ASIA stands at a pivotal moment in its energy history. Home to more than half of the world鈥檚 population and the largest share of global energy demand, the region is simultaneously the driver of economic growth and a key contributor to global carbon emissions. As the climate crisis deepens and the energy security landscape becomes increasingly volatile, Asia鈥檚 ability to pivot toward renewable, equitable, and resilient energy systems will determine not just the future of the continent but of the planet. The question is no longer whether Asia should accelerate its energy transition 鈥� but how fast and how smartly it can do so.
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Climate, cost and consumption
THE urgency for energy transformation in Asia is driven by three converging factors: climate vulnerability, rising costs of fossil fuel dependence, and ballooning energy demand. Asia is already experiencing the brunt of climate change. From the deadly heatwaves in India and Pakistan to intensifying typhoons in the Philippines and record-breaking floods in China and Bangladesh, the human and economic toll is escalating. Simultaneously, the global energy crisis triggered by geopolitical tensions鈥攎ost notably the war in Ukraine鈥攈as revealed the precariousness of overreliance on imported fossil fuels. Countries like Sri Lanka, Pakistan, and Bangladesh have faced severe energy shortfalls, blackouts, and financial stress due to their exposure to volatile fuel markets.
Yet, energy demand in Asia continues to rise. As economies expand, urbanise, and industrialise, electricity consumption is projected to grow by over 70 per cent by 2040. Meeting this demand sustainably is an enormous challenge but also a generational opportunity. A successful transition will hinge on policy innovation, investment flows, technological deployment, and social inclusion.
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A mixed picture: progress and pitfalls
THERE is already substantial momentum toward clean energy in Asia. China is the world鈥檚 largest producer of solar panels, wind turbines, and electric vehicles. India has set an ambitious goal to reach 500 GW of non-fossil capacity by 2030 and has launched the International Solar Alliance to promote solar energy globally. Southeast Asian countries, like Vietnam and the Philippines, have made notable advances in solar deployment, while Bangladesh and Nepal are scaling decentralised renewable energy solutions to expand rural access.
However, this progress is uneven and constrained by persistent structural barriers. Many Asian economies remain heavily reliant on coal, the most carbon-intensive fuel. Despite global efforts to phase down coal, countries such as Indonesia, India, and China continue to build new coal-fired power plants, often justified on the basis of affordability, energy security, or employment. Financial institutions in Asia, including public banks and state-owned enterprises, still channel large amounts of capital into fossil fuel infrastructure, crowding out investment in clean alternatives.
Moreover, policy inconsistency and weak regulatory frameworks plague the renewable energy sector across several countries. Tenders are often delayed or cancelled, land acquisition for renewable projects is difficult, and grid infrastructure is outdated or lacks the flexibility to integrate intermittent sources like wind and solar. Without resolving these structural issues, Asia鈥檚 clean energy potential will remain largely untapped.
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Unlocking finance: from billions to trillions
ONE of the biggest constraints to Asia鈥檚 energy transition is finance. The International Energy Agency estimates that to reach net-zero emissions by 2050, clean energy investments in emerging and developing Asia must triple from current levels, reaching more than $1 trillion annually by 2030. Most countries in the region, especially low- and middle-income economies, lack the fiscal space to fund this scale of transformation on their own. Mobilising global capital is therefore essential.
This calls for a combination of strategies. First, multilateral development banks and climate funds must dramatically scale up their clean energy portfolios in Asia. Institutions like the Asian Development Bank can play a catalytic role by de-risking investments, providing blended finance, and supporting regional energy interconnectivity projects. Second, countries must strengthen their domestic financial ecosystems. Developing green bond markets, offering tax incentives, and setting clear project pipelines can help attract private investors. The role of sovereign wealth funds and pension funds 鈥� many of which are based in Asia 鈥� must also be emphasised in steering capital toward long-term sustainable energy assets.
Additionally, fossil fuel subsidies, which still amount to billions across the region, must be reformed. Redirecting these funds to renewable energy development, energy access programmes, and just transition mechanisms would yield higher economic and environmental returns. However, subsidy reforms must be socially sensitive and accompanied by safety nets to protect vulnerable populations from energy price shocks.
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Technology and infrastructure: building for the future
A RAPID energy transformation requires not only investment but also the deployment of enabling technologies and infrastructure. Asia must leapfrog into a smarter, more flexible energy system that can accommodate high shares of renewable energy. This means modernising transmission and distribution networks, investing in battery storage, and developing digital tools for demand forecasting and energy efficiency.
Countries like Japan and South Korea are investing heavily in hydrogen as a future energy carrier, and pilot projects are being tested in Singapore and Australia. Offshore wind holds tremendous promise in the coastal regions of China, Vietnam, and India. Similarly, floating solar installations on water bodies are emerging as a solution in land-constrained areas like Bangladesh.
Decentralised renewable energy solutions, including mini-grids and rooftop solar, are essential for ensuring energy access in rural and remote communities. These not only improve quality of life and economic opportunities but also enhance resilience in disaster-prone areas. Supporting small-scale renewable enterprises through targeted subsidies, capacity building, and access to finance will be key to scaling these solutions.
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Governance and policy coherence
POLITICAL commitment and governance reform are the glue that holds together the technical and financial aspects of the energy transition. While most Asian countries have made climate and renewable energy commitments under their nationally determined contributions, implementation has often lagged behind. Policy fragmentation across ministries, lack of coordination among regulatory bodies, and insufficient stakeholder consultation hamper progress.
To overcome this, countries must adopt whole-of-government approaches that align energy, climate, finance, and development strategies. Clear renewable energy targets backed by legally binding frameworks, predictable auction mechanisms, and transparent permitting processes are essential to provide investor confidence. Regulatory agencies need to be empowered and resourced to enforce standards, oversee market liberalisation, and ensure accountability.
In addition, regional cooperation must be strengthened. Asia鈥檚 diverse energy landscape offers enormous potential for cross-border electricity trade, particularly in south and Southeast Asia. Initiatives like the ASEAN Power Grid and the South Asia Regional Initiative for Energy Integration should be expanded to create integrated energy markets that optimise renewable resource sharing and enhance regional energy security.
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Just transition and social inclusion
NO ENERGY transition can be truly successful unless it is just and inclusive. Millions of workers in fossil fuel sectors 鈥� especially in countries like China, India, and Indonesia 鈥� face job displacement as coal and oil-based industries decline. Transition policies must therefore include reskilling programmes, job guarantees, and community-led development strategies to support affected workers and regions.
Equity considerations must also be central in energy access planning. Nearly half a billion people in Asia still lack reliable access to electricity. Addressing this gap is not just a moral imperative but an economic necessity. Women, indigenous communities, and marginalised groups must be at the forefront of energy decision-making processes. Inclusive energy governance not only ensures fairness but also strengthens public support for reform.
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Role of cities and industry
ASIA鈥橲 cities are both major energy consumers and powerful agents of change. Urban areas account for over 70 per cent of the region鈥檚 energy use and are responsible for the bulk of carbon emissions. Local governments can accelerate the transition by adopting green building codes, investing in public transport, and deploying city-wide renewable energy systems. Initiatives like Solar Cities in India or Green Building Councils in Southeast Asia demonstrate how urban planning and local leadership can drive innovation.
Industry, too, must play a central role. Asia is home to some of the world鈥檚 largest manufacturing hubs, particularly in steel, cement, and textiles. Decarbonising these sectors will require electrification, process innovation, and the adoption of low-carbon technologies. Corporate procurement of renewable energy through green power purchase agreements is gaining traction and should be incentivised through policy support and grid reform.
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Asia鈥檚 decisive decade
THE next ten years will determine whether Asia can transform its energy systems fast enough to avert climate catastrophe, build economic resilience, and ensure energy justice. The task is enormous, but the tools, technologies, and talent are already in place. What is needed now is visionary leadership, coordinated action, and a long-term commitment to change.
Asia has led the world in economic growth, technological innovation and poverty reduction. It can now lead the global energy transition. The pathway is not without challenges, but the destination 鈥� a cleaner, fairer, and more secure energy future 鈥� is well worth the journey. The time to act is now. Asia cannot afford to wait.
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听Musharraf Tansen is a development analyst and former country representative of Malala Fund.
