Southeast Asian countries including the Philippines must take advantage of the current trade uncertainty with the United States to push for renewable energy (RE) development and regional cooperation, a study released by global energy think tank, Ember, said.
The study released over the weekend said Asian countries like the Philippines are turning to US liquefied natural gas (LNG) deals despite trade concerns, volatile prices, supply disruptions and policy uncertainty.
Clean energy remains lucrative
It said that Asian nations can, instead, focus on demand for clean energy, which continues to grow outside the US market as it “remains lucrative despite short-term disruptions.”
Ember said in its report that as of end-2022, three-quarters of the global population live in net fossil-importing nations which include all of Greater China, South Asia and Northeast Asia; 99 percent of Europe; 2/3 of Africa; and nearly half the populations of Southeast Asia and Latin America.
“The decline of the Pax Americana, rising regional conflicts, increasingly contested maritime routes, and intensifying tariff wars have placed global trade under greater threat than at any time since World War II,” the report warned.
“What was once seen as efficient interdependence has become a national security liability. If energy imports were cut off, three-quarters of the world’s economies would grind to a halt—trucks would stop, factories would shut down, and lights would go dark.”
It pointed out that as of the end-2022, fossil fuel imports accounted for more than half of primary energy use in at least 52 countries, including the Philippines with a 52 percent reliance on imported fossil fuel.
Avoid fossil fuel reliance
“Countries must act swiftly to localize electricity generation, electrify end uses, and enhance efficiency. That requires doubling down especially on electrification, and avoiding increased reliance on fossil fuel imports in growing economies,” the report added.
It said at present, some countries are pursuing a two-pronged strategy by shifting energy supply to local renewables and directing energy use toward domestically generated electricity.
The report claims that renewable potential is 120 times greater than fossil fuels and available everywhere which makes energy independence within reach of every nation.
It also mentioned that countries may focus on electric vehicles (EVs), heat pumps and RE to cut net fossil fuel imports by 70 percent and generate $1.3 trillion worth of savings globally.
“The largest gain comes from EVs replacing oil in road transport by 1/3. Scaling solar and wind to displace fossil fuels in power generation can save another 23 percent while heat pumps replacing imported fossil fuels for buildings adds a further 14 percent,” the report said.
Accelerate clean energy transition
Muyi Yang, senior policy analyst of Ember, said Southeat Asia’s “vast, growing, and increasingly affluent domestic market is a vital hedge against external volatility. By accelerating its clean energy transition, the region can future-proof its industries while advancing its climate goals.”
As for Sam Reynolds, research lead of the Institute for Energy Economics and Financial Analysis, relying on long-term commitments to buy LNG from the US is a “costly mistake” especially for Asian buyers.
“Long-term contracts with US suppliers would expose South and Southeast Asian markets to these higher LNG costs and uncertainty in both US gas markets and trade policy. More broadly, LNG has proven to be an unreliable and unaffordable fuel source for many emerging markets, due to volatile global prices, insecure contracts, infrastructure challenges, and others,” Reynolds said.
Diversifying energy mixes
He said Southeast Asian countries can seize RE opportunities by diversifying energy mixes and maximizing the deployment of clean technologies like wind and solar, not only to help support domestic renewable manufacturing industries but also to “present a hedge against volatile commodity prices and currency exchange rates.”
Meanwhile, Lauri Myllyvirta of the Centre for Research on Energy and Clean Air, said US tariffs should not distract from the opportunity that global energy transition represents for Southeast Asia.
He said the US currently represents a mere 7 percent of the global market for newly installed solar power plants but emerging and developing economies are projected to account for 70 percent of solar, 60 percent of wind and 60 percent of battery storage market share by 2030, according to the International Energy Agency’s World Energy Outlook.
“Therefore, US tariffs and tariff threats, as well as Trump’s domestic pro-fossil fuel policies, do little to diminish the outlook for the sector globally,” Myllyvirta said, though noting that Asean countries are under-investing in clean energy generation compared with rapid growth in demand.
Reorient toward emerging markets
On the other hand, Christina Ng of the Energy Shift Institute, said a lot of RE manufacturers in Southeast Asia have historically served demand from the US but not domestic markets. She said if US tariffs expand or persist, short-term disruptions are unavoidable, but can also be a turning point opportunity to reorient toward emerging markets “where clean energy demand is booming and trade barriers are fewer.”
“The region can also stabilize its clean tech sector by urgently building up its own domestic deployment. Countries such as Indonesia, Vietnam, and the Philippines have massive untapped solar and wind capacity, which could become a buffer against export volatility,” Ng added.
Gerry Arances, executive director of the Center for Energy, Ecology, and Development Philippines agreed, citing that the Philippines “with over 300 gigawatts of untapped RE potential” is a “natural leader in Southeast Asia’s transition towards strengthened localized clean energy development and supply chain resilience.”
Arances said such potential positions the country to attract significant debt-free investments from global partners seeking stable and expanding clean energy markets.
Securing the future
“The experience of volatility and policy shifts under the Trump administration underscores the imperative for Asian nations to accelerate towards a people-centered, affordable, and secure renewable energy future, independent from the price fluctuations and geopolitical risks associated with imported gas,” he added.
Earlier this month, local RE developers also expressed optimism that only a slowdown and not a complete reversal will be experienced in RE development, following the US decision to withdraw again from the Paris Climate Agreement.
Eric Francia, ACEN Corp. president and chief executive officer, said then that power developers must face the looming US’ withdrawal from the Paris Climate Agreement by investing in energy efficiency efforts and not be tunnel-visioned into developing additional power capacities only.
He also warned then that US President Donald Trump’s recent moves may affect capital spending by power developers and raise uncertainty in America’s plans to drill more indigenous oil and gas resources.
“I think there are opportunities in these challenges,” Francia said. “You need to look at the impact of local and regional policies and that is where we have a great silver lining and an opportunity to unlock opportunities in these challenges,” Francia said.
Theresa Cruz-Capellan, chair of the Philippine Solar and Storage Energy Alliance, also said recently that clean energy development in the country will continue especially since a big portion of RE development, particularly solar, are coming mostly from China and other Asian countries.
“I believe that none of the Asian participants in this global effort to transition into a net zero has indicated a slowdown in their manufacturing, in this part of the world,” Capellan said. “It is the cost, the economics that will dictate the momentum of this transition. It is not politics.”
Oliver Tan, president and chief executive officer of the Citicore Renewable Energy Corp. also said earlier that US investments related to energy transition have already been “relatively flattish” even before Trump’s return to US presidency as RE investment in the world has been primarily led by China.
“At the end of the day, smart money will eventually find its way to areas where there’s compelling investment thesis. And the Philippines today is a very compelling investment thesis for funds that eventually will come,” Tan added.
Based on latest data from the Department of Energy, as of the end of 2024, the total share of both on-grid and off-grid RE capacity in the country, composed of hydro, geothermal, wind, biomass and solar technologies, was at 9,581 megawatts (MW), or 31.4 percent of the country’s total power supply mix at 30,513 MW.
The Philippine government aims to increase RE’s share in the power generation mix to 35 percent by 2030 and raise it further to 50 percent by 2050.
