Exploring the idea of an Asian Energy Highway

Dr Noeleen Heyzer, Executive Secretary of the United Nations' Economic and Social Commission for Asia and the Pacific (UNESCAP), earlier this year proposed the creation of an Asian Energy Highway to provide for better regional energy connectivity. The development of an Asian Energy Highway could potentially connect the region's vast natural and renewable energy resources through a shared grid system, maximising the generation of electric power and encouraging the advancement of fossil fuel technologies in the region.

This system could largely benefit the region as a whole and ensure that rural communities have equal access to electricity. How will an Asian Energy Highway benefit Asia

Current electrification rate in Asia

The number of people without access to electricity in this region totals 182 million. In South Asia, 493 million people are without electricity, reflecting an electrification rate of 68.5 percent, with the urban electrification rate at 89.5 percent and rural electrification rate at 59.9 percent. A more detailed breakdown of the countries can be seen in the table below.

Asia's electrification access in 2009

Source: IEA, World Energy Outlook 2011

As can be seen from the table, some nations, such as Myanmar and Cambodia, with abundant energy resources (coal and hydro), have low electrification rates of 13 and 24 percent, respectively. The development of an Asian Energy Highway could ensure greater access to electricity, especially for population living in the rural areas. In addition, it could also ensure regional energy security by creating an inter-dependent network and providing electricity through more efficient means.

Challenges and prospects of developing an Asian Energy Highway

It has been proposed that an Asian Energy Highway could be an extension of the current ASEAN Power Grid (APG). Under this plan, there are 16 projects, of which five are in operation, four are under construction, and seven are at the preparatory stages. During the initial planning phases, it had been acknowledged by ASEAN that it is "uneconomical to fully integrate the power systems of all the ASEAN countries".

The same problem might occur within the context of an Asian Energy Highway. Should this happen, discontent could develop within countries that are excluded from the shared grid and further widen the gap of access to electricity between and within countries.

Moreover, the extension and expansion of power grids may impose on current residents whose land sits on the proposed transmission lines. Transmission lines are also usually situated in the less developed areas of the country, and therefore will feed into the problem mentioned before, if these areas do not experience the full advantages of a shared power grid.

In addition, the electricity market in Asia is highly regulated. Countries will only be able to trade electricity or reform their electricity system only if their electricity markets are liberalised. A harmonisation of rules and laws safeguarding electricity trade in the region is also necessary.

The most significant obstacle to fully developing an Asian Energy Highway is the current territorial disputes over the South China Sea, Senkaku or Diaoyu Islands, and Dokdo or Takeshima islands. Territorial disputes, especially over regions with vast energy reserves, could be a destabilising factor in any plan to integrate the region's energy system.

In order for an Asian Energy Highway to be successfully implemented, a large portion of the planning process should be dedicated to ensuring that both urban and rural populations have access to the shared grid. Given indigenous populations' attachment to the land, the consideration of native land rights issues should also be of priority so that prospective transmission lines do not cut across land that has a significant value to the people who reside in the area.

As the Asian Energy Highway looks to increase the electrification rate within the region, advance natural and renewable technology, and boast electricity trade alongside its other objectives, a regulatory body should enforce rules that govern the trade of electricity so that trade remains fair and serves a greater purpose rather than the sole profit of private companies. Conflicting interests over the territorial disputes over the South and East China Sea should also be stabilised to ensure both energy and social security for the region.

Lessons from Europe and North America

Europe and North America have existing rules, laws and initiatives in place to govern shared power grids that can inform the development of an Asian Energy Highway. The European Network of Transmission System Operators for Electricity (ENTSO-E) seeks to create an effective pan-European Market Database, Network Models, and a proper selection and assessment process for selecting network planning cases and new transmission projects. There are also defined regional groups to manage the challenges posed by grid development and the addition of new generation such as renewable energy sources.

In North America, local, state and federal agencies are involved in the planning and implementation process of the shared power grid. Sovereign tribes are also consulted should a proposed transmission line cross their land. There are also agreements to ensure that the extension and expansion of current transmission lines serve the greater needs of the public. Greater needs are defined in terms of reliable power supply streams, continuance of regional electricity trade and transparent transmission planning processes.

These factors are important in securing the confidence of the public and will influence the smooth transition to a shared regional energy grid. The development of an Asian Energy Highway requires the assurance of the people that it seeks to serve, and both challenges and prospects of a shared power grid should be addressed in order to transform the idea of an Asian Energy Highway into reality.

BY: Dr Eulalia Han and Su Liying, Energy Studies Institute