Amid global energy pressures, South-east Asia seeks to unlock geothermal power’s promise - The Business Times
Published September 21, 2026
South-East Asia's Pursuit of Geothermal Energy Amid Global Energy Challenges
As the world confronts escalating energy demands and the pressing need for sustainable solutions, South-East Asia is increasingly turning its attention towards geothermal energy. This region, endowed with significant geothermal resources, is exploring ways to harness this potential to meet its energy needs while addressing environmental concerns.
Geothermal energy, derived from the Earth’s internal heat, presents a viable alternative to fossil fuels, especially in a time when energy security has become a central issue globally. The International Energy Agency (IEA) has projected that the global demand for energy will rise significantly, with many countries looking for cleaner and more sustainable energy sources. South-East Asia, with its unique geological features, is in a prime position to capitalize on geothermal power.
Geothermal Resources in South-East Asia
The region is home to some of the world’s most extensive geothermal resources. According to the Geothermal Energy Association, South-East Asia has an estimated potential of around 27 gigawatts (GW) of geothermal energy. Countries such as Indonesia and the Philippines are already recognized as global leaders in geothermal power generation. Indonesia boasts the largest geothermal capacity in the world, with approximately 2,100 megawatts (MW) installed, while the Philippines ranks third globally, with around 1,900 MW.
Other countries in the region, including Malaysia, Thailand, and Vietnam, are also beginning to explore their geothermal potential. Malaysia, for instance, has identified several sites with promising geothermal resources, particularly in the state of Sabah, where initial studies indicate a capacity of up to 1,000 MW. Similarly, Thailand has initiated projects to assess its geothermal potential, particularly in the northern regions, which are believed to have significant geothermal resources.
Challenges to Development
Despite the abundant geothermal potential, several challenges hinder the growth of this sector in South-East Asia. One of the primary obstacles is the high upfront investment required for geothermal exploration and development. The exploration phase, which involves drilling and testing, can be particularly costly and risky, often deterring investors.
Additionally, regulatory frameworks in many countries are not fully supportive of geothermal development. Inconsistent policies, lack of incentives, and bureaucratic hurdles can create uncertainty for potential investors. For instance, while Indonesia has made strides in improving its regulatory environment, challenges remain in streamlining the permitting process and ensuring land access for geothermal projects.
Moreover, the technical expertise required for geothermal development is often lacking in the region. The specialized knowledge needed for exploration, drilling, and plant operation is critical, and many countries are still in the early stages of building this capacity. Partnerships with international companies and organizations can help bridge this gap, but they also require careful management to ensure local benefits.
Investment and Policy Initiatives
Recognizing the potential of geothermal energy, several South-East Asian governments are taking steps to promote investment in this sector. Indonesia, for example, has introduced a range of incentives, including feed-in tariffs and tax holidays, to attract both domestic and foreign investment in geothermal projects. The government aims to increase the country’s geothermal capacity to 7,200 MW by 2025, a significant leap that underscores its commitment to this renewable energy source.
In the Philippines, the government is also working to enhance its geothermal sector. The Department of Energy has launched initiatives to streamline the permitting process and provide financial assistance for exploratory drilling. Furthermore, the country is actively seeking partnerships with international firms to leverage their expertise and technology in geothermal development.
Malaysia has been gradually increasing its focus on geothermal energy, with the government announcing plans to develop a comprehensive framework to attract investment in the sector. The potential for geothermal energy to contribute to Malaysia's renewable energy targets has prompted interest from both local and international stakeholders.
Regional Cooperation and Knowledge Sharing
To further enhance the development of geothermal energy, regional cooperation and knowledge sharing are essential. Initiatives such as the ASEAN Plan of Action for Energy Cooperation (APAEC) aim to promote collaboration among member states in the energy sector, including geothermal development. By sharing best practices, technical expertise, and research, countries can accelerate the growth of geothermal energy in the region.
Moreover, international organizations and agencies, such as the World Bank and the Asian Development Bank, have been actively supporting geothermal projects in South-East Asia. These organizations provide funding, technical assistance, and capacity-building programs to help countries develop their geothermal resources effectively.
Environmental and Social Considerations
While geothermal energy is often lauded for its environmental benefits, it is crucial to address the potential social and environmental impacts associated with its development. Proper site selection and environmental assessments are essential to minimize adverse effects on local communities and ecosystems. Engaging local stakeholders in the planning process can help ensure that geothermal projects are developed in a socially responsible manner.
In many cases, geothermal projects can provide significant benefits to local communities, including job creation and access to clean energy. For instance, the development of geothermal plants can lead to the establishment of local supply chains and service industries, providing employment opportunities for residents.
Conclusion
As South-East Asia seeks to navigate the complexities of energy security and sustainability, geothermal energy presents a promising solution. With its vast geothermal resources and growing interest from governments and investors, the region has the potential to unlock significant economic and environmental benefits. However, addressing the challenges of investment, regulatory frameworks, and technical expertise will be crucial for realizing this potential.
Through collaboration, innovation, and a commitment to sustainable practices, South-East Asia can harness the promise of geothermal energy, contributing to a cleaner energy future while supporting regional development and resilience.
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