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(Photo: Prime Minister's office of Japan)
Japan is set to join the ASEAN power grid race. Prime Minister Fumio Kishida is expected to announce Japan's support for ASEAN member countries in expanding their power transmission and distribution networks. This initiative aims not only to promote decarbonization and the development of renewable energy in the region but also to boost the export of Japanese technology. Japanese media suggest that Kishida's government intends to counterbalance China and vie for influence in the Asia-Pacific energy sector.
Japanese companies assist Indonesia in building its power grid
According to a report by Nikkei Asia, Kishida will announce this initiative on July 5 at the Asia Business Summit (ABS) hosted by the Japan Business Federation (Keidanren). This announcement is part of the "Asia Zero Emission Community" (AZEC) goals for the next decade.
Reportedly, the Japanese government will fund half of Kansai Electric Power Co.'s (KEPCO) project costs to build inter-island transmission facilities in Indonesia. This news has driven up KEPCO's stock price in Japan. Additionally, Kyudenko, a subsidiary of Kyushu Electric Power, will receive funding to help introduce renewable energy to the remote islands of North Kalimantan province in Borneo, Indonesia.
Indonesia has significant potential for renewable energy generation, but the inadequate grid between islands hampers effective power transmission to Java, where demand is concentrated. Japanese companies, with their expertise in transformers, circuit breakers, and switches, may see increased demand due to the expansion of power transmission infrastructure.
The Asian Development Bank (ADB) has pointed out that to meet both economic growth and climate goals, ASEAN member countries need to invest $300 billion in national grid development, including 18 projects to promote power exchange between member countries.
The ASEAN power grid is making slow progress
ASEAN introduced the "ASEAN Power Grid" (APG) concept in 1997, but progress has been slow due to disparate energy policies among member countries. Experts have suggested developing distributed renewable energy systems as a solution. Currently, cross-border grids are mainly used between Thailand and Laos, while other island nations face severe shortages. Japan aims to fill this gap, and China has been making strategic moves, especially in Laos.
China's "Belt and Road" initiative, introduced in 2013, includes enhancing energy and power transmission development in Southeast Asia. This initiative has spurred significant investments by China's state-owned power infrastructure company, PowerChina, in Laos, including the development of the largest onshore wind farm in Southeast Asia, Monsoon. China Southern Power Grid has also acquired most of Laos' power grid, controlling local power exports and expanding its influence through energy development.
In response to global decarbonization trends, the Japanese government proposed the creation of the "Asia Zero Emission Community" (AZEC) in 2022. Japan is actively discussing with Southeast Asian countries and Australia how to accelerate the decarbonization process in Asia, formulating climate change strategies from an Asian perspective, and promoting Japanese technology exports to the Southeast Asian market. This initiative aims to seize leadership in climate cooperation in the Asia-Pacific region.
Source：Nikkei Asia(1)、(2)
