Ember estimates ASEAN needs up to USD 10.7 billion in smart grid investment. (Photo: iStock)
“Smart grids are no longer optional. They are the backbone of ASEAN’s clean energy future,” said Alnie Demoral, energy analyst at Ember.
Renewable capacity in ASEAN has more than doubled over the past decade, but an investment of up to USD 10.7 billion in smart grids will be needed to meet rising power demand and sustain economic growth, according to Ember.
The report notes that strengthening grid resilience, flexibility, and interconnectivity will be essential to fully unlock the region’s clean power potential and prevent annual GDP losses of USD 2.3 billion by 2040.
Smarter, more reliable grids for ASEAN’s renewable boom
By 2050, ASEAN’s solar capacity is projected to increase more than twelvefold, from 27.7 GW in 2023 to 334.8 GW. The surge in variable generation calls for advanced grids that can instantly respond to fluctuations, as even minor imbalances can lead to curtailment or outages.
Smart grids deploy digital technologies, sensors, and software to balance supply and demand in real time, integrating renewables more efficiently while maintaining system reliability.
Smart grids are also shifting from vision to policy reality across ASEAN, as governments integrate digital infrastructure into their national energy strategies. With Vietnam and the Philippines expected to lead regional growth in renewable capacity, both have made grid development a central priority.
In the Philippines, the Smart Distribution Utility Roadmap and the upcoming Smart and Green Grid Plan are charting a path to prepare the country’s fragmented distribution networks for large-scale renewable integration. Vietnam is following suit with its Smart Grid Roadmap, which aims to reduce renewable curtailment and modernize the power system to meet surging electricity demand.
Uneven reliability could cost ASEAN USD 2.3 billion annually
Across ASEAN, continued investment and commitment to strengthening infrastructure have already improved grid reliability. Between 2015 and 2020, the average outage duration (System Average Interruption Duration Index, SAIDI) declined by nearly 60%, from 13 hours to just over five hours, while outage frequency (System Average Interruption Frequency Index, SAIFI) was cut by half, Ember data shows.
However, reliability performance still varies widely across the region. Singapore, which unveiled its Smart Grid 2.0 strategy in 2023, keeps annual outages below one hour, while Brunei, Malaysia, and Thailand also maintain high levels of grid reliability. Other countries continue to experience prolonged disruptions that deal heavy blows to their economies.
On the Philippines’ Panay Island, a three-day blackout in 2024 caused daily losses of up to USD 9 million, underscoring the importance of a stable grid. If left unaddressed, such risks could result in foregone investment, lost industrial output, and reduced competitiveness, contributing to an estimated annual loss of USD 2.3 billion by 2040, according to Ember.
Unmanaged risks could result in lost investment and an annual loss of USD 2.3 billion for ASEAN by 2040, according to Ember. (Chart: Ember)
Interconnected grids to unlock ASEAN’s potential
To minimize these losses and build greater resilience, Ember recommends that ASEAN look beyond national systems. While stronger domestic grids are crucial for integrating solar and wind, regional interconnections can further enhance flexibility by enabling countries to share resources across borders.
Under the vision of an ASEAN Power Grid, six member states were connected as of 2023 through the Lao PDR–Thailand–Malaysia–Singapore (LTMS) project, which is already operational under a multilateral arrangement, alongside the ongoing Brunei–Indonesia–Malaysia–Philippines Power Integration Project (BIMP-PIP).
Each country faces distinct challenges, and there is no one-size-fits-all approach. Ember estimates that ASEAN will require around USD 4 billion for a distribution-focused pathway, USD 6.7 billion to enable rapid renewable energy growth, and USD 10.7 billion to achieve full regional integration.
Ember estimates that implementing a distribution-focused pathway in ASEAN could cost approximately USD 4 billion. (Chart: Ember)
Still, Ember stresses that regional standards and clear financing frameworks will be critical to realizing true ASEAN grid integration. “For ASEAN, modernizing the power grid is no longer a choice. The debate is not whether to invest, but how much — and how quickly,” the report concludes.
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