Tackling Asean grid’s $800bn challenge

Every energy planner must balance the “trilemma” of security, equity, and environmental sustainability. As Southeast Asia becomes the world’s second-fastest-growing electricity market, the region faces two main paths.

- Rapeepat Ingkasit

An employee works inside the power-cable-testing laboratory for insulation at Kei Industries, in this Aug 6, 2012 file photo.REUTERS

(REUTERS)

One is to commit to massive infrastructure to import Liquefied Natural Gas (LNG), framing it as a “transition fuel’ This is a move that risks locking our economies into decades of global price volatility, potential cross-border carbon taxes, and billions in stranded assets. The other path is accelerating renewable energy adoption, which requires a major update of the regional grid.

The Asean Power Grid (APG) is the key physical infrastructure for this energy transition. It is the ultimate solution to this energy trilemma. An efficient grid would enable the region to harness its vast but geographically dispersed renewable energy resources. A fully integrated grid lets this clean power be shared efficiently and in an optimal way.

For example, when solar generation is high in one area, the surplus can be exported to areas where demand is peaking.

The APG enhances regional energy security. A larger, more flexible grid system reduces the region’s dependence on lopsided imports of fossil fuels, and that will make the energy market in the region more resilient. Imagine when countries can share power with their neighbour during a technical failure or an extreme weather event.

$3TN ECONOMIC PRIZE

A study by the Economic Research Institute for Asean and East Asia (ERIA) estimates that the APG energy trade and supply could lower electricity costs for consumers in the region by as much as 3.9%. At the same time, the whole APG project could add up to US$3 trillion (97.5 trillion baht) in GDP value by 2050 and create 1.45 million jobs regionally.