ASEAN electricity demand has more than doubled in the past two decades, rising from about 458 TWh in 2003 to 1,258 TWh in 2023, and could climb by roughly 30%.

At the policy level, ASEAN energy ministers have endorsed a plan to raise the share of renewables to 45% of total installed power capacity by 2030 and to around 30% of total primary energy supply, while cutting energy intensity by 40% from 2005 levels. Today, renewables account for roughly one third of installed power capacity and about 13.5% of primary energy, so the region is trying to scale clean energy while demand is still growing strongly. In 2023 alone, electricity demand grew by 3.6%, and every additional 45 TWh of demand was met by coal and gas, sending power sector emissions up by 6.6% in a single year.

That is why grids have moved from background plumbing to centre stage in ASEAN’s transition. Analysis of current plans suggests that between 2013 and 2023 regional demand rose by about 50%, while planned transmission expansion to 2030 in key markets like Indonesia, Vietnam, the Philippines and Thailand is only around half of what would be needed under net-zero-aligned pathways. Doubling grid investment and accelerating approvals now would not only keep the lights on but also unlock more solar and wind projects that are currently blocked by connection bottlenecks.

Cross-border interconnections are an essential part of that strategy, not a nice to have. The Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMSPIP) is ASEAN’s first real world test of multilateral power trade, wheeling hydropower from Lao PDR through Thailand and Malaysia to Singapore via existing lines, with imports ramping up from an initial 100 MW towards 200 MW and beyond. Building on that experience, the Brunei-Indonesia-Malaysia-Philippines Power Integration Project (BIMPPIP) is being designed to link the Borneo subregion and nearby grids, so that resource rich areas can export cheaper renewables to larger demand centres through a mix of overland and subsea cables.

Together with other ASEAN Power Grid interconnections, these initiatives are intended to move the region from isolated national systems to a more integrated, flexible regional market by the 2040s.

Compared with Europe or other advanced economies, where electricity demand is relatively flat and the focus is on replacing existing fossil assets, ASEAN is trying to meet strong new demand, expand access and cut emissions at the same time.

Additional power demands
On top of traditional drivers like industrialisation and urbanisation, a new wave of demand is arriving from data centres and AI. Power consumption by data centres in ASEAN is projected to reach about 68 TWh by 2030 and to account for between 2% and 30% of national electricity demand across major markets, with the upper end of that range in Malaysia.  

AI workloads are a big part of this surge because training and running large models requires far more computing power than traditional cloud services. Average rack power density in AI focused facilities is already in the low double digit kW range and is expected to keep climbing this decade, driving up both electricity and water consumption needs in Southeast Asia’s hot, humid climate. Without careful planning, clusters of always on, high-density data centres could become local stress points, outgrowing distribution networks and competing with households and small businesses for capacity in fast-growing industrial corridors.

For system planners and regulators, this means moving from reactive to anticipatory planning. Grid operators need to map where large data centre campuses and industrial parks are likely to locate and build transmission, substations and flexibility, including storage, demand response and smart grid solutions, before the load arrives, not years afterwards. Market rules and tariffs can then encourage data centre operators to shift non time critical AI workloads, invest in onsite solar and batteries, and provide ancillary services, turning them from passive consumers into active partners in system stability.

The social and environmental dimensions also matter deeply in Southeast Asia’s context. In places with limited water and constrained infrastructure, rapid growth of energy and water-intensive data centres risks amplifying inequality if local communities see higher tariffs, more outages or environmental stress while most of the economic value is captured elsewhere. That is why regional analysts increasingly argue not only for ‘green’ data centres backed by renewable power purchase agreements, but also for ‘leaner, smarter AI’ that uses computing resources efficiently and discloses its energy and water footprint.

A ‘growth and build’ transition
Compared with Europe or other advanced economies, where electricity demand is relatively flat and the focus is on replacing existing fossil assets, ASEAN is trying to meet strong new demand, expand access and cut emissions at the same time, often with more limited fiscal space and institutional capacity.

Both regions are aiming for a cleaner, more resilient energy future, but they are travelling on very different tracks: one is largely a replacement journey, the other is a growth and build journey. ASEAN’s path should not be judged against Western trajectories or vice versa; they are distinct transitions, unfolding at different speeds from different starting points, yet moving toward the shared goal of a low-carbon, secure and inclusive energy system.

The views and opinions expressed in this article are strictly those of the authors only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

• Further reading: ‘Indonesia unveils ambitious power plan as Southeast Asia ramps up renewables’. Indonesia’s new 10-year electricity plan charts a bold course with 42 GW of renewable capacity, backed by $182bn investment and over 836,000 green jobs, although looming gas shortfalls raise supply concerns for the country. Meanwhile, a Malaysia–Singapore–Vietnam pact is raising hopes for regional grid integration, and to the west Thailand eyes solar, wind and storage to curb LNG reliance and meet climate goals.
• Discover how Singapore is looking to import electricity and diversify its energy supply while supporting regional decarbonisation.