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Understanding ASEAN’s Grids Planning Strategy

Increased needs for electricity access and rising demand shape ASEAN’s grid planning strategy.

The power grid is the backbone of the electricity system. Power lines transport electricity produced by generators to the final consumers, across different voltage levels. In ASEAN, where demand is skyrocketing and industries are expanding, the role of grids is becoming increasingly critical. Between 2013 and 2023, annual electricity demand in the region surged by around 50%, from 817 TWh to 1,277 TWh, with the majority accounted for by Indonesia, Viet Nam, Thailand and Malaysia. By 2030, electricity demand is set to rise by up to 41% again, redefining the scale and urgency of regional grid planning.

To accommodate this growth, utilities in the region are under pressure to satisfy the growing need to connect energy sources, which requires building more transmission lines to carry electricity and more substations to change voltage. Aging grids are being strategically replaced with high-capacity lines, and more high-voltage cables are being installed in each and in between countries to improve regional flexibility and energy security.

Historically, grid investment in ASEAN focused on meeting peak demand and ensuring a secure, reliable and cost-effective electricity delivery, while today economic and climate goals play an increasing role. The electrification of heat, transport, and industry is rapidly accelerating electricity demand across ASEAN.

At the same time, the cost of wind and solar has been declining rapidly. During the decade to 2020, the cost of wind and solar power fell by 55% and 85%, respectively. The cost of batteries, increasingly used to store renewable electricity, also fell by 85% over the same time period. This shifts the logic of grid planning. No longer should grids be built to serve just peak demand, but to fully integrate these technologies and intermittency, and to manage supply variability within and across countries. That means focusing on grid development at both national and regional levels.

According to the International Energy Agency (IEA), more than 80 million kilometres of power grids must be added or refurbished globally by 2040 to facilitate the energy transition. In line with this, the Global Energy Storage and Grids Pledge aims to deploy 1,500 GW of energy storage and 25 million kilometres of grid infrastructure by 2030. For Southeast Asia specifically, IEA estimates that 1.7 million km transmission and distribution grid should be added between 2021 and 2030, with around 6% comprising transmission lines and 94% distribution lines.

However, collective national plans from some countries fall significantly short of these needs.

Since data on transmission lines is relatively more accessible than distribution lines, we are focusing our analysis on them. Transmission lines transport electricity from generating stations to substations where it is stepped down in voltage and delivered to end-users via distribution lines. As greater electrification expands across transportation and household sectors, distribution and transmission grids should be prioritised. Transmission grid investment is equally critical to enable long-distance interconnections and resources sharing to avoid curtailments. These interconnections are essential for integrating large-scale renewable energy, balancing regional supply and demand, improving energy security and future energy system resilience.

Between 2023 and 2030, Indonesia plans to add 20,798  km of transmission lines. Viet Nam’s expansion plans include 12,300 km of transmission lines by 2030. The Philippines plans to add 3,935 km of transmission lines and Thailand will add 6,677 km, both by 2030. Overall, the combined total in these four countries’ plans accounts for around 45,078 km – about 45% of the IEA’s Announced Pledges Scenario (APS) transmission line expansion target of 100,000 km for Southeast Asia, between 2021-2030.

There is a lack of available data on transmission expansion plans across several ASEAN countries, which poses a challenge in assessing regional plans against the IEA pathway. For instance, while four countries account for the vast majority of existing grid infrastructure in the region, there is limited data for other ASEAN countries.

This indicates that the majority—approximately over half—of the required transmission expansion needs to be planned by countries to align with the regional pathway. The APS corresponds with announced national ambitions and targets as of September 2022 and provides a benchmark for the grid development that would be required to meet climate pledges.

The urgency of grid development was reinforced at COP29 through the Global Energy Storage and Grids Pledge which set a goal of adding or refurbishing 25 million kilometres of grids by 2030.