IEA warns Southeast Asia grid investment must quadruple by 2050

The International Energy Agency has stated that countries in Southeast Asia must significantly increase investment in their transmission and distribution networks to accommodate the rapid expansion of renewable energy capacity. According to the agency, grid investment in the region needs to rise from the current level of 13 billion dollars to 50 billion dollars by 2050. This substantial increase is necessary to keep pace with rising energy demand and to manage the growing variability of power supply and demand across the region.

Southeast Asia currently accounts for nine per cent of the global population and four per cent of global GDP. However, the IEA projects that the region will contribute almost 20 per cent of global energy demand growth by 2035 under current policy settings. To address this demand while reducing reliance on fossil fuels, eight countries in the region have established economy-wide net zero targets. The agency notes that heavy investment in renewable energy and electrification over the past decade has already helped reduce fossil fuel import requirements, saving the region approximately 30 billion dollars in import costs in 2025.

Renewable energy capacity in Southeast Asia stood at 120 gigawatts in 2024. Under current policy settings, this capacity is expected to almost triple by 2035. If announced targets are achieved, the capacity could grow fivefold. To support this growth, the IEA indicates that transmission and distribution networks must more than double in length by 2050. This expansion includes an estimated 27 billion dollars in investment for cross-border interconnections under the ASEAN Power Grid.

Across Asia, energy consumption increased by around 50 per cent over the last decade, while investment in energy infrastructure remained broadly stagnant. The Asian Development Bank has identified the lack of investment in transmission networks as a major barrier to the region’s energy transition. It suggests a need for resilient, digitalised, and flexible electricity networks. A recent assessment highlights that overloaded transmission lines, undersized transformers, ageing equipment, weak maintenance, and inadequate network planning can increase technical losses and constrain power flows. These issues also delay the connection of new renewable projects.

Despite improvements in electricity access, which rose from around 70 per cent in 2000 to over 97 per cent in 2021, grid losses in Asia remained around 12 per cent in 2022. This figure is only slightly lower than the 14 per cent recorded in 2000. As the region diversifies its energy mix to include higher shares of solar, wind, and distributed generation, the need to manage supply fluctuations has increased. Transforming the region’s transmission networks will therefore require coordinated investment across physical networks, storage, flexibility, digital system management, and regional interconnection.

In Indonesia, the government invested over three billion dollars in 2022 in the expansion and renovation of its transmission and distribution systems. This amount was about one-quarter less than the average spent during the 2017 to 2021 period. Indonesia must significantly increase investment in its power infrastructure to meet its target of extending transmission and distribution lines by more than 47,000 kilometres between 2021 and 2030. This expansion supports the country’s goal of achieving carbon neutrality by 2060.

In India, accelerated renewable energy development is beginning to outpace transmission and distribution infrastructure. In the first quarter of 2026, transmission constraints contributed almost two-thirds of all renewable energy curtailment, totalling 300 gigawatt hours, according to Ember Energy data. Between 2022 and 2026, India has delivered only about 80 per cent of its annual transmission targets. This underinvestment threatens the achievement of the country’s 2030 target of 500 gigawatts of non-fossil electricity.

In Vietnam, installed power capacity had reached nearly 90 gigawatts, with renewable energy contributing around 27 per cent. However, as grid infrastructure has not expanded at the same pace, some provinces have been forced to cut solar and wind power generation due to insufficient network distribution capacity. The Ministry of Industry and Trade is working to improve the legal framework for energy development, including proposed amendments to the Law on Electricity, to attract investment in the transmission network and boost investor confidence.