This piece is published in CSIS Indonesia's "Analysis of 2025 ASEAN and Related Summits and Outlook for 2026: CSIS Special Edition Commentaries".
Southeast Asia is projected to see a continuous increase in rapid population and subsequent economic growth. Subsequently, the region’s energy demand is projected to increase 2.6 times of its 2022 levels by 2050, elevating energy to a central strategic concern driven by geopolitical dynamics and market volatility. This challenge is compounded by the fact that approximately 82% of this rising demand is still expected to be met by fossil fuels. The core issue is whether fossil fuels can realistically continue to sustain the region’s rapidly expanding energy needs, especially amid tightening supply conditions and mounting pressure to decarbonise.
Dependency as the Core Issue of ASEAN’s Energy Security
Firstly, regarding the sustainability of fossil fuels, ASEAN is increasingly experiencing pressure as traditional energy sources become less reliable. The region has long depended heavily on coal for electricity generation. However, despite a relatively stable coal supply, ASEAN remains vulnerable due to the growing difficulty of securing other fossil fuel supplies, particularly oil and natural gas. The region is already positioned as a major import-dependent market for these resources, and ASEAN is projected to transition into a net natural gas importer by 2027. This should not come as a shock given the persistent decline in domestic natural gas production over the years across the ASEAN member states (AMS), which suggests that by 2045 the region’s import dependency could reach as high as 93%, with annual import bills potentially exceeding USD 200 billion.
If this trend continues, the region’s dependence could leave it highly vulnerable to global price fluctuations.
To give a reference of the sense of urgency here, the 2022 global energy crisis demonstrated how ASEAN’s dependency on external energy supplies had exposed the region to external price shocks, directly affecting the region’s energy experience. During the energy crisis, global energy prices surged by nearly 60% above their previous peak, directly affecting households and businesses and prompting changes in energy consumption. Overall, ASEAN experienced a 5.6% decline in natural gas consumption, highlighting the tangible impact of external price volatility on ASEAN’s energy security.
Integration as the Solution
To shift this trajectory, ASEAN may not need to look far. The region already possesses a major advantage in its abundant renewable energy resources. From Viet Nam’s offshore wind corridors to Lao PDR’s hydropower potential and Indonesia’s geothermal potential, these resources suggest that regional integration in energy resourcing could offer a pathway out of energy dependency.
Realising this potential requires ASEAN member states to think beyond self-contained national power systems. The true opportunity lies in linking grids across borders to enable freer electricity trade. Such integration could help smooth out the natural fluctuations of renewable power, while any natural local disruption in renewable generation that might pose challenges for individual countries could then be mitigated should ASEAN have a more integrated system of electricity supplies.
It has been a long-standing regional goal for ASEAN to develop a flexible and resilient power system through the realisation of the ASEAN Power Grid (APG). By delivering a shared network, the APG would enable the matching of supply and demand across broader geographies and over longer timeframes. In the long run, diversifying energy sources among neighbouring countries would allow for strengthened energy security, helping the region better anticipate and manage the growing unpredictability of global fuel markets.
Implementing Cooperation
Building a strong and reliable regional power grid requires massive support. The ASEAN Interconnection Masterplan Study (AIMS) III, under which the APG was developed, estimates that the region will need around USD 764 billion in transmission and power generation investment to support high levels of variable renewable energy adoption.
By 2035, the annual investment for electricity networks might even double to about USD 22 billion.
Beyond investment, policy and regulatory frameworks must also evolve to facilitate the efficient movement of electricity across borders in line with changing energy trends. Through the ASEAN Plan of Action for Energy Cooperation (APAEC), member states have pledged their commitments to employ initiatives aimed at realising a cleaner and low-carbon ASEAN energy landscape, leveraging each member state’s diverse strengths to enable an accelerated collective progress. Under the APAEC, mechanisms such as the Lao PDR–Thailand–Malaysia–Singapore Power Interconnection Project (LTMS–PIP) serve as the region’s first multilateral cross-border electricity trade initiative, balancing technicality and commercial objectives. What is now needed, thus, is a way to accelerate similar progress for other ASEAN energy plans.
Strategic Cooperation with South Korea
Strategic partnerships with countries that navigated similar transitions offer both technical capabilities and institutional wisdom.
During the oil shocks of the 1970s, South Korea, a country heavily dependent on oil imports, experienced a severe energy crisis, which forced it to diversify fuel sources, invest in new power plants, and establish institutions dedicated to energy efficiency and conservation.
Today, Korea’s technical capabilities align closely with ASEAN’s infrastructure needs. The country has now become one of the global leaders for high-voltage direct current (HVDC) projects, highlighted through its latest 2024 completion of the 500 kV Bukdangjin–Godeok HVDC Phase II project that enhanced transmission capacity to Seoul by 3 GW. Collaborative actions that leverage Korea’s expertise in HVDC transmission, through capacity building and technical support, can be proven beneficial for ASEAN’s overall energy development. Such cooperation directly addresses the region’s geographically dispersed renewable resources and facilitates access to proven, high-performing technology.
