AI and Data Centres Could Help Make ASEAN Clean Energy Projects Bankable

Rapid growth in artificial intelligence and data centres could become an important source of long-term electricity demand for renewable energy projects across Southeast Asia, helping improve the bankability of new generation and transmission infrastructure as ASEAN advances regional power trading. Energy transition specialists speaking after the 44th ASEAN Ministers on Energy Meeting said that long-term power purchase commitments from large electricity users could support investment, but only if policy, grid infrastructure and market rules develop alongside demand.

The International Energy Agency expects data centre electricity demand in Southeast Asia to more than double between 2024 and 2030, driven partly by growth in Singapore and southern Malaysia. That increase could create a new customer base for renewable energy projects, particularly where data centre operators have their own emissions targets or face requirements to procure cleaner power.

 

Long-Term Demand Could Support Renewable Project Financing

 

The central opportunity is that large data centres typically require reliable electricity over long periods, making them potential anchor buyers for new renewable generation. Long-term power purchase agreements can give project developers greater revenue visibility and make financing easier to secure.

Russel Marsh, Regional Lead for Southeast Asia, Energy Transition and Climate Finance at E3G, said the impact would depend on whether operators are required or encouraged to match new electricity demand with renewable supply.

“The expectation in some of these jurisdictions is that data centres will need to be supplied by renewable electricity. If that happens, then it will be a way to start to see projects and support development,” he said.

AirTrunk provides one example. The hyperscale data centre operator aims to match all electricity consumed at its sites with renewables by 2030. In Malaysia, a 29.99 MWac solar project supported by a virtual power purchase agreement between AirTrunk and renewable energy developer ib vogt began commercial operations in July.

 

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Demand Alone Will Not Solve the Infrastructure Gap

 

Higher electricity consumption does not automatically translate into new renewable capacity. Ann Margret Francisco, Asia Pacific Director at the Global Wind Energy Council, said policies still need to ensure power is available at the right time, at an acceptable cost and through adequate grid infrastructure.

That becomes particularly important for data centres because their power requirements are continuous, while solar and wind output varies. Grid investment, storage, transmission and market design therefore determine how much new renewable demand can actually be integrated into national energy systems.

Robert Cooke, Grid Advocacy Lead at the Global Renewables Alliance, also warned that inconsistent data on AI-related electricity demand could complicate system planning. Better information on where demand will emerge and how quickly it will grow is needed to guide investment in generation and grids.

 

ASEAN Is Moving Toward More Cross-Border Electricity Trade

 

The discussion comes as ASEAN governments work to strengthen the ASEAN Power Grid. Energy ministers meeting in Manila focused on implementing an enhanced regional grid agreement, advancing multilateral electricity trading and developing a framework for submarine power cables.

Cross-border power trading could allow renewable electricity generated in one country to supply demand in another, helping Southeast Asian markets overcome some of the limitations of national grids. It could also give large electricity users access to a broader pool of renewable generation rather than relying entirely on domestic projects.

For data centres, this could become particularly relevant in markets where rapid demand growth is difficult to meet through local renewable capacity alone.

 

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Methane Reduction Is Also Entering the Regional Energy Agenda

 

ASEAN ministers also called for stronger regional cooperation to reduce methane emissions from oil, gas and coal operations. Their joint statement linked better methane management with energy security, operational efficiency and regional climate objectives.

At the same time, the meeting continued to recognise a role for oil and gas in energy security, highlighting the tension between growing clean energy ambitions and continuing fossil fuel dependence.

Marsh described the outcome as mixed, pointing to progress on renewable electricity and the ASEAN Power Grid alongside continued attention to fossil fuel infrastructure. Monalisa Dimalanta, former Chair and Chief Executive of the Philippines’ Energy Regulatory Commission, took a more positive view, saying that maintaining momentum away from fossil fuel dependence was itself significant.

 

Bankability Will Depend on Contracts, Grids and Policy

 

The rise of AI and data centres gives Southeast Asia something renewable developers have often struggled to secure: large, long-term electricity buyers with strong incentives to obtain cleaner power. But demand only becomes useful to the energy transition when it is translated into credible contracts and supported by transmission, market rules and regional cooperation.

As ASEAN advances cross-border electricity trade, the combination of new corporate demand and a more integrated grid could improve the economics of renewable generation and transmission. The next test will be whether governments can turn those conditions into projects that lenders and investors are prepared to finance.