The difficult thing about electricity, is you don’t often get to generate it, in the place you want to consume it. Like all valuable resources, the real trick is to learn how to share.
But how do you receive electricity from a nation with which you don’t share a border?
That’s the goal of the ASEAN Power Grid, an ambitious project to create an interconnected power network throughout the region. Thanks to the vision of Laos, Thailand, and Malaysia, that goal just took an even greater step towards reality, with ASEAN’s first multilateral cross-border electricity project.
This recently signed deal will see Malaysia purchasing up to 100 megawatts of power from fellow ASEAN member Laos. But how do you receive electricity from a nation with which you don’t share a border? You ask your neighbours to help out. In this case, Thailand will be the vital transmission partner for the project, utilising their existing national power grid to help transfer the purchased electricity from Laos, across its own borders, and into Malaysia. This energy purchasing and wheeling agreement (EPWA) sets Thailand up as a power highway from Laos to Malaysia, with a simple toll for the energy’s journey.
Greater integration of ASEAN’s energy infrastructure was identified as a key aspect of the ASEAN Energy Plan 2016-2025. Now with this tripartite agreement in place, a future of shared ASEAN power is even closer. Let’s explore 5 key facts about this visionary deal:
This is the first time energy in ASEAN has crossed this exciting multi-lateral threshold, from one nation to another, through facilitation by a third-party nation. The agreement between Laos, Malaysia and Thailand represents the region’s first multi-lateral energy exchange.
As of the end of 2016, ASEAN shared power over 9 separate cross-border power projects throughout the region, with Malaysia, Brunei, Thailand, Laos, Singapore, Vietnam and Cambodia all benefiting from cross-border sharing of power.
Thailand is well positioned to play a vital part in these agreements, and is involved in more than half of the existing power sharing projects.
The total shared across ASEAN as of November 2016 is 5,200 MW. That’s more than six times greater than the entire installed electricity capacity of Brunei Darussalam.
ASEAN wants to be a bigger sharer. With current plans in the pipeline, ASEAN aims to be sharing 23,200 MW of power into 2020 and beyond. That’s half as much as the current installed generation capacity of the Philippines.
The recently agreed tri-partisan deal highlights a key benefit of an ASEAN power grid. Laos is a huge generator of low-carbon hydropower, yet one of the smaller regional electricity consumers. Malaysia is able to purchase 100 MW of clean hydro-power to boost the share of renewables as part of its energy mix.
ASEAN requires an estimated 250,000 km additional transmission lines alone to connect electricity consumers to 2035. That’s enough to circle the Earth 6 times over! Shared ASEAN power connections mean the ability to optimise investment in these connections, and share the benefits.
The nations of ASEAN each have access to unique energy resources. Sharing across an ASEAN grid means a more balanced fuel mix throughout the region, providing stability and security that can offset the risks, and potential energy cost implications, of individual fuel shocks. Laos’ shared hydropower is the perfect example of this.
ASEAN is a region with often challenging geography for electricity transmission. Cross-border power networks can help tackle this challenge. In many cases there are remote locations in one nation that are closer, and more accessible, to established power networks in another.
Both the benefits of electrification and the potential for cross-border infrastructure projects can be a huge catalyst for growth, helping stimulate national and regional economies, and providing a particular opportunity for economic benefits in rural areas.