From emission-intensive to investment hotspots: Championing renewables in 3 ASEAN economies
Viet Nam, the Philippines and Indonesia have the resources and workforce to lead ASEAN’s clean energy future, but turning potential into progress hinges on creating stable, predictable policies and taking bold and near-term actions to secure investment and stay competitive.
2 Dec 2025
27 Minutes Read
Table of Contents
Executive summary
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3
Solar project economics in three countries
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Conclusion
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Supporting materials
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Highlights
13–73 GW
Solar capacity target range by 2030 for Viet Nam, Indonesia and the Philippines
11%–16%
Internal rate of return range in Indonesia and the Philippines
≤9%
Percentage point increase in IRR from solar plus battery integration
Executive summary
Strong policies and clear investment frameworks key to unlocking Viet Nam, Philippines, and Indonesia’s clean energy potential
The clean energy transition in Southeast Asia has reached a critical inflection point. Viet Nam, the Philippines, and Indonesia – accounting for nearly 60% of ASEAN’s power demand and emissions – are rapidly transforming from coal-reliant, emissions-intensive economies into emerging hotspots for renewable investment. Robust policy frameworks, market reforms and targeted incentives are now setting the stage for these nations to anchor ASEAN’s clean energy future.
By 2030, Viet Nam, the Philippines and Indonesia each aim for renewables accounting for over half of their installed capacity – among the boldest commitments in ASEAN. Viet Nam has set a target of 73 gigawatts (GW) of solar, the Philippines 14 GW, and Indonesia 13 GW. However, turning this ambition into actionable progress hinges on overcoming persistent bottlenecks and creating a stable, investment-friendly environment.
The momentum is in the right direction. In 2024 alone, this trio attracted $4.6 billion in clean energy investment, a $1.1 increase from last year’s. But even more robust policy frameworks and decisive reforms can derisk and attract private long-term investment.
Viet Nam’s move to enable direct power purchase agreements could double its renewable electricity share, offering producers and buyers a clear path to cleaner power and carving out new revenue streams. The electricity market is gradually being liberalised, with policies that invite private and foreign participation and open opportunities for blended finance models.
Similarly, the Philippines continues to champion market openness. It has removed foreign ownership restrictions in the renewable sector and introduced competitive mechanisms for energy procurement, such as the Green Energy Auction, which integrates storage solutions and streamlines project delivery through digital permitting platforms.
Indonesia, in turn, is advancing regulatory frameworks with risk-sharing provisions in power purchase agreements, new ownership models, and policies that give value to carbon credits and other environmental attributes. This signals an emerging recognition that policy innovation and regulatory clarity are fundamentally necessary if Indonesia is to unlock its abundant solar and wind potential and maintain momentum in foreign investment.
Technology and financing will continue to shape the bottom line. Battery storage projects in Indonesia have propelled internal rates of return of solar projects from 14% to 23%, while similar strategies in Viet Nam and the Philippines are yielding competitive returns and underpinning grid reliability.
Even so, the financial viability of projects in all three markets remains extraordinarily sensitive to power tariffs and upfront capital costs; a 10% variation can shift project returns by as much as 45 percentage points (pp). Exchange rates, equipment fluctuations, and persistent permitting delays all pose ongoing risks. Addressing them through further regulatory coherence and financial innovation will help the nations attract more investments.
ASEAN’s energy transition depends on cementing stable, predictable policies around tariffs, risk allocation, and auction design; fast-tracking approvals and grid integration; supporting hybrid and storage-enabled projects with the right market signals; and rapidly expanding access to investment through blended and local currency finance. Viet Nam, the Philippines and Indonesia have the opportunity to show leadership in this regard.
By doubling down on execution, market flexibility, and investor confidence, the three countries can accelerate on the pathway to clean energy leadership in the region. With the right market foundations and a spirit of bold, coordinated reform, Viet Nam, the Philippines, and Indonesia can unlock private and public capital on an unprecedented scale, accelerate decarbonisation across the region, and deliver a resilient, competitive energy future for years to come.
Southeast Asia is firing on all cylinders to build an integrated, competitive, and resilient region – and energy is at the heart of this transformation. Accelerating clean energy deployment will require stronger regional governance, harmonised planning, and coordinated resilience strategies. Bold reforms are essential to place renewables at the forefront of the region’s energy security.
Dr Dinita Setyawati
Senior Energy Analyst, Ember
Senior Energy Analyst, Ember
President Prabowo’s Asta Cita on energy resilience and downstreaming natural resources are one of the main drivers of national economic growth. Indonesia continues to push for a clean energy transition by optimising all available natural resources. The energy sector holds great potential for job creation, thus, efforts to enhance renewable energy use also focuses, in addition to on-grid electricity, on captive sectors, developing storage systems, biofuel, energy efficiency and clean energy investment.
Dr. Dadan Kusdiana
Secretary General, Ministry of Energy and Mineral Resources, Republic of Indonesia
Secretary General, Ministry of Energy and Mineral Resources, Republic of Indonesia
Southeast Asia has no shortage of renewable energy ambition but lacks systems that work. A multi-trillion-dollar opportunity is stalled by circular bureaucracy, outdated permitting, and neglected grid infrastructure. With smart governance reforms and decisive execution, megawatt targets will mean something, energy security will be achieved, and foreign investment will flow into the region.
Atem S. Ramsundersingh
CEO, WEnergy Global Ptd Ltd (Singapore)
CEO, WEnergy Global Ptd Ltd (Singapore)
Key takeaways
01
Viet Nam’s renewable push includes a 73 GW solar goal by 2030, while the Philippines and Indonesia target 14 GW and 13 GW, respectively.
While all three countries are targeting ambitious renewable energy capacity of 51%–61% in their power mix with solar capacity additions featuring prominently, the scale of their planned build-up varies. Viet Nam aims for a substantial deployment of 73 GW of solar by 2030, while the Philippines targets 14 GW and Indonesia 13 GW. These targets highlight each country’s push to unlock its solar potential and position solar as a central pillar of their clean energy transition.
02
Corporate buyers can drive clean energy investment flow.
Viet Nam’s full implementation of Direct Power Purchase Agreement can roughly double its renewable energy share, from 19% to 42%, assuming that the whole processing sector joins the scheme. Meanwhile, Indonesia’s and the Philippines’ streamlined permitting and green industrial zones focus can boost renewable procurement by corporates. This demonstrates how corporate participation and market reforms are seen as catalysts for accelerating renewable deployment across the three economies.
03
Solar plus battery integration can increase project returns by at least 1.2 percentage points in Viet Nam and 9 percentage points in Indonesia, while maintaining steady returns in the Philippines.
Indonesia records an IRR of 14% for solar projects, the Philippines with a range between 11%–16% and Viet Nam at 6.1%. Integrating batteries significantly increases returns – up to 23% in Indonesia and 7.3% in Viet Nam. This highlights growing recognition of battery storage as a value-adding component in renewable projects, enhancing profitability and system reliability across the region.
04
A 10 pp change in PPA prices and capital costs can shift IRR by up to 45pp.
The model shows that project returns in the three countries are highly sensitive to PPA terms and capital costs. A 10 pp change in PPA rates can shift IRR by 33–45 pp, while a 10 pp difference in capital costs can change IRR by 18–41 pp. This highlights how small variations in tariff levels or capital costs can significantly affect project profitability and overall financial viability.
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