Singapore, explained.
Singapore’s plans for importing renewable electricity from its neighbours are sparking a broader discussion about the role for regional power grids in Southeast Asia (Getty Images)
Australia is in pole position to partner with the region on cross-border electricity supply.
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Is Southeast Asia ready for a regional power grid?Is Southeast Asia ready for a regional power grid?
In late October each year, Singapore becomes a hub of Southeast Asian energy diplomacy and business. Along with 16,000 other delegates, I attended this year's Singapore International Energy Week (SIEW), where regionally connected electricity was a hot topic. Singapore’s plans for importing renewable electricity from its neighbours – including Australia – are sparking a broader discussion about the role for regional power grids in Southeast Asia’s decarbonisation agenda.
Unless the region changes course, it will likely continue to rely on fossil fuels to meet this demand growth, meaning rising greenhouse gas emissions and fossil fuel import costs.
To understand why this debate is happening now, we need to unpack the dramatic changes taking place in the region. Southeast Asia is an emerging energy heavyweight, albeit one facing headwinds on its path towards net zero. As a region, it is projected to contribute a full 25 per cent of the world’s energy demand growth out to 2035, underpinned by growing populations and its increasingly central role in global manufacturing and industrial supply chains. But only two per cent of global clean energy investment flowed to Southeast Asia in 2023 – a worryingly low figure.
Unless the region changes course, it will likely continue to rely on fossil fuels to meet this demand growth, meaning rising greenhouse gas emissions and fossil fuel import costs. This is where the transmission of renewable electricity across borders might play a part. A key debate at SIEW was over the role of a regional power grid, such as the ASEAN Power Grid, in meeting this rising demand with renewables.
For its proponents, a regional grid is seen as a catalyst of the energy transition, allowing countries with few renewable resources, such as Singapore, to access renewable power from those with abundant supply. One study found a regional grid could wipe up to ten per cent off the cost of Southeast Asia's energy transition, potentially saving hundreds of billions of dollars.
The transmission of renewable electricity across borders is likely to play a part in Southeast Asia’s decarbonisation efforts (Derek Sutton/Unsplash)
But there remains uncertainty on the governance and policy side. Challenges canvassed at SIEW include the disconnect between domestic and regional energy planning processes, perceptions of high political risk in financing cross-border projects, and the current limitations in certifying that electricity traded across two markets is from renewable sources. Although ASEAN countries have made progress on one pilot project under the ASEAN Power Grid, much work remains to build a robust multilateral framework that could handle future regional trading.
This year’s conference showed an increased appetite from some for more rapid progress. Singapore has outlined regional power grids as one of four pillars of its own decarbonisation strategy, with plans underway to import a third of its power by 2035. Cambodia used this conference to announce new plans to import 600MW of renewable electricity from its neighbours. Malaysia has said it wants to focus on the ASEAN Power Grid during energy discussions under its ASEAN chairmanship next year.
For Australia, a future regional power grid should factor into its planning for energy and climate development partnerships in Southeast Asia.
At the regional level, the ASEAN Centre for Energy is playing a prominent role as a think tank and research hub, providing technical analysis and capacity building, and coordinating support from a wide range of development partners. Multilateral development banks are increasingly engaged, with the Asian Development Bank recently proposing a regional financing facility to support power interconnectivity. And the International Energy Agency used this year’s conference to inaugurate its Southeast Asia regional cooperation centre in Singapore, its first outside Paris and one which will have a strong focus on regional power grids.
For Australia, a future regional power grid should factor into its planning for energy and climate development partnerships in Southeast Asia. Support from development partners such as Australia is not just needed for the regional power grid itself, but also to connect regional energy discussions with energy planning and infrastructure development at the national level. Australia could build on the work started through Partnerships for Infrastructure and the Mekong–Australia Partnership on pumped hydro mapping, for instance, analysing the costs and benefits, and the environmental and social impacts of various forms of renewable energy storage available to a future regional grid.
And last but not least, Singapore announced at SIEW it had provided conditional approval to SunCable to import 1.75GW of renewables-based electricity from the Northern Territory to Singapore after 2035, a major step forward for the Singaporean–Australian project. Australia’s Minister for Climate Change and Energy, Chris Bowen, was at SIEW and welcomed the news. This approval means Singapore has assessed the project as technically and economically viable, and SunCable has the go-ahead to advance to the next stage of its planning and development work.
About the author
Hannah Lord
Hannah Lord is a PhD student and Sir Roland Wilson scholar, School of Regulation and Global Governance (RegNet), Australian National University.
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