Coal vs Renewables: ASEAN Energy Crisis

The 2026 Middle East crisis, triggered by conflict in Iran, caused a spike in oil and gas prices and led some Southeast Asian nations to switch from gas to coal for electricity. However, the report argues that coal is not insulated from geopolitical shocks and carries high hidden health and climate costs. Analysis shows that replacing planned gas expansion with solar and storage would save ASEAN USD 4 billion by 2030, whereas replacing it with coal would increase costs. Despite this, ASEAN coal demand is projected to rise by 25% by 2030, driven largely by Indonesia and Vietnam, though Indonesia has committed to phasing out fossil fuels within 10 to 15 years.

• The conflict in Iran starting in February 2026 caused a significant spike in energy prices, with the Asia gas benchmark (JKM LNG) rising nearly 70% to over USD 25 per mmBtu by early March. This crisis was exacerbated by the effective blockage of the Strait of Hormuz, through which 84% of oil and 83% of LNG shipped in 2024 were destined for Asian markets.
• To manage the energy crisis, several Southeast Asian countries implemented demand-side restrictions: the Philippines declared a national energy emergency and moved to a four-day work week, Laos reduced the school week to three days, and Myanmar introduced alternate driving days for fuel rationing.
• Switching from gas to coal as a response to price shocks increases coal prices, as seen in 2026 when Asia's coal benchmark (Newcastle coal) peaked at 19% above pre-war levels on March 9. A similar pattern occurred after the 2022 gas crisis, with Newcastle coal reaching a record USD 443 per tonne in September 2023.
• Solar energy is already more cost-competitive than coal in seven of ten ASEAN countries, including Singapore, the Philippines, Thailand, Cambodia, Vietnam, and Myanmar. In Indonesia, Brunei, and Malaysia, coal remains cheaper primarily due to subsidies and the exclusion of negative externalities like health and climate costs.
• Coal power causes severe public health issues in Southeast Asia; in 2021, PM2.5 pollution led to over 200,000 premature deaths in Indonesia, over 100,000 in Myanmar, and nearly 100,000 each in Vietnam and the Philippines. Total excess deaths per year from coal emissions in the region are estimated to reach 70,000 by 2030.
• ASEAN coal demand is projected to increase by 25% from 2025 levels to 644 million tonnes by 2030, primarily driven by Indonesia and Vietnam. Indonesia, the world's largest coal exporter, has however committed to phasing out fossil fuels within 10 to 15 years and increasing solar capacity from 1 GW to 100 GW.
• Replacing ASEAN's planned 45 GW gas expansion with solar and storage by 2030 would cost approximately USD 12 billion, saving USD 4 billion compared to gas (USD 16 billion). Conversely, replacing that capacity with coal would cost USD 19 billion, which is USD 3 billion more than gas.

APA

Kong, A. (2026). Coal vs Renewables: ASEAN Energy Crisis. Zero Carbon Analytics. https://zerocarbon-analytics.org/energy/coal-vs-renewables-asean-energy-crisis/

Chicago

Kong, Amy. Coal vs Renewables: ASEAN Energy Crisis. Zero Carbon Analytics, 2026. https://zerocarbon-analytics.org/energy/coal-vs-renewables-asean-energy-crisis/.

Wikipedia

{{cite report |last1=Kong |first1=Amy |title=Coal vs Renewables: ASEAN Energy Crisis |publisher=Zero Carbon Analytics |date=8 April 2026 |url=https://zerocarbon-analytics.org/energy/coal-vs-renewables-asean-energy-crisis/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kong2026coal, author = {Kong, Amy}, title = {{Coal vs Renewables: ASEAN Energy Crisis}}, institution = {Zero Carbon Analytics}, year = {2026}, month = apr, url = {https://zerocarbon-analytics.org/energy/coal-vs-renewables-asean-energy-crisis/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }