Stronger political will in recent years has shifted the momentum behind Asean’s long-envisioned power grid. There is now a need for the region to accelerate the pace to build a unified grid as it is the most realistic way for member states in the bloc to meet their national climate goals while ensuring energy affordability, said energy leaders at a recent regional summit in Bangkok.
“Having a stable, fully operational interconnected grid gives Asean the most pragmatic path to achieve its [net zero] goals,” said Gagan Porwal, global head of operations and software, consulting services, GE Vernova, a global technology provider that has been closely studying how grid interconnections in Southeast Asia could boost the regional take-up of renewable energy sources, especially solar and wind.
Speaking on a fireside chat at Enlit Asia 2025, a gathering of energy players in Bangkok, Porwal, pointed to the region’s “asymmetry” in their access to energy resources – with some countries rich in renewables while others still reliant on fossil fuels – as a key reason to link national grids.
“If I am not connected to anyone else, I always need to build power for myself,” he said, adding that the pressure will force countries to make “low-cost decisions that may not be climate-friendly”, particularly in the face of volatile global energy prices.
At the same time, these countries will have to consider their national commitments to reduce their greenhouse gas emissions, Porwal added. Having a regional grid “opens up the possibility of renewables taking a larger share of the energy mix to meet the demands for power.”
At the summit, industry players acknowledged that the Asean Power Grid (APG), a decades-old vision to enable cross-border electricity trade, is gaining renewed attention. In June, senior officials at an Asean meeting on energy finalised an enhanced memorandum of understanding (MOU) to be signed during the upcoming Asean Energy Ministers’ Meeting in Kuala Lumpur in October. Initiatives have also been launched to mobilise funding for cross-border transmission and integration projects.
Porwal noted that out of the 18 planned interconnections for the APG, nine are already operational, which means electricity is being exchanged. The rest are in the planning or construction phase and more needs to be done to deliver the grid’s full capacity.
“The APG started as a vision, but it is now a major initiative. There is also growing clarity [among the member states] that it needs to be prioritised,” said Porwal.
On the same panel, Nadhilah Shani, head of power generation and interconnection at the Asean Centre for Energy (ACE), stressed that demand for power is rising fast across the region, and fossil fuels still dominate the energy mix, with gas still playing a key role in meeting energy needs. “We have an abundance of renewable resources, but a big mismatch between where they are available and where they are needed,” she said.
To bridge that gap urgently, Shani shared that the centre, which serves as an energy think tank to the Asean regional bloc, is advocating for the setting up of an interim regional market exchange that uses existing mechanisms to trade power on top of current bilateral agreements.
Such an initiative would recognise that the different Asean member states are at different stages of liberalising their electricity markets and “won’t frighten everyone into catching up” while political leaders and officials work to harmonise the regulations. It would also ensure that the stronger political will behind the APG translates into “clear market signals” for key stakeholders, such as investors, to act.
ACE first floated the idea in March last year, and suggested that this would allow more flexible power trading, smooth out supply and demand mismatches and make better use of physical interconnections already in place.
Across Asean, countries like Singapore, the Philippines and Vietnam are well on their way towards, or have already achieved, fully liberalised electricity markets, allowing for competition and private sector participation across the value chain. On the other hand, Thailand, Indonesia and Malaysia operate under a single-buyer model, where a central utility purchases electricity from generators and sells it to consumers. The model allows for some level of competition but is more controlled.
There are also several other Asean countries still largely operating under a vertically integrated market structure, where a single state-owned utility handles generation, transmission, and distribution, often with limited private sector involvement.
Instead of a one-size-fits-all approach, each market should develop appropriate power market structures to suit their needs.
Gagan Porwal, global head of operations and software, consulting services, GE Vernova
Overcoming hurdles to rules harmonisation
Policy harmonisation needs to become the central focus if the Asean Power Grid is to succeed, Porwal argued. “Instead of a one-size-fits-all approach, each market should develop appropriate power market structures to suit their needs,” he said.
Expressing support for the idea of a short-term regional power exchange, Porwal said that a practical hurdle is the patchwork of regulatory agencies across Asean, with many having only advisory mandates. “Their focus – for the right reasons so far – has been in an advisory capacity to propose, assess, review and enable policy decisions,” he said, suggesting that the agencies must evolve to become “operator-of-operators” and help ensure that grid codes and tariffs are uniformly applied across the region.
Countries also need to come to a consensus on how cross-border transmission costs are shared.
Porwal said the biggest challenge for Asean’s energy transition isn’t technology. Technology is not the bottleneck,” he noted. “What we need is strong, sustained momentum on grid infrastructure and the right partners to help build it.”
He emphasised that the region has reached a critical stage where integrated system planning is essential. But for this to be effective, decisions must be made early and clear signals sent to the supply chain, especially to investors.
An integrated regional power industry, supported by harmonised rules on grid access, operations and tariffs, would give investors the certainty they need. “It’s not easy to agree on the standards, but it’s the only way to catalyse the financing we need,” he added.
Southeast Asia’s energy demand is expected to triple by 2050, from 2020 levels. GE Vernova believes that Asean is on track for significant growth in its installed renewables capacity for the next 15 years. According to ACE, Asean’s renewables capacity is expected to reach around 37 per cent from sources such as solar and wind, alongside 14 per cent from hydropower. Gas is still expected to make up about 34 per cent of the energy mix, reflecting the region’s need for “transitional fuels” as it scales up clean energy, said Porwal.
He added that if Asean can continue to move decisively on regional integration and market reforms, it can become a model for others. “We will be able to showcase to the world what a good balance of energy looks like that enables us to walk towards our climate targets, while ensuring energy is affordable at the same time.”
