ASEAN regulatory frameworks ‘must evolve’ to capture full value of battery storage

"Policy and market frameworks must evolve" in ASEAN countries to unlock the full value of energy storage in the region's energy transition, according to a new report.

The Future Energy Storage & System Integration Alliance (FESSIA), a new non-profit industry alliance formed last year, has just released its first report, 'Unlocking the role of battery energy storage systems (BESS) in ASEAN electricity markets.’

It notes that while high-value use cases already exist for BESS to deliver ancillary services in the Philippines and Vietnam, due to evolved market frameworks and policy support, other countries in the 11-strong intergovernmental Association of Southeast Asian Nations (ASEAN) have yet to follow suit.

Despite global trends, such as a near-90% reduction in BESS costs since 2013 and the large-scale deployment of solar PV and wind, FESSIA has counted just 1.4GW of BESS in operation across ASEAN countries and around 400MW of operational projects.

BESS does not fit neatly into existing regulatory classifications, given its unique characteristics, such as ultra-fast response times and the ability to stack revenues from different use cases.

However, the regulatory environment is more developed in mature markets elsewhere, and ASEAN countries could learn from these and from the early-adopter examples of the Philippines and Vietnam within their region, FESSIA said.

Regional first-movers: Philippines, Vietnam

In the Philippines, the wholesale electricity market combined with government policy support have enabled initial investments in BESS, while a draft framework for regulation is passing through legislative chambers.

In Vietnam, a recent government decree defining BESS applications and pricing mechanisms is an "important first step" toward unlocking the market.

In both instances, there are still gaps and uncertainties in regulation that prevent the countries from fully benefiting from BESS resources. DNV found that, if scaled up, co-located solar and BESS could deliver US$2.25 billion in yearly revenues in the Philippines by 2030, and making BESS the cornerstone of the Philippines ancillary services market could cut system costs by up to US$275 million annually.

In Vietnam, more than US$750 million in investment could be attracted into battery storage this year, given the business case across multiple use cases. This figure could scale to US$5.7 billion by 2030, the report found.

The report makes a full assessment of current conditions in each market, including the profitability of different applications from ancillary services to hybridisation with renewable energy, energy shifting and transmission and distribution (T&D) investment deferral.

It then identifies regulatory gaps and recommends improvements to the regulatory framework, finding that, even for these regional leaders, current market conditions fall well short of optimal.

For instance, while ancillary services opportunities are profitable in the Philippines, there is a lack of ability to stack those revenues with energy shifting, given that current regulations do not recognise batteries as a bi-directional asset for the network's benefit.

Revenue stacking, the FESSIA report argues, is essential to unlocking the full economic and system value of storage, as seen in mature markets.

Stacking revenues strengthens project economics, improves investment certainty and reduces exposure to market volatility and regulatory changes. At the same time, that versatility enables energy storage resources to respond dynamically to the system's changing needs.

"In both the Philippines and Vietnam, many of the highest-value use cases for storage depend on clearer operational rules and mechanisms that properly recognise the fast-response and flexibility capabilities of BESS, with revenue stacking offering additional upside by strengthening project economics and reducing investment risk."

In summary, unlocking the full value of energy storage in ASEAN requires policy and market frameworks to evolve—particularly to enable revenue stacking and recognize BESS's unique capabilities. While the Philippines and Vietnam lead the way, other member states can learn from their progress and from mature markets.

In this context, Super Power New Energy stands as an innovation pioneer. With a skilled technical team and an integrated R&D‑production‑sales ecosystem across the Yangtze River Delta, Super Power is well‑positioned to support ASEAN's energy storage transition.