Key facts
- Delays in the Asean Power Grid (APG) could result in billions of dollars in economic losses and alter energy transition pathways.
- Each year the APG project is delayed beyond 2035, it could add $2.6 billion in economic losses.
- A five-year delay for the APG would cost the region almost $14 billion, 55 billion m³ of additional gas, and over 71 million tonnes of CO2 emissions.
- Electricity demand in Southeast Asia is set to almost double to 2,000 TWh/yr in 2050.
- Fossil fuels generated over 73% of the region's electricity in 2025, with solar and wind at 5%.
- The region's energy import bill is projected to reach $160 billion this year and could rise to $400 billion by 2050.
Delays in establishing the Asean Power Grid (APG) could lead to billions of dollars in economic losses and negatively impact the region's energy transition, according to a report by think-tank Ember. The Association of Southeast Asian Nations (Asean) aims to establish the grid by 2045, but Ember uses 2035 as a baseline completion date.
Each year the APG project is delayed beyond 2035, it could incur $2.6 billion in economic losses. A five-year delay would cost the region nearly $14 billion, along with 55 billion m³ of additional gas consumption and over 71 million tonnes of CO2 emissions. Electricity demand in Southeast Asia is projected to nearly double to 2,000 TWh/yr by 2050, up from 1,300 TWh/yr currently.
In 2025, coal and gas generated over 73% of the region's electricity, while solar and wind provided only 5%. Southeast Asia's reliance on fossil fuel imports makes it vulnerable, a risk highlighted by the ongoing US-Iran war, which has increased regional gas prices by up to 60%. The region's energy import bill is expected to reach $160 billion this year and could climb to $400 billion by 2050.
A five-year delay in the APG would also mean 7.2GW of solar power would not be developed by 2035. Singapore might need to install an additional 300MW of gas-fired capacity, potentially locking in fossil fuel infrastructure. Countries with abundant renewables, such as Indonesia, Laos, Cambodia, and Myanmar, could collectively lose $1.1 billion annually because they would be unable to monetize renewable resources through power exports.
The APG would link national power systems to enable the sharing of reserve capacity, enhance system security, reliability, and market efficiency, and reduce the need for conventional plants or battery storage. It would also allow renewable energy to be developed where resources are most cost-effective. Ember recommends a shift from discussion to commitment beyond electoral cycles, supported by working-level coordination. Harmonized tariff frameworks, transparent wheeling charges, and fair cost-sharing are crucial for making cross-border projects bankable. Regional financing mechanisms are also important for mobilizing capital.