The 2024 ASEAN Summit is held in Vientiane, Laos. (Photo: ASEAN Summit)
As countries strive toward net-zero emissions, renewable energy development alone is insufficient. Enhancing the flexibility and reliability of power grids is equally critical. According to the International Energy Agency (IEA), the world needs to add or upgrade over 80 million kilometers of power grids by 2040 to facilitate the energy transition. Taiwan, too, is part of this global challenge, particularly with recent discussions about importing green energy from the Philippines, which have put cross-border grids in the spotlight.
ASEAN power grid: A work in progress
Cross-border grids are not a new concept. ASEAN has been nurturing this idea for decades, aiming to increase renewable energy’s share to 23% by 2025. Regional grids are considered essential to achieving this goal. However, despite nearly 30 years of effort, the ASEAN Power Grid (APG) remains incomplete, with only half of the 18 proposed interconnection projects realized. Taiwan can glean valuable insights from ASEAN’s journey toward an integrated power grid.
The benefits of cross-border grids
The idea of linking ASEAN member states’ power grids emerged in 1997 during the region’s second informal summit. The plan aimed to interconnect electricity systems to foster regional power development and trade, including clean energy. By 2040, the 18 projects envision increasing cross-border transmission capacity to 17.6 GW.
According to the Asian Development Bank (ADB), if ASEAN completes these projects while continuing renewable energy investments and implementing carbon pricing measures, the region’s GDP and employment could grow by up to 15% by 2040. Renewable energy could account for 34% of total generation, electricity prices could decrease by 28%, and carbon emissions could drop by 24%.
The ASEAN Center for Energy emphasizes that regional electricity markets can offer greater flexibility and trading opportunities while avoiding pitfalls like Vietnam’s curtailment of excess renewable energy.
Challenges to integration
Despite these benefits, progress remains slow. Only 9 out of 18 planned interconnection projects have been completed, achieving a transmission capacity of 7.7 GW, primarily within the Greater Mekong Subregion (GMS), encompassing Laos, Thailand, Cambodia, Vietnam, and Malaysia. By mid-2023, total power trade facilitated by these connections reached just 266 GWh.
The ASEAN Power Grid is divided into three regional systems: the northern, southern, and eastern systems. (Photo: EMBER)
(Note: The green solid lines indicate connected grids, while the blue dashed lines represent grids yet to be connected.)
ASEAN’s multilateral success: LTMS-PIP
ASEAN’s sole multilateral power agreement, the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP), exemplifies progress. Launched in 2022, the project enables Singapore to import hydropower from Laos via Thailand and Malaysia, paying wheeling fees for the transmission.
According to the Yusof Ishak Institute (ISEAS), the LTMS-PIP’s success is attributed to three key factors:
1. Political backing: High-level government endorsement in ASEAN countries has been vital, securing domestic and international support for regional development goals.
2. Flexible coordination framework: Unlike a rigid centralized approach, the project allows countries with varying development models to participate equitably.
3. Mature policy and technology: Years of regional and international collaboration have advanced technical expertise and governance frameworks.
Singapore successfully imports hydropower from Laos through the LTMS-PIP. Pictured is the Nam Ngum 2 Dam in Laos. (Photo: CK Power)
Crisis and opportunity
While the LTMS-PIP agreement has been extended to 2026 with a doubled capacity of 200 MW, reports suggest disagreements between Malaysia, Thailand, and Singapore over procurement thresholds. This uncertainty underscores the challenges of multilateral agreements.
For instance, Thailand and Malaysia reportedly pushed for minimum procurement levels to share transmission costs, but Singapore declined, citing the original agreement’s flexibility. Without clear wheeling fee formulas, debates over cost fairness persist, potentially hindering future grid expansion.
Moreover, shifts in energy markets create further uncertainties. Thailand, for instance, has expressed interest in buying renewable energy directly, while Singapore, heavily reliant on natural gas, has significantly reduced imports from Laos due to falling gas prices.
Preparing for future integration
As renewable energy adoption accelerates, upgrading grid infrastructure is essential to prevent overloading. ASEAN countries, many of which are liberalizing their electricity markets, must improve competitiveness and grid resilience by attracting more power producers.
Future initiatives, such as the BIMP-PIP project connecting Brunei, Indonesia, Malaysia, and the Philippines, aim to integrate long-distance land grids with submarine cables. Though technically challenging, successful implementation could significantly enhance ASEAN’s regional energy influence.
Conclusion
ASEAN’s journey toward a fully integrated power grid highlights the challenges and opportunities of cross-border energy cooperation. For Taiwan, these lessons underscore the importance of political alignment, robust governance, and technological readiness in advancing its own energy transition.
Sources: EMBER, ASEAN Center for Energy, Bird & Bird, Reuters (1), (2), Asian Development Bank, The Straits Times, ISEAS (1), (2)
