Energy wake-up call

Key driver

A key driver of the region's hunger for energy is rising electricity demand, which is growing twice as fast as overall energy use. In the next 10 years, the region will add the equivalent of Japan's total power generation, Birol said.

Demand in the region is coming from the rapid uptake of electric vehicles — one in five new cars is an EV — data centers, industrial and urban expansion, and air conditioners. The number of residential air conditioners in the region is set to triple by 2035.

Birol said the region will need about $600 billion over the next decade to build power plants and to expand and modernize the grid, underscoring an immense financing challenge ahead.

Transmission and distribution networks need to more than double in length by 2050 to keep pace with rising demand and to cope with the addition of more wind and solar energy, the report notes. Investment in grids and storage, such as battery storage, needs to ramp up from $13 billion in 2026 to $50 billion in 2050.

About $27 billion will be needed by 2040 to realize planned cross-border interconnections under the ASEAN Power Grid.

The agency notes that nuclear could become a key growth area for power generation by midcentury. Nuclear deployment could meet almost 10 percent of electricity demand growth by 2050 if announced government targets are achieved. But this will depend on accelerating deployment and reining in long construction lead times and costs.

Vietnam, Indonesia and the Philippines have announced plans to commission nuclear reactors, with the first units scheduled to come online after 2030. Singapore is carefully investigating if nuclear energy is suitable for the country and is working with the International Atomic Energy Agency on a detailed review starting in 2027.

Increasing electrification of transport, homes and industry is also a key area for the region's governments to focus on. Boosting renewable energy investment, battery storage and regional grid interconnections can cut fuel import bills while boosting regional resilience, the IEA said.

Renewable energy capacity is projected to nearly triple by 2035 under current policy settings or grow fivefold if announced targets are achieved.

Solar deployment has already increased this year: The Philippines became the second-largest destination for Chinese solar exports in the first quarter of 2026, with imports around three times higher than in 2025.

Birol expressed optimism about more rapid change in the region, attributing it to the impact of the Iran war.

He pointed to the rapid changes that occurred in Europe because of the Russia-Ukraine conflict. Before the conflict, Russia supplied about 40 percent of Europe's energy. Now, it is a fraction of that.

He said wind and solar installations in Europe have increased by a factor of three and nuclear power is now back on the energy agenda of many European countries.

"I expect this will be the same in Asia, especially in Southeast Asia," he said.

THE STRAITS TIMES, SINGAPORE