Renewable power is the focus for energy security in Southeast Asia.

• In 2020, the ASEAN Center for Energy reported that fossil fuels accounted for approximately 83% of the region's energy mix, while renewables made up only 14.2%.
• The manager of energy modeling and policy planning at the center stated that the "huge dependence" on fossil fuels increases the region's vulnerability to energy price shocks and supply constraints.

Renewable energy is being embraced by Southeast Asia as a means to secure its energy future, with the region being home to some of the world's fastest-growing economies.

The International Energy Agency predicts that energy demand in Southeast Asia will increase by an average of 3% each year until 2030 under current policy settings.

In 2020, the ASEAN Center for Energy found that fossil fuels made up about 83% of the region's energy mix, while renewables accounted for only 14.2%.

The International Energy Agency predicts that by 2050, oil, natural gas, and coal will make up 88% of the world's primary energy supply.

The reliance on fossil fuels in this region makes it more susceptible to energy price fluctuations and supply limitations, according to Zulfikar Yurnaidi, energy modeling and policy planning manager at the ASEAN Center for Energy.

In recent years, global events such as the pandemic and Russia's invasion of Ukraine have caused oil prices to rise. In March last year, benchmark oil prices reached their highest level in over a decade. Last week, oil prices increased nearly 6% as Middle East tensions escalated following Hamas militants' attack on Israel.

Yurnaidi stated that our fiscal capacity differs from Europe's, and we cannot compete with everyone to secure our own gas supply.

BMI Fitch Solutions' David Thoo stated that Southeast Asia's gas and coal power sectors have grown as power demand increases, resulting in these markets becoming more vulnerable to fluctuating fossil fuel prices on the global market.

If Southeast Asian nations fail to make substantial discoveries or enhance their existing production infrastructure, the region will become a net importer of natural gas by 2025 and coal by 2039, according to the ASEAN Center for Energy. This will result in higher fossil fuel prices and put additional pressure on consumers.

Yurnaidi stated that for economic growth and security, the region must diversify its energy sources.

Thoo stated that most Southeast Asian markets have made progress in declaring renewable energy goals and developing their low-carbon energy transition strategies.

Yurnaidi stated that the region's policies and trends indicate a desire among countries to shift towards clean energy.

Energy transitions from Malaysia to Indonesia

• Malaysia

The Ministry of Economy announced that Malaysia launched its National Energy Transition Roadmap in July, aiming to increase its renewable energy capacity and decrease its reliance on natural gas imports.

The ministry announced that the roadmap identified 10 flagship projects, including plans to construct a one-gigawatt solar photovoltaic plant, which is Southeast Asia's largest, capable of directly converting sunlight into energy.

Since 2011, solar power has been the most promising part of Malaysia's renewable energy industry, growing at a rate of 48% annually, as stated by the authorities.

The ministry announced plans for an integrated renewable energy zone, five large-scale solar parks, and three green hydrogen production plants to create a more resilient, low-carbon power system. These projects will utilize Malaysia's estimated 290 gigawatts of technical renewable energy potential.

• Vietnam

Vietnam unveiled its Power Development Plan 8 in May, which aims to increase the use of wind and gas energy and decrease its dependence on coal.

By 2030, the government predicts that renewable energy sources, including wind and solar, will contribute to at least 31% of the country's energy requirements, as reported by Reuters.

The release stated that under the plan, all coal plants must be converted to alternative fuels or shut down by 2050. While coal will continue to be a significant energy source in the near future, accounting for approximately 20% of the country's total energy mix in 2030, it will be a decrease from nearly 31% in 2020, according to Reuters.

• Singapore

The Green Plan 2023 of Singapore focuses on increasing the use of renewable energy. The plan aims to deploy at least 2 gigawatts of solar energy capacity by 2030, which will meet approximately 3% of the projected electricity demand, as stated by the Ministry of Sustainability and the Environment.

According to the ministry, 95% of Singapore's electricity is generated from natural gas, a non-renewable energy source.

Despite Singapore's limited renewable energy options due to its geographical constraints, the plan will incorporate measures such as rooftop solar panels and importing electricity and hydrogen from other Southeast Asian countries to decrease dependence on fossil fuels.

In 2020, Keppel Electric signed a two-year agreement with Laos to import up to 100MW of renewable hydropower through Thailand and Malaysia. This was Singapore's first renewable energy import and also the first multilateral cross-border electricity trade involving four ASEAN members, according to local media reports.

Yurnaidi stated that it is evident that the region comprehends the significance of energy dependability and fortitude in the face of diverse energy disruptions.

• The Philippines

BMI's Thoo stated that Southeast Asian markets are seeking foreign companies with expertise in renewable energy to develop their renewables sectors.

He stated that renewables in this region are not as advanced as those in China and Western markets.

In November, the Philippines abolished Filipino ownership requirements for certain renewable energy resources, enabling foreign investors to fully own projects involving solar, wind, hydro or ocean energy resources, as per international law firm Baker McKenzie. Prior to this, foreign firms could only own up to 40% of such energy projects.

The report by the World Bank highlights the importance of foreign ownership in enabling the installation of 21 gigawatts of offshore wind power in the Philippines by 2040, which would account for one-fifth of the country's electricity supply.

The report stated that the Philippines' heavy dependence on imported fossil fuels exposes it to the risk of supply shortages and rising prices.

The World Bank stated that foreign companies can contribute their expertise and experience to the development of renewable energy projects, particularly during the later stages that require significant investment.

• Indonesia

To stimulate investment in renewable energy, Indonesia has eased some restrictions on foreign ownership.

The Asia Business Law Journal reports that foreign ownership is now allowed for power transmission, distribution, and generation projects with a capacity of more than 1 megawatt.

Yurnaidi stated that he is hopeful that a significant amount of foreign investment will flow into the region in the near future, leading to an increase in renewable energy projects.