SEPTEMBER 30 — On the ridges of southern Laos, 133 turbines have begun to spin, signaling that Southeast Asia’s largest onshore wind farm—the Monsoon Wind Power Project—is finally operational.
At 600 megawatts, the project exports electricity across 71 kilometers of transmission lines into Vietnam under a 25-year agreement. At a cost of $950 million, and with investors ranging from Thailand’s Impact Electrons Siam to Japan’s Mitsubishi Corp. and China’s Power Construction, this facility is more than a showcase of renewable energy. It is a preview of the long-promised Asean Power Grid, a regional super-grid envisioned as early as the 1990s.
The Monsoon project demonstrates what is possible when private initiative, state utilities, and multilateral development banks align. The Asian Development Bank (ADB) provided a $692 million package of loans and guarantees, ensuring the project reached completion four months ahead of schedule.
Even more importantly, it showed that renewable energy, long dismissed by policymakers as a liability, can be converted into an asset—one that strengthens energy security while expanding Asean’s economic base.
From rhetoric to regional integration
Asean first endorsed the idea of a regional power grid in 1997. Nearly three decades later, the Asean Power Grid remains a patchwork of bilateral interconnections.
Of the 18 planned projects, only half have been completed, mostly overland links between neighbors. Multilateral projects, such as the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP), are still limited in scope, essentially one-directional flows.
The harder task—harmonizing markets, technical standards, and regulatory regimes—remains unfinished.
This is no small challenge. Asean’s energy demand is forecast to surge to a quarter of global growth through 2035, second only to India. By mid-century, Southeast Asia’s energy consumption will outpace that of the European Union.
Yet fossil fuels still account for over 90 per cent of Asean’s energy mix. Eight member states have pledged net-zero targets, most by 2050. The tension between demand and decarbonization makes renewable integration not just desirable but imperative.
What Asean needs is the conviction to move beyond bilateral deals toward a genuinely regional framework. Malaysia’s chairmanship of Asean this year provides an opportunity. — Bernama pic
Political will and the energy trilemma
The obstacles to integration are not merely financial or technical. As Sharon Seah of the ISEAS–Yusof Ishak Institute notes, the “biggest impediment” is political will.
The so-called energy trilemma—security, affordability, and sustainability—has too often been viewed as a zero-sum equation. But studies by Singapore and the U.S. Department of Energy show otherwise: regional power trade could raise Asean GDP growth by 0.8 percentage points and generate up to 9,000 jobs annually.
The Economic Research Institute for Asean and East Asia (ERIA) adds that consumer power costs could fall nearly 4 per cent with an integrated grid.
What Asean needs is the conviction to move beyond bilateral deals toward a genuinely regional framework. Malaysia’s chairmanship of Asean this year provides an opportunity.
Energy ministers meeting in Kuala Lumpur are expected to adopt an enhanced memorandum of understanding on grid alignment, including regulatory standards and financial mechanisms.
This would mark the first step toward a region-wide wholesale power market, modeled—albeit cautiously—on Europe’s integrated grid.
Financing the supergrid
The numbers are daunting. The Asian Development Bank estimates at least $100 billion will be required by 2045 just to build transmission lines, with full costs approaching $764 billion.
Yet investment trends are encouraging. Asean attracted $43 billion in renewable energy investment in 2022, growing faster than the global average.
China remains the largest contributor, but Japan and South Korea are playing bigger roles, while Singapore’s Temasek Holdings and private capital pools are increasingly active.
Singapore’s appetite for imported clean power illustrates both the challenge and opportunity. With limited land for renewables, the city-state plans to import up to 6 gigawatts of low-carbon electricity by 2035—about a third of its projected supply.
Its willingness to underwrite regional connections has already doubled cross-border flows from Laos and Malaysia to 200 megawatts.
For Asean, this model of demand-driven integration is a path forward: large, energy-hungry economies creating markets for cleaner supply from their neighbors.
Industrial imperatives
The stakes go far beyond energy. The industries of the future—semiconductors, artificial intelligence, and biopharmaceuticals—are intensely power-hungry.
Without reliable renewable energy, Asean risks losing its competitive edge in attracting foreign direct investment. Data centers are mushrooming across the region, particularly in Malaysia, Singapore, and Indonesia.
Yet investors will only commit if assured of long-term, affordable, and sustainable electricity supplies.
A joint report by Bain & Company and Temasek estimates that regional connectivity could reduce the cost of decarbonization by $800 billion, or 11 per cent, compared with each state acting alone.
The case for integration is thus not only environmental but economic: renewable energy as the backbone of Asean’s high-value industrial transformation.
Technical and market challenges
Still, formidable barriers remain. Unlike the EU, Asean lacks harmonized grid codes and market structures. Singapore operates a liberalized wholesale market, while Thailand, Malaysia, and Laos rely on state utilities as single buyers.
Aligning these models is politically sensitive but technically feasible. The more difficult task lies in financing undersea cables for island nations like the Philippines and Indonesia, where costs multiply exponentially.
The Brunei-Indonesia-Malaysia-Philippines Power Integration Project (BIMP-PIP), still in planning, illustrates these hurdles.
Without a regional framework, bilateral arrangements will remain vulnerable to commodity price swings and political disputes.
As Indonesian analyst Ardhi Rasy Wardhana warns, such deals can be weaponized, transforming energy into a tool of leverage rather than a platform of cooperation.
Strategic Thrust II: Toward an Asean energy community
The Monsoon Wind Project offers Asean a tangible example of what Strategic Thrust II—renewable energy integration—must deliver. It connects capital to capacity, policy to production, and vision to reality.
To replicate this success, Asean must create a regional framework with common standards and market rules, mobilize green finance at a scale that only multilateral banks and sovereign wealth funds can guarantee, and sustain the political will to anchor energy integration at the heart of ASEAN’s economic and security community.
This transformation must also be just and inclusive, ensuring that smaller and lower-income states benefit from power trade rather than being left behind.
The Asean Power Grid is not just about electricity. It is about energy sovereignty, industrial competitiveness, and regional solidarity.
In the absence of integration, fossil fuels will continue to dominate, with devastating consequences for climate commitments and economic sustainability.
With integration, Asean can turn its natural endowment of wind, water, and solar into a foundation for shared prosperity.
The message is clear: there will be no transition without transmission, and no transmission without cooperation. Strategic Thrust II demands nothing less than the political courage to transform Asean’s energy landscape before mid-century.
* Phar Kim Beng, PhD, is professor of Asean Studies at the International Islamic University of Malaysia and director of the Institute of International and Asean Studies (IINTAS).
** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
