Southeast Asia’s Energy Storage Market Gains Momentum

Sep 7

2 min read

Southeast Asia’s energy storage market is gaining momentum as renewable energy deployment accelerates, grid flexibility needs increase and electricity demand from AI and data centres continues to rise.

Vietnam is emerging as a regional leader in energy storage policy. Since January 2026, the country has implemented a two-part tariff structure for battery energy storage systems (BESS), allowing projects to receive separate payments for capacity and energy delivery. The reform could unlock more than US$750 million in investment in Vietnam this year, with the market potentially reaching US$5.7 billion by 2030.

Meanwhile, Cambodia has reached a major milestone with the commercial operation of a 500MW/1,000MWh BESS equipped with grid-forming inverters. Developed by SchneiTec alongside an existing solar PV plant, the project is designed to improve grid reliability, reduce power fluctuations and enable greater integration of renewable energy.

Across ASEAN, however, regulatory uncertainty remains a major challenge. The Future Energy Storage & System Integration Alliance (FESSIA) estimates that only 1.4GW of BESS is currently operational across ASEAN, despite global storage costs having fallen by nearly 90% since 2013.

The investment potential is significant. In the Philippines, DNV estimates that co-located solar and BESS could generate up to US$2.25 billion in annual revenues by 2030, while making BESS a key part of the ancillary services market could reduce system costs by up to US$275 million per year.

At the same time, the rapid growth of AI data centres is creating additional demand for reliable and flexible power. Around 24.2GW of data centre capacity has been announced across nine APAC markets between 2025 and 2030, highlighting the growing importance of long-duration storage and firm renewable power.

With renewable deployment accelerating across the region, BESS, solar-plus-storage projects and grid-forming technologies are expected to become increasingly important to Southeast Asia’s energy transition, while clearer regulations and bankable revenue models will be critical to unlocking further investment.