September 27, 2024
JAKARTA – Businesses and policymakers from ASEAN countries have gathered in Vientiane to engage in dialogue to enhance energy cooperation with a focus on several critical initiatives, including the ASEAN Power Grid, carbon capture, utilization and storage (CCUS) technology and emerging trends in renewable energy.
The dialogue is part of the three-day 24th ASEAN Energy Business Forum (AEBF-24) that began on Wednesday. It is being held in conjunction with the 42nd ASEAN Ministers on Energy Meeting (AMEM).
Laos chairs the 10-country bloc this year after assuming the rotating chairmanship from Indonesia, which held the position in 2023.
“Under Lao PDR’s ASEAN chairmanship, we proudly embrace the theme ‘ASEAN: Enhancing Connectivity and Resilience’, reflecting our collective commitment to ensuring energy security and transitioning to green and sustainable energy sources,” Soukvisan Khinsamone, deputy director general of the department of planning and cooperation at Lao PDR’s Ministry of Energy and Mines, said in a statement.
The AEBF-24 also features the fourth ASEAN International Conference on Energy and Environment (AICEE), where experts and academics discuss innovative approaches to the region’s energy and environmental challenges.
The conference also includes discussions on the ASEAN Plan of Action for Energy Cooperation (APAEC) Phase II: 2021-2025, the regional blueprint that serves as a guide for ASEAN’s energy transition implemented by the ASEAN Centre for Energy (ACE).
Since the launch of Phase I in 2016, it has touched on seven program areas, including the ASEAN Power Grid, the trans-ASEAN gas pipeline, clean coal technology, renewable energy and civilian nuclear energy.
On the sidelines of the forum, the ACE signed a memorandum of understanding (MoU) with Chinese tech firm Huawei to develop smart photovoltaic (PV) technology, a key component of solar power systems. The partnership involves collaborative research, capacity building and technical exchanges focused on the technology.
Both organizations announced that a workshop on smart PV and electrical safety standards was scheduled for next month, followed by the release of a white paper in May 2025.
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Doubts remain
However, some analysts expect ASEAN will face significant challenges in realizing collective projects aimed at establishing regional power and energy interconnection, including the ASEAN Power Grid and the trans-ASEAN gas pipeline.
Fahmy Radhi, an energy economist from Gadjah Mada University, stated that many countries in the region are power producers, which may lead to competition and hinder plans to build an interconnected system in the region.
He also highlighted a lack of clarity regarding the roles of each country in the project.
“It’s not like the situation in Europe, especially before the Russia-Ukraine war, where a gas pipeline from Russia supplied all of Europe. In that partnership, it was clear where the gas came from and who would use it,” he told The Jakarta Post on Thursday.
According to him, bilateral agreements, such as Indonesia’s decision to export renewable-based power to Singapore, would be workable rather than larger, region-wide partnerships.
“Because it is clear what Indonesia should export to Singapore and what it would receive in return. There is mutual benefit. It will be challenging [to build the ASEAN Power Grid] if such mutual benefits are not clearly defined,” he stated.
Abra Talattov, head of the Center of Food, Energy and Sustainable Development at the Institute for Development of Economics and Finance (INDEF) told the Post on Thursday that he warned an open energy market in the region could hinder Indonesia’s transition effort.
He argued that if the ASEAN Power Grid was implemented, Indonesia might become reliant on other ASEAN countries for renewables, potentially resulting in a decline in renewable energy investment.
Experts have cited investment barriers to accelerating the construction of renewable power plants in Indonesia, including high interest rates and country risk, which have increased financing costs for renewable energy projects.
Others also suggest pricing has long been an obstacle for renewable energy investment in Indonesia amid competition with power generation from coal, which is cheap due to government subsidies.
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In January, Nadiya Pranindita, a research associate at the Economic Research Institute for ASEAN and East Asia (ERIA), also pointed out that the roles of cross-sector players and stakeholders in the ASEAN Power Grid project have not been fully defined. Thus, she called for clearer definitions of each entity’s responsibilities.
According to her, ASEAN could then start considering the creation of a competitive market in which all members could participate. The appeal of the power market lies in a price-based approach, she said, despite the ongoing debate about the costs of generating electricity and building infrastructure.
“Focusing more on a market-based pricing approach doesn’t mean the viability of the integrated power infrastructure project is unimportant. Clear mechanisms to recover costs and generate profits still require attention, along with efficiency, transparency and fair cost-sharing principles,” she noted.