Sarawak's Role in ASEAN Power Grid: Driving Regional Decarbonisation with Hydropower
Key Ideas
- Sarawak's participation in the ASEAN Power Grid is crucial for regional decarbonisation efforts through the supply of low-carbon hydropower, contributing to displacing fossil fuel generation in Southeast Asia.
- The state aims to increase its renewable energy capacity to 15 gigawatts by 2035, focusing on hydropower development, solar scale-up, and hydrogen deployment to enhance its energy security and become a regional energy anchor.
- Cross-border transmission routes are being explored by Malaysia, with considerations for cost-efficiency, geopolitical alignment, and securing financing, permits, and off-take agreements to drive the implementation of the APG initiative.
- The success of Sarawak's energy strategy could serve as a blueprint for other sub-regional linkages within ASEAN, offering lessons in central coordination, technical harmonisation, and the use of climate finance instruments for clean energy transition.
The Sarawak-linked segment of the ASEAN Power Grid is emerging as a crucial enabler of regional decarbonisation efforts, with the supply of low-carbon hydropower set to replace fossil fuel generation across Southeast Asia. Prime Minister Datuk Seri Anwar Ibrahim highlighted Sarawak's potential to become the main energy hub for Malaysia and ASEAN. The state is poised to significantly increase its renewable energy capacity to 15 gigawatts by 2035, leveraging hydropower, solar energy, and hydrogen deployment.
Arthur D. Little Southeast Asia partner, Trung Ghi, emphasized the importance of the tripartite cooperation in strengthening regulatory alignment and accelerating institutional readiness for the APG initiative. The plan includes continued hydropower development, solar scale-up, and hydrogen deployment, aiming to boost export capacity and enhance domestic energy security.
Malaysia is exploring cross-border transmission routes, considering factors like cost-efficiency and geopolitical alignment to advance the APG implementation. Challenges such as land acquisition, environmental clearances, and grid code harmonisation are highlighted, requiring continued coordination among governments, regulators, and industry players.
The article underscores the long-term structural solution for emissions reduction offered by the regional power grid, provided that infrastructure, regulation, and markets are effectively aligned. The ASEAN Power Grid Finance Facility Framework, set to be launched in 2025, aims to mobilize substantial capital for energy infrastructure projects, with the ADB committing up to USD10 billion.
Sarawak's success in the energy sector could serve as a model for other sub-regional linkages in ASEAN, driving sustainable growth and energy resilience. Trung also mentions the potential lessons that ASEAN could draw from European and Chinese energy networks in terms of coordination and investor confidence. Climate finance instruments are expected to support the clean energy transition in the region, with green bonds and carbon credits playing key roles.
Overall, Sarawak's hydropower-driven export model is positioned to transform the regional energy landscape, showcasing the shift towards sustainable growth and energy resilience in ASEAN.