Energy Storage Will Define the Next Phase of Southeast Asia’s Energy Transition: FESSIA

HONG KONG, March 24, 2026 – As Southeast Asia accelerates the deployment of renewable energy, the region is increasingly confronting a critical challenge that could determine the pace of its energy transition: grid readiness.

While solar and wind projects continue to expand across the region, the ability of power systems to integrate large volumes of variable renewable energy remains limited. According to Liming Qiao, CEO and Founder of the Future Energy Storage & System Integration Alliance (FESSIA), energy storage and system integration solutions will play a decisive role in addressing this bottleneck.

Speaking to AsiaBizToday at The Battery Show Asia in Hong Kong, Qiao said the region’s clean energy ambitions are now approaching a constraint defined by the readiness of the power system itself.

Liming Qiao

“After years of working on clean energy deployment across Asia, we realised that the real constraint is now on the grid side,” she said. “The question is whether the power system is ready to take in more variable renewable energy.”

A New Alliance for Energy Storage

FESSIA was launched in late 2025 following Qiao’s recognition as a recipient of the Climate Breakthrough Award, which enabled the establishment of a new regional alliance focused on energy storage and system integration.

The organisation operates as a regional multi-stakeholder alliance, bringing together the wider energy ecosystem – industry, policymakers, think tanks, academia and more.

Its core mission is to advocate for policy frameworks that enable large-scale deployment of energy storage solutions across Southeast Asia.

“Our work focuses primarily on policy engagement and ensuring that the energy storage industry can effectively engage with governments, utilities and system operators,” Qiao explained.

Southeast Asia’s Uneven Energy Transition

The development of renewable energy across Southeast Asia varies significantly between countries, requiring tailored approaches to policy and market design.

FESSIA has adopted a tiered strategy to address these differences. The alliance’s initial focus is on the Philippines and Vietnam, which have already achieved relatively high levels of renewable energy penetration and are therefore facing the most urgent need for grid flexibility solutions.

“These two markets have the highest penetration of renewables in the region and therefore the most immediate need for energy storage,” Qiao said.

Other countries in the region are expected to follow as solar and wind capacity continues to expand.

Market Design and Policy Gaps

One of the biggest challenges for the energy storage sector is the absence of clear regulatory and market frameworks. While some Southeast Asian countries are introducing policies to support storage development, Qiao said many markets still lack a comprehensive investment pathway.

“What is missing today is a holistic market framework that provides confidence for investors,” she said.

Key policy issues include revenue certainty, market access and regulatory clarity. Without these signals, investment in large-scale battery storage projects remains limited. FESSIA aims to bridge this gap by facilitating dialogue between industry stakeholders and policymakers.

Batteries First, Then Long-Duration Storage

Over the next five years, Qiao expects battery energy storage systems to be the first technology to scale across the region. Longer-duration storage technologies are likely to emerge gradually as renewable penetration increases.

Initially, however, the focus will remain on building foundational energy storage capacity. “Battery energy storage will be the first step toward scaling system flexibility,” she said. Beyond storage, grid modernisation and transmission infrastructure will also need to evolve.

Changing Mindsets in Power System Planning

One of the less visible challenges of the energy transition lies in changing the mindset of power system planners and operators. Historically, electricity grids were designed around predictable fossil fuel generation.

Renewable energy introduces variability that requires new operational approaches. “We need to rethink how the power system is planned and operated,” Qiao said. This includes integrating flexibility solutions such as energy storage, demand response and advanced grid management systems.

Looking Toward 2030

By the end of the decade, Qiao hopes to see Southeast Asia’s renewable energy expansion supported by stronger policy frameworks and large-scale storage deployment.

While exact targets may vary by country, the overall trajectory should remain aligned with regional energy transition ambitions. “The most important thing is that power development plans remain broadly on track,” she said.

For the energy transition to succeed, grid flexibility solutions must evolve alongside renewable generation. Without them, the expansion of solar and wind capacity could face structural limitations.