Grid investment is accelerating across developed East Asia as power networks struggle to keep pace with rapid renewable energy deployment, while slower spending in Indonesia and Thailand risks constraining renewables growth and widening the gap with regional peers, BMI Country Risk and Industry Research said.
In a report published on Tuesday, the research firm said grids have become a key bottleneck for many Asian power markets, with renewable generation capacity coming online faster than the transmission infrastructure needed to connect and distribute it.
The mismatch is contributing to rising renewable energy curtailment, particularly for solar power, which has driven much of the region’s recent renewables growth.
BMI said solar utilization rates have declined in several markets over the past three to five years as grid constraints have increased. Vietnam saw a sharp decline in utilization following the connection of more than 10GW of feed-in-tariff solar in 2020, while India experienced a similar trend from 2024 as solar additions accelerated.
Globally, about 1,700GW of advanced-stage renewable energy projects are currently stalled while awaiting grid connections, according to the International Energy Agency, highlighting the importance of network investment to the next phase of renewables growth.
“Grid investment will therefore determine whether the next decade delivers sustained renewables growth or a slowdown as networks reach their integration limits,” BMI said.
China leads regional investment
China remains the regional leader in grid investment, with State Grid committing RMB 4 trillion between 2026 and 2030 to grid upgrades under the 15th Five-Year Plan. The commitment represents a 40 percent increase from the previous five-year period.
South Korea’s KEPCO and Taiwan’s Taipower are also increasing investment, with both recording their highest annual capital expenditure on record in 2025.
BMI said India would remain a regional grid investment outperformer after recording the sharpest growth over the past five years, while Taiwan and Singapore have maintained steady investment momentum.
Malaysia stands out among emerging markets, with Tenaga Nasional Bhd (TNB) recording 2025 capital expenditure of about $4 billion, already exceeding its annualized target of $3.4 billion.
TNB, India’s Power Grid Corp and Adani Energy Solutions recorded some of the sharpest increases in grid capital expenditure compared with previous years.
India’s two companies stand out in percentage terms, although BMI noted that the increase reflects expansion from a relatively low base. State Grid and China Southern Power Grid have recorded slower percentage growth but continue to invest from a much larger absolute base.
Among developed markets, Taipower and Singapore’s SP PowerAssets have steadily increased grid capital expenditure in recent years.
KEPCO’s investment has remained broadly flat, which BMI attributed partly to balance-sheet damage following South Korea’s tariff freeze in 2022-2023.
Indonesia, Thailand lag
Indonesia and Thailand face greater challenges in expanding their grids.
Indonesia’s state-owned electricity company PLN has averaged about US$3.9 billion in annual capital expenditure over the past five years, around 23 percent below its annualised target, BMI said.
PLN and Thailand’s EGAT were identified as regional laggards, with grid investment either declining or stagnating since 2021.
BMI said EGAT was on track to meet its existing grid investment plans, but considered the committed amount relatively low and less ambitious than those of regional peers.
The research firm also warned that higher costs for transformers, cables and switchgear since 2021 mean that some utilities’ investment spending is being absorbed by supply-chain inflation rather than translating fully into additional network capacity.
This makes delays more costly as renewable generation continues to expand faster than grid infrastructure.
Transmission projects typically require long development and construction periods, meaning investment postponed today could leave networks struggling to accommodate new generation later in the decade.
The risk is particularly significant in markets where renewable capacity additions are already outpacing grid expansion.
Investment intensity rises
BMI also assessed grid investment through utilities’ capital expenditure-to-revenue ratios, which measure the proportion of a utility’s income being reinvested in its network.
TNB, Power Grid, Adani Energy Solutions, Taipower, China Southern Power Grid and SP PowerAssets are becoming more capital-intensive, investing a growing share of their revenue in grid infrastructure.
India provides the clearest example. Power Grid’s capital expenditure-to-revenue ratio is expected to reach 80% in 2026, more than three times the 24% recorded in 2021.
BMI said this reflects the pressure on India’s grid from high renewable-energy curtailment and long queues for grid connections.
SP PowerAssets also stands out for its relatively high capital intensity, despite Singapore’s smaller power market, while Taipower has increased both its grid investment and capital intensity.
By contrast, EGAT remains the least capital-intensive utility among those assessed.
For PLN, both declining capital expenditure and a falling capital expenditure-to-revenue ratio indicate that grid investment has not been a major spending priority, BMI said.
Renewables integration at risk
BMI said the consequences of underinvestment extend beyond electricity transmission, as inadequate grid capacity can slow the integration of variable renewable energy and prolong reliance on thermal power generation.
Where networks cannot absorb additional solar and wind generation, renewable projects may face delays or higher levels of curtailment. This can create a cycle in which slower renewables deployment reinforces dependence on coal and other thermal generation.
“Delaying grid investment also risks prolonging reliance on thermal generation, particularly coal, as grid constraints limit renewables integration,” BMI said.
The research firm expects grid investment to remain a growing priority across Asia as governments seek to accommodate rising electricity demand and renewable capacity.
Developed East Asian markets are generally better positioned to deliver on their increasingly ambitious investment plans, BMI said, while execution remains more challenging across emerging markets.
For countries such as Indonesia and Thailand, accelerating network investment will be increasingly important to prevent grid constraints from limiting renewable-energy deployment and widening the infrastructure gap with regional peers.
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