Deal to explore exporting renewable energy from Vietnam to Singapore, Malaysia inked at ASEAN Summit

Singapore and Vietnam will jointly explore the export of renewable energy following an agreement signed by their government-linked firms on 26 May to collaborate on developing a new
electricity link.

The signing was witnessed by leaders of all three countries on the sidelines of the ASEAN Summit chaired by Malaysia.

Under the agreement, the parties will evaluate the feasibility of Vietnam sending power – particularly offshore wind – via subsea cable to Peninsular Malaysia’s north-eastern coast before it is transmitted overland to Singapore.

This represents the latest push from the regional grouping to establish an ASEAN power grid aimed at strengthening energy security and achieving net zero emissions.

Malaysia’s Deputy Prime Minister Fadillah Yusof, who is also Energy Transition and Water Transformation Minister, told reporters after the signing ceremony that technical and business details are yet to be fully outlined.

But Prime Minister Anwar Ibrahim has been bullish on the project, extolling its economic viability ahead of other options and telling The Straits Times (ST) and select regional media outlets in a 25 May interview that the deal was “considered done”.
 

The collaboration sees a consortium comprising Sembcorp Utilities, a wholly owned subsidiary of Singapore-based Sembcorp Industries, and PetroVietnam Technical Services Corporation (PTSC), a member of the Vietnam National Industry – Energy Group, joining hands with Malaysia’s MY Energy Consortium, an unincorporated consortium established by national electricity provider Tenaga Nasional Berhad (TNB) and state oil giant Petronas.

Under the agreement, the partners will evaluate the feasibility of exporting renewable energy from Vietnam to Malaysia and Singapore via a new subsea cable, wheeled into and through the Peninsular Malaysia National Grid, the consortia said in a joint statement.

“To this end, the consortia will work closely with the relevant national authorities throughout the development process, seeking necessary approvals at various project phases, and paving the way for this significant regional power integration and energy interconnection,” according to
the statement.

In a Facebook post on 26 May about the joint agreement, Singapore’s Prime Minister Lawrence Wong said: “These efforts are part of our broader vision for an ASEAN Power Grid – connecting our region with a more resilient and reliable energy supply. Step by step, we are making this vision
a reality.”

Sembcorp and PTSC had in 2023 already inked a letter of intent for 1.2 gigawatts (GW) of renewable energy to be imported into Singapore, which could begin by 2033.

According to Datuk Seri Fadillah, the undersea cable will be underwritten by Petronas and TNB. “Part of (the energy) will go to Singapore, part of it will go to Malaysia,” he said.

However, as to who will bear the cabling cost, TNB president and chief executive officer Megat Jalaluddin Hassan said “we have yet to come to that”.

“The next step for us is to go into the feasibility study, which will then determine the level and depth of the venture we will be undertaking,” he told reporters after the signing.

He said the consortia involved in the project are hopeful that “we can have something that shows our progress” by October’s ASEAN Ministers on Energy Meeting.

On 25 May, Malaysia’s Investment, Trade and Industry Minister Tengku Zafrul Aziz said negotiations on an enhanced memorandum of agreement for the ASEAN grid are set to conclude at the same energy ministers’ meeting.

Another key connection for the ASEAN Power Grid is the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project, launched in 2022 to send 100 megawattsof renewable energy from Laos to Singapore. A second phase announced in 2024 doubled this amount.
 

But key stakeholders have acknowledged that intermediate countries, especially Thailand, need to upgrade their grids to handle larger loads in the gigawatts.

Mr Fadillah had said that the Thai-Malaysia interconnection, “commissioned in the early 2000s,
is ageing”.

“Its reliability has fallen below standards due to obsolescence, and our countries are finding it increasingly challenging to maintain the facilities.

“As Malaysia and Thailand progress in integrating more renewable energy into our grids, the reliability of our interconnection becomes even more critical,” he said after a courtesy call on Thailand’s Deputy Prime Minister Pirapan Salirathavibhaga, who also serves as the Energy Minister, on 22 May.

The University of Malaya’s international and strategic studies senior lecturer Lam Choong Wah told ST that as Vietnam harnesses offshore wind energy as a renewable source, transmitting the generated power via undersea cables is both more “economically sensible and technically feasible”, compared with building an overland transmission line through Thailand and Cambodia.

He added that this approach is estimated to save nearly 1,000 km in distance compared with the overland route.

“The question is who will pay for the upgrades. Thailand already controls most of the renewable energy from Laos,” a diplomatic source with knowledge of the matter told ST.

Thailand has been buying renewable energy from Laos for over two decades, with import volumes reaching 6 GW.
 

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