By 2060, ASEAN’s final energy demand could grow to around four times current levels, driven by economic growth, industrialisation and emerging demand, including from data centres. Through AEO9, the ASEAN Centre for Energy (ACE) highlights stronger regional cooperation, electrification, connected power systems and faster renewable energy deployment as key to managing this growth, with the most ambitious transition pathway requiring around USD 405 billion in annual investment.
Photo 1. (from left to right) H.E. Tiffany McDonald, Ambassador, Australian Mission to ASEAN, Dato’ Ir. Ts. Razib Dawood, Executive Director of the ASEAN Centre for Energy (ACE), H.E. Sharon Garin, Secretary of Energy of the Philippines, H.E. Helen Fazey, Ambassador, UK Mission to ASEAN, Prof. Lisa Sachs, Director of the Columbia Center on Sustainable Investment, Columbia University.
MANILA, 8 October 2026 – The ASEAN Centre for Energy (ACE) today officially launched the 9th ASEAN Energy Outlook (AEO9), highlighting that ASEAN’s future energy security will increasingly depend on how well its Member States manage energy demand, integrate infrastructure and mobilise investment collectively.
Under the Baseline Scenario (BAS), ASEAN’s total final energy consumption could rise from around 485 million tonnes of oil equivalent (Mtoe) in 2025 to 2,047 Mtoe by 2060. This expansion is being driven by industrial production, freight transport, household cooling, urban development and digital services.
At the same time, ASEAN’s fossil-fuel trade position is becoming less favourable, with growing dependence on oil imports and a weakening export advantage in other fossil fuels. This leaves the region increasingly vulnerable to external disruptions that could raise costs across the economy.
Photo 2. Final energy consumption by fuel and primary energy supply by fuel in ASEAN.
To understand the implications of different policy choices, AEO9 compares three transition pathways: the Baseline Scenario (BAS), ASEAN Member States Target Scenario (ATS), and ASEAN Coordinated Transition Scenario (ACTS). These are not predictions, but illustrate how ASEAN’s energy system could evolve under different levels of policy implementation, target achievement, technology deployment, investment mobilisation and regional cooperation.
Under BAS, final energy consumption could reach 2,047 Mtoe by 2060. The implementation of national policies and targets under ATS could reduce this to 1,482 Mtoe, while the ACTS pathway could bring final energy consumption down further to 1,073 Mtoe through accelerated energy efficiency, electrification and fuel switching—nearly half the BAS level—while supporting a similar broad trajectory of regional economic development.
Energy demand under ACTS would be met through a more diversified supply mix, faster renewable energy deployment, stronger power grids and deeper regional integration. Delivering this coordinated transition would require investment across the entire energy system, from generation and grids to technologies and infrastructure that improve efficiency and enable electrification across end-use sectors.
“ASEAN’s energy security will be determined as much by how efficiently we use energy and how well our systems are connected as by how much energy we can produce or import. AEO9 makes clear that regional coordination is now essential to keep energy affordable, reliable and resilient as demand grows,” said Dato’ Ir. Ts. Razib Dawood, Executive Director of the ASEAN Centre for Energy.
Managing Demand to Protect ASEAN’s Energy Security
The comparison of the three pathways shows that economic growth does not necessarily have to be accompanied by an equivalent increase in energy consumption. Energy efficiency can reduce demand, while electrification and fuel switching change how energy needs are met. Under ACTS, electricity’s share of final energy consumption is projected to increase to 57.2% by 2060, compared with 22.6% under BAS.
To achieve this shift, demand-side measures must be a central part of the transition. Higher efficiency standards, electrification and timely technology replacement can prevent inefficient energy-use patterns from being locked in for decades. These measures can also reduce ASEAN’s dependence on imported fuels while limiting the need for costly new energy-supply infrastructure.
Photo 3. Sectoral demand strategies.
Connecting Clean Power, Grids and Regional Markets
Demand management must be accompanied by a major transformation of the power system. To reach ASEAN’s target for renewable energy to account for 45% of total installed power capacity by 2030, the region would need to add around 26 GW each year—nearly four times its previous annual deployment rate.
Renewable energy resources, demand centres and sources of system flexibility are distributed unevenly across ASEAN. Stronger domestic grids, energy storage and system flexibility must therefore be developed alongside the ASEAN Power Grid and cross-border electricity trade.
Interconnection can give Member States access to complementary generation mixes and demand profiles, support more efficient use of resources and improve system reliability. Realising these benefits will require coordinated planning, compatible technical standards and market rules that support reliable regional electricity trade.
Making the Transition Investable Beyond 2030
The investment requirement extends beyond building additional renewable generation capacity. ACTS drives changes on both sides of the energy system: expanding and decarbonising supply while replacing, upgrading and converting technologies across industry, transport, commercial buildings and households. The transition also requires enabling infrastructure, particularly domestic and cross-border grids.
AEO9 estimates that ACTS would require cumulative investment of around USD 14.1 trillion through 2060, equivalent to approximately USD 405 billion per year on average. This investment would support broader electrification, faster renewable energy deployment and deeper regional energy integration.
Mobilising capital at this scale will require more than increasing the volume of finance. ASEAN will need credible, investment-ready project pipelines, integrated planning, bankable contracts, transparent grid access and fair risk allocation. Cross-border infrastructure will also require agreed approaches to cost allocation and financing among participating countries.
AEO9 positions ASEAN’s 2030 targets as an important milestone for accelerating implementation, rather than the end of the transition. Power plants, grids, industrial facilities, buildings and vehicles operate across multiple policy cycles, meaning that decisions made today will shape the region’s energy security, competitiveness, investment needs and emissions well beyond 2030.
The report calls for a clearer and more consistent long-term regional direction across successive ASEAN Plan of Action for Energy Cooperation (APAEC) cycles, while taking into account the circumstances of each country. Stronger planning, regulatory, financing and implementation capabilities can provide greater certainty for governments, utilities and investors as technologies, markets and geopolitical conditions evolve.
“The transition will be won or lost in implementation. ASEAN now needs a pipeline of bankable projects, stronger grids and market rules that give investors the confidence to deliver at scale. Every APAEC cycle must move the region closer to an integrated long-term energy system,” Dato’ Razib added.
The 9th ASEAN Energy Outlook was developed by ACE with national experts from ASEAN Member States and the Regional Energy Policy and Planning Sub-Sector Network. The report combines regional energy demand and supply analysis with power-sector optimisation and covers all ASEAN Member States through 2060.
The development of AEO9 was made possible through the support of the United Kingdom’s Foreign, Commonwealth & Development Office (FCDO) through the ASEAN-UK Green Transition Fund (GTF); the Australian Government through the ASEAN-Australia Energy Cooperation Programme (AAECP), under the Australia for ASEAN Futures Initiative (Aus4ASEAN Futures); and the Government of Norway through the ASEAN Climate Change and Energy Project (ACCEPT) Phase II under the Norway–ASEAN Regional Integration Programme (NARIP).
AEO9 also benefited from contributions from partner institutions, including the Columbia Center on Sustainable Investment (CCSI) at Columbia University and the World Bank through the Multi-Phase Programmatic Approach: Accelerating Sustainable Energy Transition (MPA ASET), as well as technical modelling expertise provided by the Stockholm Environment Institute (SEI).
ACE extends its appreciation to all supporting partners for their contributions throughout the report’s development and for their support in strengthening regional energy analysis, modelling, policy development and capacity building across ASEAN.
The full report is available at: https://go.aseanenergy.org/publication-aeo9 and executive summary at https://go.aseanenergy.org/summary-aeo9
