Several countries in Southeast Asia continue to rely heavily on fossil fuels, including coal, for their power supply. This is contributing heavily to an increase in emissions. However, multiple states in the region have now introduced green transition strategies aimed at decarbonising their economies by cutting emissions and gradually shifting reliance away from fossil fuels to renewable alternatives. Vietnam, the Philippines, and Indonesia are three of the Asian countries looking to ramp up their renewable energy capacities in the coming years to decrease their reliance on coal, oil, and gas. 

Vietnam, the Philippines, and Indonesia together contribute almost 60 percent of the Association of Southeast Asian Nations’ (ASEAN) power demand and emissions. In support of a global green transition, the three countries are now looking to shift reliance away from coal by attracting high levels of investment in the renewable energy sector. This is being supported by strong policy frameworks, market reforms, and targeted incentives. 

In 2024, the three countries attracted $4.6 billion in clean energy investment. In November, the Canadian multinational Brookfield Asset Management announced it would be investing in renewable energy in all three countries. Brookfield recently acquired the clean energy developer Alba Renewables, which has a 1.8 GW portfolio of wind, solar, and battery storage assets, mainly in the Philippines and Thailand. The acquisition is expected to help Brookfield expand its operations in Southeast Asia. 

The head of renewable power and transition for Brookfield Asia-Pacific, Daniel Cheng, 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.” Cheng added, “By acquiring a seed asset in Vietnam and backing Alba’s expansion across the Philippines, Thailand and beyond, we are catalysing platforms that can deliver reliable, low-carbon energy where it is most needed and impactful.”

In the Philippines, 21% of electricity production came from low-carbon sources in 2024. Its largest source of clean electricity is geothermal at 8.3 percent, followed by hydropower at 8 percent and solar and wind power at 3.8 percent. The country’s power sector emissions have tripled over the last 20 years due to a growing reliance on coal. The Philippines has set a target of 35 percent renewable electricity by 2030, demonstrating the government’s commitment to a gradual green transition.  

The Philippines is on target to deploy 15 GW of clean energy capacity by 2030 and aims to achieve 50 percent renewable energy generation by 2040. The government hopes to increase the country’s geothermal capacity by 75 percent and its hydropower capacity by 160 percent by 2040, as well as expand its wind and biomass power sectors. It recently signed a $15 billion agreement with United Arab Emirates-based Masdar to advance solar and wind projects, as well as battery storage initiatives, aiming to achieve 1 GW of clean energy by 2030.

In Indonesia, around 20 percent of electricity generation comes from renewable energy sources. The most dominant renewable energy source in Indonesia is hydropower, providing around 8 percent of electricity generation. Meanwhile, wind and solar power contribute to just 0.2 percent of electricity production. The country’s electricity demand has more than tripled in the last two decades, leading the government to turn to coal and gas to meet the growing demand. 

In 2023, Indonesia was awarded $20 billion in funding under a Just Energy Transition Partnership (JETP), with financing coming from global lenders, to support renewable energy deployment. The draft plan includes the target of achieving at least 44 percent renewable power generation by 2030, from just 12 percent in 2022. Indonesia also aims to cut grid emissions to 250 million metric tonnes of CO2 by 2030, compared to the previous estimate of over 350 million metric tonnes. 

Meanwhile, Vietnam has already begun to develop a strong renewable energy sector, with 44 percent of its electricity produced from low-carbon sources in 2024, putting it above the 41 percent global average. Hydropower contributed 31 percent of electricity, while solar and wind power accounted for 13 percent. Vietnam aims to achieve an energy mix with 47 percent renewable electricity by 2030. 

Between 2018 and 2023, Vietnam increased its solar and wind capacity from almost zero to over 21 GW, supported by the government’s feed-in tariffs, which attracted billions in private investment in the sector. Around 58 percent of funding came from domestic sources, and 27 percent was through domestic-foreign joint ventures. By 2023, Vietnam was the biggest producer of solar power in Southeast Asia, demonstrating the possibility of rapidly developing a strong renewable energy sector. 

While Vietnam, the Philippines, and Indonesia all rely heavily on coal, all three countries are committed to building strong renewable energy industries to support a gradual transition away from fossil fuels towards green alternatives. Meanwhile, the case of Vietnam shows that it is possible to rapidly develop a strong renewable energy sector with support from favourable government policies to attract high levels of private investment.

By Felicity Bradstock for Oilprice.com

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