Solar could meet ASEAN’s new power needs at half the cost of gas: Ember study

Global energy think tank Ember has revealed in its new analysis that replacing ASEAN’s planned gas power expansion with solar energy instead could save the region up to $67 billion, underscoring the economic case for renewables as the Gulf crisis sends energy costs soaring across Asia.

Gas capacity is projected to reach almost 200 GW under ASEAN’s energy transition scenario by 2030, double the current 106 GW. Ember underscores that gas-fired power from the total fleets at current LNG price levels, would cost approximately $71 billion per year, rising to as much as $109 billion under future price projections.

Generating the equivalent amount of electricity with solar in a single year would cost roughly $42 billion, approximately half as much.

“While energy saving can be an initial short-term solution, the pivot to homegrown renewables can provide more options to buffer future energy shocks,” said Dr Dinita Setyawati, Senior Energy Analyst – Asia, Ember.

The closure of the Strait of Hormuz and a halt in Qatari Liquified Natural Gas (LNG) production have sent shockwaves through energy markets across Southeast and East Asia. The report warns that prolonged disruption could reshape price dynamics, intensify competition in the spot market and risk geopolitical fragmentation across the region.

Countries with a high share of gas in their electricity mix face the most immediate pressure. The analysis shows that the economic consequences extend well beyond the energy sector. Rising prices for US-dollar-denominated fossil fuels are expected to weigh on Asian currencies, weaken industrial output and push up inflation.

“Oil and gas are far more than just fuels. From fertilisers to high-tech polymers, they are the building blocks of modern life, leaving Asia’s industrial base deeply dependent on them.

Breaking that dependence is not just an energy switch – it is a full economic transformation. Perhaps it is time for Asia to rethink its fossil-intensive growth pathway,” Dr Muyi Yang, Senior Energy Analyst – Asia, Ember said.

Ember’s analysis also argues against a short-term pivot back to coal as a stopgap measure. Coal prices have risen by approximately 15% to around $134/tonne, and the report finds that the levelised cost of coal-fired electricity under these conditions stands at roughly $76/MWh, still significantly more expensive than solar plus battery storage at around $40/MWh. Thailand has already ordered its coal plants to run at full capacity, a move that Ember estimates could add around 3.2 million tonnes of CO2 emissions annually, representing about 5% of the country’s targeted emissions by 2037 under its draft power development plan.

The report highlights the case for accelerating renewable energy deployment, investing in grid infrastructure and regional interconnection, expanding energy storage and avoiding locking in further LNG import dependence.