Southeast Asia needs to ramp up clean energy investments to $190 billion by 2035, roughly five times the current level, according to a report from the International Energy Agency (IEA). The report emphasizes that increasing energy investments must be complemented by strategies to reduce emissions from the region’s relatively young coal-fired power plants.
As the region experiences rapid economic growth, the IEA warns that achieving energy security while meeting climate objectives will pose significant challenges. Despite efforts by wealthier Western nations to encourage the closure of coal plants in emerging markets, progress has been slow, highlighted by the lack of a deal on an Indonesian pilot project that missed its July deadline for early closure.
Electricity demand in Southeast Asia is projected to grow at an annual rate of 4% in the coming years. The IEA anticipates that clean energy sources, including wind, solar, modern bioenergy, and geothermal power, will account for more than a third of this growth by 2035. However, these measures alone are unlikely to curb the region’s energy-related carbon dioxide emissions, which are expected to rise by 35% between now and mid-century.
The IEA’s executive director, Fatih Birol, stated that “clean energy technologies are not expanding quickly enough,” adding that heavy reliance on fossil fuel imports leaves countries vulnerable to future risks. The report notes that Southeast Asia attracts only 2% of global clean energy investments, despite contributing 6% of global GDP and 5% of global energy demand, and being home to 9% of the world’s population.
To accommodate an increased share of variable renewable energy, the region will need to expand and modernize its power grids, requiring annual investments to nearly double to around $30 billion by 2035, the IEA concluded.
