Transmission line could save billions of $$$

Building a transmission line to carry electricity from Lao hydropower plants to Singapore can save as much as US$26 billion over 10 years for the four countries involved, according to a new study.

During a press conference fo r the 32nd Asean Energy Ministers Meeting on Tuesday, Dr Yanfei Li of the Economic Research Institute for Asean and East Asia (ERIA) said the savings estimate was based on current and projected electricity demand but could be even greater.

“Our key findings show that the transmission line is very valuable and economically feasible,” he said.

Laos envisaged itself as “Battery of Asia”, with plans to generate hydropower for sale to Asean countries aside from Thailand. Energy connectivity is also a theme endorsed by Asean ministers at the 32nd Asean Ministers on Energy Meeting (AMEM), hosted by Laos during September 22-24. The ministers endorsed the theme for the APAEC 2016-20: ‘Enhancing Energy Connectivity and Market Integration in Asean to Achieve Energy Security, Accessibility, Affordability and Sustainability for All’. The AMEM Chair informed the meeting about the Laos-Thailand-Malaysia-Singapore Power Integration Project which has been supported by energy officials from the region.

They also made significant progress in the various areas of cooperation such as renewable energy, Asean Power Grid and Trans-Gas Pipelines.

Through the transmission grid that will link the four countries, ERIA estimates that the four countries could save between US$23 billion and US$26 billion over 10 years of operation.

Dr Li said they had studied ten years of power trading among the four countries, especially Lao and Singapore.

“But Thailand and Malaysia would also benefit from this because the power goes through their territories and they can carry out some sort of relay power trade in between,” he said.

“We made our estimate over a ten year period but it could actually be more than that because power transmission lines stand for more than ten years. It could last up to forty years.”

Dr Li said, “Based on the current level of power demand in all four countries, we also projected the future power demand growth over the next ten years and this level of demand is already enough to justify power interconnection between Laos and Singapore.”

This is not to overlook the many challenges and barriers such as the harmonisation of regulation and technical issues such as voltage and frequency, as well as how to identify the most suitable business model for the four countries to trade. These are barriers that may delay the progress, he added.

“If you can build the transmission line, in our estimation it is already economically feasible. However, there are barriers that we need to solve before we can start construction.”

He said Laos, Thailand, Malaysia and Singapore had determined that the transmission line was technically feasible but had yet to work out a business model for the cross-border trade. He estimated that construction could begin in one or two years’ time.

Jakarta-based ERIA invited the Lao news media to a launching of its two latest studies on Tuesday (September 23) at the Asean Ministers on Energy Meeting.

Dr Yanfei Li and Dr Ichiro Kutani are the authors of Investing in Power Grid Interconnection in East Asia, which estimates the cost and net economic benefits of several proposed new transmission capacities.

Shigeru Kimura, author of the second ERIA study, Energy Outlook and Analysis of Energy-Saving Potential in East Asia, said countries like Laos had national policies and goals for improving energy efficiency but they needed detailed action plans to achieve real energy savings.