A delay in commissioning the ASEAN Power Grid (APG) beyond its 2035 target could cost Southeast Asia approximately $2.6 billion per year, primarily due to increased reliance on gas-fired power generation, according to a new analysis by global energy think tank Ember.
Ember’s quantitative modelling shows that a five-year delay could cost the region around $14 billion by 2040. The delay would also lead to an additional 55 billion cubic metres (bcm) of gas consumption, exceeding the combined gas consumption of Thailand and Singapore in 2024. Carbon dioxide emissions are projected to increase by more than 71 million tonnes by 2040, equivalent to the Philippines’ entire power sector emissions in 2025.
The analysis compares delays against a base case in which the APG is fully implemented by 2035. Under the base case, clean energy would account for more than 90% of the 400 GW of new power capacity required across ASEAN by 2040. Without the regional grid, however, up to 7.2 GW of solar capacity could remain undeveloped, reducing solar generation by 13.6 TWh by 2040. ASEAN would then require an additional 50.6 TWh of gas-fired generation to compensate for the shortfall.
Singapore could face particularly significant impacts from delays. With limited land available for domestic solar development, the country could build only around 6.6 GW of solar capacity. If the APG is delivered on schedule, interconnectors could supply around 49% of Singapore’s electricity demand in 2035. A one-year delay could reduce this contribution to just 2.5%, leaving gas to provide more than 86% of generation and requiring around 300 MW of additional gas capacity.
Renewable energy-exporting countries would also lose potential revenue from delayed cross-border electricity trade. Indonesia’s Sumatra region, Lao PDR, Cambodia and Myanmar could collectively forgo more than $1.1 billion in electricity export revenue for every year of delay, with Sumatra alone potentially losing nearly $400 million annually.
Ember identified governance and regulatory coordination as key constraints to the timely development of the APG. While the International Energy Agency estimates APG interconnections could require around $27 billion by 2040, the Asian Development Bank estimates total investment could reach $100 billion by 2045 when domestic grid upgrades are included. Ember said the financing requirement is manageable if multilateral banks and private investors can be effectively mobilised.
The report recommends maintaining political commitment beyond electoral cycles, harmonising wheeling charges and transmission tariffs, and adopting beneficiary-pays principles for cost allocation. It also recommends using bilateral power trade agreements as a starting point while establishing governance frameworks that can eventually support multilateral electricity trading.
Ember said timely delivery of the ASEAN Power Grid could strengthen regional energy security, accelerate renewable energy deployment, reduce fossil fuel dependence and support deeper economic integration through cross-border electricity trade.
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