Asia Pacific countries are set to expand their renewable energy capacities in 2026, maintaining the momentum of the energy transition despite headwinds from geopolitics and inflation, industry experts said on Jan. 2 according to an article by S&P Global.
Home to two of the world’s largest greenhouse gas emitters – China and India — the Asia-Pacific region is advancing renewable energy projects often backed by favorable policies and incentives.
“I’m not seeing anything which is affecting countries and their budgets in such a way that the energy transition would get slower,” Ajay Shankar, distinguished fellow at The Energy and Resources Institute or TERI, told Platts, part of S&P Global Energy.
“The commercial logic for the transition is so strong that it can grow without subsidies from the government.”
Shankar acknowledged rising costs for solar PV modules and project implementation, but emphasized that renewable power still holds a significant price advantage over conventional energy costs.
While geopolitical tensions have led to budget reallocations in Europe — particularly toward defense — they have had minimal impact on Asia’s energy transition, which remains largely driven by market forces backed by government subsidies, Shankar said.
“We expect to continue seeing market volatility and a challenging geopolitical environment in 2026,” Loh Chin Hua, CEO of Keppel, a prominent firm in Singapore advancing new technologies for renewable energy, said in a statement on Jan. 2.
“At the same time, inflation, which is here to stay, is expected to reinforce institutional demand for real assets with resilient, inflation-hedged cash flows.” Loh added that these trends favor asset managers with the discipline to originate, develop, and operate such assets.
Keppel is scheduled to launch Singapore’s first hydrogen-compatible power plant in the first half of 2026..
