Countries in the Southeast Asian region are undergoing a period of significant growth. Populations are booming and moving towards cities, speeding up urbanisation and industrialisation across the region. As these economies grow, so is the demand for energy. By 2050, the region’s energy needs are expected to triple. Meeting this demand will take a significant investment in energy infrastructure and technology all while balancing the energy trilemma. Singapore’s challenges will be especially acute – as an island nation with limited natural resources, it currently imports 95% of its electricity from neighbouring countries like Malaysia and Indonesia. Still, the nation intends to meet its net zero emissions goals by 2050, and the Australia-Asia Powerlink (AAPL) project hopes to be part of the solution.
The First Intercontinental Power Grid
Australia is home to abundant renewable energy (RE) resources with land availability to deploy large-scale energy projects like solar farms. Having a relatively small population, the country possesses surplus renewable energy generation capacities that can be funnelled to other countries that lack the resources or land to meet their own energy demands.
Singapore is a prime candidate for this, and the Australia-Asia Powerlink project intends to tap on this opportunity. The proposed project is a high-voltage, long-distance electricity transmission network that would connect Australia’s RE resources to Southeast Asia’s energy markets, starting off with providing up to 1.75 GW of electricity to Singapore (approx. 15% of the country’s energy needs upon completion in 2029). This project would require a 4,500km transmission line connecting Australia to Singapore via Indonesia, which would be capable of powering three million homes, supported by 36-42 GW hours of energy storage.
Slated to begin construction in 2024 and become operational by 2029, if the project goes forward as planned, the Australia-Asia Powerlink would be the first intercontinental power grid containing the world’s largest solar plant, largest battery, and longest submarine power cable.
On top of that, the project has the potential to bring significant benefits to Southeast Asia by increasing the region’s energy security and access to renewable energy while reducing greenhouse gas emissions. On both ends, the project could also catalyse significant economic growth and job creation. Nonetheless, due to the sheer scale of the project, several challenges need to be addressed for it to be executed successfully.
A Revolutionary Undertaking
There is a reason the AAPL would be a first-of-its-kind revolutionary project in the energy sector. While the project has the potential to transform the energy landscape of the region, it is also a bold and ambitious plan that will require incredible feats of engineering as well as significant resources, innovative technical expertise and cross-country collaboration to pull off.
Still, the scale of the project, along with the marked interest in it, is a testament to the magnitude of the challenge we face in transitioning to a clean energy future. Meeting the growing energy demands of Southeast Asia while reducing our emissions is critical – big and bold action is essential and the AAPL project is the kind of visionary undertaking that needs to be considered.
The challenges of the AAPL, while enormous, represent many of the challenges we will need to overcome to mitigate the impacts of climate change and establish a sustainable future for ourselves.
These challenges include:
- Funding: Initial estimates indicated that the AAPL project would cost over USD20 billion – a seemingly enormous amount yet a mere drop in the bucket compared to the estimated $5.7 trillion in annual investment needed for the clean energy transition.
- Technical complexity: Spanning across multiple countries, energy grids and with a large portion functioning undersea, the AAPL will require advancements in high-voltage direct current (HVDC) transmission technology, energy storage, grid integration and control, as well as cybersecurity technology – the same challenges that will need to be resolved to accelerate the global transition to a low-carbon future.
- Policy and regulations: The project spans three countries, requiring collaboration between multiple governments and stakeholders. This means developing coordinated policy and regulatory frameworks that balance the needs of all stakeholders.
What’s Next for the Australia-Asia Powerlink?
Last year, Sun Cable, the renewable energy company behind the AAPL, announced that it had raised USD150 million in Series B funding to develop the project. The project was initially awarded priority status by advisory group, Infrastructure Australia, and received approval for its route from Indonesian authorities, clearing a major hurdle in the project’s development.
Recently, however, Sun Cable entered voluntary administration amid disputes between its main investors centered around the fact that the project had missed several milestones and necessitated new rounds of funding. Doubts on the commercial viability of the project arose when one of its main investors, Andrew Forrest, questioned Singapore’s interest in importing RE as large an amount as the AAPL is bidding on, especially since the project has not received approval from Singapore’s Energy Market Authority (EMA).
Despite this uncertainty, the EMA is indeed taking measured steps in securing Singapore’s clean energy future, although it seems they are looking closer to home for their energy needs with intention to diversify their energy portfolio to establish a more secure energy system. So far, the EMA has issued two Requests for Proposals to source a total of 4GW of clean energy from low-carbon energy producers by 2035. Several trials and pilots have been approved from the resulting proposals, involving clean energy producers in nearby Indonesia, Malaysia and Laos, with each project providing around 100MW of electricity each.
Against these goals, AAPL’s plan to supply almost half of Singapore’s energy needs would be counterintuitive. While unfortunate for Sun Cable, this sentiment is somewhat unsurprising given the region’s priorities to increase its self-reliance and considering the groundwork that had been laid by Southeast Asian nations to establish an integrated, regional ASEAN Power Grid.
While the future of the AAPL hangs in the balance, recent news reports indicate that the project has attracted interest from multiple bidders including parties that are not Sun Cable shareholders, indicating that there may be hope for the project after all.
A Case for ASEAN Interconnectivity
Most of the challenges facing the Australia-Asia Powerlink project are inherent risks for a project of its scale. However, it is important to realise that projects of this nature, with all their technical, financial and regulatory hurdles, will be critical in our fight against climate change. Not just that, for Southeast Asian nations, regional cooperation could be imperative for securing our energy future.
Not just that, for Southeast Asian nations, regional cooperation could be imperative for securing our energy future.
The economic benefits of an interconnected grid would also be widespread and produce a win-win situation. For instance, an ASEAN power grid would provide a market for countries like Malaysia, with its abundant natural resources, to export excess electricity generated from its power plants. In the same way, countries like Singapore can turn to its neighbours for secure, diversified energy supplies, while participating in knowledge sharing to support the deployment of renewable energy project.
Ultimately, by investing in renewable energy and building an interconnected energy grid, ASEAN countries can create new opportunities for trade and investment, while also improving energy access for their citizens and increasing the energy security across the region. As countries in the region continue to grow economically and energy consumption increases, a coordinated and integrated approach would allow us to use our resources more effectively, which could, in due course, lead to more affordable and reliable energy for all.