Australia and China can power up Southeast Asia’s green energy transition - East Asia Forum
Published December 18, 2025
Australia and China: Catalysts for Southeast Asia’s Green Energy Transition
The transition to renewable energy in Southeast Asia is gaining momentum, with Australia and China positioned as critical players in this transformation. Both nations possess unique resources and technological capabilities that can significantly contribute to the region's green energy ambitions. As Southeast Asia seeks to diversify its energy sources and reduce reliance on fossil fuels, the collaboration between Australia and China could play a pivotal role in accelerating the green energy transition.
The Association of Southeast Asian Nations (ASEAN) has set ambitious targets for renewable energy, aiming for at least 23% of its total energy mix to come from renewable sources by 2025. This goal aligns with the global push towards sustainability and climate resilience. However, achieving this target will require substantial investment, technology transfer, and policy support from regional and global partners.
Australia’s Renewable Energy Potential
Australia is endowed with abundant renewable energy resources, particularly solar and wind. The country has one of the highest solar radiation levels in the world, making it an ideal location for solar power generation. In 2022, solar energy accounted for approximately 25% of Australia’s total electricity generation, showcasing its rapid growth and potential for further expansion.
Moreover, Australia is home to several large-scale renewable energy projects, including the Hornsdale Wind Farm in South Australia, which has a capacity of 315 megawatts (MW). This facility has become a benchmark for wind energy projects globally, demonstrating the viability of renewable energy in meeting large-scale energy demands.
In addition to solar and wind, Australia is also exploring the potential of hydrogen as a clean energy source. The Australian government has committed to investing in hydrogen technology, aiming to position the country as a leading exporter of hydrogen in the Asia-Pacific region. This initiative aligns with Southeast Asia’s growing interest in hydrogen as a clean energy alternative, particularly for industries that are hard to decarbonize.
China’s Technological Advancements
China has emerged as a global leader in renewable energy technology, particularly in solar photovoltaic (PV) and wind energy. The country accounts for over 30% of the world’s total installed solar capacity and is the largest manufacturer of solar panels. In 2022, China’s solar PV generation reached 392 gigawatts (GW), reflecting the rapid deployment of solar technology across the nation.
Furthermore, China has made significant investments in wind energy, with a total installed capacity of 328 GW as of 2022. The country’s commitment to renewable energy is evident in its ambitious goals to achieve carbon neutrality by 2060 and peak carbon emissions by 2030. These targets drive innovation and investment in clean energy technologies, which can benefit Southeast Asia as it seeks to enhance its renewable energy capacity.
Collaborative Opportunities in Southeast Asia
The collaboration between Australia and China presents several opportunities for Southeast Asia to accelerate its green energy transition. One of the key areas for cooperation is in the development of renewable energy infrastructure. Both countries can provide technical expertise, investment, and technological solutions to help Southeast Asian nations build and expand their renewable energy capacity.
For instance, Australia’s experience in large-scale solar and wind projects can be invaluable for Southeast Asian countries looking to develop similar initiatives. Additionally, China’s advanced manufacturing capabilities can support the production of renewable energy technologies, such as solar panels and wind turbines, at competitive prices.
Moreover, the establishment of regional renewable energy markets can facilitate the sharing of resources and technologies among Southeast Asian countries. By creating interconnected energy systems, countries can optimize their energy production and consumption, leading to greater efficiency and reliability in their energy supply.
Investment and Financing Mechanisms
To realize the potential of renewable energy in Southeast Asia, significant investment is required. According to the International Energy Agency (IEA), the region will need to invest approximately USD 1.7 trillion in renewable energy infrastructure by 2030 to meet its energy demands sustainably. This presents an opportunity for both Australia and China to play a crucial role in financing these projects.
Australia can leverage its financial institutions and expertise in project financing to support renewable energy initiatives in Southeast Asia. Additionally, Chinese companies have been increasingly active in investing in renewable energy projects across the region. The Belt and Road Initiative (BRI) has facilitated Chinese investments in infrastructure, including renewable energy, providing a pathway for collaboration between the two nations.
Policy Framework and Regulatory Support
For the collaboration between Australia and China to be effective, supportive policy frameworks and regulatory environments are essential. Southeast Asian governments must prioritize renewable energy in their national energy policies, providing incentives for investment and technology transfer. This includes implementing feed-in tariffs, tax incentives, and streamlined permitting processes to attract private sector investment.
Furthermore, regional cooperation through ASEAN can enhance policy alignment and facilitate knowledge sharing among member states. By harmonizing regulations and standards, countries can create a more conducive environment for renewable energy development and investment.
Challenges to Overcome
Despite the promising opportunities, several challenges must be addressed to facilitate the green energy transition in Southeast Asia. One of the primary obstacles is the region's reliance on fossil fuels, which still account for a significant portion of the energy mix. Transitioning to renewable energy will require a phased approach that includes the gradual reduction of fossil fuel dependency.
Additionally, the availability of skilled labor and technical expertise in renewable energy technologies remains a challenge in some Southeast Asian countries. Investing in education and training programs will be crucial to building a workforce capable of supporting the renewable energy sector.
Moreover, geopolitical tensions and trade disputes between Australia and China could pose challenges to collaboration. Ensuring a stable and cooperative relationship between the two nations will be vital in realizing the potential benefits of their partnership in Southeast Asia’s green energy transition.
Conclusion
The green energy transition in Southeast Asia presents a significant opportunity for Australia and China to collaborate and contribute to the region's sustainable development. By leveraging their respective strengths in renewable energy resources, technology, and investment, both countries can play a crucial role in helping Southeast Asia achieve its renewable energy targets. Through strategic partnerships, supportive policies, and a commitment to overcoming challenges, Australia and China can help power Southeast Asia towards a greener and more sustainable future.
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