Rising energy consumption and cost pressures continue to hinder the region’s sustainability efforts, the report said.

Singapore is setting an example across ASEAN as it takes the lead in embracing green energy following its moves to transform itself into a trading hub for LNGs, according to Capgemini’s 2018 World Energy Markets Observatory report.

Singapore is already being developed as a gas hub as the country has made important moves towards liberalising its gas market, providing the basis for more competitive price setting and greater transparency, Capgemini said.

Capgemini also highlighted how Singapore has been at the forefront to decrease energy consumption by moving to renewable sources of energy, allowing households and small businesses to choose their electricity provider, and opening up a vibrant market with competitive tariffs for residential electricity through the Open Electricity Market launched in April 2018 at Jurong district.

“A total of 108,000 residential accounts and 9,500 business accounts were able to exercise this choice of electricity provider,” Capgemini revealed. “The Open Electricity Market will be extended to the rest of Singapore from Q4 2018, allowing the remaining 1.3m accounts (mainly households) to choose their electricity provider and tariff plan.

The report noted how in October 2017, Singapore installed its first long-span wind turbine at Semakau Landfill which produces enough energy to power 45 four-room HDB units a year. The country also launched a blockchain marketplace platform that promotes renewable energy certificates (REC) trade.

Whilst ASEAN recently announced meeting its energy efficiency goals ahead of its 2020 target, energy demand in SEA has increased by more than 150% over the last 25 years.

“As Southeast Asia marches towards a digital future, there will be added pressures on utilities providers to modernise their systems,” Capgemini South East Asia & Hong Kong managing director Gaurav Modi said.

According to the report, whilst renewables have become a major focus for Southeast Asia, rising energy consumption and cost pressures hinder the region’s sustainability efforts.

“In 2017, SEA’s six major countries (Hong Kong, Malaysia, Philippines, Singapore, Taiwan and Vietnam) accounted for 3.7% of total emissions, contributing to the rise in greenhouse gas (GHG) emissions,” Capgemini noted. “According to Bloomberg New Energy Finance (BNEF), the modest renewable energy investment figures for the populous Southeast Asian economies with fast-growing electricity demand resulted mainly from policy uncertainty.”

By country, the report demonstrated how Hong Kong, Malaysia and Vietnam have each invested $965m (US$700m) into renewable energy, followed by Singapore and Taiwan with $827m (US$600m) each. Trailing behind was Philippines with a $413m ($300m) renewable energy investment.

Renewable energy sources are expected to account for the largest share of installed capacity at 40% in 2040, but coal is still likely to take the most prominent role in the generation mix, the report said.

Meanwhile, the natural gas demand in Southeast Asia is expected to increase at a rate of 2% per year over the period of 2016 to 2040, and the report highlighted how countries such as Vietnam and the Philippines are looking into LNG imports for the first time in 2019.

“Southeast Asia has the potential to leapfrog fossil fuel-based energy generation methods, but only if the renewable energy sector can attract investors,” Capgemini said.

Capgemini’s World Energy Markets Observatory report monitors the main indicators of the electricity and gas markets in Europe, North America, Australia and Southeast Asia and reports on the the developments and transformations within these sectors.