Southeast Asia Energy Transition: Challenges & Progress

Several Southeast Asian nations are increasing investments in renewable energy sources as they aim to reduce reliance on fossil fuels and decrease emissions. Vietnam, the Philippines, and Indonesia are leading the shift, attracting billions in funding to bolster their renewable energy capacities.

Renewable Energy Investment in Southeast Asia

Vietnam, the Philippines, and Indonesia collectively account for nearly 60 percent of the Association of Southeast Asian Nations’ (ASEAN) power demand and emissions. The three countries are actively seeking to attract investment in renewable energy, supported by policy frameworks, market reforms, and incentives.

In 2024, these nations attracted $4.6 billion in clean energy investment. Canadian multinational Brookfield Asset Management announced investments in renewable energy projects across all three countries, including the acquisition of clean energy developer Alba Renewables, which holds a 1.8 GW portfolio of wind, solar, and battery storage assets.

Daniel Cheng, head of renewable power and transition for Brookfield Asia-Pacific, stated, “Southeast Asia is at the forefront of the global energy transition, with surging demand, favourable policy frameworks and a deep need not just for capital, but also experienced operators with strong track records of unlocking renewable power at scale.”

Philippines’ Green Transition

In 2024, 21% of the Philippines’ electricity production came from low-carbon sources, with geothermal energy being the largest contributor at 8.3 percent, followed by hydropower at 8 percent and solar and wind power at 3.8 percent. Power sector emissions in the Philippines have tripled in the last 20 years due to increased coal reliance.

The Philippines aims to achieve 35 percent renewable electricity by 2030 and 50 percent by 2040. The country is on track to deploy 15 GW of clean energy capacity by 2030, with plans to increase geothermal capacity by 75 percent and hydropower capacity by 160 percent by 2040. A recent agreement with UAE-based Masdar involves a $15 billion investment to advance solar and wind projects, targeting 1 GW of clean energy by 2030.

Indonesia’s Renewable Energy Goals

Around 20 percent of Indonesia’s electricity generation currently comes from renewable sources, primarily hydropower, which provides approximately 8 percent. Wind and solar power contribute only 0.2 percent to the country’s electricity production.

In 2023, Indonesia secured $20 billion in funding through a Just Energy Transition Partnership (JETP) to support renewable energy deployment. The country aims to achieve at least 44 percent renewable power generation by 2030, up from 12 percent in 2022, and reduce grid emissions to 250 million metric tonnes of CO2 by 2030.

Vietnam Leads in Solar Power

Vietnam is further ahead in its green transition, with 44 percent of its electricity produced from low-carbon sources in 2024, exceeding the global average of 41 percent. Hydropower accounts for 31 percent of electricity, while solar and wind power contribute 13 percent.

Between 2018 and 2023, Vietnam increased its solar and wind capacity from almost zero to over 21 GW, driven by government feed-in tariffs and attracting substantial private investment. Approximately 58 percent of funding came from domestic sources, and 27 percent from domestic-foreign joint ventures. By 2023, Vietnam was the largest producer of solar power in Southeast Asia.

Despite continued reliance on coal, Vietnam, the Philippines, and Indonesia are all committed to developing robust renewable energy industries to transition away from fossil fuels. Vietnam’s success demonstrates the potential for rapid renewable energy development with supportive government policies and private investment.