Southeast Asia is becoming a powerhouse in renewable energy, but American companies aren’t fully tapping into this growth. The region plans to double its clean energy capacity in the coming years. Countries like Vietnam, Indonesia, and Thailand are setting ambitious goals for solar and wind power. Meanwhile, U.S. businesses have been slow to invest compared to their European and Chinese counterparts. This hesitation could cost America valuable partnerships in one of the world’s fastest-growing green markets.
While much of the world races to adopt renewable energy, Southeast Asia is emerging as a major player in the green power shift. The region has seen remarkable growth in solar and wind energy generation, increasing from just 4.19 TWh in 2015 to over 50 TWh by 2022. This represents an impressive 43% annual growth rate over that period, though it slowed to 15% in 2022 after policy changes like Vietnam ending its feed-in-tariff program.
Southeast Asia is projected to account for a quarter of global energy demand growth between now and 2035. The region’s renewable electricity generation is expected to reach 313.60 billion kWh by 2025, with continued growth at about 3% annually until 2029. The market includes six diverse energy sources including solar, wind, marine, hydropower, bioenergy, and geothermal energy. Solar power demand specifically is forecast to increase by over 70% by 2028.
Vietnam has led the region’s green energy shift, accounting for 69% of Southeast Asia’s solar and wind generation by 2022. Meanwhile, Thailand has emerged as another important market, with projected solar demand between 2-3.7 GW in 2025. Thailand has introduced several supportive policies, including a trial Direct Power Purchase Agreement program with a 2,000 MW cap for large users. As the region develops, it hopes to follow the global trend where renewables now power 29.1% of electricity worldwide.
Despite this progress, Southeast Asia only represented 2% of global clean energy spending in 2023, though it holds 6% of global GDP and 5% of global energy demand. A fivefold investment increase is needed by 2035 to meet the region’s energy and climate goals. This gap indicates significant untapped potential for growth and investment.
The region faces several challenges to faster renewable energy adoption. These include inconsistent policies, delays in regulatory approvals, and limitations in grid capacity. Eight out of ten ASEAN economies have already established net zero emissions goals, but current projections show energy-related carbon dioxide emissions increasing by 35% by mid-century.
For Southeast Asia to align with global climate goals and the outcomes of COP28, the region will need accelerated investment, stronger policy frameworks, and solutions to infrastructure bottlenecks. With these changes, the region could become a leading force in the global shift to clean energy.
