Southeast Asia needs $190 billion in clean energy investments by 2035 to meet climate goals, IEA says

The report emphasised that increasing energy investments need to go hand-in-hand with strategies aimed at reducing emissions from the region's relatively young coal-fired power plants, which currently dominate its energy landscape. The challenge is compounded by the rapid economic growth in Southeast Asia, which threatens both energy security and climate objectives.

However, efforts to accelerate the closure of coal plants in emerging markets, a key initiative backed by wealthy Western nations, have hit delays. A deadline in July for an agreement on the early closure of an Indonesian pilot project passed without resolution, as reported by Reuters.

Electricity demand across Southeast Asia is expected to grow at an annual rate of 4% in the coming years. Clean energy sources—including wind, solar, modern bioenergy, and geothermal—are forecast to meet more than a third of the rising demand by 2035, the IEA report notes.

Still, the projected increase in clean energy won't be sufficient to significantly curb carbon dioxide (CO2) emissions. The region’s energy-related CO2 emissions are expected to rise by 35% between now and the mid-21st century.

"Clean energy technologies are not expanding quickly enough, and the continued heavy reliance on fossil fuel imports is leaving countries highly exposed to future risks," said Fatih Birol, the IEA's executive director.

Despite Southeast Asia's status as an economic powerhouse, attracting just 2% of global clean energy investments, the region accounts for 6% of global GDP, 5% of global energy demand, and is home to 9% of the world's population, according to the IEA.

To support the expansion of renewable energy, particularly variable sources like wind and solar, the region will need to modernise its power grids. This modernisation will require annual investments to double to nearly $30 billion by 2035, the report concludes.