Uncertainties in approvals and laws can significantly delay subsea cables for ASEAN Power Grid

SINGAPORE – Complex approval processes and regulatory uncertainty can significantly delay the building of undersea cables crucial for electricity trading within South-east Asia.

Uncertainty over regulatory requirements can also deter investments in such expensive cross-border connections, said Frank A. Putzu, a senior adviser to a national laboratory under the US Department of Energy, on Oct 28.

He urged ASEAN nations to standardise regulatory frameworks that build on existing international laws – like the UN Convention on the Law of the Sea – to reduce any friction or dispute over infrastructure built for the regional power grid, known as the ASEAN Power Grid.

Putzu shared these insights from the second phase of a joint study between Singapore and the United States on strengthening energy connectivity within ASEAN. He presented the preliminary findings at the Singapore International Energy Week on Oct 28.

The first phase of the study, completed in 2025, analysed the existing grid infrastructure and energy landscape of ASEAN nations. It found that the regional power grid can bring significant socio-economic benefits, including economic growth and annual research investments of US$2 billion (S$2.5 billion).

If solar or hydropower plants form the heart of the regional grid, long networks of subsea cables will serve as the veins and arteries, sending greener electricity to countries that need it.

Building these subsea cables will be a massive and novel undertaking over the next decades. The region currently has only one undersea cross-border interconnector – a 2km link between Woodlands in Singapore and Plentong in Johor. No long-distance regional subsea cables exists.

The aim is to make the ASEAN Power Grid a reality by 2045.

The second phase of the US-Singapore study, which started in 2025, analysed the legal frameworks and financing models to support the deployment of subsea cables in ASEAN.

Under Singapore’s ASEAN chairmanship in 2027, one priority will be to finalise a blueprint on building the cables across the region.

“Many of the ASEAN Power Grid subsea cables are (planned to be) multilateral, which introduces more complication and more risk,” noted Putzu, who is from the Pacific Northwest National Laboratory in Washington.

“Each nation will have its own approval systems. Sometimes that can get complicated. That can cause project development delay. It can also create some uncertainty, which can deter investment,” he said. For example, as cables go across the territorial waters of different South-east Asian nations, repair and maintenance vessels would need quick access to do their work. Otherwise, significant delays could happen, which can affect electricity flow.

And if a dispute arises, it should be resolved at the “lowest possible level before it advances into something that can threaten schedule or cost”, Putzu said.

Tensions over fossil fuels have already surfaced, as Indonesia cut natural gas export to Singapore from Oct 24, redirecting supplies to meet domestic electricity needs in Batam, Bintan and Sumatra.

To prevent delays or disputes as the region prepares to build long undersea power cables, the study recommended that electricity-exporting and importing countries familiarise themselves with one another’s agencies responsible for energy, environmental regulation, security and licensing. This is because responsibilities for a single infrastructure project are typically spread across departments and ministries.

The study also suggested integrating international maritime law into national regulations.

A dedicated group with representatives across ASEAN nations can also be set up to strengthen coordination and resolve issues related to subsea cables, Putzu added.

For Singapore, importing greener electricity from the region is crucial for the country to reducing carbon emissions from its power sector, which is reliant on around 95% of natural gas. It is helping to lay the groundwork for the regional grid, with 14 electricity import projects in the works and a combined capacity of more than 10 gigawatts. 

The projects cover solar, wind and hydropower from Malaysia, Indonesia, Cambodia, Vietnam and Australia.

According to the International Energy Agency, around US$27 billion is needed between 2025 and 2040 to deliver the subsea connectors.

Putzu noted that while certainty in laws and regulations is needed to make the energy projects financially viable, subsea cables face distinct financing challenges that cannot be addressed solely by legal certainty. The risk comes from long development timelines, complicated approval processes across countries, marine and technical risks and revenue uncertainty.

The study identified several ways to finance the cables. One option is a blended financing model anchored by grants and loans from multilateral development banks to cover project risks. This will give commercial investors more confidence to come on board.

Putzu also urged countries to agree on a regional method for pricing tariffs and fees paid to transit countries that will transmit electricity through their national grids to buying countries.

Another recommendation is that countries share ownership of an entire interconnector instead of financing and owning just the section that lies within their territory, which is currently the practice. He pointed out that splitting ownership is difficult to implement in multi-country projects or long-distance routes.

Shared ownership like joint ventures between two countries would enable states to share the cost and revenue of a single interconnector, he said.

The final report will be completed by early 2027.

Laying the groundwork for subsea cables is one thing, but having the experience and infrastructure to build them is another. 

Sharad Somani, head of infrastructure advisory at KPMG Singapore, noted that there are only a few reputable manufacturers of such interconnectors, and most of them are in the US and Europe. 

“And their order book is full. We have to start thinking about the broader supply chain issues, and it’s a good idea for countries to start thinking of having those facilities based in the region,” added Somani, who is also a council member of the Sustainable Energy Association of Singapore. 

Having cable manufacturing hubs in countries that transmit the electricity could also spur economic growth for them.