UNESCAP: Sustainable Connectivity in Asia-Pacific: Challenges and Opportunities of Cross-Border Power System Connectivity

During SIEW Thinktank Roundtable hosted by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), experts weighed in on the potential for increased power system connectivity to support sustainable development in Asia.

Mr Matthew Wittenstein, Chief of Section for Energy Connectivity at UNESCAP, opened the discussion by noting three main drivers of power system connectivity: economics, in particular lowering costs and enabling more investment, security, for example through increasing resource diversity, and sustainability, by enabling the integration of higher shares of variable renewable energy resources. He also highlighted UNESCAP’s Regional Road Map for Power System Connectivity, which contains a set of strategies to support sustainable power system integration in Asia.

Mr Wittenstein then introduced, Ms Mika Ohbayashi of the Renewable Energy Institute Japan, who moderated the roundtable sessions.

The first roundtable session focused on regional power system planning. Mr Beni Suryadi, Manager at the ASEAN Centre for Energy (ACE) presented an overview of the third ASEAN Interconnection Masterplan Study (AIMS III), which was recently endorsed by the ASEAN Energy Ministers. One of AIMS III key findings is that it is technical feasible to double the level of renewable energy deployment and cross-border interconnection at no net-cost, with the increased investment costs being essentially offset by lower energy costs.

The second session focused on financing cross-border infrastructure. Mr Frederic Asseline, Head of Program Team at the Multilateral Cooperation Centre for Development Finance (MCDF), spoke first, The MCDF is a new initiative that aims to provide assistance to low- and middle-income countries to foster the development of high-quality connectivity infrastructure investments. The MCDF’s focus on connectivity projects makes it somewhat unique among multilateral institutions, with the organization focusing primarily on three areas of intervention: information and knowledge sharing, capacity building, and support for project preparation.

In the third session, speakers focused on how to align energy connectivity with sustainability goals. Ms Valerie Lee, Head of Corporate Development for Singapore and Southeast Asia at Sembcorp Industries. Ms Lee highlighted Sembcorp’s efforts to leverage regional connectivity as a tool to meet its own goal of quadrupling gross installed capacity of renewable energy by 2025, noting for example a joint development agreement signed with Indonesia’s PLN Batam and Suryagen to develop a 1 GWp solar PV project and energy storage solution, with the potential to import to Singapore. She also pointed out that for connectivity projects to be successful a number of factors are important, including united views on sustainability goals, “political will” across all relevant stakeholders to move connectivity projects forward, sufficient techno-commercial capabilities to build and operate integrated grids, and access to sustainable funding sources, with market liberalization also being an important factor by enabling more creative commercial endeavors.

Dr Huang Han, Deputy Director-General of the Global Energy Interconnection (GEI) Research Institute, discussed the potential for large-scale regional power system integration to reduce reliance on fossil fuels. He noted, for example, that according to GEI’s estimates, the technical potential for wind power in Asia is 37.3 TW and of solar PV is 606 TW – enough to meet the region’s energy demand multiple times over.

Finally, Mr Jagjeet Sareen, Assistant Director-General for Strategy at the International Solar Alliance (ISA) Secretariat, spoke about the Green Grid Initiative - One Sun, One World, One Grid (GGI-OSOWOG). Launched at COP26 by Prime Minister Boris Johnson of the UK and Prime Minister Narendra Modi of India, the GGI-OSOWOG will seek to accelerate and raise the ambition of cross-border and inter-regional connectivity initiatives, in particular ones linked to the deployment of solar, wind, and other renewable energy resources. He also talked about the One Sun Declaration, under which 80 countries have resolved to combine their efforts to create more inter-connected grids. The Steering Committee of GGI-OSOWOG comprises of 5 members – the United States of America, Australia, France, the United Kingdom, and India.

The final session was a panel discussion moderated by Ms Ohbayashi, where speakers responded to questions and dug deeper into the topic of sustainable power system connectivity:

• Mr Suryadi noted that the successful development of the ASEAN Power Grid depends not only on meeting certain technical and economic criteria, but also on political support and the presence of appropriate regional institutions and collaborative bodies. Ms Lee agreed with these points, and added that communication is key, as well as the establishment of joint study groups that work collaborative towards agreed upon goals. Mr Wittenstein followed on these comments to highlight the importance of finding the right balance between increased cross-border integration and national policy priorities, and highlighted UNESCAP’s work on “Green Power Corridors”, which seeks to leverage connectivity as a tool to support sustainable development broadly, including not only renewable energy integration, but also, for example, job creation and improved air quality.
• Dr Han explained that energy transition isn’t a goal in and of itself, but something that is necessary in order to meet broader environmental, social, and economic goals. Energy connectivity is one tool that can support the energy transition by leveraging diversity and enabling a “new economic patterns to exchange resources” and derive benefits from trade. Mr Asseline discussed the importance of supporting high infrastructure standards, including in the ICT space, which can enable more efficient trade and support green development by enabling appropriate “re-localization”, and how collaboration among implementing bodies and supportive institutions like the MCDF is critical for the successful implementation of connectivity projects.
• Responding to a question about the impact of COVID-19 on connectivity, Mr Suryadi noted that connectivity can help countries respond to many different kinds of energy system shocks, including, for example, the decline in demand caused by the response to COVID, and the rise in energy prices countries are facing new as they recover from COVID. Ms Lee noted that COVID resulted in a shifting of attention away from topic areas that were considered “less critical” and that some refocusing will be necessary. She also highlighted the impact of COVID on supply-chain connectivity, and the importance of building resilient connectivity in all senses of the word. Mr Asseline highlighted the efforts of organisations like AIIB, ADB and others on greening supply chains and green finance more generally, which will be important to support green connectivity as part of the broader effort towards green recovery. Dr Han pointed out that the COVID crisis is just one example of global uncertainty, and how we need to be more forward looking in our thinking. For example, interconnected systems that rely more on renewable energy will be more dependent on weather systems, which are inherently uncertain, and which will therefore require more careful planning and collaboration to manage. Finally, Mr Sareen pointed out that the response from COVID has not been to shutdown interconnections but has in fact led to a realization that these interconnections will grow, with the impact of COVID showing just a “brief trailer” of the impact of climate change.
• The panel discussion ended with a question on the most important single step that should be taken to enable more sustainable power system interconnectivity. All of the speakers highlighted the importance of political will. For example, Mr Suryadi discussed the need to translate political commitments into reality, with the Lao-Thailand-Malaysia-Singapore Power Interconnection Project providing a good example of how it is possible to make progress when political promises are converted to actions. Mr Asseline added the importance of “unleashing private investment into renewables through climate aligned taxonomies”, de-risking private investments through for example blended finance and the creation of mechanism to enable the efficient phaseout of coal. Ms Lee stressed that setting deadlines and creating timelines would help “push the agenda of regional connectivity forward” and avoid the slow progress seen over the past decades. Dr Han noted that the involvement and support of the private sector can help enable political will, and that there is a need for regional organizations to bring stakeholders together. Mr Sareen highlighted the lengthy timelines involved in the development of large transmission projects, and that we have only a decade to avoid the worst impacts of climate change. Technology has progressed to the point where we can address out problems, but we need to now respond urgently to the challenge in front of us.

Mr Wittenstein closed the roundtable by first stating that UNESCAP is seeking to be an “accelerator” of connectivity initiatives and to support these efforts so that they can move forward faster and more sustainably. He then conveyed the impression that we are at an “inflection point” when it comes to sustainable connectivity, and that now more than ever there is an opportunity to make real progress.

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