Energy wake-up call

If achieved, a regional grid could help propel economic growth in a region that is home to nearly 700 million people and one of the world's fastest-growing economic areas. The region is set to account for 20 percent of the growth in the world's energy demand over the next decade, ranking second only to India.

But as the region grows, so do its fuel import bill and vulnerability to energy shocks. The Middle East accounts for 60 percent of the region's crude oil imports, and almost half of the oil products that are refined or consumed in Southeast Asia come from Middle East crude oil, the IEA said.

The region has also become increasingly dependent on liquefied natural gas imports, while coal remains central for power generation in most countries in the region.

That means Southeast Asia remains exposed to future shocks, underscoring the need to diversify fuel sources and focus on domestic energy.

The region's energy import bill is projected to reach $160 billion this year, a record high, and is likely to keep on increasing, potentially rising to $400 billion, or 5 percent of the region's economy, by midcentury based on current policies, the IEA forecasts.

Policies prioritizing cleaner sources of energy, electrification of transport, energy efficiency and grid investments could reduce this risk, the agency said.