ASEAN has enjoyed economic growth levels of 5% over the past decade, and the outlook for the region is robust. As the region grows richer, energy demand is booming, leading to buoyant gas, LNG and power markets.
Additional 270 GW of new power capacity needed by 2035
ASEAN is underweight when it comes to electricity consumption. To improve access to and reliability of electricity, international investment is needed. Generation capacity will need to more than double by 2035. Indonesia, Vietnam, Philippines, Myanmar, Laos and Cambodia in particular have low power consumption per capita, between 300-1,800 kWh/person, compared to 8000 kWh/person in Singapore, ASEAN's richest member.
The region has installed power capacity of 210 GW in 2017. We estimate that an additional 270 GW of new capacity is needed by 2035. This translates to an estimated investment of US$500 billion in power assets alone. With the region lacking the internal capital, it becomes a strong magnet for foreign direct investments.
Despite the increasing anti-coal rhetoric, coal will continue to dominate the region's power generation sector in the medium term, particularly in high-growth markets like Indonesia, Vietnam, Malaysia and Philippines.