Southeast Asian nations are rejuvenating a 20-year-old plan, aiming for interconnected grids to meet rising clean energy demands sustainably.
The escalating climate crisis and the global transition to cleaner energy sources are prompting Southeast Asian nations to rejuvenate a 20-year-old plan for regional power sharing. This resurgence in interest is marked by a recent agreement between Malaysia and Indonesia to investigate 18 potential sites for cross-border transmission lines, capable of producing power equivalent to 33 nuclear plants annually.
The Association of Southeast Asian Nations (ASEAN), a coalition of 10 countries with varied political and economic structures, is spearheading this initiative. The region is witnessing a spike in electricity demand, and governments are realizing the imperative of moving away from fossil fuels, necessitating a more interconnected grid system.
A landmark in this initiative is Singapore's importation of hydroelectric power from Laos, facilitated through Thailand and Malaysia, representing a pioneering agreement for electricity trade between four countries in the region. Historically, cross-border power purchases were limited, representing only 2.7% of the region’s capacity in 2017, and were usually bilateral.
The idea of a regional grid among ASEAN members originated two decades ago but faced impediments due to technical issues and political skepticism. However, the looming threat of climate change, predicted to slash the region’s economic potential by over a third by the middle of the century, has expedited developments. The decreasing costs of renewable energy, such as hydroelectric, solar, and wind power, are enhancing their appeal, with most ASEAN countries, except the Philippines, pledging carbon neutrality by 2050.
Laos, dubbed the “battery of Southeast Asia,” has built over 50 dams in the last 15 years and has surplus power to offer to its neighbors. In contrast, resource-scarce Singapore is dependent on importing clean energy to fulfill its renewable energy goals.
Interconnected grids can alleviate discrepancies between power production and consumption locations, adapt to external economic fluctuations, and are economically beneficial. For example, in 2021, power trading in Europe resulted in $36 billion in savings. These grids also promise reliable electricity supply to isolated areas, exemplified by the transformation in West Kalimantan in 2016 due to a cross-border power line from Malaysia’s Sarawak province.
However, numerous challenges persist, including ASEAN’s principle of non-interference, leading to a hesitancy towards collaborative projects, and conflicting domestic energy priorities. According to AP News, the lack of a regulatory framework for submarine power cables and inconsistencies in voltages and grid capacities among countries also pose technical challenges.
The substantial investment required, at least $280 billion, and China’s role in developing the region’s energy infrastructure through its Belt and Road Initiative, raise concerns regarding the influence of private financing and geopolitical dynamics. Nonetheless, the collaboration between China and ASEAN is generally based on mutual interests and benefits, despite sporadic tensions.
The revitalized endeavor for regional power sharing in Southeast Asia, propelled by the urgent needs of climate change mitigation and cleaner energy adoption, is progressing despite existing obstacles. The cooperative ventures within ASEAN are forging a path towards a more interconnected and resilient energy grid system, symbolizing a collective resolve and vision for a sustainable future.
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