To understand the challenges and opportunities of Asia’s diverse energy transition, Pamela Largue gained exclusive insights from Frederic Carron, Vice President Middle East & Asia at Wärtsilä Energy.

Can you provide an overview of Asia’s decarbonisation journey of thermal assets?

Asia’s energy transition is at a pivotal moment. The region accounts for over 50% of global CO₂ emissions, and many economies still rely heavily on coal and other inflexible thermal assets.

Yet momentum is building. Countries like Vietnam, Indonesia, and the Philippines are stepping up and have set ambitious renewable energy targets and clear pathways toward net zero.

Of course, the transition isn’t straightforward. Asia’s energy systems are diverse, which means there is no single blueprint, but the direction is clear: we’re moving away from fossil-based baseload generation to renewable-led systems that are backed by flexible technologies.

That means phasing out traditional inflexible thermal assets, integrating more renewables, and deploying flexible technologies such as engine power plants and energy storage to maintain grid stability and reliability.

We also need to prepare for the future and make sure that the systems we build today are ready to run on sustainable fuels like hydrogen when they become commercially viable.

What are the two biggest challenges facing this process?

I’d say the first major challenge is the current inflexible power systems and legacy infrastructure. A lot of the power systems in Asia were built around large-scale, inflexible thermal plants such as coal and combined-cycle gas turbines (CCGTs).

These plants were designed for steady, baseload generation and due to their inflexibility, they struggle to integrate variable renewables. That results in renewable curtailment, grid instability, and higher overall system costs. Without sufficient balancing capacity, it’s really hard to integrate renewables effectively.

The second challenge is policy and market readiness. While more countries are setting renewable targets, the regulatory frameworks often lag behind. In many countries, market mechanisms that incentivise flexibility – such as capacity payments, ancillary services, and shorter dispatch intervals – are still in early development.

Learn more from Frederic Carron at Enlit Asia, 9-11 September in Bangkok, Thailand, as he shares his insights in a topical panel discussion: Navigating thermal transition – Balancing cost, opportunities and challenges in decarbonising power generation

Without these in place, it’s challenging to attract investments in balancing technologies such as engine power plants and battery energy storage. That slows down deployment and makes it harder to build resilient and flexible systems that are essential for a successful energy transition and while also ensuring power system reliability.

What opportunities are unique to the region?

Asia’s diversity presents several exciting opportunities for the energy transition. Take Southeast Asia, for example: its geography is well-suited for decentralised, hybrid power systems.

In Indonesia, with its thousands of islands, there is significant potential for decentralised hybrid solutions that combine renewables and flexible balancing engine power plants, delivering reliable and affordable power even in remote areas. Then there’s the momentum around hydrogen.

Countries like Japan, South Korea, and India are investing in hydrogen infrastructure. What’s promising is that technologies like Wärtsilä’s engine power plants are already future-proofed to run on sustainable fuels such as hydrogen, helping to decarbonise without worrying about these power generation assets becoming stranded.

We’re also seeing growing regional collaboration. Initiatives like the ASEAN Power Grid are helping countries to balance supply and demand across borders, optimising resources, and strengthening energy security. But countries shall not rely on that alone to ensure energy security, since it also has its own technical and geopolitical challenges

And let’s not forget the private sector. Major utilities and industrial players across Asia are committing to net zero, which is accelerating innovation and channelling investment into flexible, clean technologies.

Finally, Asia’s diverse energy needs are spurring innovation in modular, distributed, and hybrid solutions tailored to local conditions. With advanced power system modelling and a broad technology portfolio, Wärtsilä is helping to build resilient grids that can adapt to future challenges.

How important is gas as a transition/future fuel?

Gas is not just a bridge – it’s an enabler of Asia’s energy transition. It plays a critical role in moving toward more sustainable fuels, like hydrogen. Even relatively small amounts of fast-reacting, flexible gas engines can unlock significant renewable integration, enabling a rapid phase-out of coal while maintaining grid stability.

Wärtsilä’s flexible gas engines are a great example: they can ramp up and down quickly, which makes them ideal for providing balancing power when renewable generation dips. Equally important, these engines are fuel-flexible and future-proof. They can be converted to run on sustainable fuels like hydrogen as those become more commercially viable.

This means today’s investments in flexible gas are not just short-term solutions; they lay the foundation for a resilient, net-zero energy future.