By Dr Weerawat Chantanakome, Policy Counsel, and Dr Nuki Agya Utama, Director for Energy Policy and Head of Asia Zero Emission Center: In Southeast Asia’s race toward a low-carbon future, no country can afford to go it alone. The region’s geography, uneven resource distribution, and diverse market structures make collaboration not just beneficial but essential. In today’s world, energy security is no longer just about having enough fuel within one’s borders – it is about building systems that are interconnected, resilient, and low-carbon.

A flagship example is the Lao PDR–Thailand–Malaysia–Singapore Power Integration Project (LTMS-PIP), ASEAN’s first successful multilateral cross-border electricity trade, launched in June 2022.

For Singapore, the LTMS-PIP was a breakthrough – importing renewable electricity from a neighbouring region for the first time. It proved that clean power trade across multiple national borders is not only possible but practical, something that seemed politically and technically unlikely just a few years ago. Yet, while this project is a landmark, it also underlines the scale of the challenge if ASEAN is to make large-scale clean energy exchange a cornerstone of its power sector.

Singapore’s limitations are stark: scarce land, no large-scale domestic renewable resources, and a dense urban population. To meet climate targets, maintain competitiveness, and power its fast- growing digital economy – where data centre capacity is expected to double within a decade – it must import clean electricity. The LTMS-PIP 100 megawatts of Lao hydropower, transmitted via Thailand and Malaysia, is a start, but far short of the multi-gigawatt volumes needed to decarbonise the power supply, transport, and heavy industry.

The project has dispelled doubts over technical feasibility, but challenges remain. The scale is still small, trading is fixed under a government-to-government deal rather than through an open market, and infrastructure gaps, mismatched regulations, and non-uniform technical standards continue to slow expansion. Addressing these will require political will, coordinated reforms, technical upgrades, and strong investor confidence.

Across ASEAN, electricity demand is set to almost double by 2040, driven by economic growth, industrialisation, and urbanisation. At the same time, member states have committed under the ASEAN Plan of Action for Energy Cooperation (APAEC) and the Paris Agreement to ramp up renewable energy. But resources are unevenly spread: hydropower in the Mekong, solar in parts of Indonesia, the Philippines, and Thailand, wind in Vietnam. Without cross-border trade, such resources remain underutilised while other countries rely heavily on fossil fuels.

As ASEAN Chair in 2025, Malaysia has made energy integration a political priority, pushing the ASEAN Power Grid (APG) as a flagship initiative. It has promoted harmonised grid codes, transparent trading rules, and financing frameworks for new interconnections –steps aimed at building both infrastructure and the foundation of a regional electricity market.

Malaysia is also moving to become a clean energy exporter, piloting renewable energy schemes for neighbours and combining solar, hydropower, and storage in hybrid generation projects. These efforts align with its national target to boost renewables to 40% of installed capacity by 2035 and cut coal dependence.

Such political momentum is vital. Without strong leadership and trust, regional integration could falter under domestic energy security concerns and competing priorities. Binding frameworks, shared commitments, and willingness to compromise will be key.

Singapore, for its part, is pursuing a multi-pronged approach – exploring imports from Viet Nam, Indonesia, and Cambodia, aiming for 4 gigawatts of low-carbon power by 2035. It is investing in subsea transmission, floating solar, and advanced storage, while advocating for an open, competitive ASEAN electricity market to encourage private investment and accelerate renewables deployment.

The LTMS-PIP offers a clear lesson: decarbonisation and energy security can be mutually reinforcing. A well-integrated regional market would enable larger renewable rollouts, balance supply and demand across borders, and reduce over-reliance on any single source. This would lower carbon intensity and costs while making the region more resilient to climate shocks, fuel price swings, or geopolitical risks.

Achieving this vision will take more than cables and substations. It requires flexible market mechanisms, regulatory alignment to give investors certainty, and technical cooperation to ensure grid stability as intermittent renewables expand.

The LTMS-PIP may be modest in size, but it is a vital foundation. With Malaysia’s leadership this year, ASEAN has a rare chance to turn early progress into a fully interconnected, decarbonised power system. Done right, the ASEAN Power Grid could become both a symbol of cooperation and a pillar of the region’s economic and environmental future.

Electricity is the lifeblood of modern economies. The way ASEAN generates, trades, and consumes will shape the region’s prosperity for decades. By deepening cooperation, harmonising rules, and investing in cross-border connections, Southeast Asia can ensure its energy transition is greener, more secure, more affordable – and more inclusive.

The LTMS-PIP has shown that bridging borders for a cleaner future is possible. The next step is scaling up, sustaining momentum, and powering ASEAN’s growth through collective action, shared commitment, and partnership.

This opinion piece was written by Dr Weerawat Chantanakome, Policy Counsel, and Dr Nuki Agya Utama, Director for Energy Policy and Head of Asia Zero Emission Center, ERIA, and has been published in The Manila Times. Click here to subscribe to the monthly newsletter.

Disclaimer: The views expressed are purely those of the authors and may not in any circumstances be regarded as stating an official position of the Economic Research Institute for ASEAN and East Asia.