Why the Asean Power Grid’s future lies in subsea cables
Serious money
US$27 billion is needed from 2025 to 2040 to deliver the APG’s interconnectors
IEA estimated US$27 billion is needed between 2025 and 2040 to deliver the proposed pipeline of energy interconnection projects, inclusive of both overland and subsea cables.
This is more than 10 times the US$2 billion that the region invested in energy interconnectors from the 1970s to 2024, mostly for one-way power export.
Caution: high voltage
Building these long-distance interconnectors will require HVDC cables, as well as specialised vessels to lay them. But the global market for these resources is tight.
Lam Pham, an Asia energy analyst at think tank Ember, noted that Asean still lacks manufacturing capacity for such cables within the region, and is thus “heavily dependent” on established suppliers and installation capacity from elsewhere.
“(With) Asean projects competing for the same manufacturing slots and installation capacity as Europe’s offshore wind industry, (this) is pushing up costs and creating long lead times for new projects,” he said.
Cross-section of a HVDC subsea cable
The interactive cutaway loads as you reach this section.
Illustrative single-core extruded HVDC cable based on the Europacable reference. Layer proportions and colours are schematic.
Sources: Europacable, ZMS Cable
Assaad Razzouk, CEO of Singapore-based renewable power company Gurin Energy, called for centralised procurement of subsea power cables to mitigate supply constraints.
“Governments should give us a hand in procuring these ahead of time, so that as a region, we don’t find ourselves in five years without the ability to… build the Asean grid because the rest of the world gobbled (the cables),” he said at an industry event in August.
Cracking the puzzle
Regulatory clarity is another key piece of the puzzle.
For subsea cable manufacturers to establish production or installation operations in Asean, they will need greater certainty around the project pipeline and government policy, Lam noted.
Seah echoed this, noting that transmission infrastructure is capital-intensive and will only be developed where there is “demonstrable demand”.
Sentiment around the APG is still cautious. In a recent survey of energy professionals, only a quarter expect significant cross-border power trading in the next decade. Over half of respondents believed that a fully integrated regional grid “will remain some way off”.
Wait and see
Responses from 100 energy professionals in Asean on whether the APG will become a reality
Source: Sustainable Energy Association of Singapore
This comes amid obstacles that APG projects face. The Singapore-Indonesia projects, for instance, have run into delays over regulatory uncertainty.
Jakarta requires clean energy exporters to renew permits every five years. But this frequent renewal timeframe leads to a lack of confidence among potential investors and offtakers.
Asean member states have also not formally agreed on a single framework governing subsea cable assets under the APG, and whether ownership will be public or private, noted Seah.
Key development to watch
The status quo could change, as Asean works on its Submarine Power Cable Development Framework.
The framework will cover four aspects around the laying and maintenance of subsea power cables: legal and regulatory, technical, commercial, and governance issues.
In October last year, Asean’s energy ministers reaffirmed the importance of the framework during their annual meeting, calling for “sustained and accelerated progress”.
The completion of this framework will be a key milestone to watch out for.
Asean’s diversity of technical standards and political priorities will need to be taken into consideration, said Seah, noting that the region currently uses more than 20 grid codes.
As she put it, the process will take “time and trust”.
Sources: Rystad Energy, International Energy Agency, Sustainable Energy Association of Singapore, data compiled by BT
Graphic: Ho Yan Hao, Nurulshazanani Idris, BT (with AI assistance)
