Overcoming fossil lock-in is pivotal for Asia to buffer against energy shocks

This report by Ember analyzes the vulnerability of Asian economies to energy supply and price shocks resulting from conflict in the Middle East, specifically focusing on the risks of fossil fuel lock-in. It argues that reliance on imported oil and LNG exposes the region to economic instability, inflation, and geopolitical fragmentation, and advocates for an accelerated transition to renewable energy and regional grid integration to ensure long-term energy security.

• Asian economies face significant vulnerability to energy shocks due to high reliance on Middle Eastern oil and LNG, with 84% of crude oil and 83% of LNG passing through the Strait of Hormuz destined for Asia in 2024. Specific dependencies include Japan importing over 90% of its crude oil and South Korea sourcing around 70% from the Middle East.
• Reliance on imported gas for electricity generation creates extreme cost volatility. In Singapore, where gas accounted for 95% of electricity generation in 2024, a spike in gas prices to US$25.39/MMBtu could raise the cost of gas-generated electricity to approximately US$260.8/MWh, more than double the February 2026 level.
• Renewable energy provides a more cost-effective and stable alternative to fossil fuels. The levelized cost of electricity (LCOE) for solar plus batteries is approximately US$40/MWh, which is significantly lower than the LCOE for coal (US$76/MWh at US$134/tonne) and gas (US$104/MWh).
• Short-term pivots to coal to manage energy crises are economically and environmentally risky. In Thailand, increasing the coal capacity factor to 70% would result in an additional generation cost of US$263 million and increase annual emissions by approximately 3.2 million tonnes of CO2.
• Energy shocks disproportionately affect emerging and developing Asian economies, which may struggle to compete for limited supplies against wealthier nations. For example, a surge in oil prices above US$150/barrel could double Indonesia's current oil spending, increasing fiscal deficits.
• China is shifting its strategy toward a "new-type power system" to increase renewable shares and reduce fossil fuel reliance. The State Grid Corporation of China plans to invest approximately RMB 4 trillion (US$550 billion) between 2026 and 2030 to enhance transmission networks and energy storage.

APA

Black, R., Lolla, A., Das, T., Zhang, S., Fulghum, N., Copsey, L., Setiawan, D., Bruce-Lockhart, C., Thiru, J. Z., Demoral, A., Pham, L., Rahmani, A. A., & Terry, E. (2026). Overcoming fossil lock-in is pivotal for Asia to buffer against energy shocks. Ember. https://ember-energy.org/latest-insights/overcoming-fossil-lock-in-is-pivotal-for-asia-to-buffer-against-energy-shocks

Chicago

Black, Richard, Aditya Lolla, Tito Das, Shiyao Zhang, Nicolas Fulghum, Libby Copsey, Dody Setiawan, et al. Overcoming fossil lock-in is pivotal for Asia to buffer against energy shocks. Ember, 2026. https://ember-energy.org/latest-insights/overcoming-fossil-lock-in-is-pivotal-for-asia-to-buffer-against-energy-shocks.

Wikipedia

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BibTeX

@techreport{black2026overcoming, author = {Black, Richard and Lolla, Aditya and Das, Tito and Zhang, Shiyao and Fulghum, Nicolas and Copsey, Libby and Setiawan, Dody and Bruce-Lockhart, Chelsea and Thiru, Jivan Zhen and Demoral, Alnie and Pham, Lam and Rahmani, Ardhi Arsala and Terry, Eli}, title = {{Overcoming fossil lock-in is pivotal for Asia to buffer against energy shocks}}, institution = {Ember}, year = {2026}, month = mar, url = {https://ember-energy.org/latest-insights/overcoming-fossil-lock-in-is-pivotal-for-asia-to-buffer-against-energy-shocks}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }