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Southeast Asia’s energy security challenge


Transitioning to clean energy is imperative for ensuring the region’s energy security

Unravel editorial team

The ongoing energy crisis has put the spotlight squarely on Southeast Asia’s heavy reliance on fossil fuels to meet growing energy demand. The region is plagued with “significant vulnerability”, according to the International Energy Agency’s (IEA) recent report Southeast Asia Energy Outlook 2022.

Addressing this challenge will require multi-pronged solutions including greater energy efficiency, a push for more renewable power generation and a switch to low emissions fuels.

Demand set to continue growing

Over the past two decades, primary energy demand in the region has increased on average by around 3% year-on-year; with the majority of that mix coming from oil and coal.

Exhibit 1: Oil and coal make up the largest share in the energy mix

Note: EJ = exajoule; 2020e = estimated values for 2020

The majority of the energy demand in the region is driven by Indonesia and Thailand. Industry and transport sectors are the two main industries that have led the growth in final energy consumption in the region.

Exhibit 2: Industry and transport sectors lead the energy demand in Southeast Asia

At the height of the pandemic in 2020, there was a massive pivot from fossil fuels to renewables – relative to 2019 numbers. The use of fossil fuels such as oil reduced drastically to more than 6%; while the use of renewables increased to more than 2%.

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