Southeast Asia looks beyond oil and gas

Editor's note: In this weekly feature China Daily gives voice to Asia and its people. The stories presented come mainly from the Asia News Network (ANN), of which China Daily is among its 20 leading titles.

The war in Iran could accelerate Southeast Asia's plans to tap nuclear energy as it seeks to wean itself off its dependence on Middle Eastern oil and gas, experts told The Straits Times.

The closure of the Strait of Hormuz — a major global shipping route responsible for 20 percent of the global oil trade — has exposed the region's heavy reliance on imported oil and gas, leaving it vulnerable to volatile fuel prices, economic disruption, and strain on energy systems.

It has underscored the need to diversify energy mixes, strengthening the case for nuclear energy to shore up energy security in the region, experts said.

This is particularly so in Southeast Asia, which is largely dependent on oil and gas from the Middle East, said Arkady Gevorkyan, commodity strategist of Citibank.

He said the disruptions in oil and gas have driven up electricity generation costs and increased the price of baseload power, making nuclear energy an attractive alternative for secure power generation. Baseload power is the minimum amount of electricity a grid needs at any given time.

The conflict has also renewed interest in renewable energy, but sources like solar and wind are weather-dependent, which can mean inconsistent energy production.

Increasingly, nuclear energy has emerged as a potential energy source for countries, as nuclear reactions do not emit any greenhouse gases and use fewer natural resources to produce large amounts of energy.

It can also run around the clock, has a smaller land footprint, and can support energy-intensive sectors like heavy industries and data centers.

Tan-Soo Jie-Sheng from the National University of Singapore's Lee Kuan Yew School of Public Policy, noted that even before the war, interest in nuclear energy was growing due to rapid electricity demand, the need to decarbonize, land constraints, and the intermittency of renewables.

While the conflict has "reinforced and accelerated" the underlying rationale for nuclear energy, such a strategy hinges on long-term commitment and resolve, he said.

Countries that have had nuclear energy plans on the back-burner may now take a harder look at moving on with them.

"What the conflict has done is sharpen the energy security argument by highlighting how exposed the region remains to imported fossil fuels and geopolitical risks," he added.

Gevorkyan said that in the wake of the Russia-Ukraine conflict, Europe's reliance on imported gas, combined with periods of weak renewable output, strengthened the region's push for energy independence and security.

Europe has since scaled up its solar and wind power sectors and diversified its fuel imports, among other measures.

"Markets that rely on one source or two sources of energy for power generation are not immune to any sort of cataclysms or events when there is a power disruption," Gevorkyan said.