Can Asean Power Grid slash electricity prices?

Notes on the beat

SINGAPORE — Connecting Southeast Asia’s power grids is one thing. Making electricity more affordable for households and businesses across the region is another.

The multibillion-dollar push to build the ASEAN Power Grid (APG) is gaining momentum, promising to boost cross-border electricity trade and expand access to power supplies.

Yet whether this regional connectivity will translate into lower electricity bills remains a key question.

For Puah Kok Keong, chief executive of Singapore’s Energy Market Authority (EMA), it is too early to tell, but the prospect of lower power rates is not out of reach.

“It cannot be determined at this point. We have to look at it project by project,” Puah said in an interview here over the weekend.

First envisioned in 1997, the APG seeks to connect the electricity networks of ASEAN member states by 2045.

“If we can link them together, actually that enhances everybody’s power resiliency,” Puah said, stressing that it could improve energy reliability across the region.

Such interconnections could help cushion the impact of local supply disruptions by allowing electricity to flow from countries with surplus power to those facing shortages.

But turning that vision into reality will require substantial investment. About $800 billion in generation and transmission investments must be mobilized to support the APG, according to the World Bank Group.

Countries will also need to harmonize their electricity regulations and navigate differing rules governing cross-border power trade to ensure electricity can flow seamlessly across national boundaries.

These costs and regulatory complexities could influence how much consumers pay for electricity.

“We have to add up the cost of power generation (and) transmission wheeling charges. There may be other regulatory requirements that countries may impose on the projects and the importers or exporters,” Puah said.

The stakes are particularly high for the Philippines and Singapore, which have some of the highest electricity rates in Southeast Asia.

Both countries have liberalized electricity markets and do not provide broad-based subsidies to consumers. This leaves households and businesses bearing most of the costs of producing, transmitting and delivering power.

Instead, both governments provide targeted assistance to help ease the burden on vulnerable households.

In Singapore, the government offers utility rebates to households living in public housing units. The rebates are tiered according to flat type, with households in smaller units receiving larger amounts.

“This is the way that we help to address cost of living issues without changing the cost of electricity. And the rebate is in a way that if you don’t fully use it, you can roll it over to the next quarter and so on,” Puah said.

In the Philippines, meanwhile, qualified low-income families consuming 50 kilowatt-hours of electricity or less a month are eligible for a 100-percent discount on their power bills under the lifeline rate subsidy program.

The cost of this assistance, however, is borne by other electricity consumers.

For the Philippines, Singapore and the rest of Southeast Asia, Puah said greater regional power integration could offer an avenue to improve energy affordability over the longer term.

“Working on areas to address the project risk, working on giving clearer regulatory certainty, and this is what governments can work on together, can actually help bring the cost down,” he added.

“I think technology continues to improve, and their efficiency continues to improve.”

The APG is expected to take center stage at the 2026 Singapore International Energy Week organized by the EMA, a statutory board under Singapore’s Ministry of Energy, Trade and Industry.

Whether the APG will bring down power costs remains uncertain, but it is undoubtedly a step in the right direction toward amore resilient energy future for the region.