The Rise of Subnational Actors in the ASEAN Power Grid

Subnational actors are becoming increasingly critical to the implementation of the ASEAN Power Grid . The success of future cross-border interconnection projects will depend not only on national governments but also on state, provincial and city authorities, which increasingly shape project outcomes.

The ASEAN Power Grid (APG) is a key driver of energy security and decarbonisation in Southeast Asia (see Figure 1). The APG seeks to develop cross-border interconnections, harmonise regulatory standards, and integrate electricity markets. It aims to facilitate the uptake of 30 GW of renewables and reduce decarbonisation costs by US$800 billion .

National-level actors have been the most important players in the APG, having implemented the Laos-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) in 2022, which is Southeast Asia’s first multilateral electricity trading arrangement. Alongside the broader network of existing and proposed APG interconnections, a new generation of projects linked to specific renewable energy resources is emerging, including multilateral initiatives and a growing pipeline of proposed subsea power cables, as illustrated in Figure 1.

While national governments will continue to be the primary drivers of the APG, progress towards the Brunei Darussalam-Indonesia-Malaysia-Philippines Power Integration Project (BIMP-PIP) , together with a growing pipeline of subsea power-cable projects , is elevating the importance of states, provinces and other subnational regions.

As shown in Figure 2, the BIMP-PIP connects the Malaysian states of Sarawak and Sabah with Brunei, West Kalimantan in Indonesia, and Palawan in the Philippines. Proposed subsea cable projects linking Sarawak or Batam to Singapore also place specific subnational regions at the forefront of the electricity trade (see Table 1).

Policymakers should engage subnational actors not merely to fulfil procedural expectations for stakeholder consultation, but because they are strategically important to the APG’s future. These subnational actors can help address two of the APG’s most critical challenges: resource nationalism and inconsistent political support for interconnection projects.

Why Subnational Actors Matter More Today

Energy integration has traditionally been managed by national governments, utilities and regulators, and regional institutions such as the Heads of ASEAN Power Utilities/Authorities (HAPUA) have also been dominated by central government representatives.

Since the launch of LTMS-PIP in 2022, the APG has attracted wider stakeholder interest. Emerging cross-border electricity projects increasingly depend on state and regional governments, state-owned utilities and other subnational actors whose influence varies across political systems, from federal arrangements such as Malaysia to more centralised systems in other Southeast Asian countries.

Sarawak is one of the most important subnational actors in the APG. The state has positioned itself as a regional electricity export hub, with Premier Abang Johari Openg repeatedly supporting the proposed 1 GW subsea cable to Singapore by 2032.

Renewable energy exports are also embedded in Sarawak’s Post-COVID-19 Development Strategy 2030 , while Sarawak Energy is developing transmission infrastructure for the Borneo Grid, the land-based component of the BIMP-PIP, which links Sarawak, Sabah, Brunei and West Kalimantan.

Beyond Sarawak, the BIMP-PIP has created space for other subnational actors, including the Chief Ministers, Governors and Local Governments Forum and the Mindanao Development Authority , to align local development priorities with regional energy interconnection and trade (see Table 1).

The Strategic Importance of Subnational Actors in the ASEAN Power Grid

The state and provincial governments listed above are becoming increasingly important to the APG because their participation can address two crucial challenges to energy integration:

First, the participation of subnational actors can help address resource nationalism, which continues to undermine electricity trade in Southeast Asia. There are two notable examples of resource nationalism in this context. The first was Malaysia’s 2021 ban on renewable electricity exports. Indonesia’s Ministry of Investment attempted a similar move in 2022 .

These bans, which were later overturned, were motivated by two political perceptions: first, that domestic energy resources should be used to meet local demand before being exported; and second, that energy trade should be permitted only if it is linked to green industrialisation in the exporting country.

Southeast Asia’s subsea power cables and multilateral projects allow subnational actors to participate in infrastructure development, align state-level economic plans with connectivity proposals, and strengthen local ownership of the APG. This can reduce zero-sum perceptions of energy trade. Subnational actors can also link interconnection projects to state-level priorities, such as energy access and grid upgrades, thereby reducing grievances that often fuel resource nationalism.

Second, subnational actors can help address inconsistent political support for interconnection projects by building coalitions that sustain the APG beyond national political cycles. Cross-border grid projects require sustained political and regulatory backing.

High Voltage Direct Current (HVDC) interconnections, for example, typically take six to ten years to develop. Political transitions and shifting national priorities can cause projects to be shelved, creating high risks for investors.

Subnational actors can broaden the political and institutional base of support for interconnection projects. Because state, provincial and local governments are closer to the communities, industries and infrastructure affected by cross-border grids, they can help build coalitions that outlast national political cycles.

This makes interconnection projects less vulnerable to shifts in political priorities because they are supported not only by central governments but also by local constituencies that have a direct stake in their continuation.

Towards a Subnational ASEAN Power Grid

Central governments and national-level actors will remain the primary drivers of the ASEAN Power Grid, but its success will also depend on actors operating beyond national capitals and energy ministries. Recognising and integrating these actors is not simply a matter of stakeholder engagement, but a strategic necessity. Subnational actors can help address resource nationalism, broaden public support for regional integration, and provide the political continuity needed to complete the APG.

Mirza Sadaqat Huda is a Senior Research Fellow in the Climate and Sustainability Programme at ODI Global and an Associate Fellow at the ISEAS-Yusof Ishak Institute. Based in Singapore, he focuses on the ASEAN Power Grid, critical minerals, and the just transition in Southeast Asia.

Subnational actors are becoming increasingly critical to the implementation of the ASEAN Power Grid . The success of future cross-border interconnection projects will depend not only on national governments but also on state, provincial and city authorities, which increasingly shape project outcomes.

The ASEAN Power Grid (APG) is a key driver of energy security and decarbonisation in Southeast Asia (see Figure 1). The APG seeks to develop cross-border interconnections, harmonise regulatory standards, and integrate electricity markets. It aims to facilitate the uptake of 30 GW of renewables and reduce decarbonisation costs by US$800 billion .

National-level actors have been the most important players in the APG, having implemented the Laos-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) in 2022, which is Southeast Asia’s first multilateral electricity trading arrangement. Alongside the broader network of existing and proposed APG interconnections, a new generation of projects linked to specific renewable energy resources is emerging, including multilateral initiatives and a growing pipeline of proposed subsea power cables, as illustrated in Figure 1.

While national governments will continue to be the primary drivers of the APG, progress towards the Brunei Darussalam-Indonesia-Malaysia-Philippines Power Integration Project (BIMP-PIP) , together with a growing pipeline of subsea power-cable projects , is elevating the importance of states, provinces and other subnational regions.

As shown in Figure 2, the BIMP-PIP connects the Malaysian states of Sarawak and Sabah with Brunei, West Kalimantan in Indonesia, and Palawan in the Philippines. Proposed subsea cable projects linking Sarawak or Batam to Singapore also place specific subnational regions at the forefront of the electricity trade (see Table 1).

Policymakers should engage subnational actors not merely to fulfil procedural expectations for stakeholder consultation, but because they are strategically important to the APG’s future. These subnational actors can help address two of the APG’s most critical challenges: resource nationalism and inconsistent political support for interconnection projects.

Why Subnational Actors Matter More Today

Energy integration has traditionally been managed by national governments, utilities and regulators, and regional institutions such as the Heads of ASEAN Power Utilities/Authorities (HAPUA) have also been dominated by central government representatives.

Since the launch of LTMS-PIP in 2022, the APG has attracted wider stakeholder interest. Emerging cross-border electricity projects increasingly depend on state and regional governments, state-owned utilities and other subnational actors whose influence varies across political systems, from federal arrangements such as Malaysia to more centralised systems in other Southeast Asian countries.

Sarawak is one of the most important subnational actors in the APG. The state has positioned itself as a regional electricity export hub, with Premier Abang Johari Openg repeatedly supporting the proposed 1 GW subsea cable to Singapore by 2032.

Renewable energy exports are also embedded in Sarawak’s Post-COVID-19 Development Strategy 2030 , while Sarawak Energy is developing transmission infrastructure for the Borneo Grid, the land-based component of the BIMP-PIP, which links Sarawak, Sabah, Brunei and West Kalimantan.

Beyond Sarawak, the BIMP-PIP has created space for other subnational actors, including the Chief Ministers, Governors and Local Governments Forum and the Mindanao Development Authority , to align local development priorities with regional energy interconnection and trade (see Table 1).

The Strategic Importance of Subnational Actors in the ASEAN Power Grid

The state and provincial governments listed above are becoming increasingly important to the APG because their participation can address two crucial challenges to energy integration:

First, the participation of subnational actors can help address resource nationalism, which continues to undermine electricity trade in Southeast Asia. There are two notable examples of resource nationalism in this context. The first was Malaysia’s 2021 ban on renewable electricity exports. Indonesia’s Ministry of Investment attempted a similar move in 2022 .

These bans, which were later overturned, were motivated by two political perceptions: first, that domestic energy resources should be used to meet local demand before being exported; and second, that energy trade should be permitted only if it is linked to green industrialisation in the exporting country.

Southeast Asia’s subsea power cables and multilateral projects allow subnational actors to participate in infrastructure development, align state-level economic plans with connectivity proposals, and strengthen local ownership of the APG. This can reduce zero-sum perceptions of energy trade. Subnational actors can also link interconnection projects to state-level priorities, such as energy access and grid upgrades, thereby reducing grievances that often fuel resource nationalism.

Second, subnational actors can help address inconsistent political support for interconnection projects by building coalitions that sustain the APG beyond national political cycles. Cross-border grid projects require sustained political and regulatory backing.

High Voltage Direct Current (HVDC) interconnections, for example, typically take six to ten years to develop. Political transitions and shifting national priorities can cause projects to be shelved, creating high risks for investors.

Subnational actors can broaden the political and institutional base of support for interconnection projects. Because state, provincial and local governments are closer to the communities, industries and infrastructure affected by cross-border grids, they can help build coalitions that outlast national political cycles.

This makes interconnection projects less vulnerable to shifts in political priorities because they are supported not only by central governments but also by local constituencies that have a direct stake in their continuation.

Towards a Subnational ASEAN Power Grid

Central governments and national-level actors will remain the primary drivers of the ASEAN Power Grid, but its success will also depend on actors operating beyond national capitals and energy ministries. Recognising and integrating these actors is not simply a matter of stakeholder engagement, but a strategic necessity. Subnational actors can help address resource nationalism, broaden public support for regional integration, and provide the political continuity needed to complete the APG.

Mirza Sadaqat Huda is a Senior Research Fellow in the Climate and Sustainability Programme at ODI Global and an Associate Fellow at the ISEAS-Yusof Ishak Institute. Based in Singapore, he focuses on the ASEAN Power Grid, critical minerals, and the just transition in Southeast Asia.