India, SE Asia nations to help double Asia-Pacific's renewable capacity by 2030: IEA

The Asia-Pacific region, excluding China, is poised to double renewable capacity between now and 2030, adding nearly 670 GW, led by India and southeast Asian countries, a report by the International Energy Agency stated Oct. 7.

The overall regional forecast has been revised upwards by almost 10% from last year, reflecting improved policy and market conditions in India, Vietnam and Pakistan, the report said.

"Solar PV is expected to account for nearly three-quarters of total renewable capacity additions in the region, with utility-scale projects making up most of the growth," the IEA said in its report. "Asia Pacific is also projected to be the second largest hydropower market during the forecast period, largely because of accelerated commissioning of both conventional and pumped-storage hydropower (PSH) projects in India."

The report said India is projected to add close to 345 GW of renewable electricity capacity during this period, more than tripling its 2022 levels. This growth will be driven by record auction volumes, support schemes for rooftop solar projects and accelerated permitting processes for hydropower. In the next five years, India will become the world's second-largest national market for renewables.

India has set a target of adding 500 GW of renewable energy capacity by 2030, striving to meet emission targets amid growing demand.

India's electricity demand is forecast to grow 2.5%- 3.5% year over year in the current fiscal year (April-March) to 1,745-1,755 billion units, compared with 4.2% growth in the previous fiscal year, according to CRISIL, majority owned by S&P Global.

Auction-driven, utility-scale solar PV uptake accounts for nearly 60% of this increase in India, the report said.

"Although auction volumes fell in early 2025, a robust project pipeline supports continued deployment acceleration throughout the forecast period," the report said.

However, many state-owned electricity distribution companies face financial difficulties, which hinder the growth of renewable projects and if these companies can improve their financial health and enforce renewable portfolio obligations more rigorously, India could exceed its 2030 targets, the report said.

Investments in grid development and power system flexibility will be critical to accommodate the anticipated surge in renewable energy generation, it added.

Challenges persist

As India and China forge ahead in the renewable energy race, the broader Asia-Pacific region is also witnessing growth, with countries like Vietnam, Indonesia and the Philippines stepping up their efforts to enhance renewable energy capacity, the report said.

Vietnam is expected to add 40 GW of renewable capacity over the next five years, with the government's plan to significantly boost solar PV projects, the report said. Coal is Vietnam's largest power source, followed by hydro. Solar additions have been slow due to grid congestion and a lack of a clear pricing mechanism. To ease power shortages, Vietnam also sources power from China to the northern regions and from Laos to the central regions.

Indonesia, the world's largest thermal coal exporter, is also making strides in renewable energy, with projections indicating the addition of nearly 20 GW of capacity between 2025 and 2030, the IEA report said. While the archipelago has been aiming to retire coal and fossil-fuel power plants by 2040, it is facing issues expanding its renewable capacity as investments have been hard to come by.

Elsewhere, the Philippines is expected to add nearly 15 GW of capacity, with solar PV and onshore wind making up 90% of additions, the report said, representing a 5 GW increase over the previous forecast, owing to completed and ongoing competitive auctions.

"If challenges such as grid connection delays, high financing costs, land access restrictions and permitting bottlenecks are addressed, growth could be 90% higher, putting the country on track to exceed its targeted 35% renewable electricity share by 2030," the report said.

As the Asia-Pacific region moves to embrace renewable energy, it faces challenges such as grid congestion, financing hurdles and regulatory complexities. However, addressing these issues through government support, streamlined processes, and increased investments in infrastructure will be crucial for achieving the renewable energy goals, the report said.