Southeast Asia has been among the regions with the fastest-growing energy demand, rising 6% annually over the last two decades. The inevitable outcome has been a severe deterioration in air quality and significantly higher carbon emissions across the region. The environmental, social, and health impacts of climate change, including an estimated 450,000 premature deaths caused by air pollution in Southeast Asia in 2018, are increasingly shaping national plans for power generation. While there has been significant progress among regional countries in ramping up renewable energy projects, meeting electricity demand growth and ensuring access in remote areas remain key challenges to sustainability in the power sector.

Even as environmental outcomes are increasingly factoring into energy policy decisions, the past twenty years have shown that countries prioritize affordability and security when choosing fuel for power generation. Current national plans suggest that coal will likely continue to be cheap and abundant, retaining and even expanding its key role in the region’s power mix for the next decade. Meanwhile, natural gas faces obstacles as the share of cleaner options like wind and solar

grows (albeit from an extremely low base). The challenge of meeting power generation needs while

transitioning to a cleaner energy mix reinforces the importance of forceful action to alter the

underlying trajectory of rapidly rising demand for electricity.

At the same time, there is heightened geopolitical competition to shape Southeast Asia’s future

energy needs. China’s Belt and Road Initiative continues to expand its energy sector financing,

with a majority of projects supporting new coal-fired generation across the region. As Nadège

Rolland and others have detailed extensively in their analysis for the National Bureau of Asian

Research (NBR), including in last year’s report for the Energy Security Program, China’s approach

often has strings attached and undermines the economic interests of recipient states in favor of

Beijing’s broader strategic and economic interests.