Asia’s energy sector stands at a critical juncture – balancing the drive to fuel robust economic expansion and accommodate a rapidly growing middle class with an urgent need to mitigate climate disruptions. Despite its dominant role as a global energy consumer, Asia remains largely reliant on fossil fuels. According to the International Energy Agency, coal still accounts for 48.9% of the total primary energy supply in Asia Pacific, and contributes to 54.8% of the region’s electricity generation. Together, these figures underline the deep-seated challenges of shifting away from high-emission energy sources. This reality mandates a decisive pivot toward cleaner, sustainable systems that align with global climate resilience goals.
Global and Regional Trends in Sustainable Energy Transition
In recent years, global efforts towards a low-carbon future have intensified significantly. Governments, businesses and international organisations are ramping up investments in renewable energy, backed by commitments to robust climate finance, technology transfer and emissions reductions. The 28th Conference of the Parties of the United Nations Framework Convention on Climate Change (COP28) in December 2023 saw nearly 200 countries pledged to triple renewable energy capacity, and double energy efficiency by 2030 – a strong signal of collective commitment. Building on this foundation, COP29 emphasised the need for just energy transitions, particularly for developing economies. This policy emphasis is matched by market trends, as evidenced by global clean energy investments reaching USD2 trillion in 2024; outpacing funds allocated to fossil fuels and demonstrating a clear shift in capital towards a sustainable energy future.
Asia is emerging as a global renewable energy leader, hosting over half of the world’s renewable energy capacity. The region (excluding China) is poised to add more than 680 GW of renewable capacity between 2024 and 2030 – more than double the growth seen during 2017–2023 – primarily driven by major projects in India and within the ASEAN bloc. However, sustaining this rapid capacity expansion will require a significant boost in financial backing. Currently Southeast Asia’s annual clean energy investments average USD72 billion over the last three years. To fully support the surge in capacity to edge the region closer towards energy transition, investments must nearly double to USD130 billion by 2030 and rise to USD190 billion by 2035 for Asia to achieve its net-zero objectives.
Innovative Technologies Driving Sustainability in Asia
Innovative technologies are at the forefront of shaping Asia’s sustainable energy future. Renewable energy has moved into the mainstream, with Asia holding a leading global position in solar and wind generation. For example, India’s solar power capacity has grown from 2.82 GW in 2014 to over 108 GW in 2024, while its wind capacity has increased from 21 GW to 51 GW over the same period. In Southeast Asia, Vietnam now operates about 19 GW of operating utility-scale solar and wind capacity, the largest in the region, thanks to competitive auctions, supportive tariffs and strong private investments. However, this rapid build-out has also highlighted grid integration challenges, as legacy infrastructure has struggled to keep pace.
Energy storage is another critical component in managing the intermittent nature of renewable resources. India plans to deploy over 236 GW hours of battery storage by 2031–2032, while Vietnam is actively integrating lithium-ion and flow battery technologies to bolster grid stability. Simultaneously, emerging solutions such as green hydrogen, and carbon capture, utilisation and storage (CCUS) are gaining momentum. Large-scale projects in India and Japan, as well as pioneering initiatives in Indonesia and Singapore (including Indonesia’s USD7 billion Tangguh CCUS project and Singapore’s CCS project on Jurong Island) demonstrate the region’s commitment to decarbonising heavy industry and the power sector.
Smart grid technologies further underpin Asia’s energy transformation. In Japan, Tokyo Electric Power Company is investing USD3.25 billion by 2027 to upgrade its grid with integrated artificial intelligence, while Singapore’s Energy Market Authority and SP Group are advancing a Future Grid Capabilities Roadmap. Such measures are critical for optimising grid operations, incorporating distributed energy resources and addressing the challenges of rising energy demand.
Overcoming Barriers: Navigating Challenges and Charting the Path Forward
Despite the encouraging pace of renewable energy growth, Asia’s energy transition faces significant obstacles. The persistent reliance on coal in major economies like China, India, Indonesia and Vietnam continues to bolster the construction of new thermal plants, even as global efforts to phase out coal intensify. Regulatory uncertainty further exacerbates the issue; for instance, Indonesia’s restrictive off-site power purchase agreements and abrupt feed-in-tariff cuts in Vietnam have dampened investor confidence and delayed critical projects.
Compounding these challenges is the strain on legacy grids, which were originally designed for one-way power flows from centralised fossil facilities. Vietnam’s experience shows the risks of expanding renewable capacity faster than the grid can adapt. Between 2019 and 2021, about 20 GW of solar and wind capacity was added, yet a significant portion remained underutilised because grid upgrades could not keep pace with the rapid expansion. This gap underscores the urgent need for smarter grids that accommodate two-way power flows and fully harness new renewable capacity.
Furthermore, the financial requirements to scale clean energy are immense. Some estimates suggest that modernising Asia’s grid infrastructure could require mobilising up to USD300 billion per year in private financing, with an additional annual funding gap of around USD23 billion in concessional support. Clearly, addressing these barriers will require a coordinated effort across policy reform, infrastructural upgrades and regional collaboration.
Looking Ahead: Delivering Asia’s Energy Transition
Looking ahead, Asia must harness its innovations and translate international breakthroughs into tangible action. COP29’s agreement to mobilise at least USD300 billion annually by 2035 – and the broader objective of securing USD1.3 trillion in climate finance – provides a robust framework to bridge mitigation and adaptation gaps. As the region sets its sights on COP30 in Belém, Brazil on 10–21 November 2025, even more ambitious targets are on the horizon.
In parallel, Energy Asia aims to be a pivotal platform for governments, industries, investors and stakeholders to converge, exchange insights and forge partnerships for a holistic, just and transformative energy transition. Every decisive action taken today paves the way for collective progress tomorrow.
Be in Kuala Lumpur for Energy Asia 2025 and become part of the journey towards a fully decarbonised and sustainable energy future.
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