This is an extract from a recent report “Integrating Solar and Wind in Southeast Asia: Status and outlook for secure and efficient strategies” published by IEA.
Southeast Asia can successfully transform its power system to reliably and affordably meet growing electricity demand. This is possible with a progressive approach that aligns VRE integration measures with local contexts. It also involves building the technical and institutional capabilities to manage effectively higher VRE penetrations. This extract outlines a practical implementation roadmap with actionable steps for key stakeholders in Southeast Asia. These include policymakers, regulators, regional bodies and utilities. The roadmap draws on the regional opportunities, global experience in navigating from low to higher phases of VRE integration and the current readiness assessment.
The roadmap is organised around three types of actions that can build upon each other: foundational actions that establish basic policy and regulatory frameworks, enabling actions that implement systems and capabilities for effective VRE integration and transformational actions that drive advanced system transformation. These actions are structured across three time periods: near-term (2025-28) based on countries’ current readiness and 2030 ambitions, medium-term priorities (2028-30) focused on progression towards stated goals and longer-term preparation (post-2030). Regional interconnection represents a parallel opportunity throughout, offering pathways to reduce costs and enhance energy security regardless of individual country phases.
Implementation priorities for different phases of VRE integration
Countries with ambitious targets relative to their current readiness face the most intensive implementation efforts and require accelerated action across multiple fronts. Countries with conservative targets relative to their readiness may have opportunities to aim higher or focus on building robust foundations. The ASEAN member states will face different levels of VRE integration challenges through 2030 depending on their current readiness to integrate VRE and expected phases based on renewables targets.
Early-stage readiness countries (Brunei Darussalam, Cambodia, Lao PDR, Myanmar) are expecting to be in phases 1-2 by 2030, requiring steady progress through foundational capabilities and frameworks and enabling actions to get their readiness to tackle future VRE challenges.
Mid-stage readiness countries (Indonesia, Malaysia, Thailand, Viet Nam) present more complex trajectories. Viet Nam, which is expected to be in phase 3 in 2030, is already experiencing phase 3 challenges today but lacks sufficient readiness, creating the urgency of implementing enabling measures. Indonesia, which is likely to remain in phase 1 in 2030, faces the steepest acceleration. It is expected to leap to phase 3 by 2035, but this is complicated by fragmented grids, with some islands already experiencing phase 2-3 challenges. Malaysia and Thailand have more manageable progressions and are expected to be in phases 1 and 2, respectively, by 2030, with both progressing to phase 2 by 2035. Given their mid-stage readiness, both countries can begin to consider enabling actions and potentially pursue more ambitious renewable energy targets.
High readiness countries (Singapore, the Philippines) present distinct challenges. The Philippines faces a triple challenge as it would undergo the transition from phase 2 in 2030 to phase 4 by 2035, while simultaneously managing multiple island systems, some of which are not interconnected, at different phases and navigating the steepest system transformation requirements. Singapore presents a unique case as it would remain in phase 1 by 2030, despite high readiness, reflecting limited domestic VRE growth rather than technical constraints. Singapore plans to increase the share of VRE through imports, which requires efforts to build strong importing capability including physical infrastructure and regulatory frameworks and regional co-ordination. Singapore actively supports regional electricity trade within ASEAN, leveraging its advanced system capabilities.
Implementation priorities for systems in phases 1-2 (Foundational actions)
Foundational actions establish the basic institutional, policy and technical frameworks that create the foundation for successful VRE integration. These actions are essential for all countries but represent the near-term priority for countries in phases 1-2 where the focus is on building basic capabilities and frameworks for initial VRE deployment.
Set policy frameworks that support a clear path to achieve VRE integration targets: Establish clear policy frameworks that enable continued VRE deployment and investment confidence. Investment decisions, technology choices and infrastructure planning all depend on policy certainty over multi-year timeframes. Specifically, ambitious VRE targets with supporting policy measures provide a coherent roadmap, giving confidence to investors. Competitive procurement mechanisms are increasingly driving the most cost-effective VRE deployment while Southeast Asia relies on regulated approaches. Successful regional examples demonstrate competitive approaches’ effectiveness, but require government co-ordination for implementation.
Enhance energy efficiency regulations to reduce electricity demand, grid capacity requirements and enable future flexibility: Update appliance standards and building codes to reduce electricity demand and enable future grid integration. Energy efficiency, often called the “very first fuel”, is a cost-effective, proven strategy to reduce electricity demand, lowering energy bills and reducing pressure on power systems. Most technologies are market-ready with large potential in the buildings and transport sectors. Updating appliance standards now offers the greatest opportunity for long-term impact, as appliances purchased today will remain in use for decades across Southeast Asia’s rapidly electrifying economy. Embedding demand-response readiness in new standards prepares the foundation for grid-responsive capabilities that support VRE integration as grid infrastructure develops.
Ensure technical standards and enhance operational capabilities for secure and efficient power systems: Develop updated grid codes with detailed VRE performance requirements to enable renewable integration that protects existing infrastructure. Grid codes must specify technical requirements for VRE plants including fault ride-through capability, voltage and reactive power control, and communication interfaces. Establish compliance monitoring frameworks to ensure VRE installations meet safety and performance requirements throughout plant lifetime. Implement basic operational capabilities in forecasting and dispatch to create the foundation for initial VRE deployment and future operational enhancement.
Establish co-ordinated grid infrastructure planning between government and utilities: Establish co-ordinated planning processes that align government policy frameworks with utility technical expertise. Grid plans become robust by testing them against scenarios for supply and demand trajectories, grid configuration options and regional interconnection possibilities. This provides the foundation for infrastructure investments that deliver value across different possible futures. Energy ministries, regulators and planning authorities must work together to create grid development plans with clear timelines and technical specifications. Co-ordinated planning between government renewable energy targets, utility grid development capabilities and VRE deployment timelines ensures that renewable energy investments can be fully utilised while maintaining system reliability and security.
Implementation priorities for systems in phase 3 (Enabling actions)
Enabling actions implement the operational capabilities, market mechanisms and infrastructure systems that allow countries to effectively manage variable renewable resources. These actions become critical for countries moving through phases 1-3 and are essential for phase 3, where VRE variability begins to require active system management and flexibility resources.
Develop mechanisms to procure flexibility and create viable business cases for flexibility services: Establish clear incentive mechanisms and update regulatory frameworks to value and procure essential system services, tailored to each country’s market structure. This requires defining and quantifying specific system services needed to support grid stability and reliability. Countries should establish transparent procurement processes and provide valuation mechanisms that enable service providers to build viable business cases. Countries can define specific technical requirements for system services such as frequency response or ramping products. Create transparent procurement processes and market rules that facilitate fair competition among flexibility providers.
Establish stable investment signals for diverse flexibility providers: Remove regulatory barriers and create supportive policy environments that unlock private sector investment in flexibility resources. As renewable energy shares grow, power systems need diverse flexibility options that private sector can deliver, including distributed energy resources, BESS, gas turbines, virtual power plants and aggregator services. Removing regulatory barriers means establishing fair market access rules, allowing market participation of new flexibility resources, and ensuring different flexibility providers can compete on equal terms. Co-ordinated policy development across government departments provides consistent signals about market opportunities to unlock private investment in flexibility technologies.
Enhance power system infrastructure and operational practices: Ensure timely grid capacity development and digitalisation to meet growing electricity demand and support effective VRE integration. Grid capacity development is primarily needed to cater for growing electricity demand, whilst digitalisation provides real-time visibility into grid conditions and control over transmission assets. Update grid codes regularly to reflect evolving system needs while balancing performance requirements with provision costs. As VRE penetration increases, their operational requirements evolve. Enhance operational procedures to respond more quickly to system changes. This requires improved VRE and demand forecasting capabilities – while many countries including the Philippines, Singapore, Malaysia and Thailand have established VRE forecasting systems, though most only forecast days to six hours ahead.
Enable flexible operation of conventional power plants: Co-ordinate improvements across plant performance, market operations and system control capabilities to enable flexible operation of conventional power plants. Countries can retrofit existing power plants to operate more flexibly to respond to changing electricity demand by lowering minimum generation levels, increasing ramp rates and shortening start-up times. Studies in Thailand, Viet Nam and Indonesia indicate the technical and economic feasibility of enhancing thermal plant flexibility, though implementation strategies vary by country. Many countries including Indonesia, Thailand, Viet Nam, Lao PDR and the Philippines face limitations from inflexible long-term PPAs that hinder VRE integration.
Reform system planning and adequacy assessment: Adapt system adequacy assessment methods to account for variability and uncertainty of demand and supply. With rising VRE penetration and growing uncertainty on both the supply and demand side, system adequacy assessments must evolve beyond traditional deterministic methods. Malaysia, Thailand and Viet Nam have moved from traditional reserve margin approaches towards more sophisticated, probabilistic assessments such as LOLP, LOLE and EENS that better capture the uncertainty of power systems. As Southeast Asia is highly exposed to severe weather events including typhoons, floods and extreme heat, integrating the risk of climatic events into planning is essential to ensure system security.
Systems preparing for a high VRE future at phase 4 and above (Transformational actions)
Transformational actions deploy advanced technologies, cross-sector integration and sophisticated market designs that optimise high-VRE system performance. These actions are necessary for countries approaching phases 4-5, where very high VRE penetration demands comprehensive system transformation and advanced operational capabilities.
Map out policies needed to mobilise the power system transformation: Develop comprehensive flexibility deployment roadmaps to guide when and how different flexibility resources will be needed as countries approach high phases of VRE integration. These roadmaps should quantify flexibility needs, indicate deployment timelines and consider procurement methods for different flexibility options including demand response programs, large-scale storage systems and flexible generation resources. Establish streamlined permitting processes and co-ordinate VRE and demand development locations to enable system-friendly deployment at scale. As VRE deployment increases, ensuring that new projects are developed in locations and configurations that support grid integration becomes essential for efficiently maintaining system security.
Align and map market and regulatory reforms with power system transformation: Implement targeted market and regulatory reforms that work within current frameworks rather than requiring complete restructuring. These reforms should include transparent mechanisms to value and procure system services, focusing on incremental adjustments that enable higher renewable integration. Regulatory frameworks must evolve to accommodate new technologies like BESS and advanced grid enhancing devices while providing clear incentive mechanisms for flexible power plants and demand response providers to deliver essential system services. Reform electricity tariff structures to support grid investments while maintaining affordability for consumers. Expand green finance eligibility to include grid infrastructure investments essential for VRE integration.
Deploy advanced system transformation capabilities: Develop comprehensive power system transformation roadmaps to guide co-ordinated planning of multiple resources. These roadmaps outline the staged deployment of flexibility providers including BESS, pumped hydro storage, long-duration energy storage, vehicle-to-grid services and power-to-hydrogen, while accounting for transmission infrastructure development. Integrate planning across different sectors to align power system development with decarbonisation and regional energy security objectives. As electrification of transport, heating and industry accelerates, integrated and coordinated planning can align grid expansion and flexibility resource deployment with changing demand patterns.
Regional interconnection
Regional interconnection offers strategic benefits for system optimisation. While countries pursue individual VRE integration at different paces, regional interconnection runs as a parallel track requiring sustained multilateral effort. The APG initiative provides the institutional framework for this co-ordination, aiming to enhance regional energy security and optimise resource sharing across the region. The inherently cross-border nature of regional interconnection means that progress depends on collective commitment and co-ordinated action rather than individual country readiness. This framework identifies priority actions across near-term (2025-28), medium-term (2028-30) and long-term (beyond 2030) timeframes to build the institutional capabilities, technical standards and cross-border frameworks needed for successful regional integration.
Strengthen regional co-ordination platforms for crossborder electricity trade in the near term (2025-28)
Enhance existing co-ordination platforms to be more effective in planning and implementing large-scale infrastructure for interconnectors with clear mandates, deliverables and timelines to ensure sustained progress in regional integration. These platforms should go beyond high-level dialogues and be structured as working groups or steering committees that enable actionable implementation rather than just policy discussions. Existing ASEAN energy coordination bodies like the ASEAN Secretariat, ASEAN Centre for Energy, ASEAN Power Grid Consultative Committee, ASEAN Energy Regulators’ Network and Heads of ASEAN Power Utilities/Authorities provide the foundation that can be further strengthened through mechanisms for regular progress reviews and adaptation of strategies. Co-ordination platforms should balance the representation of all participating countries and establish equitable benefits to maintain long-term commitment and political support.
Setting a consistent crossborder power trading framework, starting from bilateral trading in the near term, provides the foundation for broader regional market development, as demonstrated by initiatives like the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project. Developing actionable roadmaps for cross-border electricity trade requires identifying priority interconnection projects based on regional system assessments that consider technical, economic and strategic factors. Establishing phased implementation plans with clear milestones and responsibilities enables the tracking of progress and identification of bottlenecks, as demonstrated by the ASEAN Power Grid Advancement Programme approach to structured regional cooperation. Creating frameworks for addressing the unique challenges of crossborder investments, including currency risks, regulatory differences and cost and risk allocation between participating countries, can help resolve institutional challenges that often delay regional projects. Regional or multilateral institutions can play important roles in facilitating these complex negotiations.
Sustain regional implementation progress through adaptive co-ordination in the medium term (2028-30)
Implement adaptive management approaches that sustain progress in cross-border integration through continuous learning and adjustment. Regional integration requires ongoing co-ordination that can adapt to changing circumstances and emerging challenges. Regular reviews of implementation progress against established milestones enable regions to apply lessons learned and recalibrate approaches and timelines as needed to maintain momentum. Ensure timely development of grid infrastructure that delivers secure electricity to the growing demand. While grid planning in Southeast Asia currently remains primarily domestic or bilateral, regional bodies can work to coordinate and align grid development plans gradually based on evolving regional needs, adjusting timelines and priorities as renewable deployment accelerates and demand patterns change. This ongoing planning process involves continuing efforts to harmonise technical aspects such as grid codes, operating procedures and trading rules to enable secure electricity trade across borders.
Develop roadmaps to harmonise trading across interconnected borders (beyond 2030)
Establish regional frameworks to enable cross-border trade across different electricity market structures. Fundamental to this are regional co-ordination mechanisms that create compatible trading interfaces between different national electricity systems, harmonise grid codes, align operating standards and coordinate transmission planning practices. Where power transits through third countries, there must be consistent wheeling charge methodologies to ensure fair cost allocation for shared infrastructure use. Establish common transmission cost recovery principles for investment recovery and regulatory harmonisation. The ASEAN member states will need phased roadmaps for regulatory harmonisation and grid code alignment that enable cross-border electricity trade while respecting national sovereignty and regulatory autonomy, using incremental approaches where grid codes and trading rules are progressively revised and adapted to achieve higher levels of regional integration through step-by-step implementation.
Access the report here
