ASEAN POWER GRID : ROAD TO MULTILATERAL POWER TRADING

Presented By: Bambang Hermawanto

Chairman, ASEAN Power Grid Consultative Committee (APGCC)

ERC Forum 2015, Bangkok 01 October 2015

Overview of ASEAN Electricity Outlook

MOU of APG

Objectives and Benefits

Current Status of APG and Challenges

APG Barrier

Way Forward & Route to APG Multilateral Trading

Conclusion

3

Land Area (Sq km) Population 2013 (Million)

Source: ASEAN Statistics Leaflet

Electricity Consumption 2013 (TWh) GDP per Capita 2013 (USD)

ASEAN – REGION OF DIFFERENCES

Courtesy of Mr Varavoot Siripol-

EGAT

4

Forecasted consumption in selected countries

1 1000 TWh

2 Includes Japan, South Korea, Taiwan

Worldwide electricity consumption

CAGR Consumption

2012-2017

1%

Rest of Asia2 2%

Africa 3%

Latin America 4%

Middle East 6%

Southeast Asia 7%

India 7%

China 10%

North America 0%

Europe 0%

Oceania 1%

Eastern Europe

& Eurasia

Consumption

1000TWh1, 2010

0.7

0.7

0.6

0.9

1.2

1.9

0.3

4.6

3.4

Consumption growth

CAGR, 2006-2010

3.6

0.7

4

4

5

6

7

7

7

7

8

10

Myanmar

Laos

Malaysia

Hong Kong

Vietnam

Indonesia

Philippines

Singapore

Taiwan

Thailand

SOURCE: Country reports; IEA

ASEAN – Electricity Consumption Growth

Courtesy of Mr Varavoot Siripol-

EGAT

ASEAN – Installed Capacity (ACE, 2015)

-

50

100

150

200

250

1990 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013

GW

Coal and lignite Oil Natural Gas Others Renewables

ASEAN – Electricity Production (ACE, 2015)

-

100

200

300

400

500

600

700

800

900

1990 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013

TWh

Coal and lignite Oil Natural Gas Others Renewables

-

100

200

300

400

500

600

700

2013 2020 2025 2030 2035

GW

Coal and lignite Oil Natural Gas Nuclear Renewables

ASEAN – Forecasted Installed Capacity - BaU (ACE, 2015)

ASEAN’s POTENTIAL ENERGY RESOURCES

Fosil Energy Resources: Oil

Gas

Coal

Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Thailand, Vietnam

Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Thailand, Vietnam

Indonesia, Malaysia, Philippines, Thailand, Vietnam

Renewable Energy Resources:

Hydro

Geothermal

Solar

Wind

Biomas

Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Vietnam

Indonesia, Philippines

All Countries has various amount

Limited potential

All Countries has various types and amount

The ASEAN Power Grid (APG) is a flagship programme mandated in 1997 by the ASEAN Heads

of States/Governments under the ASEAN Vision 2020.

The 17th AMEM in Bangkok July 1999 has adopted The APAEC 1999- 2004 tasked to implement the ASEAN

Power Grid (APG) program

The MOU of APG signed by Energy Minister in July 2007 with objective to strengthen and promote power interconnection and trade ultimately

towards the realization of the ASEAN Power Grid to help ensure greater regional energy security and sustainability on the basis of mutual benefit

The ASEAN Power Grid (APG)

Facilitate cross-border power purchases /exchanges within the region

Allows for effective development and utilization

of resources

Optimize usage of diverse energy resources in the region

Enable power transfer from efficient generation in the

region to load centers

Reduce capital investment required

for generation capacity expansion

Capitalizing difference of demand peaking

time

ENCHANCING REGIONAL ENERGY

SECURITY, RELIABILITY,

TOWARD MORE EFFICIENT,

ECONOMIC AND SECURE OPERATION OF POWER SYSTEM

Objectives of APG

Greater economic generation and transmission of electricity

Greater reliability and security of electricity supply in member countries

Provision of a platform for future ASEAN electricity trade

AIMS-II identified

• 16 generic interconnection projects for EE (3.000MW) and PP (19,576MW)

• Significant saving in CAPEX & OPEX

BENEFITS OF ASEAN POWER GRID

Source: ASEAN Interconnection Master Plan Study (II), June 2010

Items

Total Expenses (MUSD) *

Savings (MUSD) * Without

Interconnection With

Interconnection

Capital Costs 83,699 81,980 1,719

Fuel Costs 253,025 252,871 154

Total 336,724 334,851 1,873

Note: * 2009 Present value.

TANGIBLE BENEFIT FROM APG

Courtesy of Mr Varavoot Siripol-

EGAT

* Updated as of November 2014

UPDATED LIST OF ASEAN POWER GRID PROJECTS

NO. System Region Exist On-going Future Total

Northern System 2,659 3,942 15,774-18,924 22,375-25,525

9 Thailand - Lao PDR 2,111 3,352 1,865 7,328

10 Lao PDR -Vietnam 248 290 - 538

11 Thailand - Myanmar - - 11,709-14,859 11,709-14,859

12 Vietnam - Cambodia 200 - - 200

13 Lao PDR - Cambodia - 300 - 300

14 Thailand - Cambodia 100 - 2,200 2,300

Southern System 450 600 1,800 2,850

1 P.Malaysia - Singapore 450 - 600 1,050

4 P.Malaysia - Sumatra - 600 - 600

5 Batam - Singapore - - 600 600

16 Singapore - Sumatra - - 600 600

Eastern System - 430 600 1,030

6 Sarawak - W.Kalimantan - 230 - 230

7 Philippines - Sabah - - 500 500

8 Sarawak - Sabah - Brunei - 200 100 300

15 E.Sabah - E.Kalimantan - - - -

Northern - Southern System 380 100 300 780

2 Thailand - P.Malaysia 380 100 300 780

Southern - Eastern System - - 3,200 3,200

3 Sarawak- P.Malaysia - - 3,200 3,200

Grand Total 3,489 5,072 21,674-24,824 30,235-33,385

CURRENT STATUS OF ASEAN POWER GRID PROJECTS

Note: there are six projects consist of eight cross border links have already in operation.

EXISTING

• 11 cross borders

• Total power: 3.489 MW

ON-GOING (COD 2018/2019)

• 10 cross borders

• Total Power: 7.192 MW

FUTURE (BEYOND 2020)

• 17 cross border

• Total Power: 25.424 MW

UPDATED STATUS OF ASEAN POWER GRID PROJECTS

National impediments to

promotion of power trade

•Differing national policies in ASEAN

•Countries desire for self‐sufficiency before interconnection is allowed

•Countries concerns over restructuring to be competitive under APG

Electricity industry

restructuring and evolution

into a power market

•Multilateral Power Trading is new to AMS

•Harmonized operational & regulatory framework or tariff structure, not available

•No mechanisms for power wheeling, pool rules, power bidding, regulatory framework and ensuring system reliability & security

•Financing Modalities for funding sources to APG realization

Enviroment Awareness

•High penetration of intermittent renewable energy sources

•Aware and concern on environment impact

APG’s CHALLENGES

• National Energy Policy

• National PDP & Priority

• Regulation

• The availability of infrastructure

Harmonization

• Commitment

• Funding sources for APG Studies

• Private Participation

• Financial burden to develop APG infrastructures & institutions

Solution under ASEAN Spirit

BARRIERS FOR THE REALIZATION OF APG

•To accelerate the completion of the Cross Border Projects Listed by AIMS-II

Accelerate the development of the Bilateral Cross Border Power

Interconnection projects

•To setup ATSO, ATGP, APG Regulator to regulate and control the Multilateral Trading

Preparation of the Formation of the ASEAN Power Grid

Institutions

• To conduct an optimization studies on the most economic operation and possible reserve sharing scheme within the region

• Review AIMS-II to consider the optimization of Regional Energy Resources, considering the National Infrastruscture and Reduction of CO2 Emission

Synchronize National Power Development Plan and optimize

the generation of electricity

•Encourage the private sector to jointly develop Cross Border Power Interconnection Projects

•Study on the ASEAN Primary Energy Resources for Power Generation

Encourage and optimize the utilization of ASEAN resources, such as, funding, expertise and

products to develop the APG

THE STRATEGIC & ACTION PLAN 2016/20

TOWARD MULTILATERAL TRADING

STUDIES COMPLETED AND PROPOSED

•Benchmarking of Bilateral Contract between HAPUA Member Countries

•Develop Bilateral Contract model based on experience of HAPUA

Member Countries

Bilateral Interconnection Agreement

•To promote more efficient, economic, and secure operation of power systems;

•To optimise the use of energy resources in the region by sharing the benefits;

•To reduce capital required for generation capacity expansion;

• To identify barriers to the implementation of APG.

AIMS - II

• to harmonize the technical standards of ASEAN Member

• to facilitate cross-border electricity trading and to support quality electricity supply to consumers of all ASEAN Member States.

Harmonization of technical standard codes

or guidelines for APG

• To propose the formulation of APG TSO /APG GTP and Roadmap of APG interconnection,

•propose operation procedures of ASEAN TSO, Control Blocks and Control Areas for efficient exchange of active and reactive power for APG,

•recommend an integrated institutional structure of the regional grid planners group

Formation of ATSO & AGTP (funding proposal)

Conduct study for ASEAN Power Grid (conceptual road map for bilateral trading toward the multilateral electricity trading: regulation and infrastructures)

Establishment of Funding sources or financial support to be assisted and sought by AIFM

Deregulation or relaxation of regulation to assist private investment

National Expert Group on specific field (less dependency on non ASEAN countries)

Introduction on sub-regional interconnection as further step of cross border interconnection

Establishment of APG Institutions

WAY FORWARD

TO THE REALIZATION OF APG

The key initiatives include embarking on multilateral trading to the ASEAN Power Grid (APG),.

The realisation of the APG is to first encourage on a cross-border bilateral basis, then gradually expand to sub-regional basis, and finally to a fully integrated ASEAN power grid system

Seriously consider to harmonise regulatory frameworks and standards to facilitate regional energy connectivity

Action Plan for the next five (5) years is to embark on multi-lateral interconnections.

Initiative to undertake a pilot project to explore cross-border power trade from Lao PDR to Singapore and serve as a pathfinder to enhance multilateral electricity trading beyond neighbouring borders towards realising the APG.

ASEAN Energy Cooperation:

APAEC 2016 – 2025 (Phase One)

OBJECTIVES

To enable the power trade from Lao PDR to Singapore via the existing Interconnection of Thailand’s grid and Malaysia’s grid, which will be considered as the first multilateral power trade in ASEAN and pave the way for other power integration projects in ASEAN to follow up (i.e. GMS and APG).

LTMS–PIP will take into account each country’s national development plan with the existing interconnection among the countries as well as associated laws and regulations in order to streamline our coordination and set up the feasible and workable plan for us to pursue on this project.

LTMS: Multilateral Pilot Project

Lao PDR (L)

Thailand (T)

Malaysia (M)

Singapore (S)

TNL, PT-NK

PX-BKN

PB-MD2

TKH-NN

BY-SRD

KNE-Gurun Plentong- Woodlands

275/230kV HVAC 300 kV HVDC 300 MW

115 kV HVDC

Note: •Between Lao PDR-Thailand: without Power Flow Control (without ACE) •Between Thailand-Malaysia: Controlled by Pole Control of HVDC •Between Malaysia-Singapore: AGC setting of Area Control Error (ACE)

LTMS: Physical Flow

HAPUA Power Interconnection Cooperation & AIMS

MOU of APG

Fully Physical Cross Border Interconnections Established

Implemention of Cross Border Bilateral Trading

Developing Regulation, Planning, and Operation Frameworks

Implementation of Sub-Region Multilateral Trading

Formation of APG Regulator. Planning, and Operation Bodies for

ASEAN Multilateral Trading

ASEAN Electricity Market Integration

We are

here

ASEAN countries collectively need to benefit from the abundance of indigenous resources

within the region

APG is a step towards the optimization and conservation of energy in the ASEAN region

AIMS & National PDP should be synchronized to support the Multilateral Power Trading.

APG creates bilateral arrangement through cross border electricity trading toward

multilateral trading arrangement

The involvement of the ASEAN Member States is required to Accelerate the realization of

APG

CONCLUSION

THANK YOU