Key facts
- Asia needs $1 trillion annually for energy investment over the next 15 years.
- Total investment required through 2040 is estimated at $15 trillion.
- Asian energy demand is forecast to reach 370 million terajoules by 2040.
- The region is expected to drive roughly 70% of global net energy demand growth by 2040.
- Solar and wind investment is projected to reach approximately $300 billion annually through 2040.
- 50% to 60% of renewable projects in Vietnam, Thailand, and Indonesia were canceled or stalled between 2021 and 2025.
Asia will require up to $1 trillion annually in energy investments over the next 15 years to meet rising demand and enhance energy security, according to a McKinsey report. This projection totals $15 trillion through 2040, highlighting the region's vulnerability to oil and gas shipment disruptions, particularly through the Strait of Hormuz, as evidenced by the Iran war.
McKinsey forecasts Asian energy demand to increase by 15% to 370 million terajoules by 2040, with the region accounting for about 70% of global net energy demand growth. Key drivers include data centers, industrial expansion, and increased demand for cooling.
Coal consumption is expected to remain stable in Asia over the next decade, with growth in India and Southeast Asia offsetting declines in China. Natural gas demand growth is anticipated to slow in the near to medium term, though industrial demand could spur a longer-term recovery. Solar and wind investments are projected at around $300 billion annually, but face challenges such as inadequate infrastructure and policy support, with 50% to 60% of renewable projects in Vietnam, Thailand, and Indonesia stalled or canceled between 2021 and 2025.