Forging ASEAN Energy Unity with Insights from the LTMS-PIP and Beyond

Key discussions at the SIEW Thinktank Roundtable A underscored the necessity of political commitment, equitable collaboration, and sustainable approaches to drive ASEAN's energy connectivity and decarbonisation. ISEAS – Yusof Ishak Institute reports.

The SIEW Thinktank Roundtable, on "Accelerating Progress on the ASEAN Power Grid 2.0: Lessons from the LTMS-PIP and Beyond", emphasised pivotal themes: the significance of strong political dedication, fair collaboration, and sustainable strategies in advancing ASEAN's energy connectivity and decarbonisation.

Jointly hosted by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and ISEAS-Yusof Ishak Institute (ISEAS), the Roundtable took place on 26 October at the Singapore International Energy Week (SIEW) 2023. Expert insights also highlighted challenges in interconnectivity, the need for transparent regulations, and active private-sector engagement, offering a pragmatic roadmap for an interconnected and environmentally conscious ASEAN energy landscape. The Roundtable was well attended, with over 100 in-person attendees. 

Lessons learned from the LTMS-PIP

Dr Mirza Huda, Lead Researcher, ISEAS, presented key findings from ISEAS' research. This analysed the enablers, challenges and lessons learned from key energy stakeholders in Laos-Thailand- Malaysia-Singapore Power Integration Project (LTMS-PIP) and how they can inform future projects under the ASEAN Power Grid (APG).

The research highlighted that strong political will in the region can pave the way for greater interconnectivity, but it also revealed obstacles such as resource nationalism, regional rivalries and conflict of interest. There were also technical challenges in integrating energy systems, including the calculation of wheeling charges and upgrading transmission and grid infrastructure.

Dr Huda proposed recommendations drawn from these insights to overcome such limitations for future APG projects. A detailed policy report stemming from the findings presented will be published by ISEAS in November 2023.

Introducing the Green Power Corridor Framework

Matthew Wittenstein, Chief of Section for Energy Connectivity at UNESCAP, introduced the Commission's Regional Roadmap on Power System Connectivity. This contains a set of nine strategies to aimed at fostering secure, efficient and sustainable power system connectivity across the region.

Strategy 9 focuses on the need to align energy connectivity initiatives with the Sustainable Development Goals. Mr Wittenstein unveiled UNESCAP's draft Green Power Corridor Framework, which seeks better alignment of connectivity initiatives with sustainable development objectives, while respecting national priorities for economic development and energy security.

The Framework, which is still in development, consists of building blocks to help orient and structure connectivity initiatives, guiding principles on their development, and metrics to assess the sustainability of connectivity initiatives.

Insights on operationalising the ASEAN Power Grid

Moderator Sharon Seah, Senior Fellow and Coordinator, ISEA, invited the panel to share their perspectives on Southeast Asia's approach to expanding the APG.

On the regulatory front, Nick Pittarello, Head of Future Interconnections, Office of Gas and Electricity Markets (OFGEM), UK, concurred with Dr Huda on the importance of political will. He suggested that mutual trust can be built if parties ensure equitable sharing of costs and benefits. This is by way of expanding third-party access, early community engagement, transparency, and price mechanisms that prioritise affordability for the end user.

Architrandi Priambodo, Senior Energy Specialist, Asian Development Bank (ADB), advocated for market-based strategies, citing ADB’s ongoing pilot project for demonstrating the economic benefits of power resource sharing under a regional power market for ASEAN. He shared that shadow trading, under a regional power market for the region, can not only help define appropriate rules, but show how such markets can improve flexibility and reduce costs.

From the private sector, Chin Xueyong, Senior Vice President, Project Finance, Institutional Banking Group, DBS Bank and Nikita Yu, Director, Regional Business Development, EDP Renewables, provided insights into creating a favourable environment for developers and investors. Mr Chin argued that project financing must be designed with effective risk allocation in mind. Interconnection projects should have clear contingencies for outages, disasters, political conflict, and other potential disruptions. Ms Yu stressed the importance of transparency in national energy planning, regulatory licensing and permitting, and market conditions for fair competition.

Driving climate ambition through regional interconnectivity

Discussions at the Roundtable expanded to the broader context of climate ambition through regional interconnectivity. Dr Tharinya Supasa, Project Lead Southeast Asia, Agora Energiewende, highlighted the upcoming ASEAN Plan for Energy Cooperation Phase III as an opportunity to strengthen renewable energy ambitions. She also floated the idea of a regional interconnectivity target.

Beni Suryadi, Manager, ASEAN Centre for Energy, referred to other key aspects of the energy transition such as regional targets on primary energy and energy efficiency, which have driven both demand- and supply-side policy measures. He noted countries' growing willingness to work together for mutual benefit as well as strong interest from corporate end-users.

Marlon Apañada, Southeast Asia Lead, Global Energy Program, World Resources Institute, was also optimistic about the growing number of corporate giants using science-based targets.  He cited examples such as Apple, Meta and IKEA which have joined the Asia Clean Energy Coalition and RE100. Their demand for clean energy can become a strong impetus for the energy transition if traceability and transparency issues in emissions reduction can be addressed.

In the Q&A session, panellists addressed questions concerning data transparency, supply chains, and multilateralism. They, expressed optimism for stronger energy cooperation among ASEAN stakeholders to achieve both energy security and regional decarbonisation.