Brunei Darussalam, Indonesia, Malaysia and the Philippines are planning to connect their power grids and trade electricity by 2025.
The power grid integration initiative was launched in Bali, Indonesia last August during the 41st ASEAN Ministers on Energy Meeting.
In a joint statement posted this month, the Department of Energy at the Prime Minister’s Office of Brunei Darussalam; the Ministry of Energy and Mineral Resources of the Republic of Indonesia; the Ministry of Natural Resources, Environment, and Climate Change of Malaysia; and the Department of Energy of the Republic of the Philippines said a pilot project called Brunei Darussalam, Indonesia, Malaysia, the Philippines Power Integration Project (BIMP-PIP) will study cross-border power trade among their countries.
“This initiative will serve to complement the existing efforts toward realizing the ASEAN Power Grid under ASEAN Economic Community Blueprint, by expanding opportunities for multilateral power trading (MPT) beyond neighboring borders,” they said. It is expected to help strengthen energy security in the region by using sustainable resources and promote economic prosperity.
The four countries will form a BIMP-PIP Working Group to assess the technical, policy, regulatory, legal, commercial, and capacity building issues. It is expected to assess the feasibility of cross-border electricity trade by 2025, taking into consideration national circumstances, capabilities, and priorities.
USAID’s Smart Power Program will support the feasibility study of the BIMP-PIP. The $40 million program is mobilizing $2 billion in blended financing for clean energy projects in Southeast Asia, which include strengthening energy trade and integration.
ASEAN energy ministers last month called for greater interconnectivity in the region through the expansion of the ASEAN Power Grid and the Trans-ASEAN Gas Pipeline, which includes liquefied natural gas (LNG) infrastructure. The ministers from the 10 member states welcomed the BIMP-PIP as a potential multilateral power trading project and urged other member states to initiate similar projects. They said the Lao People’s Democratic Republic-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) could serve as a model for addressing technical, legal and financial issues of multilateral electricity trade.
Interconnecting national power systems to enable power trade is a key strategy of the regional bloc to enhance energy security and shift to renewables through efficient resource sharing. Along with market integration, it is seen as a critical component of a just and inclusive energy transition and for ensuring resilience and stability in the power grid and energy supply chains.
ASEAN, including the BIMP-EAGA subregion, has abundant energy resources. Its renewable resources include natural gas, hydropower, solar, biomass, wind, and geothermal energy.
The ASEAN Centre for Energy says enhanced integration through the ASEAN Power Grid could “avoid adding 154 MW of capacity, saving $1.87 billion, by 2025,” citing estimates of a 2010 study.
Energy initiatives in the subregion
Power trade in the Southeast Asia started at the bilateral level and is envisioned to scale up to trade within three subregions—north (ASEAN countries in the Greater Mekong Subregion), south (Malaysia and Singapore), and east (BIMP-EAGA countries).
In BIMP-EAGA, interconnection projects include the Trans-Borneo Power Grid Sarawak–West Kalimantan Interconnection Project, which was commissioned and energized in January 2016. Supported by the Asian Development Bank, the project built a 275-kilovolt grid-to-grid transmission line between Sarawak in Malaysia and West Kalimantan in Indonesia on the island of Borneo.
The Sabah–Sarawak Power Interconnection Power Exchange Agreement between SESCO, a subsidiary of Sarawak Energy Bhd, and Sabah Electricity Sdn Bhd also paves the way for establishing the Borneo Grid as well as the ASEAN Power Grid.