ASEAN Power Grid: The Key to Lower Energy Transition Costs

By Romel S. Gurky Southeast Asia could significantly reduce the cost of decarbonizing its power sector and improve energy security by accelerating development of the ASEAN Power Grid, according to the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). The ASEAN Power Grid (APG) aims to connect all ASEAN member states into a single, integrated electricity network by 2045, enabling cross-border power trade and greater use of renewable energy. As electricity demand continues to rise across the region, governments are seeking ways to deliver affordable, reliable and cleaner power while meeting climate goals. ESCAP said regional power connectivity could cut Southeast Asia’s overall decarbonization costs by as much as US$800 billion, citing recent studies. Shared infrastructure would reduce the need for costly investments in domestic power generation and energy storage, a critical consideration in a region where access to financing remains uneven. Energy connectivity is increasingly seen as central to climate action. The International Energy Agency has estimated that global investment in power grids must double to meet climate targets. In Southeast Asia, linking national systems would also allow countries to balance variable renewable energy sources such as wind and solar over wider geographic areas. The APG concept dates back to the mid-1980s and has so far progressed through bilateral and sub-regional projects. Existing initiatives include the Lao PDR–Thailand–Malaysia–Singapore Power Integration Project, which supplies hydropower across borders, and the Brunei–Indonesia–Malaysia–Philippines Power Integration Project announced in 2023. Singapore has also signed agreements to import up to 7.3 gigawatts of clean electricity from neighbouring countries. “To encourage stakeholders to look beyond the techno-economic advantages of the APG, it’s essential to highlight the long-term sustainability and just transition benefits that a more integrated grid can offer,” said Matthew David Wittenstein, chief of ESCAP’s Energy Connectivity Section. Read also: AFD, ACE and UNOPS sign grant deals to advance ASEAN power grid ESCAP said it is working with regional partners to embed sustainability and equity considerations into power grid planning through initiatives such as its Green Power Corridor Framework and a forthcoming Green Power Corridor Playbook, which will provide guidance on policies, best practices and social and environmental impact assessment. Despite progress, challenges remain. Countries continue to prioritise national energy objectives differently, with varying emphasis on security, affordability or sustainability. Ensuring that the benefits of integration are shared equitably, particularly for smaller economies, will be critical, ESCAP said. Regional efforts are guided by the ASEAN Plan of Action for Energy Cooperation, whose next phase starting in 2025 is expected to place stronger emphasis on energy connectivity. ESCAP said closer alignment between national plans and regional roadmaps could help accelerate implementation. Beyond the energy sector, ESCAP said expanded transmission networks could support rural development, job creation and public health. Adding 30 gigawatts of solar and wind capacity could create more than 180,000 jobs, while cleaner power could help prevent thousands of pollution-related deaths each year. The ASEAN Power Grid, ESCAP said, represents a platform for deeper regional cooperation and inclusive growth as Southeast Asia works toward a just energy transition.