Fossil fuels have long been central to ASEAN’s energy story, shaping economic growth, industrial development, and the region’s geopolitical dynamics. Coal, oil, and natural gas remain prominent in ASEAN’s energy mix against a backdrop of continued global and regional efforts to decarbonise. According to the Energy Institute’s 2025 Statistical Review of World Energy, fossil fuels account for nearly 90% of the region’s energy supply, with countries such as Indonesia, Malaysia, Thailand, and Vietnam its major producers and consumers.

Insights from the Energy Barometer survey of energy professionals across the ASEAN states highlight how the region’s fossil fuel development is perceived today and the role these fuels are expected to play in the future.

Responses on the future share of fossil fuels in national energy mixes reveal cautious confidence in the region’s capacity to diversify its energy supply over the next decade. More than half of the respondents (55%) expect the share of fossil fuels to decrease, mostly only “moderately”. Around 19% anticipated that the energy mix would remain the same, while a further 25% projected an increase, underscoring the region’s continued reliance on fossil fuels.

One interviewee from the Philippines, an experienced energy strategist and researcher in energy investment and sustainability, observed that it is easy to oversimplify the energy transition as simply a substitution of one fuel with another. He stressed that “the energy transition is more than substituting coal or oil with renewables - it’s about access, logistics, and availability of resources.”

Echoing this pragmatic perspective, another interviewee, an experienced consultant in sustainable engineering and energy management from Singapore, pointed to the country’s structural and geographical limitations, noting that despite ongoing efforts, the scope for large-scale renewable deployment remains narrow: “We are putting solar panels on the roofs of government buildings wherever we can, but it’s chicken feed. 95% of our electricity is generated from gas, and it’s hard to see how that can change.”

Responses to the question on the primary factors driving continued reliance on fossil fuels reveal a complex interplay of economic and structural considerations. Respondents were asked to rank potential drivers from first (most important) to ninth (least important). Responses were weighted by rank (first = 9 points, second = 8 points, etc.) and aggregated to reflect the relative importance of each factor. Percentages reflect the share of total points allocated across all factors, based on respondents’ ranked choices. Overall, “energy affordability” (21% of the total points) and “energy security concerns” (16%) were viewed as the leading reasons for ongoing reliance on fossil fuels in the region. “Infrastructure and technology limitations” (12%), “readily available resources” (11%), and a “lack of viable alternatives” (11%) also feature prominently.

Importantly, the “continued promotion of fossil fuel exploration and production by resource-rich nations” (10%) emerged as a notable driver. While it ranks slightly lower in the overall weighted aggregate, it rises to third position when analysing respondents’ highest-ranked response only. For context, major producers such as the US, China, and Indonesia continue to expand - or maintain - significant fossil-fuel output, despite broader shifts toward cleaner energy. This highlights the scale of the challenge.

Overall, the responses suggest that economic and security factors still outweigh environmental considerations in many national policy frameworks, reinforcing the entrenched position of fossil fuels in ASEAN’s energy systems.

Respondents were very clear in stating their opinions on how the fossil fuel sector should adapt to a changing energy system. As in other sections, respondents could select more than one priority.

The results show that most (74%) favour “diversification into clean or low-carbon fuels”, while 60% also highlight the need to “boost efficiency and reduce carbon intensity”. Additionally, 49% of participants support “investments in emissions reduction technologies” such as carbon capture, utilisation, and storage (CCUS), methane abatement, and direct air capture. In contrast, only a small fraction of respondents (4%) favours measures aimed at “continuing current operations with minimal change”.

With the two second highest ranked options essentially utilizing technologies to clean-up and improve the operation of fossil-fuelled plant, the results indicate that respondents expect the fossil fuel sector to pursue a dual strategy: support transitioning towards low-carbon energy whilst reducing the environmental impact of existing fuels and operations. As indicated by the responses to the previous questions, although energy professionals recognised the continued dominance of coal, oil, and gas, many expect to see a move towards a low-carbon energy system through diversification, albeit a gradual one.

Yet alongside these forward-looking priorities, the survey findings reveal ongoing concerns about the stability of current energy systems. Respondents most frequently cited “rising energy prices and affordability challenges” (42%) as the biggest risks over the next five years, followed by “exposure to price volatility of energy commodities” (30%) and “dependence on fossil fuels” (30%). While survey respondents indicated a strong interest in financial incentives for clean energy in response to the previous question, their simultaneous concern about rising energy prices suggests a preference for these incentives to come from general government resources rather than being financed through mechanisms that would directly increase consumer costs. Overall, the results suggest that while policy priorities are increasingly forward-looking, affordability continues to dominate immediate public and political attention.

One interviewee noted that one dimension of “affordability” lies in improving access to capital for clean energy projects. He suggested that revenues generated from fossil fuel exports outside of the ASEAN region could be reinvested and used to cross-subsidise renewable energy development within the region. However, as not all ASEAN nations are energy exporters, this approach would require deeper regional cooperation and financial integration to ensure equitable progress across the bloc. This need for stronger coordination and collaboration is a theme that recurs across many responses to other energy-related challenges in ASEAN.

While affordability and price volatility emerged as major risks, some interviewees also pointed to underlying structural and policy factors that compound these challenges. One observation made was that “affordability and energy security concerns are certainly valid, but the broader issue lies in the limited policy and regulatory support that would otherwise make the transition more feasible. Until governments in the region strengthen their climate strategies with concrete regulations or incentives, companies will find it difficult to move decisively toward cleaner energy.”

In terms of whether the ASEAN member states would achieve their net-zero emissions targets, respondents were, once again, very much divided. While 51% believe current policies will “fall short”, a substantial 42% expect the targets “to be met” or even “exceeded”. The findings reveal a mixed outlook, where caution coexists with cautious optimism. To put ASEAN results in perspective, the same question was asked in previous Energy Barometers, which captured the views of energy professionals in the UAE (2023) and the UK (2024). Confidence was high in the UAE, where 61% of respondents expected emissions reduction targets to be met or exceeded, while expectations in the UK were far more pessimistic, with 72% anticipating current policies would fall short - placing ASEAN in the middle, with a near-even split between concern and optimism.

When asked how recent global political tensions - such as fuel price shocks, conflicts, and trade disruptions - have influenced national energy policy, respondents mostly cited a “shift toward regional energy cooperation and integration” (50%). Other frequently mentioned responses included “diversification of energy import sources and trade partners” (40%) and “accelerated investment in clean energy” (40%). Furthermore, 26% reported “delaying or deprioritising climate and decarbonisation goals”, while 24% identified “increased domestic production of conventional energy sources”.

Asked how governments could best act to protect consumers from energy price shocks a majority (57%) highlighted the “promotion of energy efficiency programmes across both household and industrial sectors” as the most effective measure. “Diversifying energy sources” was the second most cited response (52%). Furthermore, “targeted financial support for vulnerable households” (45%) was identified as a crucial social protection measure. The results suggest a balanced public policy perspective: combining long-term structural measures - efficiency and diversification - with short-term social protection mechanisms.

Interestingly, these preferred policy responses sometimes differ from the measures respondents reported governments have taken in response to price shocks (as noted in the previous question), highlighting a gap between expectations and real-world actions.

The growing emphasis on regional cooperation links into a wider strategic shift from purely national approaches to more integrated regional frameworks to ensure energy system stability, affordability and sustainability. As ASEAN countries advance their energy transition, collaboration, innovation, and inclusion are emerging as defining themes.

However, the fact that a minority of respondents expressed reservations about the importance of regional cooperation points to persistent concerns regarding the potential trade-offs with domestic priorities and/or reservations about how effective regional cooperation could be. These concerns may come from perceived challenges related to energy sovereignty, cost (or revenue) sharing arrangements, differing regulatory frameworks, or uneven levels of infrastructure development among ASEAN member states.

Nevertheless, the results signal a clear appetite among energy professionals for deeper regional collaboration in pursuit of energy security. They also imply a pragmatic awareness that successful regional integration depends on aligning cooperation with national development priorities and institutional capacities.

Turning to the potential barriers of greater ASEAN collaboration, in particular electrical grid interconnections, survey participants highlighted multiple issues. “Sovereignty concerns”, “regulatory differences”, “technical restrictions”, and “financing challenges” all ranked highly as factors influencing the pace and feasibility of cross-border integration.

The similar scores across these barriers again reflects the multidimensional nature of the challenge.

Insights from in-depth interviews reinforced the complexity of this issue. One interviewee, with extensive experience working across the ASEAN region, explained that cross-border energy integration in ASEAN faces unique challenges “rooted in history, sovereignty, and regional diversity.” As they put it, “The biggest barrier is perceptions of sovereignty and sovereign risk. ASEAN is not just diverse socially and economically; there are still many political fault lines that go back decades.” The interviewee also highlighted the human and historical dimensions that continue to shape energy policy: “In some places, energy poverty is still [within] living memory. Creating a level playing field for cross-border projects against that backdrop is extremely difficult.”

Another participant, a consultant in sustainable engineering and energy management based in Singapore, emphasised that political alignment remains the decisive factor: “The challenge is less about technical feasibility and more about aligning national priorities with broader regional objectives - a process that requires patience, trust, and careful negotiation.”

Several interviewees also pointed to the practical risks associated with shared infrastructure. One observed: “When you link critical infrastructure, such as electricity, to another country - or even a network of countries - the risks increase significantly. You need to acknowledge and accept those risks, have robust management and mitigation plans in place, and be prepared to respond if problems arise.”

Despite these challenges, participants identified examples of incremental cooperation, they said were encouraging. One interviewee cited the collaboration between Singapore and Johor, in southern Malaysia, where a special economic zone has been created, as a good example. “It shows how cooperation can take place, and from small examples, bigger things can grow.” Others suggested that commercial and industrial buyers are more likely to drive future interconnections than residential consumers. He said: “To make cross-border transmission easier, ASEAN countries need a common regulation and financing framework. If every country follows different rules, it will always take time.”

Overall, the interview findings complement the survey data by pointing out that ASEAN’s regional energy integration is not simply a technical or economic endeavour - it is a deeply political process shaped by history, trust, and institutional readiness.

Respondents highlighted two key areas where ASEAN governmental structures themselves can add the most value in supporting the energy transition: “developing cross-border infrastructure” (57%) and “promoting regulatory alignment among member states” (46%). Energy professionals recognise that infrastructure development must be supported by coherent and harmonised policy frameworks to succeed.

ASEAN’s energy landscape is evolving. Growing energy demand, technological innovation, and climate imperatives are driving the need for transformation. Evidence of progress can be seen in the pace of renewable generation: in several countries in the region, renewable generation is growing faster than overall energy demand, indicating momentum toward cleaner energy systems even as challenges remain (New Energy World, “Latest Statistical Review of World Energy signposts age of energy additions”, 26 June 2025) .

Against this backdrop, survey respondents point to the persistent financial, regulatory, and systemic barriers that must be addressed to turn ambition into action.

This balance between ambition and realism is reflected in respondents’ views on regional clean energy goals. When asked about the likelihood of ASEAN achieving its renewable electricity target of 35% by 2030, respondents were nearly evenly split in their outlook. Half expected the target “to be met” (42%) or even “surpassed” (8%), while 46% anticipated it would “fall short”.

Perspectives on this issue vary across the region. As observed by an interviewee from Singapore, a researcher and advisor with extensive experience in sustainable energy and climate change policy, the picture across the ASEAN region is complex. In several countries - Indonesia and Malaysia, for example - energy subsidies remain deeply embedded. These policies, the interviewee noted, “effectively subsidise fossil fuels, and without reforming such fundamental elements of energy policy, it will be difficult for renewable and clean energy sources to become competitive.”

Another described subsidy as “one of the silent killers of decarbonisation.” The interviewee added: “Relying on government support transforms long-term investments into short-term bets. Governments can kickstart decarbonisation, but long-term reliance on subsidies distorts incentives and risk.” He went on to say “Regulation should enable markets to function, not control them. When it doesn’t, resource allocation becomes distorted, resulting in bankrupt industries and dysfunctional systems. The problem for renewable energy is the phenomenon of missing markets and missing regulation.”

Turning to the technical measures needed to enable greater renewable energy integration, respondents seem to suggest multiple approaches.  “Energy storage” was identified as the top priority (54%), followed by the “modernisation of the electricity grid” (45%). Other measures received similar levels of support, including the “deployment of decentralised systems” such as microgrids and local energy communities (37%), “regional electricity grid interconnection and integration initiatives” like the ASEAN Power Grid (33%), and “flexible generation and demand response mechanisms” (32%).

While no ASEAN country currently operates a nuclear power plant, several are actively exploring nuclear energy as a key component of their future energy strategies, including Singapore, Malaysia, Vietnam and Indonesia. When considering the potential role of nuclear energy in ASEAN’s future energy system, energy professionals expressed conditional support. A majority (60%) stated that nuclear could be viable “if strong regulations and safety systems are in place”. That underlines the importance of robust governance and risk management as prerequisites for nuclear development in the region. Half of the respondents (50%) also stated that the sector’s viability depends on greater “public acceptance and trust”. In addition, 39% of respondents indicated that nuclear energy could be considered “if renewables and storage technologies fail to provide reliable and affordable baseload power”, suggesting that many view nuclear primarily as a complementary or fallback option.

However, 22% believe nuclear should be actively pursued as a key low-carbon solution “regardless of current limitations”.

The findings point to a cautious and pragmatic attitude toward nuclear energy in Southeast Asia - one that prioritises safety, public confidence, and demonstrated need over outright rapid expansion.

In interviews, while most participants expressed measured views, a few spoke with confidence about the centrality of nuclear power to the country’s decarbonisation strategy. As one  put it: “The only way Singapore can decarbonise electricity is nuclear. That’s the only feasible route given our constraints.” This conviction was coupled with an understanding that public acceptance will be critical. It perhaps reflects a pragmatic solution to a nation’s limited land mass and/or renewable resource quality.

Survey participants went on to prioritise various investments in technologies and innovations that balance near-term practicality with long-term sustainability objectives. “Energy efficiency and demand management” emerged as the top priority, selected by 47% of respondents. “Solar” energy ranked second, with 37% of respondents highlighting it as a central investment focus. Other notable areas of focus included “energy storage” (35%), “carbon capture, utilisation, and storage” (CCUS) (33%), “efficiency improvements and modernisation of fossil fuel power plants” (29%), and “low-carbon transport” (27%).

Notably, energy efficiency consistently stands out across multiple survey questions - from protecting consumers against price shocks to guiding the fossil fuel sector’s adaptation - echoing similar findings from the past Energy Barometers. Yet, despite its persistent recognition as a key lever for addressing the energy trilemma, it remains an area where progress consistently falls short of policy goals.

Respondents highlighted several key obstacles to scaling up investment in energy transition projects. Financial and regulatory challenges emerged as the most significant barriers to clean energy development. The biggest concern, cited by 68% of participants, was “high upfront capital costs”, followed by “regulatory uncertainty”, noted by 49% of respondents. Other frequently mentioned challenges included “limited access to affordable, long-term financing” (35%) and “insufficient government incentives” (31%).  Together, these results suggest that overcoming the financial barriers to the energy transition will require a dual focus: reducing the cost and risk of capital through innovative financing mechanisms and ensuring long-term policy stability and clarity to build investor confidence.

One interviewee noted that creative approaches can help unlock financing for renewable projects: “Thinking in terms of logistics and capital flows can unlock financing for renewable projects, e.g., trading coal internationally to fund geothermal power.”

Beyond finance and policy, respondents also offered opinions on the role of digital solutions as key enablers of a cleaner, more adaptable energy system. The most popular selection was “grid operations and real-time monitoring”, chosen by 56% of respondents. This is followed by “consumer demand response and smart metering” (46%) and “renewable energy forecasting and integration” (46%). Although respondents clearly recognised the value of digital solutions in these areas, AI-related options in other parts of the survey – such as priorities for energy-related investment – were consistently ranked lower than some other response options. This likely reflects the region’s evolving digital maturity, particularly as many ASEAN power systems are still developing and must first address foundational needs such as grid stability and storage.

The rapid expansion of data centres across Southeast Asia, driven by the region’s accelerating digital transformation, is creating new challenges for managing electricity demand. In Singapore alone, data centres consumed around 5.4 TWh in 2023 - nearly 10% of national electricity use - with average growth of about 18% annually since 2020 (IEA, 2025). Similar surges are projected elsewhere, with Malaysia’s demand expected to rise sevenfold by 2030 and Indonesia’s and the Philippines’ data-centre emissions set to multiply several times over (Ember, 2025).

In this context, respondents identified priorities for addressing the sector’s rising energy consumption. A strong majority emphasised the need to “power data centres with renewable energy sources” (73%). Many also called for “stricter energy efficiency standards to curb rising demand” (54%). Nearly half (47%) highlighted the importance of “co-locating data centres closer to renewable energy sources”. These findings suggest that there is support for ensuring that Southeast Asia’s digital transformation helps rather than hinders its broader energy objectives.

An interviewee from Singapore with experience in energy efficiency highlighted the strategic potential of data centres as part of the region’s low-carbon growth. He noted that shifting energy-intensive sectors like data centres away from fossil fuels - and potentially powering them through cleaner sources such as nuclear energy - could be a logical step in connecting energy planning with industrial development. “In connecting the dots between power generation and digital growth, the region could transform its energy transition into an engine for sustainable innovation,” as expressed by the interviewee.

As countries move toward cleaner, more advanced energy systems, there is increasing recognition that not all populations will benefit equally. Without careful planning, the transition risks leaving behind those with limited resources, restricted access, or insufficient capacity to adapt to new technologies and energy services. Ensuring a just and inclusive energy transition therefore requires attention not only to infrastructure and technology but also to skills, social equity, and targeted support.

Survey respondents highlighted the disproportionate effects of the energy transition. The most frequently cited groups at risk were “low-income and marginalised households” - both urban and rural - selected by 75% of participants. “Remote communities without reliable access to energy” followed closely at 68% whilst 39% of respondents identified “elderly populations and individuals with limited digital literacy”, reflecting a less visible but critical barrier. The increasing digitalisation of energy systems - through smart meters, demand response programmes, and online platforms – risks leaving behind those without digital skills or access, underscoring the importance of inclusive planning and capacity-building.

Expending on this point, an interviewee from Singapore, with several decades of experience in energy policy, stressed the importance of balancing progress with fairness across the region. They observed that the path toward sustainability is complicated by the diverse stages of economic development in ASEAN countries. These disparities make discussions around a “just energy transition” essential to protect livelihoods, support growth, and uphold social stability. 
The challenges faced by vulnerable populations highlight the need for workforce development to support a transition that is technically robust, socially equitable, and environmentally sustainable.

Respondents considered which skills and capabilities most need development. The most frequently cited area, selected by 50% of participants, was “engineering and technical expertise” for energy infrastructure. This was followed by “policy, leadership, and strategic planning” skills, chosen by 41% of respondents. Third place, at 29%, was shared between expertise in “environmental and social impact assessment” and competence in “renewable energy technologies” (solar, wind, hydro, biomass, etc.). This indicates growing awareness that the energy transition requires multi-disciplinary skills and must be implemented responsibly, with careful consideration of environmental sustainability, community engagement, and social equity.  These findings reflect the diverse backgrounds of respondents. They represented a range of sectors, including renewables, oil and gas, hydrogen, carbon management, energy storage, CCUS, energy transportation and distribution, and other energy-related areas.

These findings reinforce why professional development sits at the heart of the Energy Institute's mission. With active branches in Malaysia and Singapore, the EI is working to build the skills and capabilities the energy transition demands through initiatives such as the EI Academy, which provides professional development opportunities and the Executive Leadership in Energy Programme. Preparing the next generation is equally essential, which is why  the EI recently launched the Energy Institute Student Chapter at Universiti Teknologi PETRONAS (UTP). Across the region, the EI is convening multidisciplinary expertise - including technical partners and contributors to the EI Technical and Innovation (T&I) programmes - to support capacity-building in emerging technologies. Alongside this, ongoing flagship initiatives - such as the Energy Barometer and the Statistical Review of World Energy - continue to inform evidence-based debate, helping ensure that the transition is both technologically robust and socially inclusive, supported by shared regional insight.

“This report reinforces a key lesson that people matter just as much as technology in the energy transition. Ensuring that all community, including those remote or digitally excluded, have access to opportunities and develop relevant skills is crucial. A truly successful energy system is one that empowers people, sparks innovation, values geographical context and leaves no one behind.”

- Ir. Dr. Lim Eu Shawn, CEng MEI - Chief Business & Solutions Officer, Aerodyne Group and EI Malaysia Chairman

The report underscores that ASEAN’s energy transition is a complex balancing act between economic realities, energy security, and sustainability ambitions, and between technical innovation and the social skills needed to ensure an inclusive, just transition.  This challenge is further shaped by ASEAN’s unique context, including wide differences in levels of development across - and even within-countries, as well as difficult geography, such as remote or isolated islands that are harder to connect to modern energy systems

Ensuring that the transition benefits all communities requires attention to social equity, inclusion, and multi-disciplinary skills - from technical and policy expertise to digital literacy and environmental-social impact competencies.

Through coordinated regional action, implementing practical efficiency measures, and targeted skills development, ASEAN can build an energy system that is resilient, equitable, and capable of delivering both innovation and long-term sustainability, as seen by the region’s energy experts.