Southeast Asia's Clean Energy Transition Faces Major Hurdles
The energy transition in Southeast Asia faces significant hurdles, with regional conflicts, protectionism, and supply chain disruptions posing the biggest threats. Despite Singapore's early lead, Malaysia and Vietnam are now seen as more progressive in the shift towards clean energy.
Outdated and fragmented grid infrastructure, regulatory uncertainty, and financing constraints are major barriers to scaling clean energy in the region. Indonesia and the Philippines, in particular, struggle with lax environmental standards, regulatory uncertainty, and local community resistance, especially against geothermal development in Indonesia. Singapore, once the dominant leader, has seen its status slip. It delayed mandatory disclosure rules for smaller listed firms, undermining its early mover reputation. However, investors are now prioritizing grid upgrades and energy storage to stabilize grids with intermittent power sources. Despite these challenges, 51.4% of respondents still ranked Singapore as the top energy transition leader in 2025, with Malaysia and Vietnam close behind at 14.3% and 13.3% respectively.
Southeast Asia's clean energy transition is facing increasing challenges due to geopolitical, financial, and systemic risks. While Singapore remains a leader, other countries like Malaysia and Vietnam are gaining ground. Addressing grid bottlenecks, regulatory uncertainty, and financing constraints will be crucial for the region's renewable energy growth.
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