Enabling Cross-Border Pumped Storage Hydropower Deployment: Addressing Bankability, Regulation, and Risk in ASEAN

ASEAN's energy demand is projected to triple by 2050, even as 64% of its current energy mix relies on fossil fuels. To meet growing consumption sustainably, the region is accelerating its transition to renewable energy while advancing plans for an interconnected regional power grid, with cross-border transmission capacity targeted to reach 17.6 GW by 2040.

Solar and wind are expected to supply much of ASEAN's new renewable capacity, but energy storage systems, particularly battery storage and pumped storage hydropower (PSH), will be essential for managing variability and maintaining grid stability. PSH, in particular, offers a cost-effective means of providing long-duration storage, balancing intermittent renewable generation, displacing demand, and managing seasonal and geographic mismatches between demand and supply.

ASEAN's PSH capacity is projected to reach 18 GW by 2033, requiring between US$12 billion and US$70 billion in investment. However, for cross-border PSH projects, bankability challenges are amplified by regulatory gaps, unclear allocation of costs and benefits across countries, and limited risk-mitigation mechanisms, all of which continue to constrain private sector participation and delay project development.