ASEAN Must Ensure Power Grid Integration Benefits Region's Economy

By Rosemarie Khoo Mohd Sani KUALA LUMPUR, Oct 7 (Bernama) -- ASEAN countries need to ensure that efforts towards establishing an energy integration market are viable and will provide a high return on investments to the region's economy. Energy Economist at the Economic Research Institute for ASEAN and East Asia (ERIA), Han Phoumin, said before the blocks of development could further take place, the 10 ASEAN member countries must first conclude bilateral negotiations on grid connectivity. "Bilateral negotiations will take a lot of time and it needs to happen in a sequential process because it has to be assessed based on financial economic returns, economic feasibility and its risks to financial institutions that would largely finance the initiatives. "In my perspective, once the stage one is done, system of operators will need to be integrated in the market and harmonise the investments made, which will then benefit the whole region," Han told Bernama on the sidelines of the ASEAN Energy Business Forum 2015 here. As a whole, he said the integration of the ASEAN Power Grid (APG) would also reduce the system cost, thus giving investors the confidence to invest more in the grid system for the ASEAN energy market. "Based on a simulation and study by ERIA, if the power grid can be connected, we could save about US$12.2 billion for the current year (2015) until 2035. "In this matter, ASEAN countries need to also address their penetration of renewable energy as part of their power grid to accelerate the harmonisation of policies, laws and regulations to realise the APG," he added. The APG integration idea was first mooted in 1997 by the ASEAN Heads of States/Governments under the ASEAN Vision 2020 towards ensuring regional energy security while promoting the efficient utilisation and sharing of resources. According to the ASEAN Centre for Energy website, the investment requirement of the APG is estimated at US$5.9 billion with the adoption of a strategy that encourages interconnection of 15 identified projects. --BERNAMA