Southeast Asia's Renewable Energy Manufacturing Potential: A Pathway to Economic Growth and Climate Resilience

Jakarta, INTI - Southeast Asia, home to over 600 million people, is grappling with the urgent need to address climate change impacts. With extensive coastlines and low-lying regions, the region faces heightened risks from weather extremes and rising sea levels. The reliance on coal and oil for energy production exacerbates these challenges, contributing to global warming and threatening vital sectors like agriculture, tourism, and healthcare.

To combat these threats and align with sustainable development goals, Southeast Asia has the potential to emerge as a global leader in renewable energy manufacturing. This shift not only mitigates climate risks but also presents significant economic opportunities, with revenue potentials ranging from US$160 billion to US$200 billion by 2030, as projected by the Asian Development Bank.

Investment Opportunities in Renewable Manufacturing

Solar PV Manufacturing Southeast Asia is poised to produce 125-150 GW of module capacity by 2030. The region currently controls a notable share of the world's polysilicon, wafer, modules, and cells capacity. Lao, Malaysia, Vietnam, Cambodia, and Thailand are key players in this arena.

According to the International Energy Agency, Southeast Asian countries supplied one-third of global PV module exports, primarily to the US and EU markets. Vietnam, Malaysia, and Thailand dominate production, catering to both domestic and international demand, while Indonesia focuses on serving its vast domestic market through small-scale module assembly.

Battery Manufacturing The region is projected to produce 140-180 GWh of battery cells by 2030, positioning Southeast Asia as a battery manufacturing hub. Abundant mineral resources, particularly nickel, facilitate the development of an end-to-end Nickel Manganese Cobalt (NMC) battery ecosystem.

Indonesia holds a significant share of global nickel reserves, making it pivotal in the global electric vehicle (EV) industry. Demand for batteries in Southeast Asia is surging, driven by electric vehicles and battery energy storage systems (BESS). Indonesia, Thailand, and Vietnam lead in EV battery demand, while Malaysia and the Philippines focus on BESS.

Indonesia's Role in the EV Battery Supply Chain

Indonesia's nickel reserves are instrumental in positioning the country as a global EV hub. Foreign investment, notably from China, has fueled the expansion of Indonesia's nickel supply chain, with a surge in smelter construction. The country aims to be among the world's top three EV battery producers by 2027.

Since imposing export bans on nickel ores in 2014, Indonesia has mandated purification processes before export, attracting substantial foreign investments. Processed nickel exports surged to US$30 billion in 2022 from US$1 billion in 2015. By 2025, Indonesia is projected to contribute significantly to global nickel production.

Southeast Asia's transition to renewable energy manufacturing not only mitigates climate risks but also unlocks substantial economic potential. Solar PV and battery production can drive sustainable energy initiatives, empowering countries to combat climate change while fostering economic resilience.

By embracing renewable energy manufacturing, Southeast Asia can lead the charge toward a greener future, reinforcing its position as a key player in global sustainability efforts.