Regional grids can lower renewable energy costs: Report


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

Agency says they will allow South-east Asian nations to meet their climate change targets

Importing electricity generated by various renewable sources across South-east Asia is one way for nations in the region to meet their climate change targets in an affordable way, a new report by the International Energy Agency (IEA) has found.

For example, regional grids allow resources to be shared, reducing overall system costs, noted the report, which was released yesterday during the global launch of the Singapore International Energy Week (SIEW), an annual energy conference which is in its 15th edition.

The Republic had earlier announced plans to import 30 per cent of its energy needs - or 4GW of electricity - by 2035.

One way of doing so could be through Asean's regional power grid.

Such power grids allow countries that may have a surplus of electricity from renewable sources like hydropower to trade with countries that lack these resources.

This is especially important for Singapore as 95 per cent of its electricity is generated from natural gas - a fossil fuel - which accounts for 40 per cent of its total national emissions.

Speaking to The Straits Times yesterday, IEA's chief energy economist Tim Gould said having an integrated power system across countries helps to bring down the costs of transitioning to a greener energy sector.

"For a country like Singapore, being able to access energy supplies from low-carbon sources from its neighbouring countries through a regionally interconnected grid is very, very important, given the constraints on land that Singapore faces," he added.

As each country has its own advantages in different renewable technologies - some in hydropower, geothermal, and others in wind, for instance - having a diverse mix of resources could help to reduce variability in factors such as weather conditions, said Mr Gould.

IEA's report, South-east Asia Energy Outlook 2022, also pointed out that institutional and contractual structures will also need to be adapted to facilitate multilateral cross-border power trade.

For instance, more flexible market models can be introduced with elements such as continuous data-sharing across borders and frameworks to ensure ease of trade, it noted.

Projects such as the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) can boost grid interconnectivity and potentially pave the way for setting up market mechanisms to facilitate multilateral power trade in the future, said the report.

Under the LTMS-PIP, Singapore will import up to 100MW of renewable hydropower from Laos via Thailand and Malaysia using existing interconnectors.

The Energy Market Authority yesterday also unveiled "A Resilient and Sustainable Energy Future" as the theme for the SIEW conference, which will take place from Oct 25 to 28.

It said in a statement that the theme reflects how the global energy community has accelerated the pursuit of a greener future.

"Asia, which accounts for almost half of the global energy demand, faces urgency to accelerate the deployment of renewables, fortify grid infrastructure, strengthen supply chain resilience of key fuels, and develop regional interconnections to enhance security while keeping electricity accessible and affordable," it added.


Ang Qing and Cheryl Tan