ASEAN Centre for Energy and IEA: Regulatory and Market Rules Are Key Barriers to Energy Storage Deployment in Southeast Asia

A joint report by the ASEAN Centre for Energy (ACE) and the International Energy Agency (IEA) identifies policy and regulatory frameworks, rather than technology, as the main barriers to battery energy storage system (BESS) deployment in Southeast Asia.

The report highlights several challenges, including unclear regulations for energy storage ownership, limited market mechanisms to generate revenue from storage services, delays in grid connections, and power purchase agreements that may restrict operational flexibility. These issues increase investment uncertainty and make it harder for storage projects to secure financing.

The report also notes differences in market readiness across ASEAN. The Philippines and Singapore have more developed electricity market mechanisms that allow storage projects to access multiple revenue streams, while other countries need clearer rules for procurement, grid services, and project remuneration.

To accelerate deployment, the report recommends strengthening regulatory frameworks, establishing technical and safety guidelines, incorporating storage into national energy planning, and developing market mechanisms that enable projects to earn revenue from energy trading, reserves, and ancillary services.

As solar and wind capacity expands across Southeast Asia, improving these frameworks will be essential to attracting investment and integrating more renewable energy into regional power systems.