Smart grids have power to drive industry boom

ASEAN's next growth phase won't be built only on roads, ports and railways, but on invisible highways of electricity.

- By ALNIE DEMORAL and DINITA SETYAWATI

Power disruptions and forced reductions in renewable output are no longer inconveniences but economic liabilities that threaten Southeast Asia's industrial ambitions.

Many other countries have faced this situation. China, for instance, modernized its grids to integrate record additions in solar and wind power by pairing digital tools with pilot rollouts to keep its vast electricity system stable. It shows that grid modernization is not optional but a prerequisite for sustaining renewable growth.

As the ASEAN region accelerates its transition to clean energy, aging power grids are showing their limits. Built decades ago for large coaland gas-based plants, most of the region's power networks were not designed to accommodate the massive volumes of wind and solar energy produced today. Moreover, solar and wind energy volumes fluctuate with the weather and time of day, which strains the networks.

These outdated grids pose risks to both energy security and economic growth, undermining the competitiveness of the region and investor confidence. Smarter, more resilient and flexible grids are urgently needed.

Between 2015 and 2020, targeted upgrades in the grid networks helped improve reliability. But the next leap will be far more complex. Led by Vietnam and the Philippines, ASEAN's solar capacity is projected to increase more than 12 times by 2050. Without smart technologies, managing these fluctuating power flows will be difficult.

A recent study by Ember estimates that reliability gaps could cost the ASEAN region nearly $2.3 billion a year by 2040 in lost industrial output.