South-east Asia is growing rapidly - from populations and incomes, to its colourful, bustling cities.
But its economic growth spurt has come with a voracious appetite for energy, and a cleaner energy diet will be needed if future growth is to be sustainable.
The region's energy needs are growing twice as fast as the global average, says the International Energy Agency. Unfortunately, much of those needs are currently met by burning fossil fuels - primarily oil, natural gas, and coal, the "dirtiest" form of fossil fuel - which release large amounts of carbon dioxide, contributing to global warming.
With the imminent threat of more intense typhoons, floods, and rising sea levels associated with global warming, the need for concerted action against climate change is clear, and urgent.
South-east Asia's long coastlines and low-lying regions make it one of the world's most climate-vulnerable regions.
Referring to the switch away from consuming and producing energy from fossil fuels, to renewable sources such as wind, water or the sun, UOB chief sustainability officer Eric Lim says: "Fundamentally, energy transition is central to climate action."
What is Asean doing?
Asean has an ambitious target of greening its energy mix such that 23 per cent will be renewable by 2025.
But if it continues on its current path, the region will likely miss this "aspirational" goal by 5 per cent, according to the Asean Centre for Energy (ACE).
There is strong impetus for policymakers to act, given how the global costs of generating solar and wind energy have fallen dramatically.
The International Renewable Energy Agency's Global Renewables Outlook report believes that with continued cost reductions, South-east Asia could meet 41 per cent of all its energy needs from renewable sources by 2030, and in doing so, even create 6.7 million new green jobs by 2050.
However, renewable energy prices across the Asean region have not fallen by as much, ACE notes in its Regional Energy Trends Report 2020.
The cost of solar and wind installations in the region can now compete with fossil fuels but remain above global averages, due to the smaller economies of scale and levels of technology and expertise.
Energy research and consultancy group Wood Mackenzie senior analyst Rishab Shrestha says the stage is set for rapid growth of subsidy-free renewables in Asia Pacific.
For example, the cost of power from renewables is expected to fall below that of coal for Thailand and Vietnam as soon as this year. This is because economic viability, combined with political will, has meant that these countries have channelled significant public funds into tapping on the ample sunshine they receive with large utility-scale solar farms and rooftop solar installations.
Vietnam now generates close to half the total solar capacity across South-east Asia.
In Singapore, the Government plans to increase the total capacity of solar energy from 350 megawatt-peak (MWp) in 2020 to 2 gigawatt-peak (GWp) by 2030 - enough to power around 350,000 households - and 5 GWp by 2050.
But Mr Shrestha still sounds a word of caution saying: "Despite the low cost of renewables, government policy is still critical in the future to attract investors, manage grid reliability and transmission upgrades, and encourage battery storage to manage the intermittency of renewables."
What role do grids play?
Switching away from coal-fired power plants to set up solar panels and wind turbines is the most visible part of the energy transition, but it is only part of the full process of greening the grid.
Solar, wind, hydropower and other renewable energy sources must be connected to the grid - the backbone of the energy system.
As these were traditionally designed to transport predictable energy flows in one direction - from large power plants to end-users like factories and homes - South-east Asia's national grids do need modernising.
More "targeted investments" are needed to integrate solar and wind energy - subject as they are to the vagaries of weather - into national grids without compromising the stability and reliability of power supply, ACE said in its sixth Asean Energy Outlook report.
These would include investing in grid improvements via digitalisation, demand-side management technologies and energy storage systems. A more flexible grid is also one that allows for energy to flow in multiple directions - from generators to users and from end-users back into the grid.
Acknowledging the importance of improving grids, UOB's Mr Lim says that countries that are driving renewable energy adoption, Singapore included, have made considerable investments into smart grid research and demonstration projects to integrate renewables into their energy systems.
Singapore power grid operator SP group, for instance, is trialling technology that transfers energy from the batteries of parked electric vehicles back to the grid - one means of smoothing out the intermittency in the supply of solar power.
Saving the environment, helping the underprivileged
The bright lights of South-east Asia's bustling cities can overshadow the fact that 29 million people across the region - mostly in rural areas - still have no access to electricity. Here, renewable energy presents an opportunity to extend access sustainably, via micro-grids.
Micro-grids running on renewable sources such as localised solar farms in remote communities are a means of providing stable electricity - particularly for Indonesia's and the Philippines' thousands of remote islands.
And these efforts may pay off economically too. In a report in January this year, the International Finance Corporation said: "The distributed generation of renewable energy and storage has emerged as a solution to deliver energy to locations with weak or non-existent electricity grids, and stimulate local economies."
Financing the switch to renewables
Rising environmental consciousness among banks has been a game-changer, as financing moves away from coal to renewable energy projects.
In April this year, a report by US-based non-governmental organisation Global Energy Monitor said: "Lower power demand and slowed coal plant development from the Covid-19 pandemic, coupled with tightened financing for coal plants and decreasing costs for solar and wind power, are closing the door on coal in the regions."
In 2019, when all the Singapore banks announced that they will no longer finance new coal-fired power plants, they were the first in South-east Asia to do so.
More from the region have since shunned opportunities to finance dirty energy. The Asian Development Bank said in May that it would cease funding new coal-fired power stations, coal mining, and oil and natural gas production activities.
Several large coal plants are still being built in Vietnam, Indonesia and the Philippines, but a drying up of funding is no doubt shaping public renewable energy policies too.
It was in 2019 too, that UOB set a target of doubling its renewable energy portfolio by 2023, from 2018's levels.
The bank hit this target in 2020 - three years earlier - and renewable energy now forms 17 per cent of its power generation portfolio.
Speaking of the bank's approach in South-east Asia, Mr Lim says it works with large national anchors that have the will and ability to implement diversification strategies and plans.
He adds that these anchors include state-owned or government-supported energy companies that would be able to diversify their energy business and contribute to the countries' shift to renewable energy.
The bank also aims to make sustainable finance more accessible to the region's companies, especially small and medium-sized enterprises.
"For example, companies that can demonstrate how their activities promote a better quality of life for residents through the use of renewable energy and energy efficiency can apply for financing under the UOB Smart City Sustainable Finance Framework," says Mr Lim.
"Through the provision of sustainable financing, we help businesses capture the growing opportunities related to sustainable development and in turn drive the region's transition towards a sustainable and climate-resilient economy."
This is the sixth of a 15-part series in collaboration with