Southeast Asia energy security at risk amid rising demand, report says

Key facts

• Southeast Asia's energy security is at risk due to rapidly rising electricity demand.
• Geopolitical tensions, including conflicts in the Middle East, are increasing energy costs and price volatility.
• The region's electricity demand is expected to double by 2050.
• Clean energy investments in Southeast Asia reached $47 billion in 2025.
• Fossil fuels, particularly coal, remain a significant part of the region's energy mix.
• Southeast Asia is projected to drive 25% of global energy demand growth by 2035.

Southeast Asia is facing mounting risks to its energy security as demand for electricity escalates faster than solutions are being developed, according to a report by the International Energy Agency released on Tuesday. The region's "insatiable appetite for energy" is being strained by rising costs, partly attributed to the conflict in the Middle East, and the increasing need for power to fuel data centers and provide cooling for homes and businesses.

Geopolitical shocks, including strikes on Iran and ongoing conflicts in the Middle East, could lead to increased energy price volatility and pose sustained challenges to the global economic outlook, ASEAN economic ministers warned in March 2026. These developments threaten energy security and economic progress in a region that is the world's fifth-largest economy and third-largest in population.

Southeast Asia is a critical player in global energy dynamics, accounting for approximately 25% of global energy demand growth through 2035, second only to India. Electricity demand in the region grew by over 7% in 2024, nearly double the global average, and is projected to double again by 2050 due to urbanization, industrial expansion, and rising cooling needs. Despite clean energy investments reaching around $47 billion in 2025, the region remains heavily reliant on fossil fuels, with coal-fired power plants constituting a significant portion of its energy mix, having reached an installed capacity of 121 gigawatts in 2025.