October 24, 2024
SINGAPORE – The Asean power grid would have many benefits for countries in the region other than providing green electricity, including the creation of new jobs, reduced air pollution, and significant investments generated for the energy sector.
Speaking on the third day of the Singapore International Energy Week, Dr Daniel Gaspar, deputy director of Net Zero World Initiative, which is backed by the US Department of Energy, presented the findings of the US-Singapore feasibility study on regional energy connectivity. It concluded that such interconnection would have significant socio-economic benefits for the region.
These would include investments of US$2 billion (S$2.6 billion) annually for research and development, and US$1.4 trillion cumulatively to build electricity generation capacity.
By being part of an interconnected regional grid, each country’s gross domestic product could also increase by about 0.8 per cent to 4.6 per cent, Dr Gaspar noted.
The US-Singapore regional connectivity study, which started in April 2023, examined the renewable energy landscape and existing grid infrastructure of Asean countries, along with the socio-economic impact of having regional connectivity.
The Net Zero World Initiative, launched in 2021 is a new partnership between the US and countries looking to implement their climate ambition pledges and to transition to a net zero energy system.
The Asean power grid has been decades in the making, but really made progress with the 2022 launch of the Laos-Thailand-Malaysia-Singapore electricity import pilot, which is a pathfinder project for the Asean grid.
Under this project, 100MW of hydropower is being transmitted from Laos to Singapore, via Malaysia and Thailand. This was later extended to include another 100MW from Malaysia’s electricity grid in October 2024, after progress on the second phase stalled. The electricity, however, would include a mix of generation sources, including coal and natural gas.
Having countries trade electricity freely through a regional grid would allow them to meet rising electricity demand while being assured of energy security. Such a grid would hedge against the intermittencies of renewables, by distributing energy more efficiently.
Around 99 per cent of the region’s population would benefit from air pollution being reduced by around half, leading to 15,000 fewer pollution-induced deaths annually, Dr Gaspar noted.
The leading cause of air pollution in the region arises from the use of coal-fired power plants, which are carbon-intensive and power the lion’s share of many South-east Asian countries, particularly in Indonesia and the Philippines.
Having greater regional interconnectivity can also create a significant number of jobs – from at least 2,000 to 9,000 jobs annually for the region, the study found. These, among others, would be in the renewables manufacturing sector, which includes cables and other related equipment.
“These require a variety of qualifications, and would generate high-quality jobs at all education levels in the region,” said Dr Gaspar.
The study also looked at the estimated upfront investment costs of laying subsea cables that would connect the region, allowing for “significant amounts of renewable energy” to be transmitted between countries.
Building long subsea cables – which can cost several billion dollars – can become affordable when shared among various countries in the region, said Dr Gaspar.
On Oct 22, Singapore gave conditional approval to import some 1.75GW of solar energy from Sun Cable, which will have the power transmitted over a 4,300km subsea cable. The constructed cost is expected to total US$24 billion.
Dr Gaspar said that the second phase of the study will look into regulatory frameworks, and how the grid can fit within international laws.
Singapore, for its part, has committed to importing 7.35GW of clean electricity from Cambodia, Vietnam and Indonesia, and Australia.
Asked if Singapore’s Energy Market Authority (EMA) has any initiatives to push regional connectivity, EMA chief executive Puah Kok Keong said high upfront investment costs are needed for such power import projects. For instance, large solar farms and battery storage to ensure a stable electricity supply take billions of dollars to set up. He was speaking at a panel discussion which included Dr Gaspar, Mr Eka Satria, the president director of electricity generation firm Medco Power Indonesia, and Sun Cable’s interim chief executive Mitesh Patel.
Mr Puah said that project developers will be given 30-year import licences from EMA, taking into account the large amounts of capital needed to kick-start the projects, and the time needed for companies to eventually recover their investments.
“So it’ll be really good also for the countries, where these projects are based, be it Indonesia, Australia, or elsewhere, for (them) to reduce the policy uncertainty by giving export licences that are equally long as well,” he added.
Mr Satria noted that such cross-border electricity trade is good for economic growth as it expands the export sector, and attracts foreign direct investment.