Geopolitical crises and the resulting shocks to fossil fuel supply and prices often dominate discussions about energy security. However, the resilience of domestic energy systems is equally critical. This month, our research examines the factors impacting energy resilience across Southeast Asia, including unrealistic liquefied natural gas (LNG) demand expectations, costly fossil fuel subsidies and domestic policies, and grid reliability challenges.
Key findings from our research this month include:
After more than a decade of delays, Australia-based Energy World Corporation’s (EWC) LNG-to-power project in the Philippines appears to have come to an end following the sale of its gas turbines to a United States (US) company. Although the EWC power project lacked a robust commercial value proposition, many forecasting agencies expected it to come online for years. This highlights how investments with weak commercial fundamentals can inflate LNG demand expectations in emerging markets.
The ongoing Middle East conflict has exposed Pakistan’s over-reliance on long-term contracting for LNG procurement. Since the conflict began, Qatar, a major LNG supplier, has shipped only three cargoes to Pakistan. Pakistan is managing LNG shortages through austerity measures, scheduled load shedding, and alternative energy sources, including rooftop solar. However, summer peak demand is expected to exceed 28,000 megawatts (MW), potentially exacerbating fuel shortages in the power sector and necessitating spot market procurement, which could increase LNG-based power generation costs by two- to threefold.
Indonesia’s diverse energy mix makes it resilient to oil and gas shocks, but coal remains a significant component at 41.3%. From 2020 to 2025, coal expenses accounted for 14–15% of the operating costs of the state-owned electricity utility, PT Perusahaan Listrik Negara (PLN). While the Domestic Price Obligation (DPO) and Domestic Market Obligation (DMO) policies help maintain affordable electricity prices, they also impose significant implicit costs, including an estimated USD1.5 billion in forgone royalty revenue in 2025 and a potential USD8.6 billion loss for the coal mining industry.
Recent power outages in Sumatra and the Java-Madura-Bali grid have exposed the fragility of Indonesia’s electricity system, underscoring the urgent need for improvement across the power network and highlighting the critical role that renewable energy can play. Rooftop solar paired with battery energy storage systems (BESS) offers a viable energy resilience solution for households, industries, and local governments, providing localized generation that is insulated from fuel supply disruptions, global price volatility, and grid failures.
On 28 July, we will be hosting an in-person IEEFA Energy Finance Forum 2026: Financing Indonesia’s Energy Transition, in Jakarta. Senior representatives from the Government of Indonesia, state-owned enterprises, multilateral institutions, the private and financial sectors, and civil society will gather to advance policy dialogue on Indonesia’s energy transition financing. Please register here to request an invitation.
Warm regards,
Paige Nguyen
Director, Asia Institute for Energy Economics and Financial Analysis
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