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Southeast Asia is experiencing rapid economic growth and development, as well as rising population and urbanization, and improved access to basic services. However, this rapid expansion poses significant energy challenges and raises serious questions about the environment’s long-term viability. Growing demographics, increasing incomes, and rapid urbanization have all combined to increase energy and other resource consumption across the country.
Current Renewable Energy Market Scenario In Southeast Asia
Renewable energy infrastructure investment has been high in the country, owing to government efforts to reduce carbon emissions as well as lower costs due to cheaper technologies and economies of scale. During the period 2020-2025, the renewable energy market in Southeast Asia is projected to expand at a CAGR of 7.3%. Coal-fired power generation dominates the power generation market in Southeast Asia.
Southeast Asia is emerging as one of the world’s fastest-growing solar energy markets and one of the most promising regions for the industry’s global expansion. With the latest and newest PV capacity built in the area in 2019, Vietnam and Malaysia were at the forefront of this trend. The growing demand for electricity, the abundance of solar resources in the area, and favourable renewable-related policies are just a few factors that have aided the region’s solar power industry’s development. Furthermore, policymakers in the area have been stepping up their efforts to ensure a stable, affordable, and long-term path for the energy sector, which includes actions to encourage investment in solar power generation and infrastructure.
The COVID-19 pandemic was seen as a major threat to the power markets in Southeast Asian countries. Despite significant disruptions to industry and a reduction in overall power demand, the energy shift to a more sustainable and greener system has not slowed. To reduce greenhouse gas (GHG) emissions, the unpredictable economic crisis caused by the COVID-19 pandemic has prompted a shift away from fossil fuels and toward cleaner energy sources. This move demonstrates that Southeast Asian countries are working to strengthen energy market resilience and ensure more long-term development. With the setting in of the second half of 2020, the renewable energy sector has steadily recovered as a new standard has been implemented in many Southeast Asian countries, despite the fact that the effect, such as project delays, remains. As communities explore alternatives to economic and consumption trends that have fed many of the world’s shared crises, from health emergencies like COVID-19 to pollution and climate change, the COVID-19 pandemic has given it new wind to sail on in this energy transition.
Future Growth Potential
The energy that is affordable, safe, and environmentally sustainable will be essential to Southeast Asia’s growth in the coming decades. Diversifying the region’s energy supply by renewables is a viable choice for supporting development while also achieving socio-economic and environmental benefits. According to the International Energy Agency (IEA), Southeast Asia’s energy demand has increased by more than 80% since 2000 and is expected to increase by 60% by 2040. Electricity demand has been rising at 6% per year in what was previously a high-growth area before the pandemic. The year 2021 is shaping up to be another year of volatility, but cautious optimism about the energy transition could come from a combination of clean energy promotion and green recovery. The governments of the Southeast Asian cluster are trying to rebalance the future additions in the power mix because of the global trend, that is related to the declining costs of renewables and increasing worries about carbon emissions. Different countries in the Southeast Asian cluster are trying to come up with various initiatives and practices to get back on the road to renewables. Despite the disruptions caused by the Covid-19 pandemic, it is still projected that renewable energy generation from solar to hydro to wind is expected to rise in the years to come.
The above listed information makes it clear that the renewable sector of the Southeast Asian countries has a bright future. Just like the rest of the world, the renewables’ sector of these countries has been impacted due to the outbreak of the Covid-19 pandemic. With prevailing optimism and constant efforts, the governments of these countries are certain that the demand and supply of renewables will spike again in the coming years.