Why Southeast Asia's Clean Energy Surge Could Stall Before It Starts
Meets Six Sweeping Demands Haley Zaremba is an energy journalist and researcher with more than a decade of professional experience covering global energy systems, land and natural resources, and… Southeast Asia has been hit harder than anywhere else on Earth by the energy crisis stemming from the War in Iran, leaving many nations scrambling to shore up localized energy supply chains.
The newfound volatility in global energy markets has catalyzed the clean energy transition worldwide, but particularly in cash-strapped, import-dependent nations, of which there are many in Southeast Asia.
But the rapidly developing region’s ageing and overburdened grids are ill prepared for a quick build-out of indigenous renewable energy capacity, threatening energy security and transition capabilities in the near term.
When the Strait of Hormuz closed down in February of this year, 20 percent of the world’s oil and gas flows were cut off overnight, leaving many energy importing countries in the lurch.
Of the approximately 20 million barrels of oil and oil products that passed through the Strait on any given day before the the United States and Israel began a military offensive in Iran,about 80 percent of oil and 90 percent of natural gas exported through the channel were destined for Asian markets.
Southeast Asia was particularly vulnerable to the resultant price volatility due to the region’s comparatively high dependence on energy imports and low economic capacity to absorb market shocks.
In the months after the closure of the Strait of Hormuz, the Philippines declared anational energy emergency, and governments across the region turned to energy rationing, work-from-home mandates, and even four-day work weeks to manage the strain on finite energy sources and an overstressed grid.
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The same crisis has alsokickstartedan overdue renewable revolution that will ultimately result in a more energy-secure, independent, and autonomous energy landscape.
But that renewable revolution is at risk of failure if Southeast Asian nations don’t expand and reinforce their energy grids as a matter of top priority.
In fact, the region’s beleaguered and fragile grids are already reportedly deterring billions of dollars in planned clean power investments.
According to a recentreportfrom Climate Home News, “inadequate grid capacity and maintenance is already proving a major factor in the region’s stuttering rollout of new clean energy projects.” The report also points to “issues ranging from unclear power purchase agreement (PPA) structures, a failure of power policies to keep up with investor needs, permitting and licensing approval delays, grid connection constraints, limits to private sector involvement in electricity markets, and policy and tariff uncertainty.” While green energy investing has shown massive growth in the region in recent years, many p.
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