Jul 24, 2025 0 272

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“Energy transition is driving profound changes in Southeast Asia’s power sector, accompanied by the emergence of new business models tailored to a decentralized, digitalized, and greener market.”

Energy Transition and New Electricity Business Models Reshaping Southeast Asia

⚡ Energy Transition Trends in Southeast Asia

With electricity demand in Southeast Asia growing by an average of 6% annually, countries like Vietnam, Thailand, Indonesia, and the Philippines are being pushed to accelerate the shift from fossil fuels to clean energy sources.

According to IRENA (International Renewable Energy Agency), the region holds significant potential for solar and wind energy, especially in countries such as Vietnam, Indonesia, and the Philippines. Vietnam has emerged as a regional leader in rooftop solar capacity, surpassing 9 GW by the end of 2023 (IRENA, 2024).

Energy transition is not only about changing energy sources but also restructuring the entire sector – from generation, transmission, to distribution. This transformation brings about new business models to support decentralization and decarbonization of the power system.

🔋 New Electricity Business Models: A Strategic Shift

Traditionally, Southeast Asia’s electricity sector has been dominated by state-owned utilities. However, the energy transition necessitates opening the market to private enterprises and startups. The following models are gaining traction:

*Figure 1: Overview map of new electricity business models and energy transition flows in Southeast Asia – illustrating the decentralization and digitalization of the power sector.*

1️⃣ Distributed Energy Resources (DER)

Consumers are becoming producers (prosumers). Rooftop solar systems in Vietnam and Thailand allow households and SMEs to sell electricity back to the grid, enabling “peer-to-peer energy trading.”

2️⃣ Energy-as-a-Service (EaaS)

Companies like Schneider Electric and ENGIE offer comprehensive energy services – including installation, operation, maintenance, and optimization – on a subscription basis. This model is especially suited to green industrial zones and office buildings.

3️⃣ Virtual Power Plant (VPP)

VPP integrates small-scale sources (e.g., household solar, batteries, EVs) into a single virtual unit that participates in the electricity market. According to the ASEAN Centre for Energy, Singapore is piloting a VPP combining storage batteries, solar power, and microgrids (ACE, 2024).

*Figure 2: A virtual power plant model (VPP) combining solar energy, battery storage, and smart control systems in Singapore – a leading example of energy transition in Southeast Asia.*

🚧 Challenges in Transforming Electricity Business Models

Despite its promise, Southeast Asia faces several challenges in adopting new electricity business models:

⚠️ Lack of Flexible Regulatory Frameworks:

Many countries still rely on fixed electricity pricing, which discourages investment and innovation. For instance, Vietnam has yet to introduce a clear replacement after phasing out the FIT (feed-in tariff) policy for solar.

⚠️ Outdated Technical Infrastructure:

Transmission grids in countries like Indonesia and Myanmar are not designed for distributed generation. Their isolated and outdated networks hinder the rollout of smart grids and VPPs.

⚠️ Shortage of Talent and Technology:

New models require IoT, AI, and big data analytics for real-time coordination – capabilities that traditional power companies often lack.

💼 Role of Private Sector and Startups

A wave of energy startups is emerging in Thailand, Vietnam, and Singapore. For example, Thailand’s Builk has developed an energy tracking platform for businesses, while Vietnam’s SolarBK provides AI-integrated rooftop solar management solutions.

Public-private partnerships (PPP) are gaining traction to support storage infrastructure and smart grid deployment. Institutions like ADB and the World Bank are financing pilot projects connecting small-scale renewable energy and storage in the Philippines and Laos.

*Figure 3: A renewable energy startup deploying rooftop solar monitoring and optimization solutions – exemplifying the prosumer model and digital transformation of Vietnam’s power sector.*

📈 Outlook for Southeast Asia’s Power Sector

By 2030, more than 25% of Southeast Asia’s electricity supply is projected to come from renewable sources, with solar and wind taking the lead. To reach this target, countries must expand legal frameworks, support SMEs, and accelerate digitalization.

According to McKinsey, early adopters of digital operations and innovative business models can cut operating costs by up to 25% compared to traditional utilities – boosting profits and speeding up the green transition.

*Figure 4: Projected growth in renewable energy supply across Southeast Asia by 2030 – with solar and wind dominating the region’s future energy mix.*

🧭 Conclusion: The Inevitable Path to a Sustainable Energy Future

The energy transition in Southeast Asia is not just a technological or environmental shift – it’s an opportunity to restructure the electricity sector. New models like VPP, EaaS, and peer-to-peer markets enhance efficiency and empower consumers. However, seizing this opportunity requires swift regulatory reform and investment in smart infrastructure.

(Vn-Industry)

Source: Compilation

Homepage: https://vn-industry.com