At Cop28 last year, 125 countries agreed to triple renewable energy capacity by 2030 and double energy efficiency improvements. Half of the Association of Southeast Asian Nations signed this pledge, but even countries that did not have made national commitments to increase renewable energy and move to net-zero emissions. An Asean power trade will be crucial to ensuring that these commitments are met.
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Singapore already has electricity trade projects with six other Asean members – Laos, Thailand, Malaysia, Cambodia, Vietnam, and Indonesia – placing it at the forefront of regional power trade. Singapore can use its early mover advantage to establish standard approaches to the green electricity trade and inspire positive change regionally.
Southeast Asia is collectively the world’s fourth-largest energy consumer, and the International Energy Agency projects that Southeast Asia’s energy demand will rise around 5 per cent annually through 2030 and 3 per cent through 2050, above the global average during that time frame. Indonesia, Malaysia, the Philippines, Thailand, and Vietnam are responsible for about 89 per cent of Asean’s current energy demand and most of its future growth. Singapore is responsible for only 5 per cent of Asean’s energy demand, but nonetheless is influential as a hub of electricity trade innovation and progress.
A vendor waits for customers under a light powered by solar panels installed on the roof of a market in Klaten, Indonesia’s Central Java province. Photo: AFP
Singapore’s leadership in this space is driven by domestic needs: currently, most of its power comes from natural gas, and the government has set a long-term target of reducing that to a little over 50 per cent by substituting clean electricity. Some of this alternative energy will come from domestic sources such as rooftop solar and potentially geothermal, nuclear, or hydrogen. However, given land constraints, electricity imports will be a necessary factor in Singapore’s future energy mix.
The Energy Market Authority has set a target of importing 4,000 megawatts (or about 30 per cent) of Singapore’s electricity by 2035. Reaching this target will require a major expansion of imports, since Singapore currently imports only 1.3 per cent of its electricity in the form of 100MW of hydroelectricity sold through the Laos-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP). This milestone was the first multilateral power trade scheme in Asean and is likely to soon rise to 300MW.
However, future needs are likely to be met through other sources, due in part to requisite infrastructure upgrades to expand interconnections and power flow for the LTMS-PIP, and in part to the general security and resilience benefits of power diversification. Singapore’s Energy Market Authority recently gave conditional approval for a series of alternative electricity imports: agreements for 1,000MW of solar, wind, and pumped storage hydropower from Cambodia; 1,200MW of offshore wind projects in Vietnam; and up to 2,000MW of solar from Indonesia were signed in 2023.
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There are many factors in the region’s re-energised push for regional power trade, including excess electricity and reserve margins in exporting countries like Laos, shared concerns about overreliance on volatile fossil fuel markets in light of the Covid-19 pandemic and Ukraine conflict, and the climate crisis driving national efforts to reduce emissions. Within this context, Singapore’s agreements are helping spur momentum on innovations to regional power trade that were not considered in earlier analyses of the Asean Power Grid.
A worker takes a picture of rooftop solar panels on the Keppel Bay Tower office building in Singapore last year. Photo: Reuters
