Iran war energy shock revives Asean’s power grid plans: ‘it’s the way to go’

Illustration: Huy Truong For a few weeks after the bombs started falling on Iran, Southeast Asian governments told their people not to worry.

Emergency funds would cushion the blow.

Subsidies would hold.

Prices would stabilise.

A month on, with oil well above US$100 a barrel, long queues for fuel forming at petrol stations across the region and Thailand restarting coal plants it had mothballed years ago, the reassurances have worn thin.

Against this backdrop, an old question has resurfaced with fresh urgency: why does a region rich in sun, rivers and geothermal heat still depend on a strait it cannot control for the energy that powers its economies?

The answer, analysts say, is an idea that has been sitting in a drawer for decades.

The Asean Power Grid – a vision for connecting the national electricity networks of all 11 member states through a web of overland and undersea cables – was designed precisely to address this kind of vulnerability.

A workers checks solar panels in Depok, Indonesia, From hydropower in Laos and Myanmar to solar in the Philippines and Indonesia, Southeast Asia has vast renewable energy potential.

Photo: EPA-EFE By pooling the region’s enormous and diverse renewable energy potential, from hydropower in Laos and Myanmar to solar in the Philippines and geothermal beneath Indonesia’s volcanic Sumatra, the grid would give Southeast Asia the ability to generate and trade its own clean electricity rather than import fossil fuels it cannot price or secure.

The war that erupted on February 28, when US and Israeli strikes on Tehran triggered Iran’s near-total blockade of the Strait of Hormuz, has exposed just how precarious that foundation always was.

Days after the first strikes, suppliers to Shaun Ho’s family-run plastic packaging factory in Malaysia put sales on hold.

They soon returned, but with price increases attached.

Raw material costs for plastic resins, derived from crude oil and natural gas and used in everything from mineral water bottles to grocery bags, had surged by as much as 70 per cent to nearly 3,000 ringgit (US$750) per tonne as of March 16, the Malaysian Plastics Manufacturers Association said.

A worker inspects a machine processing products at a plastics factory in Klang, Malaysia’s Selangor state.

Raw material costs for plastic resins have surged.

Photo: AFP Suddenly, a strait some 6,000km (3,700 miles) away had become Ho’s most pressing business problem. “At first, all the suppliers said they would put

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