Bilateral power trading is laying the foundation for the Asean power grid
Janice Lim
A REGIONAL power grid connecting various member states of the Association of South-east Asian Nations (Asean) may no longer just be a pipe dream.
First mooted in the late 1990s as a means for member countries to cooperate in energy efficiency and develop renewable energy resources, it has unfortunately been languishing in development hell for the past two decades.
That is until now, as member states gear up for the energy transition in a bid to meet their countries’ net-zero emission targets.
Singapore recently inked its fourth cross-border electricity contract to import low-carbon electrons from Vietnam.
This follows similar bilateral agreements with Indonesia, Cambodia and Laos.
Keppel Infrastructure Trust’s subsidiary City Energy is working with Gentari, the renewable energy arm of Malaysia oil giant Petronas, to study whether it is possible to construct a pipeline from Malaysia to Singapore for the city-state to import hydrogen.
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A regional power market would need these bilateral investments as a start first, said Sharbini Suhaili, chief executive officer of Sarawak Energy.
“When people are comfortable with power trading, then the logic of a regional market will become very clear. The private sector needs to drive this, but the government needs to then put in enabling policies and frameworks to assist us,” said Suhaili, who spoke on Tuesday (Oct 24) at the Singapore International Energy Week conference.
“To build a regional grid in Asean, which is very diverse and geographically expansive, is a huge challenge... But if we don’t do anything different, then in 10 years’ time, we will still be talking about the same thing,” he added.
The utility company for Sarawak state in Malaysia had also previously announced that it is in talks to supply up to 1 GW of renewable hydropower to Singapore by 2032 through submarine cables.
Suhaili also said on Tuesday that the Sarawak Energy is studying how to produce green hydrogen at a cost that the market is ready to pay for. If successful, it could also consider exporting it to Singapore.
Speaking at the same panel discussion, Dannif Danusaputro, chief executive officer of Indonesia’s state-owned oil and gas company Pertamina, said it already has a gas pipeline to Singapore and is currently looking at the potential of exporting hydrogen to the city-state through the existing transmission lines.
If the regional grid connectivity can be further expanded, he added, the potential for geothermal energy would be further unlocked.
Probably the nation most starved of domestic renewable energy resources in the region, Singapore issued two requests for proposals in November 2021 and June 2022 for low-carbon electricity imports, as part of its efforts to decarbonise its power sector to meet net-zero by 2050 targets.
Last year, both Malaysia and Indonesia imposed a temporary export ban on renewable energy, though both counties have already lifted the ban.
Frank Phuan, business chief executive officer of EDP Renewables in Asia-Pacific, said it is important for Singapore to understand what its neighbours want as they seek clean energy imports from them.
“Let’s not forget that almost a year ago, two of our closest neighbours (Malaysia and Indonesia) announced a ban on energy export. Let’s not forget that. So one year later, I think we are all revisiting this. I think it’s also because of economics,” said Phuan, who also spoke at the panel discussion.
He said Indonesia is looking to build up a renewable production ecosystem for the long term, beyond the recently inked cross-border projects with Singapore, while Malaysia is looking to set up an energy exchange policy.
“So how do we arrange all these different pieces of puzzle in such a manner that... everybody is happy?” he said.
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