Replacing planned gas-fired power expansion in ASEAN with solar energy could reduce system costs by as much as USD 67 billion, according to a new analysis by energy think tank Ember, amid ongoing disruption in global LNG markets linked to tensions in the Gulf.

The study, Overcoming fossil lock-in is pivotal for Asia to buffer against energy shocks, was released on March 23 and comes as the closure of the Strait of Hormuz and a halt in Qatari LNG production heighten volatility in Asian energy markets, exposing what Ember describes as structural risks in fossil-fuel-dependent power systems.

Under ASEAN’s energy transition scenario, gas capacity is projected to nearly double from 106 gigawatts (GW) to almost 200 GW by 2030. 

Ember estimates that operating the expanded gas fleet at current LNG price levels would cost about USD 71 billion annually, rising to as much as USD 109 billion under future price projections. In contrast, generating equivalent electricity from solar would cost around USD 42 billion per year.

The findings are relevant for ASEAN economies, including the Philippines, where LNG import capacity is being developed alongside efforts to ensure mid-merit and baseload power security in an increasingly volatile global gas market.

Countries with high gas dependence are expected to face the most immediate pressure. In Singapore, where gas accounts for about 95% of electricity generation, Ember estimates gas-fired generation costs could rise to approximately USD 260.8 per megawatt-hour (MWh) under current LNG price trajectories, roughly double late-February 2026 levels.

Ember said the broader macroeconomic exposure extends beyond the power sector, with higher fossil fuel import costs potentially weakening currencies, raising inflation, and dampening industrial output across Asia. The report references previous energy price shocks during the Russia–Ukraine conflict, when inflation in Singapore and Thailand peaked at 8.5% and 6.1%, respectively, in 2023.

“Current and past crises have proven that fossil import dependence is risking energy security. While energy saving can be an initial short-term solution, the pivot to homegrown renewables can provide more options to buffer future energy shocks,” said Dr Dinita Setyawati, Senior Energy Analyst – Asia at Ember.

The report also warns against a short-term shift back to coal. 

Coal prices have risen about 15% to roughly USD 134 per tonne, with Ember estimating the levelised cost of coal-fired electricity at around USD 76/MWh—still higher than solar combined with battery storage at about USD 40/MWh. It notes that Thailand has ordered coal plants to run at full capacity, which could add an estimated 3.2 million tonnes of CO2 emissions annually.

“Oil and gas are far more than just fuels. Breaking that dependence is not just an energy switch – it is a full economic transformation. Perhaps it is time for Asia to rethink its fossil-intensive growth pathway,” said Dr Muyi Yang, Senior Energy Analyst – Asia at Ember.

The analysis further highlights exposure in import-dependent economies such as Japan, where more than 90% of crude oil imports come from the Middle East, and oil prices have already reached around USD 100 per barrel, with potential upside toward USD 110 per barrel if conditions persist.

Ember also points to accelerating clean energy investment signals, including China’s State Grid Corporation plan to invest about RMB 4 trillion (around USD 550 billion) in transmission and storage infrastructure between 2026 and 2030.

ASEAN economic ministers have also reiterated the need to strengthen regional energy security, accelerate renewables, and deepen cooperation on the ASEAN Power Grid.

With ASEAN weighing massive gas expansion while renewables show significant cost advantages in this analysis, should regional energy planning accelerate a shift away from LNG dependence, or is gas still a necessary transition fuel in the current security landscape?

Follow Power Philippines on Facebook and LinkedIn or join our Viber community for more updates.