Modern, flexible grids are essential to unlock ASEAN’s solar and wind potential, create new jobs and new market opportunities.

Rising solar and wind generation, as well energy demand from data centres and transport electrification is expected to take place in the region in the near future. This calls for a greater action on grids and interconnections to accelerate renewables build and bring various economic benefits such as jobs. 

Most ASEAN countries have historically been fossil fuel dependent, but the energy landscape is rapidly changing. By 2030, solar and wind generation are projected to account for around 23–25% of the power mix, up from just 4% today. To realise this transition, grid infrastructure must evolve – becoming more modern, flexible and regionally integrated, and integrate six pillars that a good future grid development plan should include. Stronger grids can be achieved through comprehensive grid planning that include modernisation, expansion, adoption of flexibility options, regional integration, market reforms, and mobilisation of finance. 

Some ASEAN countries have started to embed these priorities in their respective national energy policy. Yet, a stronger push for action from policymakers could help in securing finance and building investor confidence in grid infrastructure. To date, only Cambodia, Malaysia and Singapore have signed the Global Energy Storage and Grids Pledge, which aims to deploy 1,500 GW of energy storage and 25 million kilometres of grid infrastructure globally by 2030. Grid development plans across ASEAN vary according to geographical landscape and require more data availability to assess whether their scale aligns with member governments’ climate and clean energy goals.

ASEAN countries vary widely in their clean energy potential, with some having abundant capacity for solar and/or wind and others blessed with hydro and geothermal resources. For hydro-rich locations such as Borneo island and countries along the Mekong rivers, increased variability in hydro generation due to seasonal variations necessitates the diversification of renewable energy sources. Regional grid interconnection holds the key to using these resources in combination, boosting renewables use and economic growth. 

Expediting the pace of connectivity could increase GDP across ASEAN by 0.8% to 4.6% and unlock a bigger market. To date, the development of multilateral power trade in ASEAN has been limited to several projects: the Lao PDR – Thailand – Malaysia – Singapore Power Integration Project (LTMS-PIP), and early initiation of Brunei Darussalam, Indonesia, Malaysia and the Philippines Power Integration Project (BIMP-PIP). To encourage further collaborations, proposed reforms include better coordinated planning for regional power trade arrangements.