Geopolitical Conflict and the Rising Cost of Energy Transition in Asia

Conflict in the Middle East is driving up the short term costs of the energy transition. Higher interest rates and supply chain disruptions are increasing the capital expenditure required for renewable energy projects, which rely heavily on upfront financing compared to fossil fuel operations. Despite these headwinds, the volatility of oil and gas is strengthening the case for localized renewable energy and the development of the Asean power grid. Diversifying energy sources and increasing grid interdependence are becoming critical for regional energy security and long term decarbonization.