This piece is written by Aqwika Deviena Hermawan, Nathania Azalia, Livia Liannasari, Dr. Asmus Randløv Rungby, Marcel Nicky Arianto.
ASEAN is riding a wave of economic momentum. The region is expecting an average growth rate of 4% between 2023 and 2050, making it one of the fastest-growing economic regions of the world. Yet this trajectory depends reliable, affordable, and resilient access to energy. For people across the region, especially in rural and hard-to-reach areas, access to electricity is not a matter of necessity, but also an entryway to opportunities such as enabling entrepreneurship, education, and gender empowerment.
As a development tool, the ASEAN Power Grid (APG) can help actualise this future by delivering reliable, affordable, and secure energy access through interconnection—transforming productivity and social welfare. Achieving a prosperous energy future for ASEAN requires coordinated governance.
Productivity Gains Across the Board
Between 2023 and 2025, ASEAN’s economic growth stabilised at around 4.1 to 4.7% and is projected to have a potential of accelerated economic growth. Energy is at the core of economic expansion as the regions energy investments drive capital inflows, driving demand for energy to accommodate increased economic activity. To this point, up to 2.6 times increase in the region’s final energy demand by 2050 is projected, with roughly a 3.7% compound annual growth rate. With such high and dynamic demand, the supply side must be systemised to support it.
Power systems in some ASEAN countries still experience outages from time to time, with the most recent case happening in Myanmar where electricity production fell below 2,000 megawatts per day. Up to 2023, Cambodia experienced 15 outages on average that would last up to 20 hours. However, some countries in the region have more stable power systems, with total annual downtime measured in mere minutes. This level of stability drives investment and fuel economic growth. Study found that in general, manufacturing firms suffer 9% lower productivity rate compared with firms with stable power supply—largely due to frequent outages.
Stronger grid infrastructures present a crucial response. Regional interconnectivity through the APG offers a steadier supply even during peak demand by expanding the range of supply facilities even during fluctuating demand shifts. Firstly, connectivity enables opportunities for regional power trading to better support peak demands. The Sarawak-Kalimantan interconnection transformed West Kalimantan’s daily power interruptions into a rare occurrence since 2016, allowing factories and small businesses to operate longer hours, preventing them from investing in costly diesel generators often priced two to three times higher per kilowatt hours.
Second, reliable grids help drive affordability, a core point in ASEAN’s socioeconomic development. By developing new cross border transmission lines, the APG helps unlock access to countries with lower cost of energy generation, particularly countries with abundant renewable resources like hydro and solar energy, thereby reducing fuel consumption and electricity cost through optimal resource sharing. Together, these mechanisms create a more competitive playing field in the energy market, strengthening both affordability and security for households and industries alike.
Translating Growth into Community Impact
Beyond technical numbers, sociological effects realised in the community reflect the real benefit of grid expansions. Higher productivity translates to many employment benefits. Enhanced interconnectivity will pave the way for greater renewable energy integration, considering the abundance of renewable energy potential in ASEAN. It is projected that full implementation of the APG could potentially generate jobs related to solar and wind power from 130,000 to 182,000 jobs by 2040.
Outside direct economic growth seen through renewable energy project development, new and innovative sectors may also develop as energy becomes reliable enough to support entrepreneurship. Through digitalisation and home-based machines, for example, more inclusive economies can thrive, including giving platforms for women-led home businesses.
Looking further, economic expansion means living standards may also subsequently rise. Broader income flows through employment opportunities combined with more reliable grids give people more opportunities for domestic activities without needs trade-offs. Ultimately, communities in ASEAN can and should expect holistic socioeconomic benefits from interconnections.
Achieving APG’s Real Impact
Cross-border grid connectivity under the APG initiative must be embedded within ASEAN’s broader economic architecture. To do this, ASEAN must go beyond conventional measures of success. Enhancement of regional grid connectivity is necessary in order to ensure the achievement of energy indicators, such as electrification rates, renewable energy shares, and energy intensity, listed under ASEAN Plan of Action for Energy Cooperation (APAEC).
In order to achieve the targets, a stepwise development plan is needed to ensure an inclusive approach towards the full implementation of the APG. A comprehensive roadmap will require systematic assessments establishing community needs across Southeast Asia and pairs these needs with detail concrete governance actions. Moreover, it can also anticipate broader transformations by accounting for the socioeconomic, political, and psychological dimensions of community change.
Key metrics to systemise and accomplish social impact analysis could include rural electrification rates, small and medium enterprises (SMEs) access to reliable and affordable power, employment distribution in energy-related sectors, and household energy expenditure relative to income. This way, reliability and service quality indicators could be properly contextualised and assessed, to ensure that electricity access is meaningful and impactful rather than nominal.
