How the ASEAN Power Grid Could End Southeast Asia’s Fossil Fuel Dependency

Southeast Asian nations are facing a $160 billion energy import bill this year as regional supply chains struggle with the fallout of the war in the Middle East. With 60% of the region’s crude oil imports historically sourced from the Middle East, the disruption of shipments through the Strait of Hormuz has forced governments to adopt emergency measures, including mandatory energy-saving curbs and the revival of decommissioned coal plants, Climate Home News reported.

Developing the ASEAN Power Grid

To mitigate future vulnerability, member states of the Association of Southeast Asian Nations (ASEAN) are accelerating plans for a regional power grid designed to enable cross-border trading of electricity. The project, originally conceptualized in 1997, aims to connect national power networks through a series of underground and subsea interconnectors. This infrastructure would allow countries with a surplus of renewable energy—such as the Philippines with solar, Malaysia with hydropower, and Indonesia with geothermal—to export power to neighbors and high-demand centers like Singapore.

According to the International Energy Agency (IEA), the project requires an estimated $27 billion in investment to deliver cross-border connections by 2040. While nine of 18 priority interconnection projects were operational as of 2025, providing roughly 10 GW of capacity, an additional 13.7 GW remains in the planning stages.

Bridging the Investment Gap

In 2025, the Asian Development Bank and the World Bank launched a dedicated funding initiative to support the grid’s expansion. Despite this, experts warn that the transition remains hampered by complex regulatory and legal hurdles. Monalisa Dimalanta, former chair of the Philippine Energy Regulatory Commission, noted that while the enabling pieces are emerging, current timelines remain unclear and the 2045 vision does not provide an immediate solution to today’s energy emergency.

Singapore’s Critical Infrastructure Needs

Singapore faces the most immediate pressure to finalize these connections. As a land-constrained nation reliant on gas for over 90% of its electricity, the city-state has set a target to import 6 GW of low-carbon electricity by 2035, representing one-third of its total energy demand. Analysts at Ember warn that failing to deliver the planned interconnectors could force Singapore to install an additional 300 MW of gas-fired power capacity to support its growing AI and data center infrastructure.

Regional Energy Security Outlook

• What is the primary goal of the ASEAN Power Grid? The project aims to integrate renewable energy resources across Southeast Asia, allowing member states to trade surplus clean electricity and reduce their collective reliance on volatile fossil fuel imports.
• Why is the 2045 timeline under scrutiny? Government officials and energy experts, including the Philippines’ energy secretary Sharon Garin, have suggested that the 2045 completion date is too distant to address the urgent energy security risks caused by current geopolitical conflicts.
• What happens if the grid is not completed on time? According to analysis by Ember, delays could lock the region into decades of new gas infrastructure and cost billions in additional fuel expenses, while also failing to meet the rising electricity demands of the region’s industrial and digital sectors.

By 2030, the region aims to increase the share of renewable energy in its total installed power capacity from 34% to 45%.

More on this story: Philippines Plans 25-GW Renewable Energy Auctions to Hit 2030 Goal · Energy Cooperation and Joint Development in the South China Sea