The Association of Southeast Asian Nations or ASEAN is a political and economic organization of ten Southeast Asian countries. Formed in 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand, membership has since expanded to include Brunei, Cambodia, Laos, Myanmar and Vietnam.
Covering more than 4.5 million square kilometres and comprising a population of more than 600 million people, ASEAN is about the size of the European Union. But these are probably the only similarities the two economic unions share.
While the EU currently has more economic power, is further developed and is a politically more integrated trade zone, when it comes to GDP growth, ASEAN, is by far the more dynamic.
For the last five years, its annual GDP growth averaged around 6%. In 2015, the organization’s combined nominal GDP had grown to more than USD 2.6 trillion.
If ASEAN were a single entity, it would rank as the seventh largest economy in the world behind the USA, China, Japan, Germany, France and the United Kingdom.
With such economic growth levels expected to continue, ASEAN is fast becoming a major economic force in Asia and a driver of global growth.
Energy-related challenges driving renewable energy growth
Installing sufficient additional power generation capacity is one of the most pressing issues for ASEAN countries to solve. Despite the rapid economic development, many parts of ASEAN remain under-electrified – 160 million of its people still do not have access to electricity today.
For those that do, prices of grid electricity are high at 0.18 USD/kWh or more in some markets.
The insufficient power generation structures currently in ASEAN are characterised by their strong reliance on fossil sources, such as natural gas, coal and oil, and the absence of nuclear power.
ASEAN, one of the regions with the strongest growth in CO2 emissions in the last decade is also the region expected to experience some of the most harmful effects of climate change – more intensive storms, variable precipitation, a rise in sea levels, as well as more severe droughts and floods.
Like many emerging economies with sizeable populations, ASEAN must solve numerous economic and energy-related challenges such as providing sufficient energy services, improving industrial productivity and reducing poverty, and on top of that, adapting to global warming.
As a result, ASEAN is increasingly turning to renewable energy.