ASEAN Urged to Establish Sovereign Energy Bloc Amid Global Economic Uncertainties

Kavita Gandhi, the Executive Director of the Sustainable Energy Association of Singapore, has put forth a compelling vision for the Association of Southeast Asian Nations (ASEAN) to establish a sovereign energy bloc in light of the current geopolitical and economic uncertainties. With tensions between the United States and China, the potential return of a Trump administration, and ongoing conflicts in the Middle East, the landscape for ASEAN’s energy transition is fraught with challenges that could dampen investor confidence.

In a recent interview, Gandhi articulated the necessity for ASEAN nations to first fortify their internal energy markets before looking to expand their exports. She argues that a strong regional framework is essential for protecting the bloc against external shocks, which could destabilize both supply and grid reliability.

Her insights are echoed in an op-ed that underscores the fragmented state of ASEAN’s energy market, where infrastructure and planning have evolved in a piecemeal fashion. This fragmentation not only weakens the region's bargaining power in global markets but also constrains economic growth and investor trust.

To overcome these hurdles, Gandhi proposes a structured approach comprising four phases aimed at consolidating ASEAN's energy capabilities. She acknowledges the complex reality that while the region cannot entirely detach from its export-driven economy, prioritizing exports prematurely could jeopardize domestic energy supplies, particularly in countries like Myanmar and Indonesia, where power demand is surging.

Building consensus among member states emerges as the most significant challenge in realizing this energy bloc. Gandhi stresses that all ASEAN countries must collectively recognize the need for a unified energy strategy, a prerequisite for mobilizing investment and determining necessary infrastructure developments.

Amid a growing demand for green power, the prospect of resource competition could arise from a collective energy strategy. Gandhi suggests reframing this issue commercially, focusing on the unique strengths of each country to enhance low-carbon supply while meeting national climate objectives.

She points out that Indonesia and the Philippines boast significant geothermal potential, while Laos excels in hydropower. Additionally, agricultural residues in Indonesia, Vietnam, Malaysia, and Thailand present a robust feedstock for biomass and biogas development.

The upcoming Asia Clean Energy Summit, hosted by the Sustainable Energy Association of Singapore this October, will spotlight biomass for the first time, addressing sustainable feedstock supply. Looking to the future, Gandhi notes that emerging technologies such as green hydrogen and small modular reactors, though currently costly, are poised for commercialization.

Citing a Singapore-based photovoltaic firm that has established manufacturing operations in Indonesia, she asserts that a cohesive ASEAN market could mitigate supply chain issues. As companies of all sizes are increasingly driven toward net-zero goals, not only by government mandates but also by declining renewable energy costs, Gandhi emphasizes the critical importance of ASEAN uniting to ensure secure and affordable power at home while leveraging integration to assert global leadership in the energy sector.