Solar PV installation in Vietnam. ASEAN stands out in IEA report with one of the most optimistic forecasts among all regions. (Photo: iStock)
The International Energy Agency (IEA) forecasts a 15% upward revision in renewable capacity growth for the ASEAN region over the next five years, while lowering the global outlook by 5% compared with last year’s prediction.
Despite headwinds, global renewable power capacity is still expected to double by 2030, reaching an additional 4,600 GW and about 900 GW less than projected in last year’s report, according to the IEA’s Renewables 2025 report.
Solar dominates growth as geothermal brings stability
Solar PV continues to drive renewable expansion, accounting for more than 60% of the projected increase in generation. Both utility-scale and distributed PV are growing rapidly in Vietnam, Indonesia, the Philippines, and Thailand.
As countries harness energy from the sky through solar power, they are also looking underground to tap geothermal resources. The growing reliance on variable renewables like solar underscores the need for dispatchable sources like geothermal to strengthen grid flexibility.
Geothermal power additions are expected to rise for the second consecutive year in 2025, reaching nearly 0.45 GW, driven by new capacity in Indonesia, the Philippines, Japan, Turkey, and the United States. Several large-scale enhanced geothermal projects are also set to come online within the next two years.
By contrast, offshore wind faces the bleakest outlook. The IEA has revised down its five-year growth forecast by 25%, citing policy changes in the United States, project cancellations in Europe, and high costs and supply chain challenges in Japan and India.
Policy support powers ASEAN’s upward outlook
While global forecasts have been revised downward, ASEAN stands out in the report with one of the most optimistic forecasts among all regions. Vietnam remains the region’s frontrunner, accounting for over 40% of total renewable growth, followed by Indonesia with around 20%.
IEA forecasts a 15% upward revision in renewable capacity growth for ASEAN over the next five years. (Chart: IEA)
The upward revision in ASEAN’s outlook is largely attributed to faster implementation of large hydropower projects and improved policy frameworks that are creating clearer pathways for investment. These include the continuation of renewable energy auctions in the Philippines and Thailand, as well as the expansion of corporate power purchase agreements (PPAs) in Vietnam.
Ambitious national energy goals are also boosting investor confidence and accelerating deployment across the region. Moreover, greater adoption of grid flexibility solutions could boost renewable deployment in ASEAN by up to 70% above the IEA's main-case scenario, representing the highest upside potential of any major region.
However, the IEA notes that ASEAN could face increasing grid integration challenges as renewable capacity expands. These issues can be managed if existing assets operate more flexibly, with hydropower and thermal power plants playing the central roles given their technical adaptability. But current long-term power purchase agreements (PPAs) and fuel supply contracts often limit their ability to adjust output.
Revising existing contracts, designing more flexible new ones, and diversifying fuel supply could help sustain ASEAN’s bright outlook. As IEA Executive Director Fatih Birol said during the report’s launch, “Renewables are growing, and the pace of growth is mainly determined by governments around the world.”
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