ASEAN delays road map for regional power grid

Energy demand in Southeast Asia is set to grow by around 3 per cent per year until 2030, with 75 per cent of the increased demand projected to be met by fossil fuels.

Divya Karyza

Divya Karyza

The Jakarta Post


ASEAN energy ministers and dialogue partners attend an MoU signing ceremony on Aug. 25, 2023, at the 41st ASEAN Ministers on Energy Meeting 2023 in Bali. PHOTO: THE JAKARTA POST

August 30, 2023

JAKARTA – The presentation of the eagerly awaited ASEAN Power Grid road map, which is expected to guide the region’s efforts to integrate power grids, has been delayed.

To explain the delay, Beni Suryadi, manager of the Power, Fossil Fuel, Alternative Energy and Storage Department of the ASEAN Centre for Energy (ACE), who oversees the road map’s formulation, cited the need for more time to “reach a consensus between ASEAN member states” before making the document public.

Beni said devising the road map required a significant amount of time and resources considering the massive modeling scale. Nevertheless, the final document is currently under review.

“ACE has been conducting a series of consultations with each country involved, which takes quite a bit of time. We do this to ensure that the document accommodates the aspirations of all members,” he told The Jakarta Post on Monday.

The plan, which would include financial and regulatory frameworks for intraregional connectivity, was expected to be unveiled during the 41st ASEAN Ministers on Energy Meeting (AMEM), which was held in Bali last week in conjunction with the ASEAN Energy Business Forum.

“We targeted for the official launch to take place in October or November, but it is contingent upon the agreement of all ASEAN countries.”

Energy demand in Southeast Asia is set to grow by around 3 percent per year until 2030, according to an International Energy Agency (IEA) report, with 75 percent of the increased demand projected to be met by fossil fuels under a business-as-usual scenario.

Without stronger policy action, the region’s net oil import bill, which amounted to US$50 billion in 2020, is expected to multiply rapidly if high commodity prices endure, the same report reads.

Beni went on to say that the road map for the ASEAN Power Grid identified 18 potential cross-border interconnections with a total capacity of 33 gigawatts by 2040, including two proposed between Indonesia and Malaysia that are ready for assessment through feasibility studies.

Thus, state-owned electricity utility PLN signed two MoUs with ACE and two Malaysian electricity companies, Sabah Electricity Sdn Bhd (SESB) and Tenaga Nasional Berhad (TNB), to carry out feasibility studies for connections between Sumatra, Indonesia and Peninsular Malaysia as well as Kalimantan, Indonesia and Sabah, Malaysia, respectively.

The latter aims to achieve sustainable energy security interconnectivity in the subregion of Brunei Darussalam, Indonesia, Malaysia and the Philippines (BIMP).

Indonesia is already involved in bilateral electricity trade. Sarawak Electricity Supply Corporation (SESCO), a subsidiary of Sarawak Energy Berhad, in Sarawak, Malaysia, for instance, supplies electricity to North Kalimantan.

SESCO operates a hydropower plant, making its electricity much cheaper than diesel-generated power from West Kalimantan.

Meanwhile, an existing multilateral electricity agreement in the region involving the Laos-Thailand and Malaysia-Singapore (LTMS) transmission networks covers the western side of Southeast Asia.

“Indonesia is initiating multilateral cooperation in the eastern subregion through the BIMP [initiative]. LTMS needed time to materialize, but [the electricity transmission line] was on land, so it was easier,” Jisman Hutajulu, the Energy and Mineral Resources Ministry’s electricity director general, said in Jakarta on March 31, as reported by Kompas.

“[For BIMP], we have hills on the border with Malaysia, while the Philippines is separated by sea. The challenge is enormous.”

ASEAN electricity trade?

Asked whether ASEAN countries needed to be more open to renewable electricity trade, Malaysian Minister of Natural Resources, Environment and Climate Change Nik Nazmi Nik Ahmad said that was a decision every country needed to make based on their own circumstances.

“ASEAN has been talking about an ASEAN Power Grid since many years ago, but I guess previously the cost and all that did not make sense,” he told the Post in an interview on Aug. 23, saying that, if electricity prices were not high enough or if the government was heavily subsidizing electricity, it was “difficult to justify the cost of trading in electricity”.

Fossil fuel subsidies constrain the growth and adoption of renewable energy in Southeast Asia, as they make renewable energy artificially more expensive than fossil fuels, according to a report by the EU-ASEAN Business Council published in April.

Still, ASEAN countries need more interconnection to ramp up their renewable energy usage because of intermittency, Nik Nazmi said.

“That is why we think that renewable energy export is important, and we believe it should be realized through the ASEAN Power Grid,” he said during the same interview.

While cross-border grid connection projects have drawn investment and government interest in regions from Europe to Southeast Asia, geopolitical tensions, the rising costs of building subsea cables and surging prices of raw materials needed to upgrade grids have raised questions about the viability of such projects.

ASEAN member states have been trying for decades to form a regional grid to facilitate multilateral power trade, but progress has been limited to bilateral deals between countries.

Dadan Kusdiana, secretary general of the energy ministry, said stakeholders would focus on aspects of the power interconnection plan that could be deployed immediately to share renewable energy sources and demand across the region.

“The Asian Development Bank is the facilitator for financing, supported by ACE. Every country has a different financial situation to deal with in carrying out the energy transition. So, we cannot all use the same financial scheme,” he said at a press briefing on the sidelines of the AMEM in Bali on Thursday, when asked about the means to finance grid interconnection projects.

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