Energy demand in the Southeast Asia (SEA) region has been growing rapidly, driven by robust economic growth, demographic expansion, and increased urbanization. Traditionally, the SEA region has been reliant on fossil fuels, with coal consumption more than doubling since 2010. The rapidly increasing energy demand is also a challenge to the long-term ambition of keeping regional GHG emissions on a trajectory consistent with the goals of the Paris Agreement.

The SEA region has been undergoing a clean energy transition in recent years. In 2019, for the first time, more renewable energy projects than coal projects reached final investment decision in the SEA region according to IEA. More recently, the deployment of new renewable capacity has accelerated in some countries at an unprecedented scale. In Viet Nam, utility-scale gridconnected solar photovoltaic capacity increased from only 260 megawatts in April 2019 to 5,053 megawatts in July 2020. Similarly, Cambodia launched its first open reverse auction for new solar photovoltaic capacity in 2019 and completed this project in 2022. Some countries in the SEA region have also indicated preliminary measures to scale back their coal generation expansion plans, cancel new coal-fired power projects in the development pipeline, or retire old plants.

Notwithstanding these encouraging signs, more needs to be done to accelerate the transition to cleaner energy in the SEA region. The long-term aim of reaching net-zero emissions by mid-century, consistent with the Paris Agreement goals, requires a profound transformation in how energy is produced and used. The power sector has been at the forefront of this transformation, benefiting from the significant drop in renewable energy costs, particularly wind and solar.