’s heavy dependence on fossil fuels makes the region vulnerable to energy price shocks and supply constraints. Global events, such as the COVID-19 pandemic and geopolitical developments like Russia’s invasion of Ukraine, have led to significant fluctuations in oil prices, with benchmark oil prices reaching a decade-high in March of the previous year.
• Transition to Clean Energy: Despite the current dominance of fossil fuels, the region is eager to transition to cleaner and more sustainable energy sources. Many Southeast Asian nations are taking steps to diversify their energy sources and reduce reliance on fossil fuels. Several countries, including Malaysia, Vietnam, Singapore, the Philippines, and Indonesia, have introduced plans and initiatives to increase their use of renewable energy and reduce their dependence on fossil fuels.