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

The document examines how reliance on imported oil and liquefied natural gas (LNG) exposes Asian economies to price shocks and supply disruptions, particularly those stemming from conflicts in the Middle East. It analyzes the economic impacts on countries like Singapore, Thailand, and Japan, highlighting how fuel price volatility drives inflation and weakens currencies. The report argues that returning to coal as a short-term fallback is economically and environmentally risky compared to renewables. It recommends investing in regional connected grids and clean technology supply chains to build long-term resilience and energy security.

• Asia's energy security is highly vulnerable to Middle East disruptions, as 84% of crude oil and 83% of liquefied natural gas (LNG) passing through the Strait of Hormuz were destined for Asia in 2024.
• Import dependence on fossil fuels creates significant economic risks; for example, a spike in gas prices could double Singapore's cost of gas-generated electricity to approximately US$260.8/MWh based on April 2026 shipment forecasts.
• Renewable energy is more cost-effective than fossil fuel alternatives; solar plus batteries have a levelized cost of electricity (LCOE) of about US$40/MWh, which is significantly lower than the LCOE for coal (US$76/MWh) and gas (US$104/MWh) under recent price conditions.
• Short-term pivots to coal to manage energy crises are costly and unsustainable; 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.
• China is shifting its strategy toward a "new-type power system" to enhance energy security, with the State Grid Corporation of China planning to invest approximately RMB 4 trillion (US$550 billion) between 2026 and 2030 to improve transmission and storage.
• Developing and emerging Asian economies face higher vulnerability to energy shocks due to limited fiscal space for subsidies; for instance, if oil prices rise above US$150/barrel, Indonesia's oil spending could effectively double relative to its 2026 budget assumption of US$70/barrel.

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

{{cite report |last1=Black |first1=Richard |last2=Lolla |first2=Aditya |last3=Das |first3=Tito |last4=Zhang |first4=Shiyao |last5=Fulghum |first5=Nicolas |last6=Copsey |first6=Libby |last7=Setiawan |first7=Dody |last8=Bruce-Lockhart |first8=Chelsea |last9=Thiru |first9=Jivan Zhen |display-authors=etal |title=Overcoming fossil lock-in is pivotal for Asia to buffer against energy shocks |publisher=Ember |date=23 March 2026 |url=https://ember-energy.org/latest-insights/overcoming-fossil-lock-in-is-pivotal-for-asia-to-buffer-against-energy-shocks |access-date=17 August 2026 |via=Climate Insights Directory}}

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} }