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ASEAN Regional Electricity MarketIntegrationASEAN Regional Electricity MarketIntegration
18 October 2016
Anton Finenko
ESI
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Outline
• Background and introduction
• Historical development
• Current state and planned developments
• Challenges and opportunities
• Background and introduction
• Historical development
• Current state and planned developments
• Challenges and opportunities
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Background
ASEAN (2015)
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Background
IMF (2015)
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History
• First bilateral power interconnection (100MW) built between Laos andThailand in 1966
• ASEAN Declaration in August 1967 was signed between five foundingmembers: Indonesia, Malaysia, the Philippines, Singapore, andThailand.
• Heads of ASEAN Power Utilities/Authorities (HAPUA) established in1981, to promote electricity network integration in the region
• First bilateral power interconnection (100MW) built between Laos andThailand in 1966
• ASEAN Declaration in August 1967 was signed between five foundingmembers: Indonesia, Malaysia, the Philippines, Singapore, andThailand.
• Heads of ASEAN Power Utilities/Authorities (HAPUA) established in1981, to promote electricity network integration in the region
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History• Rather sluggish progress until 1997 when “ASEAN Vision 2020” was
signed between the member states
• APG and TAGP were announced as a part of ASEAN Vision 2020 in 1997
• The Memorandum of Understanding (MOU) on the APG was signedbetween the ASEAN member states in 2007
• Meanwhile some countries are already in progress of developingbilateral interconnectors (GMS)
• Rather sluggish progress until 1997 when “ASEAN Vision 2020” wassigned between the member states
• APG and TAGP were announced as a part of ASEAN Vision 2020 in 1997
• The Memorandum of Understanding (MOU) on the APG was signedbetween the ASEAN member states in 2007
• Meanwhile some countries are already in progress of developingbilateral interconnectors (GMS)
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APG
• Objective: to strengthen and promote power interconnection and tradeto help ensure greater regional energy security and sustainability on thebasis of mutual benefit
▫ Facilitate cross border power trade
▫ Optimize usage of energy resources in the region
▫ Reduce capital investment required for generation
▫ Increase access to electricity
• Objective: to strengthen and promote power interconnection and tradeto help ensure greater regional energy security and sustainability on thebasis of mutual benefit
▫ Facilitate cross border power trade
▫ Optimize usage of energy resources in the region
▫ Reduce capital investment required for generation
▫ Increase access to electricity
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Benefits of interconnection – who gets it?
P P
University of Bath (2014)
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Infrastructure development• Follows recommendations prepared in ASEAN Interconnection Master
Plan Studies (AIMS)
• AIMS are prepared by HAPUA with help of regional experts
• Prior to first AIMS the vision for APG was 14 bilateral and multilateralinterconnection projects
• AIMS I, released in 2003, concluded that it was uneconomic to create asingle ASEAN grid, and recommend instead 11 bilateral interconnectorsto be constructed by 2019.
• Follows recommendations prepared in ASEAN Interconnection MasterPlan Studies (AIMS)
• AIMS are prepared by HAPUA with help of regional experts
• Prior to first AIMS the vision for APG was 14 bilateral and multilateralinterconnection projects
• AIMS I, released in 2003, concluded that it was uneconomic to create asingle ASEAN grid, and recommend instead 11 bilateral interconnectorsto be constructed by 2019.
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Infrastructure development• Following the re-organisation of HAPUA in 2004, its Working Group 4
embarked on a second study (AIMS II) which was published in 2010
• Unlike AIMS I, AIMS II concluded and ASEAN-wide power grid waseconomically viable
• However, it suggested first to create three geographically separateinterconnection sub-systems before integrating them into one APG
• In addition to the five interconnections that already existed at that time,the report listed another 12 projects that were classified as “committed”and another 17 as “generic”
• Following the re-organisation of HAPUA in 2004, its Working Group 4embarked on a second study (AIMS II) which was published in 2010
• Unlike AIMS I, AIMS II concluded and ASEAN-wide power grid waseconomically viable
• However, it suggested first to create three geographically separateinterconnection sub-systems before integrating them into one APG
• In addition to the five interconnections that already existed at that time,the report listed another 12 projects that were classified as “committed”and another 17 as “generic”
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Current vision for APG
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Current vision for APG
AIMS II (2010)
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Supply and demand situation
ACE (2015)
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Supply and demand situation
IEA (2015)
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Supply and demand situation
ACE (2015)
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Supply and demand situation
ADB (2015)
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Supply and demand situation
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Supply and demand situation
ACE (2015)
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Benefits of APG
ACE (2015)
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Benefits of APG
IEA (2015)
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Current state
AIMS II (2010)
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Current state: traded volumes
IEA (2015)Thailand’s consumption was 165 TWh in 2010
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Future possible projects until 2020
AIMS II (2010)
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Projects under construction beyond 2020
AIMS II (2010)
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Major achievements so far• adoption of the AIMS and the updated AIMS II, which serves as a
reference guide for the implementation of the ASEAN interconnectionprojects
• restructuring of HAPUA to streamline operations and the establishmentof a permanent HAPUA Secretariat, which rotates every three years;
• signing of a Memorandum of Understanding on the ASEAN Power Grid(MOU on the APG)4 to serve as a reference document for thecoordination and facilitation of programmes to implement the APG;
• establishment of the APGCC to oversee the overall development andimplementation of APG projects
• adoption of the AIMS and the updated AIMS II, which serves as areference guide for the implementation of the ASEAN interconnectionprojects
• restructuring of HAPUA to streamline operations and the establishmentof a permanent HAPUA Secretariat, which rotates every three years;
• signing of a Memorandum of Understanding on the ASEAN Power Grid(MOU on the APG)4 to serve as a reference document for thecoordination and facilitation of programmes to implement the APG;
• establishment of the APGCC to oversee the overall development andimplementation of APG projects
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Challenges: national• Large regional diversity in geographic, cultural and economic terms
• Different national policies of ASEAN member states
• Countries’ desire for self-sufficiency before interconnection is allowed
• Countries’ concerns over restructuring of national power sectors andliberalisation
• Conflict of interest in resource use (e.g. hydropower in Laos)
• Corruption
• Large regional diversity in geographic, cultural and economic terms
• Different national policies of ASEAN member states
• Countries’ desire for self-sufficiency before interconnection is allowed
• Countries’ concerns over restructuring of national power sectors andliberalisation
• Conflict of interest in resource use (e.g. hydropower in Laos)
• Corruption
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Challenges: regional
• No harmonized operational & regulatory framework or tariff structure,tariff subsidies
• No mechanisms for power wheeling, pool rules, power bidding,regulatory framework and ensuring system reliability & security
• Financing Modalities for funding sources
• Unresolved diplomatic issues
• No harmonized operational & regulatory framework or tariff structure,tariff subsidies
• No mechanisms for power wheeling, pool rules, power bidding,regulatory framework and ensuring system reliability & security
• Financing Modalities for funding sources
• Unresolved diplomatic issues
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Thank you!
Energy Studies Institute29 Heng Mui Keng TerraceBlock A, #10-01Singapore 119620
Thank you!
Energy Studies Institute29 Heng Mui Keng TerraceBlock A, #10-01Singapore 119620