Asean countries are making steady
progress on the road to seamless and secure electricity supplies throughout the
region under the Asean Power Grid (APG).
Fifteen investment projects worth
nearly $6 billion are under way or planned and all had been scheduled to be
completed by 2015. However, many of the completion dates have been moved back,
and other barriers still exist to full interconnection of power supply in the
region.
The creation of a region-wide
grid is a response to growing energy demand in rapidly modernising Asean. The
region’s primary energy requirements are projected to triple between 2005 and
2030 to 1,252 million tonnes of oil equivalent (mtoe). The average annual
growth rate is 4%, higher than the world average of 1.8%.
The APG was first discussed as
long ago as 1978 and formally adopted in 1997 by Asean heads of state and
government under the Asean Vision 2020. The goal is to create an energy
security system for the whole region by having an interconnected grid through
which members can share electricity transmission.
The system would make it easier
for countries with surplus electricity to supply others where power supply is
short of demand.
The 15 APG investment projects
with a combined value of US$5.9 billion are forecast to help save $662 million
in new investment and operating costs if Asean member can share electricity
transmission.
Worldwide, investments in
national and regional electricity supply grids could go as high as $10 trillion
in the next two decades, of which $5.5 billion would be for transmission alone,
said Sridhar Samudrala, director for Asia of the World Association of
Decentralised Energy (WADE), a non-government organisation.
Claude Galzin, sales director for
East Asia with the French engineering group Alstom, said the global market for
power grids was projected to grow from 16 billion euros in 2010 to 50 billion
in 2020.
The concept and intention are
sound. However, implementation is not easy, especially when dealing with issues
that cross national borders. Energy efficiency is the main goal, but energy
cooperation is also critical for success.
Some progress has been made on
power supply interconnection in Asean, said Shiva Prasad Susarla, a research
associate with the Energy Studies Institute at the National University of
Singapore. For example, Thailand has signed power transmission agreements with
Laos and Malaysia, and Malaysia with Singapore.
However, the region has a long
way to go before it can complete all interconnection as planned. Other
countries such as the Philippines and Myanmar have yet to see progress, he said
on the sidelines of a recent conference in Singapore.
The Nam Theun 2 hydropower dam in
Laos has been transmitting electricity to Thailand through Roi Et province in
the northeastern part of the country since 2010. The dam, which was constructed
by SET-listed Electricity Generating Plc (Egco) has installed capacity of 1,086
megawatts (MW).
PT PLN, an Indonesian power
utility, is constructing two transmission lines to connect the power grids of
Indonesia and Malaysia. The first will be laid from South Sumatra to peninsular
Malaysia, and the second from West Kalimantan to Sarawak. Construction is
expected to be completed by the end of 2014.
Although Mr Susarla said he
believed that all Asean countries had a strong intention to cooperate in
completing the APG projects, some barriers have not been removed, and mutual
standards have not been fully addressed.
Each country, he noted, has its
own electricity market, tariff structure and market design. Differing technical
standards in each country are also a barrier. The differences between Laos and
Singapore, for example, are quite pronounced. A single interconnection standard
needs to be defined and agreed on.
The tax structure is another
concern. Asean countries have to discuss and agree on tax rates for purchasing
power across borders very clearly, Mr Susarla added.
Issues related to electricity
pricing are a constraint as well.
“Each country has a different
market design. Some countries have independent operators, but some still rely
on subsidies, resulting in power costs not reflecting the real price,” said Mr
Susarla.
“A fully integrated
interconnection system is a long way off. Some countries have to at least get
real pricing before we can have real interconnection.”
Mr Samudrala agreed that
electricity purchasing prices would be a big issue. With the exception of
wealthy Singapore, other Asean states are at various stages of development and
do not want to charge their consumers, whether households or businesses, too
much for electricity.
“I think it will take more than a
decade for Asean to have real interconnection of its power grid. Members may
have to wait until the countries have more development. They have to grow their
economies more until they are ready to spend more for purchasing electricity
from other Asean members,” he said.
Poor relationships among Asean
countries, in contrast to the surface harmony the leaders always display, are
also a big barrier, in his view.
“They hate each other and they do
not trust each other. This has led to negotiations not happen,” he said.
Mr Susarla disagreed, saying only
a few countries in Asean had conflicts, so this would not hinder wider cooperation.
“Most Asean members have good
relationships. The border issues between some countries may be a barrier, but
if we look at the big picture, I don’t think these conflicts will delay the
whole process,” he added.
Maria van der Hoeven, executive
director of the International Energy Agency (IEA), said the region’s
policymakers needed to create a strategy based on an evaluation of the entire
electricity system.
For Asean, the creation of smart
grids and the Asean Power Grid (APG) are an opportunity for the region, and it
should learn from the mistakes of other regions such as Europe.
“Spain is an example of a country
that has renewable energy capacity but fails to have sufficient power grid
infrastructure to support it,” she said in a talk at Singapore International
Energy Week recently.
“So Asean should learn from the
failures of the past and adapt [the lessons] to its system for success.”
Nalin Viboonchart
http://www.bangkokpost.com/
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