Asia Pacific’s renewable energy capacity has more than doubled over the past decade, and national targets continue to rise. But this rapid buildout coincides with fast-growing energy-intensive sectors, such as data centres, industrial parks, and manufacturing hubs, which require reliable energy sources, according to a report from global energy think tank Ember.
The analysis titled Asean’s low-carbon future flows through smart grids warned that traditional grids, built around centralised fossil supply, were not designed for the current renewable growth, unlike smart grids which could integrate renewables more efficiently by enabling real-time monitoring.
Integrating smart grids has the potential to save the Asia Pacific economy US$2.3 billion by 2040 in annual GDP losses from unaddressed power outages, read the study.
Outage costs have weighed mostly on the Philippines, Indonesia and Myanmar. For instance, the Panay Island power interruption in the Philippines in last year was reported to cause daily losses of up to US$9 million.
However, Singapore, where power interruptions are rare, is vulnerable to even higher lost value, reflecting how even short outages can disrupt high-value sectors such as finance, information, communiations and technology, as well as advanced manufacturing, the research found.
Reliability gaps could cost Asean nearly US$2.3 billion in annual outage-related losses by 2040, through foregone investment, missed industrial output, and diminished competitiveness. Image: Ember
“Modernising grids is essential to secure growth, unlock renewable potential, and safeguard its place in the global economy. Delay, by contrast, risks billions in annual losses and erodes the resilience the region has worked hard to build,” the report said.
US$10.7 billion investment gap
Smart grids are critical to Asean’s clean energy transition, but they require substantial upfront investment, with countries needing between US$4 billion and US$10.7 billion, projected the study.
Singapore has developed a scheme called Grid 2.0 that leverages digital technologies, artificial intelligence, and data analytics for real-time grid management and operational stability.
The Energy Market Authority mandated grid digitalisation and together with SP Group, a state-owned utility, funded deployment directly through its green financing framework, recovering costs through regulated tariffs.
Grid 2.0 supports the Singapore clean energy goals by integrating solar energy, energy storage, electrification of transport, and potentially hydrogen power, as the city-state works toward net-zero emissions by 2050.
In the rest of Southeast Asia, most utilities lack SP Group’s financial strength, such that regional strategies will need to combine multilateral development bank-backed blended finance, green bond frameworks, public-private partnerships, and regulatory reforms that secure cost recovery while protecting consumers, noted the study.
However, national policies increasingly emphasise smart grid development across the region. Malaysia’s National Energy Transition Roadmap promotes smart meters, automation, cybersecurity, and reforms like third-party access to boost competition and renewable energy adoption. It will enable its grid to gradually accommodate a much larger share of renewable energy sources like solar, wind, bioenergy, and hydrogen, aiming for 70 per cent renewable power by 2050.
Thailand’s 20-year Smart Grid Master Plan has initiated pilot projects on renewable forecasting by using real-time and area-wide systems to predict how much electricity will be generated from renewable sources, especially solar farms operated by very small power producers.
The Philippines is preparing for large-scale renewable integration with its Smart and Green Grid Plan, while Indonesia has already deployed over 1.2 million smart meters. Vietnam’s evolving Smart Grid Roadmap aims to reduce waste from renewable energy that is generated but cannot be fed into the grid due to system limitations.
