ASEAN Renewable Energy Assets Worth US$165 Billion Face Rising Climate Risks, Zurich Insurance Warns

A new report released by Zurich Insurance has warned that renewable energy assets worth up to US$165 billion in Southeast Asia are facing significant threats from climate-related hazards. The report states that around 75 percent of the region’s clean energy generation capacity, spread across 1,380 existing and planned renewable energy projects in ASEAN countries, is exposed to severe climate risks.

According to the study, extreme weather events such as strong winds, flooding, hailstorms, and tornadoes could cause major damage to renewable energy infrastructure by 2030 if adequate preventive measures are not taken. The report highlights that these climate hazards can affect critical components of clean energy projects, including civil structures, electrical substations, wind turbines, and solar panels. Such damage could lead to substantial financial losses and disruptions in power generation.

Solar energy projects have been identified as the most vulnerable segment. The report estimates that nearly 80 percent of solar installations in the region could fall into the highest climate risk categories within the next few years. This growing exposure raises concerns about the long-term reliability and sustainability of renewable energy investments across Southeast Asia.

Despite the risks, the report emphasizes that early investment in climate resilience can significantly reduce potential losses. It estimates that an upfront investment of approximately US$13 billion in resilience measures could help prevent losses of up to US$82 billion. This translates into an estimated return of 6.5 times the initial investment. The report further notes that incorporating climate risk assessments and resilient design standards during the planning and construction stages can reduce expected losses from extreme weather events by 40 to 50 percent.

The study also points out that climate resilience is becoming increasingly important for securing financing and insurance coverage. Investors, lenders, and insurers are now relying more on future climate projections and risk assessments before committing capital to energy projects.

ASEAN countries have set a target to increase the share of renewable energy in total power generation capacity from 33 percent to 45 percent by 2030. Achieving this goal is expected to require around US$190 billion in clean energy investments by 2035.

To support this transition, the report recommends mandatory climate risk screening for renewable energy projects during the planning phase. It also suggests prioritizing stress testing for high-risk assets and adopting hazard-specific design standards when selecting equipment. Additionally, governments and developers are urged to strengthen supporting infrastructure such as roads, power grids, and communication networks to improve overall energy security and resilience.