What’s Holding Back ASEAN on Renewable Energy? - The Diplomat – Asia-Pacific Current Affairs Magazine
Published December 15, 2025
Challenges Facing ASEAN in the Transition to Renewable Energy
The Association of Southeast Asian Nations (ASEAN) has been making strides towards integrating renewable energy into its energy mix. However, several challenges remain that hinder the region's progress in fully embracing sustainable energy sources. As the world increasingly shifts towards greener energy solutions, it is crucial to understand the barriers that ASEAN faces in this transition.
Current Energy Landscape in ASEAN
ASEAN comprises ten member states: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. The region is rich in natural resources, including solar, wind, and hydropower potential. Despite this, fossil fuels, particularly coal and natural gas, still dominate the energy landscape. According to the ASEAN Centre for Energy, fossil fuels accounted for around 80% of the total primary energy supply in the region in 2020.
In recent years, there has been a growing recognition of the need to diversify energy sources and reduce dependence on fossil fuels. The ASEAN Plan of Action for Energy Cooperation (APAEC) aims to increase the share of renewable energy in the region's energy mix to 23% by 2025. However, achieving this target requires overcoming significant obstacles.
Regulatory and Policy Barriers
One of the primary challenges hindering the growth of renewable energy in ASEAN is the lack of coherent regulatory frameworks and policies across member states. Each country has its own set of regulations governing energy production and consumption, which can create inconsistencies and uncertainties for investors. For instance, while some nations, such as Vietnam and Thailand, have implemented feed-in tariffs and other incentives to promote renewable energy, others have yet to establish similar policies.
Furthermore, the regulatory environment can often be slow to adapt to new technologies and market dynamics. This rigidity can stifle innovation and deter potential investors from entering the renewable energy sector. The need for harmonization of policies across ASEAN member states is crucial to create a conducive environment for renewable energy development.
Financial Constraints
Financing is another significant barrier to the expansion of renewable energy in ASEAN. While the initial capital investment for renewable energy projects can be substantial, access to financing remains limited in many countries. According to a report by the International Renewable Energy Agency (IRENA), the cost of renewable energy technologies has decreased significantly in recent years. However, the high upfront costs still pose a challenge for many ASEAN countries, particularly those with less developed financial markets.
Moreover, traditional financing institutions may be hesitant to invest in renewable energy projects due to perceived risks and uncertainties. The lack of a robust track record of successful renewable energy projects in the region can further exacerbate this issue. As a result, innovative financing mechanisms, such as green bonds or public-private partnerships, are essential to mobilize the necessary capital for renewable energy initiatives.
Infrastructure Challenges
Inadequate infrastructure is another critical obstacle that ASEAN faces in its pursuit of renewable energy. Many countries in the region have limited grid capacity and outdated transmission systems, which can hinder the integration of renewable energy sources. For instance, solar and wind energy generation is often intermittent, requiring a reliable grid infrastructure to manage fluctuations in supply and demand.
Additionally, rural areas, where renewable energy resources are often abundant, may lack the necessary infrastructure to support energy generation and distribution. Building new transmission lines and upgrading existing infrastructure can be costly and time-consuming, posing further challenges for the region's renewable energy ambitions.
Technological Barriers
The adoption of renewable energy technologies is also hampered by a lack of local expertise and technological know-how. While many ASEAN countries have made progress in deploying renewable energy projects, there is still a significant reliance on imported technologies and expertise. This dependency can lead to higher costs and limit the potential for local innovation.
Moreover, the region's renewable energy sector often lacks the research and development (R&D) capabilities necessary to drive technological advancements. Investment in R&D is crucial for developing locally adapted solutions that can effectively harness the region's renewable energy potential. Strengthening partnerships between governments, academia, and the private sector can help boost innovation in renewable energy technologies.
Social Acceptance and Public Awareness
Public perception and acceptance of renewable energy technologies can significantly influence their deployment. In some cases, there may be a lack of awareness about the benefits of renewable energy among the general population. Misconceptions about the reliability and efficiency of renewable energy sources can lead to resistance against new projects.
Engaging communities and raising awareness about the advantages of renewable energy is essential for fostering public support. Educational campaigns and stakeholder consultations can help build trust and encourage participation in renewable energy initiatives. Additionally, involving local communities in decision-making processes can enhance social acceptance and ensure that projects align with local needs and priorities.
Regional Cooperation and Collaboration
To address these challenges effectively, regional cooperation and collaboration among ASEAN member states are crucial. Sharing best practices, knowledge, and resources can help overcome common obstacles and accelerate the transition to renewable energy. Initiatives such as the ASEAN Renewable Energy Policy and the ASEAN Energy Cooperation Framework can facilitate collaboration and drive progress in the sector.
Furthermore, engaging with international organizations, development banks, and private sector stakeholders can provide additional support and resources for renewable energy projects in the region. Collaborative efforts can help create a more favorable investment climate and promote the sharing of innovative financing solutions and technologies.
Conclusion
While ASEAN has made significant strides towards integrating renewable energy into its energy mix, numerous challenges remain. Regulatory and policy barriers, financial constraints, infrastructure inadequacies, technological limitations, and social acceptance issues all pose significant hurdles to the region's renewable energy ambitions. However, through enhanced regional cooperation, innovative financing mechanisms, and increased public awareness, ASEAN can work towards overcoming these obstacles and achieving a sustainable energy future.