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Climate change
OpinionAsia Opinion
Muyi Yang
Alistair Ritchie
Muyi YangandAlistair Ritchie

Opinion | How China can help change the game for clean energy in Southeast Asia

  • Sustained and major investments are needed to help Southeast Asia’s energy sector provide renewable energy at affordable prices
  • An approach that supports rapid, off-grid deployment of renewable energy with project-specific support can lead to more investment

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Employees assemble a wind turbine blade at a factory in Yancheng, Jiangsu province on November 16 last year. Photo: EPA-EFE
Muyi YangandAlistair Ritchie
Southeast Asia and China are committed to closer cooperation in climate action and transitioning to clean energy, as reaffirmed at the 26th Asean-China summit last year. The question is how China can support the region’s transition towards such a future. For answers, one needs to first understand the Southeast Asia’s changing energy landscape.
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With growing climate commitments, Southeast Asia’s energy sector is at a critical juncture, faced with the need to ensure the provision of sufficient and reliable clean energy at affordable prices while advancing the decarbonisation agenda.

Among the many essential factors required to achieve these goals, securing significant and sustained investments in renewable energy projects emerges as a crucial factor.

Although opinions vary on the scale and scope of the required investment, there is a wide consensus that the investment needed for the progress of the region’s energy transition is substantial, far exceeding what the public sector can provide, despite traditionally being the main source of funding.

From 2016 to 2020, a total investment of about US$60 billion was made in clean power in the region. A large bulk of that funding has come from the public sector. This amount falls substantially short of what is needed to expand renewable energy supply to stay aligned with Paris climate goals, estimated at US$92 billion a year by the International Energy Agency.

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Allocating more public funding for renewable energy projects is also challenging, especially considering that governments across the region are trying to manage public debt and spending after Covid-19 while addressing competing demands for public budgetary allocation.

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