BESS in ASEAN
By Henry Chang Jie Shen
Battery Energy Storage Systems (BESS) capture and release electrical energy on demand, providing crucial grid stability and backup power for renewable energy integration. During the R.A.C.E to Zero: ASEAN Edition summit on April 28, energy experts concluded that while the technology is proven, underdeveloped regulatory frameworks hamper its widespread regional adoption. The consensus is that policy reform, rather than technological advancement, is urgently needed to achieve ASEAN’s net-zero targets by 2050.
The Identity Crisis
The most fundamental issue plaguing the sector is the absence of a clear legal and market identity for battery storage. Dr. Christopher Len of the Future Energy Storage and System Integration Alliance explained that because BESS is not formally defined as an asset class, it cannot participate fully in relevant markets. Consequently, operators struggle to stack revenues across energy capacity and ancillary services, significantly limiting their profitability.
Weak Regional Price Signals
Most ASEAN power systems operate on single-buyer or vertically integrated models where central utilities purchase all electricity. This structure results in weak or nonexistent price signals for dispatching BESS, offering little financial incentive for utility-scale deployment. Dr. Len emphasized that these markets remain underdeveloped, keeping the operational role of battery storage largely limited and nascent.
The Philippine Exception
The Philippines stands out as a regional pioneer due to its liberalized electricity market and progressive regulatory frameworks. In 2024, the country launched a Reserve Market within its Wholesale Electricity Spot Market, allowing ancillary grid services to be traded competitively alongside energy. XanhTerra CEO Ananth Chikkatur noted that San Miguel Corporation alone has already capitalized on this, installing around 1,000 megawatts of BESS across 32 sites.
Vietnam’s Implementation Gap
While Vietnam holds immense ambition for renewable energy, actual utility-scale battery implementation remains stalled. The country’s Power Development Plan 8 calls for up to 16,000 megawatts of grid-connected battery storage by 2030, yet operational dispatch protocols are not fully defined. Chikkatur observed that most existing storage is relegated to commercial sites, largely used to avoid peak demand prices rather than to stabilize the national grid.
Malaysia’s Regulatory Groundwork
Malaysia has established solid regulatory groundwork for its emerging battery storage market, despite currently having lower solar and wind penetration than Vietnam. Leader Energy recently emerged as one of four winners in the MyBESS program, the country’s first large-scale competitive auction for grid-connected storage. Chief Operating Officer Ezraila Isa explained that the program provides essential fixed capacity payments, though she advocated for a future transition toward a more lucrative merchant-type market.
Overcoming Power Curtailment
Insufficient energy storage directly leads to wasted clean energy during peak generation periods. Isa recalled that during Vietnam’s 2018–2019 renewable energy boom, inadequate grid infrastructure forced operators to intentionally curtail up to 20% of their generated power. Following extensive grid upgrades by 2024, curtailment rates dropped below 3%, underscoring the vital need to plan storage and grid enhancements in tandem.
Ensuring Project Bankability
To attract private capital, BESS projects require clear commercial models that guarantee predictable, bankable returns. UOB Bank’s Tan Yee Ho highlighted that pairing developers with investment-grade corporate off-takers on fixed rental contracts effectively secures long-term project financing. Furthermore, Dr. Supawan Saelim of Agora Energiewende suggested adopting South Korea’s model of 15-year fixed-capacity contracts, which proactively compensate operators for system availability.
Resolving the Bottleneck
While AI technologies are beginning to optimize project bids and weather forecasting, the primary obstacle in ASEAN remains regulatory. Chikkatur stressed that the region faces a governance bottleneck, requiring modernized rules that make private sector investments truly bankable. Ultimately, fundamental policy shifts that explicitly value and pay for grid flexibility are the absolute keys to unlocking clean energy capital across Southeast Asia.
