ASEAN Energy Outlook 8: Critical insights into the region's energy trends and projections

At last week’s ASEAN Energy Business Forum, ASEAN’s Centre for Energy launched its flagship ASEAN Energy Outlook 8 (AEO8). The ASEAN Energy Outlook series has been instrumental since its inception in 2006, guiding energy policy and planning across the region. The AEO8 provides critical insights into energy trends and projections, covering key areas such as energy access, affordability, security, and environmental sustainability.  

AEO8 shows that ASEAN’s energy demand is projected to grow significantly, driven by economic and population growth. To manage this demand sustainably, the AEO8 highlights the need for robust, demand-driven policies, particularly in high-consumption sectors like transportation and industry. National efficiency measures and fuel shifting are critical, with potential to reduce energy demand by 31.02% by 2050 under the ASEAN Member States Target Scenario (ATS). However, these efforts must be scaled up rapidly to meet regional goals.

The report explores emerging technologies as ASEAN advances towards a net-zero future. Key developments include the introduction of hydrogen and sustainable aviation fuel (SAF) by 2023 and 2025, respectively.  

A Shared Vision for Renewable Energy

Public opinion in ASEAN strongly supports the transition to renewable energy, with a majority favouring the cessation of new coal plant construction and backing the phase-out of coal by 2030. The AEO8 underscores this momentum, projecting a 28.9% decrease in fossil fuel reliance by 2050 under the ATS scenario, thanks to accelerated renewable energy deployment.

With the right policies, renewable energy is poised to play a pivotal role in future power generation. The region is predicted to meet and exceed its 2025 renewable energy target of 35% installed capacity. With 33.6% achieved in 2022, AEO8 projections suggest the region could reach between 39.6% and 42.2% under ambitious scenarios by 2025. By 2040, the ATS scenario projects ASEAN will achieve 100% household electrification, demonstrating the region’s commitment to universal energy access.

P4I has been working with ASEAN Member States in the process of advancing their own long-term energy transition plans. Sharing Australia’s experience and insights into the systems, policies and frameworks needed to transform the energy sector is critical collaboration as we all strive toward net zero and inclusive and climate resilient energy infrastructure.

With rapid shifts in technologies and costs, there is now a range of low carbon energy storage technologies and carriers that countries can tap into. For instance, Lao PDR is well-positioned to leverage its strategic location and renewable energy potential to substantially expand its clean energy export capacity to ensure sustainable growth.

P4I is working with Lao PDR where technologies such as Pumped Hydro Energy Storage (PHES) and green hydrogen have the potential to help transform Lao PDR’s energy sector and maximise its untapped renewable energy potential. PHES could be a practical solution to store surplus hydropower for use domestically during the dry season and for export. It could also provide essential system services to stabilise the grid as more variable renewable energy is installed. Modelling by the RE100 Group, Australian National University shows the important potential for PHES in Lao PDR with over 5,822 identified sites. Australia is well placed to assist, having deployed its own large-scale energy storage solutions such as PHES to ensure the security and reliability of its increasingly renewable electricity grid.  

In Carbon Neutrality Scenario (CNS), the AEO8 outlines how emerging technologies are supporting ASEAN progress towards a net zero future. New fuels in the demand sector include Hydrogen and Sustainable Aviation Fuel (SAF), which will be introduced in the region's TFEC by 2023 and 2025, respectively. Among others, we foresee more role for hydrogen in the transport sector.  

In Malaysia, a country that has the potential to be a regional green fuel bunkering hub in Southeast Asia, P4I is working with the Ministry of Transport (MOT) and Port of Tanjung Pelepas (PTP) to explore how an industry shift to alternative fuels and green fuel bunkering could strengthen Malaysia’s port sector and catalyse a low carbon fuel production industry by creating jobs and supporting economic growth.

A Foundation for Evidence-Based Decision Making

The AEO8 shows that to achieve regional targets, a range of demand driven policy interventions are needed, particularly in the transportation and industrial sectors – the highest energy consumers across all years and scenarios. Across the region, P4I is supporting partner governments to research-based policy decision making and implementation to support quality infrastructure, and regulatory environment reforms that attract green financing and green investment to fund the energy transition.

P4I is proud to have contributed to the development and launch of AEO8. By supporting the development of this critical resource, Australia aims to empower policy decision-makers in ASEAN with the tools and insights needed to navigate the complex energy transition ahead. Our collaboration highlights the importance of shared learning and regional cooperation in achieving a cleaner, more inclusive energy future. As ASEAN Member States (AMS) strive for a sustainable energy future, the report offers valuable data and recommendations to support the region’s ambitious net-zero targets.

AEO8 stands as a crucial resource, guiding ASEAN’s path to a sustainable and resilient energy system. As the region embraces new technologies and policies, the insights from AEO8 will help shape a future where renewable energy drives growth, secures energy supply, and fosters a just transition for all communities.

Take a look at the report: http://go.aseanenergy.org/AEO8 

*Image: (from left to right) H.E. Satvinder Singh, Deputy Secretary General of ASEAN;  Amy Williams, Deputy Head of Mission, Australia Mission to ASEAN; Beni Suryadi, Acting Executive Director of ACE; H.E. Phosay Sayasone, Minister of Energy and Mines of Lao PDR; Dato’ Mohamad Razif bin Haji Abdul Mubin, Deputy Secretary General (Energy) at the Ministry of Energy Transition and Water Transformation (PETRA) Malaysia; Michael Schiffer, Assistant Administrator of the Bureau for Asia of USAID; Dr Zulfikar Yurnaidi, Head of Energy Modelling and Policy Planning (MPP) Department at ACE.