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Kolette Lim

Singapore and Indonesia’s latest push to trade low-carbon electricity could become more than a bilateral energy deal, with analysts saying it might offer Southeast Asia a practical test case for a regional power grid that has long struggled to move from ambition to implementation.
The cooperation, centred on electricity-import deals and cross-border interconnector projects, is also expected to strengthen Singapore’s energy security and help the city state reach its sustainability goals, while boosting Indonesia’s green economy.
The projects would allow both countries to deepen cooperation on energy security and diversification, Singapore’s Prime Minister Lawrence Wong said.
“Indonesia has tremendous potential in renewable energy and Singapore would like to partner with Indonesia in unlocking this potential,” he said at the Singapore-Indonesia Leaders’ Retreat in Jakarta on Monday.

Jakarta’s sovereign wealth fund Danantara signed agreements with Singapore firms Keppel Electric and Sembcorp Industries on Monday to explore collaboration on the offtake of imported low-carbon electricity.
Danantara also signed an agreement with Singapore Energy Interconnections to facilitate information-sharing and collaboration on cross-border interconnector development, the state-owned fund said in a statement.
The advanced collaboration would “galvanise growth” in Indonesia’s green industries and create jobs in the renewable energy sector, according to Mirza Huda, a senior research fellow at the climate and sustainability programme at think tank ODI Global
The import of low-carbon electricity would also strengthen energy security and enable faster decarbonisation for Singapore, which has committed to reaching net zero by 2050, noted Mirza, who is also an associate fellow at ISEAS-Yusof Ishak Institute.
Existing projects include the development of what is expected to be one of Indonesia’s largest utility-scale solar projects, which Sembcorp, Sumber Energi Surya Nusantara and the Indonesia Investment Authority are involved in. Both countries are also piloting Jakarta’s first biogas-to-biomethanol project in North Sumatra.
Dinita Setyawati, senior Asia energy analyst at Ember, said advanced cross-border electricity trade would diversify Sumatra’s economy and provide it with a secure electricity off-taker in Singapore.
She noted that Singapore’s purchase of electricity could help renewable energy sources be priced competitively against fossil fuels. “If the grids are connected between Singapore and Sumatra, it could also help South Sumatra, a coal-dependent province, transition away from coal and into renewables,” she said.

Building blocks
Bilateral cooperation between Singapore and Indonesia would also set a reference point for the region’s energy initiatives, analysts said.
The Asean Power Grid was first conceptualised in 1997 and aimed to connect the electricity networks of all 11 member states through overland and undersea links.
Progress has been gradual, with only eight of 18 planned interconnection projects made operational by 2024, according to the Asean Centre for Energy (Ace).
The centre said the “mutually beneficial” projects between Indonesia and Singapore would pioneer more bankable cross-border infrastructure in Asean and spur the realisation of the regional power grid.
Mutually beneficial bilateral cooperation would build trust and help to shape regional frameworks needed to operationalise the grid, Ace said. “It is a building block towards a well-interconnected region to strengthen the regional energy security, transition, and the investment and economic opportunity.”
But regulatory differences and misalignment between states could affect such projects, analysts said, urging proactive coordination.
Kaho Yu, head of energy and resources research at risk intelligence company Verisk Maplecroft, said shifting priorities in energy security and transition, as well as tariff structure and differing market rules, were among challenges to cross-border projects.
“Their effectiveness will depend on regulatory clarity and durable pricing structures that align with evolving demand and decarbonisation targets,” Yu said, urging coordinated governance and dispute resolution mechanisms.
Setyawati said the involvement of Danantara, designated on Monday to spearhead cooperation in cross-border electricity trade, could increase public and governmental acceptance of the project.
“I think Danantara could be the vehicle to negotiate these cross-border projects and lead coordination between different ministries in Indonesia,” she said.
The importance of flexible governance and policy support was highlighted by the success of the Laos-Thailand-Malaysia-Singapore Power Integration Project, Mirza said. The project had supplied 30.6 gigawatt-hours of electricity and generated revenue of 23.06 million ringgit (US$5.66 million) as of April this year, Malaysia said last month.

Successful electricity trade via subsea cables between Indonesia and Singapore could also become an “important milestone” for the regional power grid, Mirza said.
While electricity trade via subsea power cables was relatively new in Southeast Asia, it had been deployed successfully for decades across the globe, he said. “While implementation in Southeast Asia will require close regional coordination, the technology itself is well established and technically feasible.”
Rosan Roeslani, Indonesia’s Minister of Investment and Downstream Industry and Danantara CEO, said Jakarta was “fully committed” to addressing regulatory and infrastructure priorities.
Indonesia’s link-up with Singapore was a sign of a “far larger strategic transformation”, he said. “By building this interconnection, Indonesia envisions being the champion of the Asean Power Grid along with Singapore, and we are proving that regional decarbonisation and high-value economic growth can, and will, happen simultaneously.”
Besides energy cooperation, Wong and Indonesian leader Prabowo Subianto also discussed the Association of Southeast Asian Nations, defence and people-to-people ties during the retreat.
“We agreed on the importance of Asean and Asean centrality,” Wong said, adding that Singapore would consult Jakarta closely to shape the agenda for the city state’s chairmanship of the bloc next year.
Wong said they agreed to ensure that the Straits of Malacca and Singapore remained safe and accessible, noting that both countries were “strategically aligned” and shared interests as states bordering the waterways.
Prabowo said peace in the straits had to be preserved. “I would also like to assure our friends in Singapore that my position, and Indonesia’s position, has remained consistent for decades,” he said.


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The cooperation could boost both countries’ sustainability goals and help shape regional frameworks for the Asean Power Grid, analysts say


The cooperation could boost both countries’ sustainability goals and help shape regional frameworks for the Asean Power Grid, analysts say.


Can Singapore and Indonesia’s energy push kick-start regional power grid?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The cooperation could boost both countries’ sustainability goals and help shape regional frameworks for the Asean Power Grid, analysts say

The cooperation could boost both countries’ sustainability goals and help shape regional frameworks for the Asean Power Grid, analysts say