Challenges and opportunities

The report examines the need for grid modernisation and policy alignment in ASEAN to support the transition to renewables. It highlights the current dominance of fossil fuels, the risk of curtailment seen in Vietnam, and the potential of clean flexibility options such as pumped hydro, battery energy storage systems (BESS), and demand-side management (DSM) to ensure grid stability and enable cross-border energy sharing.

• ASEAN electricity systems are currently dominated by fossil fuels, with Indonesia possessing the largest capacity at 78 GW, followed by Thailand (44 GW), Viet Nam (35 GW), Malaysia (32 GW), and the Philippines (20 GW) as of 2023.
• While Vietnam leads the region in wind and solar with 23 GW, grid constraints and a lack of pricing mechanisms led to a reduction in the utilisation rate of its largest solar farm by up to 40% in 2022.
• The ASEAN power system has a combined 8 GW of wind and 26 GW of solar capacity, with regional targets to add 51 GW of solar and 109 GW of combined wind, hydro, geothermal, and bioenergy by 2040.
• Certain regional grids exhibit high emission factors, notably Indonesia's Sumatra and Java-Bali-Madura at 0.9 tCO2e / MWh and the Philippines' Mindanao at 0.8 tCO2e/MWh, which impacts the sustainability of electrification efforts like EV adoption.
• Pumped hydro is identified as a mature technology for grid stability; currently, 2.7 GW is under construction and 13.3 GW is in development across the region, with specific targets in the Philippines (4.3 GW by 2035), Viet Nam (2.4 GW by 2030), Indonesia (3.7 GW pipeline), and Thailand (2.5 GW by 2037).
• Battery Energy Storage Systems (BESS) are being deployed for fast response and frequency regulation, with projects including 400 MWh in Malaysia's Sabah, 4.5 GWh in the Philippines, and joint 2 GW solar plus 8 GWh BESS ventures in Indonesia and Singapore.
• Demand-side management (DSM) and smart electrification offer low-cost flexibility, but adoption in ASEAN is hindered by a lack of supportive policies, regulatory frameworks, and underdeveloped digital infrastructure.
• Expanding cross-border grid interconnections could increase GDP growth by 0.8% to 4.6% and create 2,000 to 9,000 new jobs annually, though it requires significant political coordination and harmonised regulations.

APA

Ember (2025). Challenges and opportunities. https://ember-energy.org/chapter/challenges-and-opportunities/

Chicago

Ember. Challenges and opportunities. 2025. https://ember-energy.org/chapter/challenges-and-opportunities/.

Wikipedia

{{cite report |author=Ember |title=Challenges and opportunities |date=15 May 2025 |url=https://ember-energy.org/chapter/challenges-and-opportunities/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ember2025challenges, author = {{Ember}}, title = {{Challenges and opportunities}}, institution = {Ember}, year = {2025}, month = may, url = {https://ember-energy.org/chapter/challenges-and-opportunities/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }