AI, data centres could make Asean clean energy projects bankable as grid plans advance: experts

MANILA, 12 OCTOBER 2026 —

The surge in demand from artificial intelligence and data centres across Southeast Asia could unlock critical long-term power purchase agreements, making renewable energy and transmission projects viable for investors—just as Asean accelerates its push for cross-border electricity trade.

The International Energy Agency (IEA) has projected that electricity consumption by data centres in Southeast Asia will more than double between 2024 and 2030, driven in part by Singapore’s status as a regional tech hub and the rapid expansion of data infrastructure in southern Malaysia.

Globally, Asia Pacific demand is expected to rise by about 170% in China and 80% in Japan over the same period, underscoring the scale of the challenge—and the potential rewards—for clean energy deployment.

At the 44th Association of Southeast Asian Nations (Asean) Ministers on Energy Meeting (AMEM44) in Manila from 5 to 9 October, officials advanced discussions on operationalising the enhanced Asean Power Grid agreement, regional planning for multilateral power trade, and the development of a submarine power cable framework. These moves signal Asean’s commitment to deepening cross-border electricity cooperation, a critical enabler for large-scale renewable projects that span national borders.

Yet, experts stress that demand alone will not suffice. Ann Margret Francisco, Asia Pacific Director at the Global Wind Energy Council (GWEC), told a media briefing on 9 October that while AI and emerging industries will generate new electricity needs, "demand alone cannot build projects." Policies must ensure that renewable energy supply aligns with infrastructure development and pricing that supports both industry operations and investor confidence.

Francisco pointed to emissions-reduction pledges by data centre operators as a potential catalyst for renewable electricity procurement. Australia-based hyperscale provider AirTrunk, for instance, aims to match all electricity consumed at its sites with renewables by 2030. In Malaysia, a 29.99 megawatts alternating current (MWac) solar project—backed by a virtual power purchase agreement (VPPA) with renewable energy developer ib vogt—began commercial operations in July, demonstrating how data centre demand can directly spur new clean energy capacity.

The project’s scale reflects the growing viability of such partnerships, though Francisco noted that jurisdictions like South Korea and Australia are also considering mandates requiring data centre developers to source additional renewable generation alongside their facilities.

The urgency of the transition was reinforced at AMEM44, where energy ministers issued a joint statement reaffirming Asean’s commitment to stronger regional power connectivity, renewable energy deployment, and financing for cross-border projects. The statement also highlighted the continued role of oil and gas in energy security while calling for greater cooperation to reduce methane emissions from fossil fuel production—a nod to the region’s ongoing reliance on conventional energy sources.

Yet the outcomes of the meeting were described as "mixed" by Russell Marsh, Regional Lead for Southeast Asia at E3G, a climate think tank. While he welcomed progress on coal transition and the Asean Power Grid, Marsh emphasised that sustained momentum away from fossil fuels remains fragile.

"Moving away from fossil fuels towards clean electrification offers the strongest route to future energy security," he said, urging ministers to prioritise policies that accelerate renewable integration over incremental fossil fuel investments.

Monalisa Dimalanta, former Chair and CEO of the Philippines’ Energy Regulatory Commission, offered a more optimistic assessment. She framed the mere continuation of discussions on fossil fuel reduction as an achievement, recalling the challenges of drafting the Philippine National Renewable Energy Plan during the Covid-19 pandemic. "Keeping that momentum in itself is an achievement," she said.

Dimalanta also welcomed the statement’s call to revitalise the Asean Energy Database System, arguing that greater transparency in energy data would enhance investment decisions and public trust—a critical factor in securing long-term financing for renewable projects.

The timing of these developments could not be more critical. As AI and data centres expand, their electricity demand will increasingly compete with traditional industrial and residential loads. Without coordinated planning, the risk of grid instability or reliance on fossil fuel peaker plants grows. Experts like Robert Cooke, Grid Advocacy Lead at the Global Renewables Alliance, cautioned that inconsistent data on AI-related electricity consumption across geographies could hinder effective planning.

"It’s important that we have the dataset to inform energy system development plans that will ultimately help support the transition and integration of renewable energy," Cooke said during the briefing.

The path forward hinges on three interconnected actions: first, the finalisation of Asean’s cross-border grid frameworks to enable large-scale renewable projects; second, the adoption of policies that mandate or incentivise renewable procurement by data centres and other high-demand industries; and third, the development of regional energy data portals to ensure transparency and investor confidence.

If Asean succeeds, the region could emerge as a leader in clean energy innovation, leveraging its tech-driven growth to accelerate the global energy transition. The alternative—a fragmented, fossil-fuel-dependent grid—would lock in emissions and leave the region vulnerable to future energy shocks. The choices made at AMEM44 and in the months ahead will determine which path Asean takes.

Related: International Energy Agency · Manila