Rethinking the Asean power grid
The Association of Southeast Asian Nations (Asean) Power Grid or APG promises a regionally interconnected electricity market by 2045—one that can strengthen energy security and accelerate decarbonization across Southeast Asia. But as the region confronts intensifying climate risks, slow-moving transmission projects, and massive financial requirements, it is time to rethink how interconnection should proceed. A more pragmatic, phased approach—one that fortifies domestic grids and expands distributed renewable energy first—may deliver faster returns, greater resilience, and more equitable access.
We cannot build a regional grid on unstable national grids.
A grand vision meets ground realities. The APG, championed by the Asian Development Bank, stands as one of Southeast Asia’s most ambitious infrastructure undertakings. Full integration by 2045 is envisioned to enhance power trading, reduce system costs, and support a transition toward cleaner energy systems. The Philippine Department of Energy has stated its intent to use its Asean chairship in 2026 to accelerate APG implementation.
Yet optimism must be grounded in reality. The APG requires an estimated $764 billion in power generation and transmission investment, including $100 billion for cross-border transmission lines alone. Coordination among 10 regulatory regimes, lengthy permitting, and diverging national policies further complicate progress. Meanwhile, each country must still invest heavily just to stabilize its own grid. The Philippines, for example, needs approximately $10 billion in domestic transmission upgrades.
For investors, these factors translate into high upfront costs, long payback periods, and significant regulatory risk.
Counting the cost of connection. Even with financing secured, operational risks are still substantial. Long-distance transmission networks face heightened exposure in a region regularly struck by severe typhoons, floods, earthquakes, and landslides.
In the Philippines, powerful typhoons routinely topple transmission towers, with repairs taking weeks or even months. These disruptions impose cascading social and economic impacts, cutting power to entire provinces, and slowing post-disaster recovery. With roughly 20 typhoons entering the country annually—and several Category 4 and above events hitting directly—transmission-specific restoration costs often run into tens or hundreds of millions of dollars, based on the National Grid Corporation of the Philippines’s documented pass-through claims.
Climate resilience must be integral—and accorded top priority—in energy planning. Without durable, climate-resilient infrastructure, the promise of a seamless Asean grid risks becoming an expensive liability.
The Philippine reality: Strengthen the base first. Despite progress such as the Mindanao–Visayas Interconnection Project, the Philippines continues to grapple with grid instability. Yellow alerts, rotational brownouts, and weak interisland connections remain common, especially in disaster-prone, off-grid, and underserved areas.
For an archipelagic nation, a regional grid should not precede a strong and stable domestic grid. A more adaptive, inclusive pathway lies in distributed renewable energy—rooftop solar, microgrids, community-scale storage, and modernized feeders.
Investment that builds resilience. The investment environment also favors modularity. Distributed renewable energy projects allow faster implementation, reduced capital exposure, and more stable revenue streams. Public–private partnerships in grid modernization and decentralized energy can generate measurable returns while supporting national and regional climate goals.
Civil society and local governments, meanwhile, can advance energy sovereignty—empowering communities to generate, store, and control their own clean energy.
Phased integration: A smarter regional pathway. Regional interconnection remains valuable, but it must be pursued strategically and grounded in domestic readiness. Policymakers should:
• Prioritize bilateral interconnections with clear technical and economic value.
• Use regional power trade to complement seasonal and geographic supply-demand variations.
• Require climate-resilient design and innovative financing models for cross-border infrastructure.
Powering progress responsibly. The APG remains a compelling long-term vision. A DNV study estimates that a fully interconnected system could help Asean save up to $800 billion in achieving a net zero power sector by 2050.
By aligning investor confidence, community empowerment, and climate responsibility, Southeast Asia can forge a cleaner, smarter, and more inclusive energy future—one that truly powers progress and advances a just energy transition.
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Pete Maniego is senior policy advisor of the Institute for Climate and Sustainable Cities and former chair of the National Renewable Energy Board, Institute of Corporate Directors, University of the Philippines Engineering Research and Development Foundation, Inc., and UP Barkada, Inc.
