Southeast Asia’s ambition to create an interconnected electricity market remains constrained by a missing regional framework for cross border power trade, according to Sarawak Premier Tan Sri Abang Johari Tun Openg. Despite years of discussion around the ASEAN Power Grid, member states have yet to establish a common implementation mechanism that defines how electricity interconnections should operate across national borders.
The issue highlights a central challenge for ASEAN’s energy transition: the region has growing renewable energy potential, but infrastructure, regulatory alignment, and market coordination remain fragmented.
Speaking at the Asia Pacific Green Hydrogen Conference and Exhibition, Abang Johari said ASEAN countries have expressed support for a regional grid but lack agreement on practical arrangements for interconnection. Current proposals, including power links between Laos and Singapore as well as potential connections involving Sarawak, Indonesia, the Philippines, and Singapore, demonstrate growing interest in regional electricity exchange but also reveal the complexity of aligning national energy systems.
The ASEAN Power Grid concept was introduced more than two decades ago as a mechanism to improve energy security, reduce reliance on fossil fuel imports, and enable countries with different resource profiles to trade electricity. However, progress has largely remained project based rather than operating through a fully integrated regional market.
With ASEAN lacking a unified framework, Sarawak has pursued bilateral energy agreements as an interim pathway toward wider connectivity.
Sarawak currently supplies electricity to West Kalimantan, Indonesia, through cross border arrangements, while Sarawak Energy Berhad has expanded its regional presence through investments and partnerships. The state is also exploring additional supply relationships with Sabah, Brunei, and Singapore.
These projects reflect a practical approach: establishing smaller cross border links before attempting a fully integrated regional electricity market. However, bilateral agreements can create challenges if different technical standards, pricing structures, and regulatory rules develop independently across countries.
The European Union’s energy integration model was cited by Abang Johari as a possible reference point. The EU has developed interconnected electricity markets through coordinated regulations, transmission operators, and cross border trading mechanisms. Adapting such a model to ASEAN would require consideration of the region’s different political structures, economic conditions, and energy systems.
Many ASEAN economies have significant renewable resources that are unevenly distributed. Hydropower potential is concentrated in countries such as Laos, while solar and wind opportunities vary across geographical regions. Cross border electricity trading could allow countries to balance supply and demand more effectively and reduce the need for each market to develop identical generation capacity.
However, renewable integration also creates technical challenges. Variable renewable sources require stronger transmission networks, improved balancing mechanisms, and greater coordination between electricity producers and grid operators.
Without regional cooperation, individual countries may face higher costs as they build domestic backup capacity to manage fluctuations in renewable generation. Sarawak’s strategy is based on expanding generation capacity beyond domestic demand. The state aims to reach 10 GW of energy production capacity by 2030, compared with current domestic electricity consumption estimated at around 6 to 7 GW.
Hydropower remains central to Sarawak’s energy system, providing a relatively stable renewable electricity source that could complement intermittent renewables elsewhere in the region. The state’s location also gives it strategic importance for potential connections linking Malaysia with Indonesia, Brunei, and Singapore.
However, expanding generation capacity alone will not create a regional market. Transmission infrastructure, cross border agreements, and long term purchasing commitments will determine whether additional electricity can reach consumers.
The discussion around ASEAN’s electricity grid also intersects with the region’s emerging hydrogen economy. Green hydrogen production depends on access to large volumes of low carbon electricity, making reliable power networks a key factor in future industrial decarbonization.
Countries seeking to develop hydrogen exports or industrial hydrogen applications will require stable renewable electricity supplies. Regional electricity trading could potentially reduce costs by connecting areas with abundant renewable resources to industrial demand centers.
Yet hydrogen development faces similar barriers to those affecting the ASEAN Power Grid: unclear market rules, infrastructure requirements, and the need for long term investment certainty. The region already has potential supply sources, growing electricity demand, and expanding renewable projects. The unresolved issue is how national systems can operate together through a common framework.
A regional grid would require agreement on issues ranging from ownership of transmission assets to electricity pricing and emergency supply mechanisms. Without these arrangements, individual projects may continue advancing, but the broader vision of an integrated ASEAN energy market will remain difficult to achieve.
