Aaron Daniels on Building Renewables from Inside Southeast Asia’s Transition

The offtake comes last, the capital stays away, and the grid was never built for this. If climate policy can't change things, data centers might. 

Southeast Asia’s energy transition spent a decade moving at a crawl. Now, momentum is growing, fast.

For most of the last decade the region built cautiously, liberalised reluctantly, and upgraded its grid infrastructure at a pace that consistently lagged behind its own targets. 

Vietnam built solar aggressively in 2019 and spent years managing the grid instability that followed. The same thing happened with wind in 2021. The private sector could build. The infrastructure to absorb what it built was much slower to follow.

Aaron Daniels has operated within that complexity since 2011. Currently CEO of Kairos Renewables, he has spent over 15 years building and developing wind and solar projects across a region that was, for most of the time, moving too slowly for its own good. 

That has finally changed. “The market hasn’t moved in the same direction at the same time until now,” he says.

Operating from Thailand’s capital, Daniels has observed that “Bangkok has no excess supply of energy.” Demand for electricity is rising exponentially all over the world, and the driving force behind that demand is data. Data centres are consuming electricity at a rate existing grids can’t handle. 

There is a pressing need for new capacity. “Even if there was an excess supply of energy, additional demand would raise rates” says Daniels.

Global electricity consumption for data centres is projected to double by 2030, reaching 945 TWh. LNG cannot fill a gap this size. Not fast enough. Not as cost-effectively as renewables can, and not cleanly enough for the companies now driving demand. 

The Grid

Renewables can be hard on the grid. “Before storage became cost effective, solar by itself wreaks hell on the grid,” Daniels explains. This is the part of the energy transition the political debate consistently glosses over. 

Grid operators have had to compensate, keeping conventional power running in the background to hold the system steady. “You need load balancing on the grid,” Daniels says. The easiest way to balance is with conventional power, “because you can dial it up or down, or turn it off and on.” 

Wind is less erratic than solar, as the inertia of the rotor allows turbines to smooth out the sharpest fluctuations on their own. Wind is also, Daniels argues, more socially responsible, as turbines can coexist with farmland. 

However, the growing scale of solar, wind, and affordable storage changed everything. 

The result is something the region has not had before. "We now have projects in the Philippines where we can provide firm power, the equivalent of a conventional power plant in terms of stability." For the first time, there is a credible answer to the grid problem.

The Problem

The structural flaw at the heart of Southeast Asia’s renewable energy market is deceptively simple. In mature markets, developers secure a power purchase agreement (PPA) first, then raise capital for development and construction. A guaranteed buyer at an agreed price means that development risk is managed from the outset. 

“The problem in Southeast Asia, fundamentally, is that the offtake agreement comes last,” Daniels says. “Managing development cost is like asking how long is a piece of string.”

This structural quirk forces developers to deploy capital speculatively, raises the cost of development capital, and drives away the institutional investors who could fund the transition at scale. Developers go in blind, spending years and their own capital on permits, land, and infrastructure, with little to no certainty on the commercial prospects of the project. 

Kairos absorbed that risk by self-funding. “The only reason we have a team is because we self-invested.” Almost nobody else has. That detail is the human cost of the structural flaw. 

"With the data centres coming into the market, governments are starting to liberalise," Daniels says. The offtake problem has not been solved, but the approach is shifting in a promising direction. 

The Juggernaut 

The data centre demand shock wasn’t missing from forecasts. That being said, the scale and speed of it was significantly underestimated. Driven by unprecedented demand for AI, cloud consumption, and digital services, they are what Daniels calls “a juggernaut coming through.” 

Arriving in the region with foreign direct investment, machine learning infrastructure, and an ever growing appetite for power, these new consumers are reshaping energy systems across Southeast Asia. 

The data centre boom is forcing governments to adapt. Thailand is piloting a 2,000 MW Direct PPA programme that started in early 2026, allowing data centres to buy renewable power directly from producers, sidestepping the utility systems that would distort consumer pricing. Vietnam and the Philippines are moving in the same direction.

The demand shock has done what a decade of climate policy could not. It has made liberalisation urgent. The transition that spent a decade waiting for governments to lead is being pulled forward by the electricity bills of the world’s largest technology companies. 

The Reality

Scale eventually did what policy couldn’t achieve. It drove costs down until renewables won on economics alone. Daniels is clear-eyed about the gap between political rhetoric and physical reality. 

The transition is happening not because governments led it, but despite how they talked about it. Politicians preach the fantasy of 100% renewable energy, he observes, “but their promises defy the laws of physics.” Daniels knows that renewable energy alone cannot power the grid. Renewables require a base load from conventional power to even operate.

What moved the needle was capital. Imperfect, politically motivated, sometimes misdirected capital, but capital nonetheless. "Whether the climate hysteria crowd was right or wrong," he says, "the amount of money allocated to support renewables did get us to the scale where renewables is now cost-competitive with conventional power." The subsidies did their job, the technology scaled, and the economics changed. 

Daniels develops projects around what he calls strong fundamentals. Good wind or solar resources. Sites near grid interconnection points. Terrain that is actually suitable for construction. 

This logic extends to how Kairos builds. Daniels has little patience for the subsidy-dependent model that characterised early renewable development in the West. “If you’re building your business around tax subsidies or handouts from the government, it’s not a sustainable business.” 

Eventually, the costs came down and the markets caught up. "While we've been developing our projects, the markets matured significantly, where we've had these cost reductions due to scaling."

The human fundamentals matter too. Roads built to service a wind farm become community infrastructure. The land between turbines remains farmable. The jobs created during construction and subsequent operation stay local. For Daniels, the transition is not just a green energy story. It is an infrastructure story, a jobs story, a community story. 

The Verdict

Daniels laughs as he tells me about a running joke from grad school, that green energy was called green because it cost more money. 

"Now we are actually cost competitive with conventional power," he says. "And that's with current pricing, without forecasting any kind of fuel volatility." The punchline no longer lands. 

From the inside, the situation is becoming clear. The Philippines is already moving. Multiple offtake paths, a liberalising regulatory environment, a government pragmatic enough to act before the crisis rather than after it. 

Then there is Thailand, which Daniels has watched from close range for fifteen years. "Thailand's a sleeping giant. I think it’s going to wake up,” he tells me.

The energy markets that looked too slow, too fragmented, and too risky, are being driven by forces nobody planned for. Daniels has been on the inside long enough to know the difference between a market that is about to move and one that merely looks like it might. Energy markets in Southeast Asia are changing, and fast. 

Sierra exists to connect this knowledge with the capital ready to do something about it.