ASEAN power grid must be ready before next crisis – think tank

SINGAPORE — The ambitous ASEAN power grid or APG, which is pushing for the interconnectivity of grids in the region to increase energy resilience, must be operational before the next crisis hits, ASEAN Centre for Energy Executive Director Dato Razib Dawood have said.

 To meet the 2045 target, ASEAN member states must work double time in addressing current challenges and in laying out the regulatory framework for the regional power trade, Dawoood told reporters at the sidelines of the Singapore International Energy Week.

“We have to accelerate the work. Everything accelerated to meet the target. Then you need a first mover to demonstrate to the bankers and to world that ASEAN really want to do it because ASEAN wants to get the benefit,” he said. 

“Everyday that we wait, everyday that we waste. We miss the opportunity. Are we going to wait for the next crisis? So you have to get ready for the next crisis,” he added.

For its part, the Philippines is committed to help speed up the development of the interconnected power grid that could strengthen the region’s capability for multinational trade, which in turn, could shield member states from supply shocks during crisis, Energy Secretary Sharon Garin said. 

“The Philippines will keep working with every member state until the grid is operated,” Garin said.

“No country in this region can insulate itself from every shock. Resources and demand profiles complement each other and that is our advantage. Where one system is short, another has surplus. Working together, we widen our supply options and respond to disruptions as a region and not alone. The ASEAN power grid is how we make that real,” the energy chief added.

Dawood said among the challenges faced by the initiative is the manufacturing timeline of subsea cables. Although several countries have been producing the technology such as China, Japan and Korea, there is high demand of the commodity.

“Subsea cable is special, not many people can manufacture…We just discovered that the supply chain issue, when you want to order long kilometer of subsea cable, only limited manufacturer… But they are fully booked, their order book is so long…It’s an issue,” he said. 

A market mechanism framework for the actual trade must also be developed, Dawood said.

“To calculate how to finance, profitability of the project, bankability and so on, commercial agreements, the terms. And also the market mechanism, how can you coordinate even how to operate because the moment you interconnect you must have some SOP communication, even the language, maybe in English as a lingua franca… And just harmonizing the code and so on,” he added 

Garin also said building physical infrastructure is not enough. Policy framework in the entire region must be aligned in order for it to work. 

“It’s not like you just build a cable and then we buy, we buy from each other. No, because it’s different jurisdictions… In fact, technically there could be a difference like voltage or quality of electricity. So it has to be synchronized,” she said. 

Despite the challenges, the ASEAN believes linking existing power grids have “obvious benefits,” Singapore’s Energy Market Authority CEO Puah Kok Keong told reporters.

“That enhances everybody’s power resiliency. When there’s a power incident in one part of the region, and that grid is interconnected with the rest, it will allow you to draw energy from the wider regional grid, and therefore keep energy, your power grid, more stable. So clearly it enhances resilience, clearly it enhances energy reliability,”  Puah said.

Interconnection among some adjacent ASEAN countries that are connected by land are currently in place under the Lao PDR-Thailand-Malaysia-Singapore power integration project o LTMS-PIP. However, geography proves to be a challenge for other island nations.

“We are an archipelagic region with tens of thousands of islands, and countries spread quite far apart…So the practicality of developing an interconnected ASEAN will require subsea cables, and this will come with a certain impact on technical viability, and it will come with certain cost implication as well. So that’s one big challenge,” Puah said. 

But he said improvements in technology could, in the future, lower costs. Puah also said “I’m sure this is the way for it to be done.”

“When this ASEAN power grid is able to happen and the investments into the renewable energy takes off, then they also create jobs and create also revenue, income and export revenue income for the countries that are exporting it. So quite clearly we will see that there are tremendous win-win benefits to be had,” he added. 

During the 44th ASEAN Ministers on Energy Meeting (AMEM) held in Manila in October, member states have reached a “consensus” to move forward with the APG through an enhanced MOU. On top of that, the Philippines and Singapore have also exchanged Letters of Intent to explore benefits of bilateral power interconnectivity between the two countries.