“Ensuring universal access to reliable and affordable energy is a foundational pillar for a just energy transition”
The world is on a critical path where climate atrocities meet financial bottlenecks. Southeast Asian (SEA) countries, in particular, are navigating a complex path in the global energy transition. While nations like Vietnam, Indonesia, Malaysia and the Philippines possess vast reserves of renewable energy, from solar and wind to hydropower and geothermal, the region continues to attract only a fraction of the global clean energy investment. This disconnect highlights an imbalance. Despite strong climate commitments, many SEA countries are still grappling with energy insecurity, underdeveloped infrastructure and widening inequality. At the opening ceremony of the Energy Asia 2025, YAB Dato’ Seri Anwar bin Ibrahim, Prime Minister of Malaysia, in his keynote address, highlighted the need for a balanced and pragmatic energy transition rooted in regional realities. Excerpts…
Regional energy trends and challenges
In 2024, energy demand in the Asia-Pacific region accounted for 50 per cent of global consumption, with the region also contributing to 60 per cent of global emissions. Even with the acceleration of growth, commitments towards climate actions remain strong. In the SEA region, eight out of 10 countries have set net zero targets. The Association of Southeast Asian Nations (ASEAN) member states have also pledged to triple global renewable energy capacity to 11,000 GW by 2030 at the COP28. Moreover, the National Energy Transition Road Map 2023 followed by Malaysia adopts a pragmatic and realistic approach. This approach considers national energy demands, the needs of marginalised and underprivileged communities and emerging demands from data centres, artificial intelligence (AI) and other technologies that require strategic and practical policymaking.
However, global investment trends remain misaligned, highlighting a key challenge. The region attracted only 2 per cent of global clean energy investment in 2023, despite the region’s vast renewable energy potential spanning across solar energy in Malaysia, wind energy in Vietnam, hydropower in Laos and geothermal resources in Indonesia.
Financing the energy transition
One of the core focus areas is the need to determine and articulate a clear and coherent financial architecture that is capable of mobilising large-scale capital flows into renewable energy projects across the region. A pragmatic and strategic policy approach is essential to ensure that investors are confident about the region’s energy future.
Malaysia has been doing its part by introducing initiatives such as the Corporate Renewable Energy Supply Scheme (CRESS), which enables companies to procure clean energy from the national grid through a third-party access model. In addition, mechanisms like the Green Technology Financing Scheme incentivise investment in green projects.
Upgrading grid infrastructure
The upgrade of electricity grids also forms a key pillar in the advancing energy transition. Therefore, efforts have been made to upgrade regional electricity grids to increase cross-border interconnectivity and funding flows. At the ASEAN Summit, member states agreed to accelerate the ASEAN Power Grid (APG) initiative by signing an enhanced memorandum of agreement and establishing a dedicated financing facility network. This move is expected to contribute to the creation of a truly integrated regional energy market.
Moreover, Tenaga Nasional Berhad, a multinational electricity giant in Malaysia, has committed around RM 43 billion to upgrade the national grid. This investment includes the integration of battery energy storage systems and AI to build greater resilience and flexibility for the future.
Balancing transition with equity
The need to invest in improving efficiency and reducing emissions within the existing energy systems also holds notable importance. This, however, is a challenging task as fossil fuels still account for nearly 80 per cent of global supply. It would, therefore, be unrealistic to abandon traditional energy sources without first ensuring stable growth and the ability to meet the demands of new industries and technologies. The transition must be grounded in equity. Inequality deepens when decarbonisation efforts ignore the needs of the poor and vulnerable. Therefore, ensuring universal access to reliable and affordable energy becomes a foundational pillar for a just energy transition. At the same time, ensuring energy security must go beyond supply stability to include social justice and inclusive access. This is especially critical for Asia as energy security remains a prerequisite for progress. A balanced energy mix where renewable energy is complemented by emissions-abated oil and gas, would help keep energy affordable, improve living standards and support a fair energy transition.
Carbon capture and storage and regional cooperation
ASEAN has laid the groundwork of the Carbon Capture and Storage [CCS] Deployment Framework and Roadmap, aimed at streamlining regulations and facilitating cross-border flow of capital and carbon. In line with this, Malaysia has already passed the Carbon Capture, Utilisation and Storage Bill, 2025, which establishes a regulatory foundation for this emerging sector. PETRONAS is leading the way and plans to develop three CCS hubs in the offshore waters of Malaysia. These hubs are designed to serve both the oil and gas sector and hard-to-abate industries. Moreover, Malaysia’s efforts towards CCS also involve partnerships with more than 10 international firms from Japan and South Korea, and firms such as Total and Shell. PETRONAS is collaborating with ENEOS, Mitsubishi and JX Nippon for exploring cross-border carbon dioxide transport and storage from the Tokyo Bay area to Malaysia, positioning CCS as a vital tool in the decarbonisation process and as a future revenue generating opportunity for the region.
In sum
The path towards energy transition must be realistic, equitable and regionally attuned. In order to deliver energy transition, clear financing strategies, infrastructure modernisation, inclusive policies and technological innovations are required. Through regional cooperation, the SEA region has the potential to shape a resilient, low-carbon energy future that meets both environmental and developmental goals.
