Major energy companies from Singapore, Malaysia, and Vietnam have agreed to explore cross-border renewable energy links.

The focus will be on exporting offshore wind power from Vietnam, with the initiative announced during an ASEAN summit in Kuala Lumpur.

The collaboration includes subsidiaries of Singapore’s Sembcorp Industries, Malaysia’s Tenaga Nasional Berhad, and Petroliam Nasional Bhd., along with Vietnam’s PetroVietnam.

The project aims to assess the feasibility of transmitting clean energy from Vietnam to Malaysia and Singapore through a subsea cable and the Malaysian grid.

This agreement is part of broader ASEAN efforts to establish a regional power grid to support climate goals and meet rising energy demands. More than a dozen related projects are currently underway across member states.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Closing the enormous renewable investment gap remains Southeast Asia’s biggest challenge

Despite growing commitments to clean energy, ASEAN faces a substantial financing shortfall for its renewable ambitions.

The region requires approximately $85 billion annually to meet its climate targets by 2030, but currently only achieves about $15 billion in renewable investments per year 1.

This gap is particularly concerning given that ASEAN economies are among the fastest-growing globally, with average growth rates of 5.3% from 2022-2024 (compared to the OECD average of 2.3%), driving a projected 41% increase in energy demand by 2030 2.

While renewable energy investments have surged to $43 billion in 2022, with a 15% annual increase in international projects since 2020, this remains insufficient to meet ASEAN’s stated goal of renewables constituting 23% of primary energy supply by 2025 2.

Current trajectories suggest the region will achieve only 19.6% renewable energy by 2025, highlighting the urgency for accelerated investment and international cooperation in initiatives like the supergrid 2.

2️⃣ The supergrid vision represents a critical pivot from decades of fossil fuel dependence

The recent agreement marks a significant step in ASEAN’s long-standing but previously underrealized vision for a regional power grid.

Currently, coal still dominates Southeast Asia’s energy landscape, accounting for over 40% of power generation in the region, creating both environmental challenges and energy security concerns 3.