Singapore’s energy consumption today clearly reflects Southeast Asia’s (SEA) broader growth story. The city-state now consumes nearly 55 terawatt-hours of electricity annually, about 30% higher than a decade ago, driven by rapid digitalisation, urban growth and economic expansion.
Across SEA, the trend is similar; growing populations and industries are powering sharp increases in energy demand.
This rapid growth makes transitioning from fossil fuels challenging, due to the region’s established infrastructure and lower upfront costs associated with coal and oil.
Additionally, fossil fuels offer stable and dependable baseload power, a reliability that intermittent renewable sources, like wind and solar, cannot yet consistently match.
For SEA’s business leaders and policymakers, the task ahead isn’t simply choosing between fossil fuels and renewables, it’s about intelligently integrating cleaner technologies into existing energy systems to ensure stability, affordability and sustainability as the region navigates towards net-zero emissions.
Addressing SEA’s coal reality
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The path to net zero is complex. Coal dominates SEA’s energy mix, generating about half of the region’s electricity in 2023, and an even larger share in coal-reliant markets like Indonesia and the Philippines.
Abruptly switching off coal plants isn’t feasible as it risks energy shortages, economic disruption and job losses.
Conversely, continued reliance on coal brings mounting environmental liabilities, rising health costs and economic risks from global regulations like Europe’s Carbon Border Adjustment Mechanism (CBAM).
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Navigating this tension requires practical, immediate steps that cut emissions while maintaining energy security. One such pathway is the shift toward cleaner-burning, flexible power sources that can complement renewables and reduce carbon intensity in the near term.
High-efficiency gas turbines, for instance, can reduce emissions by up to 65% compared to coal while enhancing grid stability — a critical need as SEA’s economies expand and electrify.
Singapore offers a tangible example of what’s possible. At PacificLight Power, a turbine upgrade enabled the facility to become the country’s most efficient, achieving an efficiency rate of over 60%, which increased output by 30 megawatts and reduced carbon emissions by more than 60,000 tonnes annually, equivalent to taking 9,300 cars off the road.
It’s evidence that incremental improvements in existing infrastructure can deliver rapid, measurable climate benefits without compromising economic growth.
Building a reliable, integrated energy mix
Energy efficiency is a low-hanging fruit that can deliver immediate emissions reductions, but it is not the end game. SEA’s long-term energy future depends on building integrated systems that bring together renewables, storage, flexible generation and grid stability.
In 2023, solar and wind capacity in the region grew by 20%, signalling strong momentum. Yet, renewables still account for a small share of the region’s energy mix; solar generation contributed just 2.7 terawatt-hours last year, even as total electricity demand continues to rise.
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The core challenge is not just scaling renewables, but making them reliable. Their intermittent nature risks supply gaps that can disrupt industries and daily life. In Singapore, where renewables comprise under 5% of the electricity supply, reliability concerns are already mounting and in Laos and Vietnam, where renewables contribute close to 50%, managing fluctuations is even more critical.
Yet, things are looking up. The Asean Power Grid is fast becoming a cornerstone of regional energy resilience. With the impending MOU signing in October, and Malaysia backing the fast-tracking of Phase 2, connecting Laos, and Thailand to Peninsular Malaysia and Singapore, this vision of an interconnected regional electricity market is gaining momentum.
Announced during the Asean-GCC Summit earlier this year, the move reflects growing political alignment to enable clean electricity trade and strengthen grid reliability across borders.
To fully realise the benefits of such integration, however, Asean will need to pair these grid enhancements with generation assets that are not only low-carbon but also flexible and dispatchable.
This is where modern gas turbines come in: by ramping quickly to support fluctuating renewable inputs, they ensure stable baseload power and enhance the efficiency of shared grids, especially critical as data centres and digital industries raise the stakes for uninterrupted electricity supply.
Future-proofing SEA’s competitiveness
The energy decisions SEA makes today will shape its economic competitiveness for decades to come. As global carbon regulations tighten, exporters powered by high-emissions grids risk facing penalties, trade barriers and reduced market access.
Investors, manufacturers and global trading partners are increasingly asking the same question: how clean is the energy powering your supply chain? In this environment, clean and flexible infrastructure isn’t just a climate goal; it’s becoming critical to operate in global markets.
Solutions like high-efficiency gas turbines, CCS and hydrogen-ready technologies that are evolving to work with green ammonia, giving Southeast Asia a crucial head start. They reduce emissions now while offering the flexibility to integrate cleaner fuels as they scale, helping governments and businesses avoid stranded assets and stay competitive as carbon prices and sustainability standards evolve.
To illustrate, Malaysia’s vision to become a regional hub for CCS and low-carbon hydrogen is one example of how this shift is already underway. By mapping CO2 storage sites and building industrial zones around clean energy infrastructure, the country positions itself to attract investment and decarbonise at scale, particularly in hard-to-abate sectors like steel, cement and chemicals.
But unlocking this future will require more than just technology. We need a pragmatic, forward-looking energy strategy. By integrating modern gas technologies, renewables, CCS and future fuels like hydrogen, SEA can build an energy system that is not only cleaner but also more competitive, resilient and responsive to the demands of the future.
The region doesn’t need to wait for the perfect solution to start moving. The tools to make meaningful progress exist today. The challenge now is speed and scale.
The opportunity is clear. So is the cost of delay.
