The Southeast Asia region will see rapid economic growth in the coming decades, and energy use is set to grow significantly. Today, the region stands at a crossroads.
On the one hand, it can pursue a path of continued reliance on fossil fuels, mostly from non-indigenous sources, increasing the region’s emissions and exposure to volatile and increasingly expensive global commodity markets.
Conversely, the region could use its ample, affordable, indigenous renewable energy resources to lower energy costs, reduce emissions and drive regional economic development.
ASEAN IT Industry
Southeast Asia’s IT spending market share is expected to increase to $33.97 trillion from 2021 to 2026. The market’s growth momentum will accelerate at a CAGR of 8.4%, according to reports on the IT spending market in Southeast Asia.
The increased adoption of mobility solutions in Southeast Asia is notably driving the IT spending market growth in Southeast Asia. However, factors such as lack of skilled talent and retention of the talent pool may impede the market growth.
The growing urbanization is expected to drive mobility growth in Indonesia and Malaysia. IT services and software development centers are highly required with the increasing mobility associated with urbanization. Such factors are expected to propel the Southeast Asia IT spending market growth during the forecast period.
Clean Energy Imperative
According to a recent report published by the International Renewable Energy Agency (IRENA), by the end of 2018, the total installed electricity generation capacity of all ten ASEAN member states was 252 GW, with 28% of that capacity coming from renewable sources, mainly hydropower.
In 2020, that share had increased to 33.5% due in part to the rapid expansion of solar photovoltaics (PVs). The power sector is one of the major sectors contributing to ASEAN’s energy-related CO2 emissions because it is heavily reliant on fossil fuels.
All these points to IT industries in the Southeast Asian region that must step up their investments in renewable energy. Commoditization of emerging technologies such as big data analytics, predictive analytics, and IoT will help renewable electricity providers expand their operations and boost efficiencies to meet the rising market demand.
Power Cost Decline
The costs of supplying renewable energy are declining, and the infrastructure for transmitting and connecting renewable energy providers to the grids keeps improving. All the above creates new opportunities across the electricity value chain in Southeast Asia.
ASEAN countries share the common challenge of energy security: meeting the rising demand for energy in a secure, affordable, and sustainable manner. As one outlook shows, overall energy demand will continue to rise, doubling over the period to 2050. Therefore, supplying this energy securely is of paramount importance.
In this regard, energy security implies greater use of indigenous resources, particularly renewable energy, and a focus on reducing demand growth through energy efficiency.
In the ASEAN region, all renewable energy sources have a role to play in the energy transition. However, regarding the potential for sustainable bioenergy to serve Southeast Asia’s energy demand, a recent study from IRENA identified 13 sustainable bioenergy pathways that will enable bioenergy to compete economically with fossil fuels in the region’s energy markets.
