Renewables momentum will be offset by record demand for oil in 2024

Despite growing momentum in Asia for renewable energy and continuing geopolitical and economic headwinds, demand for oil will hit record highs, challenging emissions targets.

Although geopolitical tensions continue to disrupt global energy supply chains, and economic growth has slowed in China, demand for oil is expected to reach record levels in 2024.

There is continued strong demand for oil from the Middle East and other Asian countries, which will set back global carbon reduction targets.

The current high oil price will also continue to drive investment in oil and gas production, as seen with the major uptick in investment for floating production storage and offloading (FPSO) installations. New FPSO projects are planned in several countries around the world, including Guyana, Suriname, Mexico, Angola, Namibia, Vietnam and Malaysia.

However, momentum in renewables is set to continue, as countries seek to safeguard their energy security. Countries across Southeast Asia are rapidly scaling up investment in renewable power, with the governments of the Philippines and Indonesia, for example, relaxing foreign ownership rules to attract international investment and expertise for renewable energy projects.

But amidst this growing appetite for renewable and clean energy sources, there remain some considerable challenges across the continent. For example, supply chain disruptions, rising financing costs and low tariffs offered for energy production, are creating a difficult landscape for the development of offshore wind in many countries. And despite ambitious plans for the production of clean hydrogen, not much progress has been made in Asia towards building the necessary infrastructure.