In today’s complex and evolving global landscape, the need for ensuring energy resilience has never been more urgent. With heightened geopolitical tensions, supply chain shortages, and an increase in extreme and hazardous weather events – decarbonising the energy system is now a top priority for securing a sustainable future.

But while utilities and governments around the world are focused on transitioning to renewable energy sources like wind or solar, this alone will not be enough. Responding to waves of demand or localised power challenges in today’s disrupted, fragmented energy environment is a major shortcoming of today’s centralised grids.

Which is why decentralised energy systems are now moving into focus, offering bidirectional flows of electricity and greater control to optimise energy flow. As the world transitions to cleaner forms of energy, now is the time to seize the power of decentralised energy systems with key components like third-party access (TPA) and battery energy storage system (BESS), to ensure energy remains reliable, affordable, and accessible for all.

Understanding the need for grid resilience

 For decades, power grids have been structured in a hub-and-spoke model that relies on enormous, centralised energy infrastructure. Massive capitalisation was required to build out the system from end-to-end: from giant fossil fuel power plants to thousands of miles of transmission and distribution lines.

The idea was to rely on economies of scale to create electricity at the most efficient and lowest price possible, to ensure it can be universally affordable. This logic held true for a long time. But in today’s landscape of decarbonisation, the lack of modularity in traditional energy systems renders them vulnerable to new risks.

Centralised grids have proven to be inflexible in meeting rapid demand changes and standing up to the destructive impacts of climate change. What’s more, it is often populations in rural and remote regions that are disproportionately affected by the impact of these power shortages.

Vietnam for instance suffered from power shortages due to record-smashing heat waves last year, which led to a surge in power demand with dried up hydropower reservoirs. The direct damage from one single power outage affecting five manufacturers at one industrial park in Northern Vietnam costed the nation over US$190,000 in losses in a single day.

Moreover, small island communities such as those in archipelagoes including the Caribbean, the Philippines, and Indonesia, can’t be connected to larger grids by default. As such, the primary source of electricity on islands has typically been imported diesel fuel, which poses high financial costs for most electricity utilities.

Fortunately, new energy technologies are now enabling an array of unique value propositions that increase grid flexibility and in turn, boost energy resilience. Decentralised energy systems, a.k.a. distributed energy resources (DERs), can empower energy markets to adapt to changing conditions, recover rapidly from disruptions, and boost accessibility.

Strategic investments in these technologies can significantly mitigate grid instability and voltage shortages by providing localized power generation and storage capabilities, reducing strain on the main grid during peak demand periods, and offering rapid response to fluctuations in supply and demand.

 Advancing decentralised energy in Southeast Asia

Decentralised energy reverses the idea that bigger is better. With a DER, thousands if not millions of tiny, localised electricity-generating systems light up homes or businesses. Advances in battery technologies, coupled with the falling cost of renewables, are making it more viable and desirable for on-site electricity generation.

Cost-effective energy storage is the key that makes decentralisation work. Batteries are the go-to tool to tap into electric power on a mobile basis, which have obviously been around for a while in the form of AA batteries, cell phones, laptop batteries and the like. Yet these applications have traditionally been smaller scale and less practical for scaling up.

Nonetheless, latest advancements in battery storage are making this technology finally ready for the shift to electrification – with the rapid rise of electric vehicles being a case in point. More advanced batteries now enable users to take a tangible, physical piece of energy and move it from one location at one time to where and when it’s most useful.

With this shift, the role of the energy consumer is reimagined: they can become prosumers, forever changing their relationship with energy.  By installing on-site systems to store surplus rooftop solar power, for instance – not only can users save on energy costs for themselves but can even feed excess electricity back into the power grid.

Indeed, one of decentralised energy’s greatest strengths will be its role in reducing our overall carbon footprint. Communities in remote regions and small islands are especially ripe for decentralised energy systems, given the difficulty in building and maintaining carbon-heavy energy systems in these areas.

The Palawan Island Mini-Grid Project in the Philippines for instance, has successfully connected hundreds of households in remote villages to solar-powered mini-grids. Indonesia’s Lombok Island has also embraced solar-powered microgrids, which have led to 100% rural electrification, over 25% cost savings and over 22% reduction in CO2 emissions.

Meanwhile, Cambodia has achieved remarkable success with off-grid energy infrastructure, increasing electricity access for over 2 million rural homes. Twenty years ago, only 16.6% of the Cambodian population had access to electricity – that number had increased to 93% by 2019, largely thanks to solar home systems, solar lanterns, and rechargeable batteries.

Here in Malaysia, the government has launched an initiative called Pulau Tenaga Hijau, or the Smart Green Island Project, which encompasses Tioman Island, Perhentian and Redang. This program aims to pioneer the adoption of energy-efficient technologies and multiple clean generation sources across these islands.

In collaboration with the country’s leading utility, Tenaga Nasional Berhad (TNB), which acts as the main driver powering the PTH initiative, the programme focuses on developing and implementing renewable energy technologies and infrastructure on the islands. For instance, “Tioman Green Initiative” on Tioman Island has successfully deployed solar and mini-hydro systems to power suraus, schools, homes and buildings across the island.

Through these combined efforts, all three islands are expected to achieve net-zero emissions by 2040, marking a significant step towards sustainable energy towards sustainable energy practices in Malaysia’s island communities.

In addition, the upcoming implementation of the third-party access (TPA) framework will enable renewable energy producers in Malaysia to use the national electricity grid to deliver their green energy to customers in the country. This will lay the foundations for a robust decentralised energy system in Malaysia with a diverse mix of renewable power supply, emphasising the importance of fortifying the country’s grid system and harnessing the power battery storage.  This will lay the foundations for a robust decentralised energy system with a diverse mix of renewable power supply, emphasising the importance of fortifying the country’s grid system and harnessing the power battery storage.

Decentralising energy is also democratising energy

 Beyond improving the resilience of the energy system, the decentralisation of energy will empower individuals and communities to gain more control over their energy destinies. When using decentralised energy systems, electricity users become more aware of where their power comes from, thus encouraging more energy-efficient behaviours.

DERs also enable local communities to take control of their energy production and consumption to match their local sensitivities and priorities. Those with DERs like solar panels or battery storage systems can participate in local and even regional energy markets through data-driven electricity sales or purchases.

As DER proliferates and matures, the potential for interpersonal energy grows – enabling greater sharing between stakeholders, both within and across borders. This will create new community energy opportunities, shared ownership and business models, and finally, a true transactive energy system.

To go further, transparent blockchain transactions could support increased trust between all stakeholders using a real-time smart grid. Meanwhile, the powerful data processing and analytics capabilities offered by artificial intelligence (AI) could be used to show where energy can be saved or where to place solar panels.

All these aspects promise to foster a new era of energy cooperation that effectively addresses the energy trilemma of affordability, security, and sustainability.

Indeed, one of decentralised energy’s greatest strengths will be its role in reducing our overall carbon footprint.

Preparing for the era of decentralised generation and storage

Remote communities, power-hungry industries, and eco-minded homeowners can now access clean energy rather than drawing on power plants from many miles away. Renewable energy, with its low carbon emissions and interconnectivity, turns scores of microgrids into a green energy support system for the entire power grid.

With the rise in energy literacy, more people will also see new possibilities in batteries, while usability and user-friendliness will drive greater acceptance of battery systems.– which in turn strengthens the desire to be self-reliant, especially in the wake of continued grid interruptions.

Ultimately, decentralisation’s real strength is in its locality, empowering people and communities about their energy usage and consumption. When we treat and care for the energy system the same way we would our own homes, we can make the future brighter and more sustainable for everyone.