Abstract This paper examines the power sector and electricity market in the Greater Mekong subregion (GMS) and explores potential pathways for low-cost, low-carbon, and low-conflict development of the sector. The results show that implementing a smartly-designed regional power grid, combined with enhanced cross-border trade, can facilitate a transition to a 100 percent renewable electricity supply. It projects a three-fold increase in energy demand by 2050 and highlights the need for a transition to low-impact renewable electricity sources. It utilizes modelling tools to analyze four scenarios and assess their impacts on electricity cost, carbon emissions, and environmental and social aspects. Results indicate that a scenario combining an expanded regional grid and cross-border trade, increased share of non-hydro renewable energy sources and energy efficiency measures yields the best outcomes. This approach reduces sectoral emissions, lowers costs, and minimizes conflicts. The paper recommends establishing coordinated and functional regional institutions, ratifying a regional grid code, and promoting standardized cross-border power trade arrangements. In conclusion, the report highlights the relevance of a well-designed regional power grid and cross-border trade for a successful transition. Implementing the recommended measures can lead to a greener and more inclusive power sector, ensuring the region’s long-term energy security and environmental sustainability.