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Southeast Asia has 20 TW of untapped VRE potential, but countries remain at different integration stages and will rely on the ASEAN power grid to scale up, the IEA says. (Photo: iStock)
Southeast Asia has 20 TW of untapped variable renewable energy (VRE) technical potential, but countries remain at different phases of solar and wind integration, underscoring the need for a stronger regional grid, according to a new report by the IEA.
The region must accelerate VRE integration and address flexibility challenges as power demand surges, and the IEA’s three-tier roadmap of foundational, enabling and transformational actions offers guidance for the policies needed to support this development, experts said during the webinar “Integrating Solar and Wind in Southeast Asia.”
“Realizing even a fraction of the 20 terawatts could provide substantial opportunities,” said Sue-Ern Tan, Head of the IEA Regional Cooperation Centre.
Countries at different VRE-integration phases, Vietnam and Philippine lead
Countries across the region are progressing at very different speeds, according to the IEA’s six-phase framework for variable renewable energy integration. Camille Paillard, one of the study’s main authors, said the framework classifies power systems based on how much solar and wind they can absorb and the kinds of operational challenges that arise as VRE penetration increases.
The IEA’s six-phase framework classifies power systems by how much solar and wind they can absorb and the challenges that emerge as VRE grows. (Chart: IEA)
In the early phases, solar and wind have little impact on system operations, but as countries advance, VRE begins to influence dispatch decisions and system flexibility becomes more important. Most Southeast Asian countries by 2030 will still have wind and solar shares of less than 10%, said Peerapat Vithayasrichareon, lead author of the study and Senior Energy Analyst at the IEA.
Indonesia, Malaysia, and Thailand are moving into the middle phases, where solar and wind start shaping daily system operations. Paillard explained that from Phase 4 onward, stability challenges emerge because wind and solar can meet the majority of demand during certain hours. This is also when systems face steep ramping needs and the appearance of the “duck curve,” a pattern already observed in countries with more mature solar deployment.
Most Southeast Asian countries by 2030 will remain in early phases, but the Philippines and Vietnam are on track to enter the higher phases where more extensive reforms are required. (Chart: IEA)
Only a few Southeast Asian markets, notably the Philippines and Vietnam, are on track to enter the higher phases where more extensive reforms are required. Countries at this level will need a broader portfolio of flexibility options, including grid forming inverters, synthetic inertia, battery storage and new business models to handle higher VRE shares, said Vithayasrichareon. The Philippines, which is projected to reach about 30% variable renewables by 2035, is expected to enter Phase 4, where solar and wind must support not only energy needs but also system stability.
Actions needed to support VRE integration: foundational, enabling, transformational
Southeast Asia’s electricity demand jumped 7% in 2024 and is expected to rise more than 50% by 2035, potentially doubling by 2050 to reach 3,000 TWh. Cooling demand, industrial activity and the rapid growth of data centers are among the main drivers. The good news is that eight of the 11 ASEAN countries now have net zero or carbon neutrality goals, but meeting them will require faster progress on VRE readiness.
Paillard added that regional cooperation will be essential, noting that the ASEAN Power Grid “will be a key regional initiative to tap into the diverse renewable energy potential of each country and provide an additional layer of flexibility at the regional level.”
To guide this transition, the IEA’s three-tier roadmap outlines the actions needed at each stage of integration. For early phase countries such as Brunei and Laos, the priority is to put foundational measures in place. Policymakers must set clear targets and master plans, regulators need to establish connection and performance standards and utilities should conduct resource assessments and ensure basic grid readiness.
The IEA’s three-tier roadmap outlines the actions needed at each stage of integration. (Screenshot of webinar)
Countries in Phase 3, including Indonesia, Malaysia, Vietnam and Thailand, need enabling actions to keep up with rising shares of solar and wind. Policymakers in these markets must plan for grid and infrastructure expansion, regulators should update market rules for distributed resources, electric vehicles and battery storage, and utilities need to invest in grid upgrades and flexible plant retrofits.
More advanced markets, such as the Philippines in the coming years and Singapore are entering Phase 4 and beyond, where solar and wind can meet large shares of demand during certain hours and stability challenges become more pronounced. These systems require transformational actions, including long duration storage, advanced technologies such as synthetic inertia and grid forming inverters, and deeper market and financial reforms.
Utilities must adopt real time forecasting, digitalized system operations and technologies capable of maintaining stability in high VRE grids.
“Delays will underutilize the potential of renewables and lead to higher costs, locking countries into uncompetitive fossil fuel assets,” said Vithayasrichareon.
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