ASEAN’s demand growth continues to outpace renewable growth, but falling clean energy costs offer a way out

ASEAN’s electricity demand is expected to rise by 41% by 2030. Several pathways suggest that renewable capacity should grow by 3-5 times by 2035. With renewable costs falling, the region has the opportunity to rapidly accelerate renewables, particularly solar and wind, to meet rising demand and climate targets. However, solar power added just 2.7 TWh in 2023.

Solar and wind complementarity makes regional interconnection vital

When considered as complementary sources, the report finds that solar and wind offer significant potential, especially when supported by regional interconnections. Solar peaks at midday and tapers off by sunset, while wind speeds are often higher at night in some areas.

Energy consumption patterns in the Philippines, Peninsular Malaysia and Singapore in 2023 also suggested that daytime peak demand hours highlight the opportunities to ramp up solar power use as one of the solutions to meet electricity consumption during this period.

Bioenergy 4x more costly, while solar, hydro and geothermal were cheapest in 2023

The report finds bioenergy is nearly four times more expensive than hydro in several ASEAN countries, with costs ranging from $59-98 USD per MWh in Indonesia, Malaysia and Thailand. Meanwhile, hydro costs around $25 USD per MWh in Lao PDR, while solar and wind offer competitive alternatives, with prices between $43-73 USD per MWh across Viet Nam, Thailand and the Philippines.

However, despite adding 0.5 GW in new capacity, hydro’s 21 TWh decline in generation from 2022 to 2023 due to seasonal climate variations highlights the need for a more diversified clean energy mix. Falling solar and wind costs, with price drops of 55-81% for solar and 35-53% for wind between 2012 and 2024, present viable options for diversifying ASEAN’s renewables landscape.