Energy Transition in Southeast Asia

Southeast Asia governments have been revising their power development plans to reduce the reliance on coal, switching to gas and renewables. Gas-fired generation capacity is estimated to grow by 30% to 130 GW by 2030. However, natural gas-fired generation whether standalone or with carbon capture, is still not a zero-carbon source. This opens up the opportunity for hydrogen—which is zero-carbon—to fuel gas turbines. But will this be an economical option in a region where affordability is a paramount concern?

Vietnam and the Philippines have been gaining traction among offshore wind developers and investors. About half of electricity generation in these economies still comes from coal, while growth in electricity demand is among the highest in the region.

Phasing out coal-fired power has been a common strategy in the developed countries’ energy transition roadmap. Given the large share of coal generation (42%), young age profiles (average of 11 years), growing demand for base-load power, and affordability concerns, will accelerating coal-fired capacity retirement be feasible? Will the adoption of biomass/ammonia cofiring or carbon capture in the region to maintain the coal-fired capacity be an option? What role would the coal capacity play in a net-zero scenario?

Governments in Southeast Asia will be faced with a balancing act, between energy transition and keeping power prices affordable. This is inevitable as energy transition will involve fuel switching, carbon pricing, grid enhancements and the adoption of low-carbon and emission abatement technologies, all of which run counter to keeping power prices low.

As fossil fuel generation still remains an important part of the fuel mix over the coming decades contributing to almost 70% of the generation mix by 2030, the journey to net-zero will require carbon capture. When will adding carbon capture be cost-competitive enough to be adopted more widely? Which countries will be the early adopters?

Governments across Southeast Asia are promoting the shift from internal combustion engine (ICE) vehicles to electric vehicles (EVs). Although the timing of the shift from ICE to EV will differ, the overarching plan is for the gradual adoption of electric vehicles. How will the adoption of more electric vehicles affect the power system in terms of demand and the demand profile?

Given a challenging policy and regulation environment, will the renewable sector in Southeast Asia be able to attract sufficient investment to meet its targets? This complimentary report provides insights to help address the opportunities and risks for market participants.

Enlit Asia (formerly PowerGen Asia) is a major event in Southeast Asia that gathers various power sector stakeholders, from regulators and financiers to industry leaders and from generation grids to consumers. Our experts presented and moderated six separate sessions during the event, on 20 to 22 September.

Southeast Asian markets struggle to secure volumes at affordable prices. Europe's quest for LNG to replace Russian pipeline gas will continue to prop international LNG prices until significant tranches of new supply can be brought onstream by 2025-26.

Each country in Southeast Asia will begin their journey towards net-zero from different starting points, depending on earlier decisions and policies.