Exceeding the Triple Target: How Can ASEAN Sustain Solar and Wind Energy Growth Momentum?

Beyond Tripling: How Can ASEAN Sustain Solar and Wind Growth Momentum?

The Association of Southeast Asian Nations (ASEAN) is at a critical juncture in its clean energy transition. According to the latest report released by energy think tank Ember, *Beyond tripling: Keeping ASEAN's solar & wind momentum*, although ASEAN's solar and wind power generation achieved a high average annual growth rate of 43% from 2015 to 2022, the growth rate slowed significantly to 15% in 2022. The report points out that to meet the International Energy Agency's (IEA) net-zero emissions scenario by 2050, ASEAN needs to add 229 GW of solar and wind capacity by 2030—a goal that cannot be achieved without stronger policy support and infrastructure investment.

Industry Background: Policy Drivers Behind Rapid Growth

Over the past decade, solar and wind power generation in the ASEAN region grew from 4.2 TWh in 2015 to 50 TWh in 2022, with an average annual growth rate of 43%, equivalent to 14% (46 TWh) of the increase in electricity demand over the same period. This data indicates that clean energy is becoming an important force in meeting the region's electricity demand. Among them, Vietnam is the absolute dominant player: the feed-in tariff (FiT) policy introduced in 2017 greatly stimulated the development of solar and wind projects, enabling Vietnam to contribute 69% of ASEAN's total solar and wind generation in 2022.

However, this growth is highly dependent on policy stimulus from a single country. As Vietnam's feed-in tariff policy gradually phased down, the growth rate of ASEAN's solar and wind power generation fell sharply from 67% in 2021 to 15% in 2022 (an increase of 6.4 TWh). This highlights the importance of policy continuity and predictability for the development of renewable energy.

Meanwhile, ASEAN leaders have committed to achieving targets of renewable energy accounting for 23% of primary energy supply and 35% of installed capacity by 2025. At COP28, ASEAN member states also issued a joint statement supporting the global goal of tripling renewable energy capacity. In addition, the Just Energy Transition Partnerships (JETP) for Indonesia and Vietnam have opened new financing windows to accelerate the net-zero process.

Current Developments: Divergent Country Performance, Policy Windows OpeningIn 2022, ASEAN countries showed divergent performance in solar and wind energy development. Except for Vietnam, Indonesia's solar power generation increased by 0.3 TWh, the Philippines by 0.3 TWh, Thailand by 0.7 TWh, and Singapore by 0.3 TWh. Malaysia and Vietnam's solar power generation increased by 8% (+0.2 TWh) and 2.3% (+0.6 TWh) year-on-year, respectively. In wind power, Vietnam's wind power generation increased by 236% (+5.7 TWh) year-on-year, while Indonesia (-0.1 TWh), the Philippines (-0.2 TWh), and Thailand (-1.3 TWh) declined. Overall, ASEAN's wind power generation increased by 4.1 TWh year-on-year.

Notably, although Thailand did not add new solar capacity, it has begun to combine battery energy storage systems with photovoltaic projects to explore ways to improve grid flexibility. Vietnam is shifting toward an auction mechanism to replace its previous feed-in tariff subsidies, Malaysia has launched a green electricity tariff mechanism, and Thailand is providing incentives for rooftop solar and energy storage systems. These policy updates indicate that ASEAN countries are striving to build a more competitive and sustainable renewable energy market.

However, the report emphasizes that ASEAN's theoretical potential for solar and wind energy remains largely untapped. According to estimates by the U.S. National Renewable Energy Laboratory (NREL), the theoretical potential for solar energy in the ASEAN region is about 30,523 GW, and for wind energy about 1,383 GW. As of 2022, ASEAN's installed solar capacity was only 27 GW and wind capacity 6.8 GW, less than 1% of the theoretical potential. Among them, Thailand, Myanmar, and Cambodia are the top three countries in terms of solar potential, while Myanmar, Vietnam, and Thailand rank high in wind potential.

Impact on the Energy System: The Dual Challenges of Grid Stability and Energy Security

The large-scale deployment of solar and wind power will have a profound impact on ASEAN's energy system. On the one hand, renewable energy can enhance energy security, reduce dependence on imported fossil fuels, and provide electricity access to remote areas, promoting sustainable development. On the other hand, solar and wind power are intermittent, placing higher demands on grid stability and flexibility.

The report points out that grid expansion and modernization are prerequisites for integrating a high proportion of renewable energy. Energy storage systems will play a key role in peak shaving and valley filling and in ensuring reliable power supply. In addition, ASEAN countries need to establish sound electricity market mechanisms so that renewable energy can gain fair market access and reasonable price signals.

In terms of carbon emission reduction, accelerating the deployment of solar and wind power will help ASEAN achieve its Nationally Determined Contributions (NDC) targets. According to the IEA Net Zero Scenario, the share of solar and wind in ASEAN's power generation mix needs to reach about 23% by 2030, which would significantly reduce the carbon emission intensity of the power sector while creating new employment opportunities and industrial chain value.

Challenges Ahead: Policy, Financing, and Infrastructure Bottlenecks## Challenges Ahead: Policy, Financing, and Infrastructure Bottlenecks

Despite the promising outlook, solar and wind energy development in ASEAN still faces multiple challenges. First, policy uncertainty is the biggest obstacle. The slowdown in growth after Vietnam's feed-in tariff phase-down shows that a lack of stable and predictable policy frameworks can significantly dampen investor confidence. Second, project financing pressures remain, especially in developing countries, where financing costs for renewable energy projects tend to be higher.

Transmission network constraints are another key bottleneck. Many ASEAN countries have relatively weak grid infrastructure, making it difficult to support the grid connection of large-scale centralized wind and solar PV plants. In addition, insufficient energy storage capacity could exacerbate the problem of curtailment of wind and solar power.

The report also points out that Local Content Requirements may increase project costs in the short term, weakening the competitiveness of renewable energy relative to conventional energy. Meanwhile, fossil fuel subsidies continue to distort market prices, putting clean energy at a competitive disadvantage. The report recommends that, until the local manufacturing industry matures, local content requirements should be appropriately relaxed and fossil fuel subsidies adjusted to improve the economic viability of renewable energy.

Future Outlook: Leapfrog Development Led by Policy

Looking ahead five to twenty years, ASEAN's energy mix will undergo profound changes. According to the IEA's Net Zero Scenario, ASEAN needs to add 164 GW of solar and 65 GW of wind capacity by 2030, with total new capacity reaching 229 GW—nearly seven times the current total installed capacity of 34 GW. This means that more than 30 GW of solar and wind capacity will need to be added each year in the future, far above current levels.

In terms of investment trends, as global capital shifts toward sustainable energy and mechanisms such as JETP are implemented, ASEAN is expected to gain more green financing support. Technology development will focus on complementary technologies such as battery storage, smart grids, and hydrogen to address the system challenges posed by a high share of renewable energy.

In the global energy competition landscape, ASEAN has the potential to become an important player in renewable energy manufacturing and supply chains. The report emphasizes that by strengthening regional cooperation, harmonizing standards, and streamlining approval processes, ASEAN can reduce project development costs and attract more private capital participation.

Ultimately, the large-scale deployment of solar and wind energy is not only necessary for climate goals, but also an opportunity to promote economic growth, create jobs, and achieve energy equity. Strong policy support and government commitment will be decisive factors in steering ASEAN onto a sustainable and resilient energy path.

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*This article is based on a public report published by Ember, with data as of 2022.*