Energy Security and the Rise of the Electrostate

For many years, policymakers in Asia, when discussing energy security, generally referred to fuel—such as how many days' supply of oil a country had in storage, how many LNG cargoes it had booked, and the effect a rise in prices would have on its import bill. These questions are still important. However, since an increasing part of the economy is based on electricity, another question is becoming just as significant: whether the power grid can deliver electricity to where and when it is needed. Nations that give a good answer to this question are ones that analysts have begun to term electrostates, and Southeast Asia is currently going through this transition.

The main reason is the increasing electricity demand. Electricity consumption in the area has risen by about 6% each year since 2015, outpacing overall energy usage, and the International Energy Agency (IEA) anticipates a yearly growth rate of around 5.3% up to 2030. Over the next ten years, the region will see demand increase to the level that Japan currently generates. A large part of this increase is due to households purchasing their first air conditioners and factories switching from boilers and diesel to electric processes, alongside data centres in Singapore and Johor contributing a substantial and concentrated amount of power. Changes are also taking place on the supply side: for every megawatt of solar, wind, hydro, or geothermal energy that is installed at the household level, there is less need for imported fuel, which represents a real improvement in security.

One of the challenges though is of geography since hydropower is located in the mountainous areas of Laos and geothermal power is found in Indonesia and the Philippines, whereas the demand for electricity is in cities like Bangkok, Jakarta, and Singapore. Without transmission lines keeping pace, affordable and clean power ends up being wasted, and the IEA has already cautioned that investment in grids is falling behind generation. Regional interconnection can help to overcome this gap. The ASEAN Power Grid, which was first suggested in 1997, has gained more momentum in the last year. In 2025, the member states agreed on an improved memorandum of understanding with a target of achieving full interconnection by 2045, and the Asian Development Bank and the World Bank have started a financing initiative to assist in funding the projects.

The power integration project involving the Lao PDR, Thailand, Malaysia, and Singapore has proven that multilateral trade can be successful, and Singapore's intention to import as much as 6 GW of low-carbon electricity by 2035 provides the region with a reliable buyer upon which to base its developments. India has already experienced something similar; its five regional grids were gradually brought into synchronisation to form a single national grid, which in turn enabled power to be sent from rich-resource states to distant areas of consumption. The investment made in transmission infrastructure is the main factor that has allowed India to increase its solar and wind capacity so rapidly, and it offers a useful example for ASEAN. Three factors will determine how quickly the region acts.

The grid codes should be established first; there are currently over 20 of them in ASEAN, and having common standards, clear tariff rules and a workable method of settling disputes would make it easier to plan cross-border projects. Money is the next issue, as the ASEAN Interconnection Masterplan Study estimates that the investment required to achieve the renewable energy targets is about US$764 billion, and most of that amount will only go to projects which are capable of being financed. Regarding technology, the necessary tools are already available: high-voltage direct current is the obvious solution for transmitting large amounts of power over long distances or under sea between the islands, and batteries can deal with the drop in power in the evening when solar generation decreases. What the utilities actually need at this stage is greater visibility, since a grid powered by rooftops and wind farms works in a very different way to one that is based on a small number of large thermal power stations.

This discussion within the industry has become more urgent. At the Enlit Asia event in Indonesia in 2026, a large part of the talk concerned battery storage and the ways of ensuring that power grids remain reliable as the use of renewable energy increases. The same questions are expected at the Future of the Grid event in Singapore on 27–28 October, although this time the emphasis will be on data centres and whether the region's power grids will be able to keep up with them. Just as Asia has taken decades to build up its oil security, one reserve and one supply agreement at a time, it will take just as long to achieve electricity security, and it will be the countries that today start constructing the transmission lines and reach agreements on the relevant rules who will not have to react in a hurry when demand arises.