Building ASEAN’s sovereign energy bloc: The only play to defy global volatility

Progress has stalled on ASEAN's vision for a shared power grid connecting its markets, with technical, political, and regulatory hurdles blocking the way.

For decades, ASEAN’s energy markets have remained fragmented, with each country planning and building infrastructure largely in isolation. This patchwork approach has led to uneven progress, duplicated infrastructure, and limited the region’s ability to tap its diverse natural resources efficiently, to meet energy transition goals and to support economic growth as a whole. 

For instance, surplus hydropower in Laos would stay stranded without export links, while energy-short nations like Singapore remain reliant on costly fuel imports. 

Fragmentation also weakens ASEAN’s bargaining power in global markets, leaving it vulnerable to price swings and external policy shifts. These risks are magnified by today’s geopolitical tensions, from US-China trade rivalries to the ongoing Iran-Israel conflict, which have driven up oil prices, disrupted fuel flows, and rattled investor confidence across Asia’s energy sector.

President Trump’s “One Big Beautiful Bill” has just passed the US Senate and is moving through the House, aiming to roll back clean energy incentives under the Inflation Reduction Act. It would cut tax credits for wind, solar, and electric vehicles, dealing a significant blow to America’s renewables sector despite some last-minute softening. 

For Southeast Asia, this could dampen export demand for solar panels, batteries, and clean tech components, particularly from manufacturing hubs like Malaysia, Vietnam, and Thailand. creating tougher competition for ASEAN producers, and reduce American climate finance and investments into the region. It’s a clear reminder of how exposed Southeast Asia remains to policy swings in major markets.

Three paths forward

ASEAN is not without options. The first path available to us is to continue depending on global markets for energy imports, remaining a price-taker exposed to external shocks. The second path is for each country to do it alone, aiming for national self-sufficiency in isolation. But this risks costly duplication, inefficiency, and slows down the clean energy transition. 

There is a third path, however, and that is for ASEAN to unite as a sovereign energy bloc, linking its markets and resources into a collaborative clean energy ecosystem that strengthens resilience and economic power.

Singapore’s blueprint for regional integration

Since the 1990s, ASEAN has been envisioning a shared power grid connecting its markets. Progress has been blocked by technical, political, and regulatory hurdles, but this year, momentum is finally building. In May, ASEAN leaders backed a fresh push to integrate the ASEAN Power Grid, with studies by our partner, DNV,  showing it could save the region up to US$800 billion by allowing cleaner, cheaper power to flow across borders. 

Singapore is already showing us what’s possible. In June, Singapore and Indonesia signed a landmark MOU for 3.4 GW of low‑carbon power exports to Singapore by 2035, also exploring cross-border carbon capture projects. This demonstrates how even a small state can build energy resilience through regional collaboration. In the first half of 2025, our clean energy imports hit record highs, (with a renewable energy share of 2.58% in May), buoyed by strong domestic solar growth and rising imports made possible by the Lao PDR–Thailand–Malaysia–Singapore Power Integration Project (LTMS). 

To support this, Singapore’s Energy Market Authority has established SG Energy Interconnections (SGEI) to build and operate regional cables and has granted conditional licences beginning with a 1 GW Indonesia import to power long-term import deals, with approved plans to import up to 6GW of low-carbon electricity by 2035 - about a third of our projected power needs.

Deals with Indonesia and Malaysia are also underway. A new 6GW solar-plus-storage pipeline from Indonesia is being planned, while Malaysia’s Energy Exchange has begun auctioning green electricity for export to Singapore. These steps prove that cross-border trade is becoming an operational reality, demonstrating what energy sovereignty could look like in practice. 

The missing link: ASEAN’s untapped potential

The region doesn’t need to rely solely on external suppliers. ASEAN already manufactures solar panels, batteries, and power equipment. By tapping into our own production capacity and linking markets, ASEAN can build clean energy systems at scale, reducing exposure to tariff shocks and global supply chain disruptions. Projects like  hydrogen-ready YTL PowerSeraya plant show how local investments can future-proof infrastructure. Singapore’s strategic deals highlight how political will can turn economic scale into true sovereignty.

But wait, I hear you say – doesn’t ASEAN need to export to sustain growth? Should ASEAN not prioritise international exports before regional trade and domestic needs? After all, exports can attract investment, accelerate clean energy scale-up, and strengthen ASEAN’s economic influence.

This is true but with rising demand and access gaps in countries like Myanmar and parts of Indonesia, prioritising export deals could risk local supply and grid stability.

On the flip side, regional integration alone could deliver major sustainability and economic benefits. Studies estimate that linking ASEAN’s grids could reduce system costs by US$800 billion without relying on exports beyond the region, enabling countries to share surplus power, balance intermittent renewables like solar and hydro across borders, and avoiding the need for each market to build expensive standalone backup capacity. With data centre demand set to double by 2030 and  approximately $100 billion needed to build interconnectors, ASEAN must act now.

The key lies in sequencing: build a strong regional energy bloc first, then use exports to enhance sovereignty rather than replace domestic security with external reliance.

The roadmap to energy sovereignty

To make the third path a reality, ASEAN needs a clear, phased approach:

•    Phase 1: Strengthen domestic foundations
Each country must accelerate domestic clean energy deployment by streamlining approvals, upgrading grid infrastructure, and investing in workforce capabilities. This ensures energy security at home forms the bedrock of regional trade.

•    Phase 2: Build regional connections
Next, ASEAN should prioritise quick-win cross-border interconnections. Bilateral and trilateral deals much like Singapore’s deals with Malaysia and Indonesia - can serve as building blocks for a wider ASEAN Power Grid, testing technical compatibility and regulatory frameworks.

•    Phase 3: Develop unified policies and financing mechanisms
Governments will need to harmonise standards, create regional power trading platforms, and pool financing instruments such as blended finance facilities to lower project risks and attract private capital at scale.

•    Phase 4: Expand to export markets strategically
Only after regional systems are stable and robust can ASEAN scale clean energy exports beyond the bloc. This ensures domestic needs remain met while positioning ASEAN as a clean energy price-setter, not merely a supplier.

Conclusion: An ASEAN-first approach

To create an energy sovereign ASEAN that meets its own needs affordably, grows its industries competitively, and negotiates on the global stage with strength and confidence, the region must act now – strengthening domestic clean energy systems, building seamless regional connections, and laying the policy and financial groundwork for a truly integrated power market. 

Only then can ASEAN realise its full potential as a unified clean energy powerhouse, capable of meeting its own needs and powering the world. As they remind us on every flight: we must first put on our own oxygen mask before helping others.