ASEAN renewables fail to meet rising electricity demand in 2023

As the demand is expected to increase by 41%, solar and wind offer market opportunities.

ASEAN’s renewables did not meet rising electricity demand last year and were entirely supplied by fossil fuels, according to an analysis by Ember. 

As the demand is expected to increase by 41% by 2030, coupled with falling renewable costs, solar and wind offer market opportunities due to their complementary nature.

Solar, hydro and geothermal were the cheapest in 2023. Hydro costs around $25 per megawatt-hour (MWh) in Lao PDR, whilst solar and wind were priced between $43-73 per MWh across Vietnam, Thailand, and the Philippines.

However, despite adding 0.5 GW in new capacity, hydro’s 21 terawatt-hour TWh decline in from 2022 to 2023 highlights the need for a more diversified clean energy mix.

The report noted that regional interconnection is crucial for sharing renewable resources. Eight out of 18 major projects were completed, adding 7.7 gigawatts (GW) of cross-border transmission capacity last year.

Notable projects include the Lao PDR-Thailand-Malaysia-Singapore power integration project. Wind in Lao PDR, reaching 48% from October to December, can complement wind in Thailand and solar in Malaysia and Singapore. 

Recent advances in power purchase agreements, electricity trading and carbon markets in Vietnam, Malaysia, and Thailand could also further drive growth.

Whilst ASEAN's renewable growth is challenged by grid infrastructure, adopting innovative technologies in clean flexibility, battery storage and improved interconnections can support the energy transition.

“ASEAN's shift to renewable energy promises new jobs, stronger energy security and economic growth,” Dinita Setyawati, Ember’s senior electricity policy analyst for Southeast Asia, said.