Regional connectivity needs to be enhanced for clean energy trade

This article was licensed through Dow Jones Direct. The article was originally published on The Straits Times.

To facilitate clean energy trade in the region and enhance regional connectivity, governments should work together to establish regulatory frameworks and infrastructure, said Second Minister for Trade and Industry Tan See Leng on October 26.

To this end, Singapore will be partnering with the United States to conduct a feasibility study on developing a regional power grid network comprising both land- and sea-based interconnectors in South-east Asia, said Dr Tan.

Electricity interconnectors are high-voltage cables that connect the electricity systems of neighbouring countries so that excess power from, say, solar farms, can be shared and traded.

He was speaking at the Asia Clean Energy Summit - which looks at ways to accelerate the region's transition to clean energy - on October 26, as part of the Singapore International Energy Week at Marina Bay Sands.

The study will assess the benefits, technical feasibility and economic viability of developing a power grid network in the region.

It will also take into consideration implemented and planned electric power connections, as well as other possible connections involving regional countries to facilitate the trade of clean electricity and spur further investments in the region, noted Dr Tan.

Regional power grids and co-developing renewable energy projects in the region not only serve each country's domestic demand for renewable energy, but also help to strengthen regional energy security and resilience, he added.

"The study will be part of the Net Zero World Initiative led by the US, in which the US plans to work hand in hand with Singapore and South-east Asian partners to co-create and implement highly tailored, actionable, technical and investment plans to support energy decarbonisation in the region," he said.

Dr Tan also noted that having cross-border trade of clean energy can help to make regional projects more commercially viable.

"We are a diverse collection of countries with varying capacities to generate and pay for clean energy. Having a wider base of consumers willing to offtake clean energy can provide the base demand and improve a project's financing options," he added.

Infrastructural upgrades would also be needed to facilitate trade within the region.

For instance, the Malaysia-Singapore interconnectors have been successfully upgraded and can now accommodate bidirectional electricity flow of around 1,000 megawatts between the two countries - double its original capacity.

This has helped to support the Laos-Thailand-Malaysia-Singapore power integration project which can import up to 100 megawatts of renewable energy from existing hydropower plants in Laos for a two-year period.

The project commenced on June 23.

At the conference on October 25, Singapore and Cambodia signed a Memorandum of Understanding (MOU) to deepen energy cooperation.

This also helps to facilitate key areas of cooperation such as the development and financing of renewable energy projects, development of regional power grids and cross-border grid interconnections for electricity between both countries, said Dr Tan.

He highlighted the importance of anchoring subsea cable manufacturing facilities in the region, as well as having regional operations and manufacturing capabilities due to the "intense demand" for these cables and electricity import infrastructure.

In order to support the growing demand for clean energy - both domestically and regionally - it is also important to support the growth of the local clean energy industry, said Dr Tan.

According to a study by the Energy Market Authority, new opportunities are present in the areas of solar, smart grids, and energy storage systems, which can store energy, like solar power, for later use to reduce intermittency of power from such sources.

"These opportunities will in turn bring about more business opportunities for companies and create new jobs for locals," said Dr Tan.

As local companies sharpen their capabilities and expand, they can also support decarbonisation efforts in the region, providing more opportunities to those in the region, he added.