Thailand and Vietnam lead Southeast Asia’s energy expansion with renewables and LNG

As Southeast Asia faces surging electricity demand and mounting pressure to decarbonise, two countries – Thailand and Vietnam – have emerged as dominant forces in the region’s energy expansion. Both countries are driving forward ambitious energy plans, with a clear focus on renewable energy and liquefied natural gas (LNG) playing key roles in reshaping their power landscapes.

The International Energy Agency (IEA) forecasts that Southeast Asia’s energy demand could grow by more than 60% by 2040. Much of this growth is being led by Thailand and Vietnam, which are investing heavily in energy diversification to help secure supply, enhance sustainability and reduce reliance on coal.

Thailand: LNG anchor with a growing green agenda

Thailand has long been seen as a regional leader in energy planning, owing to its robust infrastructure and relatively stable policy environment. As domestic natural gas reserves in the Gulf of Thailand decline and pipeline imports from Myanmar become less reliable due the de-facto civil war taking place, Thailand has increasingly turned to LNG imports to fill the gap.

The kingdom imported over 5mn tonnes of LNG in 2023, and that figure is expected to rise sharply as demand grows. With its Map Ta Phut terminal already operational and the Nong Fab LNG receiving terminal, Thailand is well on its way to becoming a key LNG hub in Southeast Asia.

LNG plays a vital role in Thailand’s updated Power Development Plan, providing a flexible baseload to support variable renewable sources. While gas is often criticised globally for its emissions, Thai policymakers increasingly see it as a pragmatic transitional fuel, helping the country reduce coal dependency while scaling up renewables.

On the renewables front too, Thailand has made strong progress, with solar power generation leading the charge. By 2037, renewables are projected to account for more than 30% of total generation capacity in the Kingdom, helped along by floating solar farms, such as the hybrid project at Sirindhorn Dam in Ubon Ratchathani that has garnered international attention for its innovation and scale.

Vietnam: renewable growth on a grand scale

While Thailand offers stability and strategic positioning, Vietnam has surged ahead with the most dramatic growth in renewable energy in the region. Between 2019 and 2021 the country added over 16 GW of solar power to the national grid, transforming it into one of Asia’s top solar producers almost overnight.

Generous feed-in tariffs (FiTs) and clear government incentives from Hanoi attracted a wave of private investment, leading to rapid deployment of rooftop and utility-scale solar projects. Wind energy has also gained a substantial degree of traction, particularly in southern and central Vietnam, where long coastlines offer strong and consistent wind speeds.

Vietnam’s renewable build-out is now being matched by growing interest in LNG. The government sees LNG as essential for grid stability, especially as older coal-fired plants are retired and the country works to move away from all things coal. Under its long-awaited Power Development Plan VIII, Vietnam is currently developing a number of large LNG-to-power projects, including the 3.2-GW Long An complex and the Hai Lang LNG terminal in Quang Tri province.

These projects aim to meet soaring demand from the 100mn population, whilst also helping to support the integration of intermittent renewable sources, particularly as Vietnam’s electricity consumption is projected to double by the early 2030s.

Balancing growth with transition

Despite their different starting points and market structures, however, both Thailand and Vietnam are confronting similar energy dilemmas faced by nations around Asia and the wider world: how to meet growing demand, reduce carbon emissions, and manage the intermittency of renewable sources as green infrastructure is developed.

To this end, for now LNG offers a relatively cleaner fossil fuel option, while solar and wind provide long-term sustainability.

Both governments are also exploring energy storage and cross-border grid interconnections with neighbouring Laos in particular to improve resilience and flexibility. In time, cooperation between the two countries – already evident in joint investment deals and technical exchanges in other sectors – may prove crucial to advancing regional energy security.

As the world eyes Southeast Asia’s energy future, Thailand and Vietnam stand out not just for the scale of their ambition, but for their ability to combine pragmatism with innovation. With renewables and LNG forming the backbone of their strategies, the two countries are not only powering their own economic growth, but also setting a model for the region.