Given the region’s uneven distribution of renewable resources, a connected grid can better optimise the use of green power. - ST
SINGAPORE: Singapore on Sept 20 announced plans to double its electricity import capacity via a regional grid, in an extension of the landmark Laos-Thailand-Malaysia-Singapore (LTMS) power integration project – which brought the Republic its first imports of clean energy.
This announcement, which comes after news that progress on the second phase of the LTMS project had been stalled, may at first glance seem worth celebrating.
But closer scrutiny into the details of this development raises some important questions.
For one thing, the energy imported under this phase of the project is unlikely to come solely from renewable sources.
The LTMS was announced in June 2022 to much fanfare, particularly as the electricity would come from Laos’ low-carbon hydropower.
But details on the second phase of the project were scant.
It was revealed – only after The Straits Times put forth questions on how the electricity will be generated – that the energy from Malaysia will be from its grid, and hence come from a “mix of generation sources”.
According to the Asia Natural Gas and Energy Association, coal accounted for more than 43 per cent of Malaysia’s electricity production in 2023, compared with natural gas at 36 per cent and hydropower at nearly 17 per cent.
In many ways, the LTMS can be seen as a pathfinder project for the Asean regional power grid – a vision where countries in the bloc share excess power with one another to meet rising electricity demand, while ensuring energy security.
Given the region’s uneven distribution of renewable resources, having a connected grid can allow countries to better optimise their use of green power and hedge against intermittencies.
On the heels of the LTMS, the Brunei-Indonesia-Malaysia-Philippines power integration project was announced in August 2023. It aims to create multiple interconnections across the grids of the four countries, drawing on key lessons from the LTMS.
But observers have long underscored the difficulty in realising a regionally interconnected grid, with South-east Asian countries in a race to decarbonise their economies, amid rapid economic and population growth.
This explains why the Asean grid had made slow progress despite being decades in the making.
Some challenges include connecting the national power systems of all 10 Asean countries, which is a mammoth task with many technical and financial obstacles.
To aid the process, countries would need to invest in grid upgrades to not only take in a greater share of renewables, but also to ensure alignment in operating voltage and frequency with the other countries.
In December 2023, Thai Prime Minister Srettha Thavisin said that Thailand would not allow electricity from Laos to pass through to Singapore as the kingdom wants to purchase the clean power for itself, reported Thai news portal The Nation.
A Reuters report in July 2024 later said that an extension of the deal was fraught with disagreements over how the energy will be transmitted through Thailand and Malaysia, and the quantity of power to be purchased.
A 2023 report on the LTMS project by the ISEAS – Yusof Ishak Institute, pointed to there being a diversity of views among stakeholders on the wheeling charges, or the transboundary costs of transmitting electricity from one grid to another. Some said that the costs were too high, while others felt they were too low, noted the report.
Laos, however, has indicated its interest in becoming South-east Asia’s renewable energy electricity supplier, with a large share of its hydropower currently exported to neighbouring countries, like Thailand and Vietnam.
More is expected, with Thailand to increase its clean power imports from Laos as it weans off natural gas.
When asked for an update on these negotiations, an Energy Market Authority (EMA) spokesman said the agency does not comment on speculative reports, and that it is committed to working with its neighbours to advance this “important initiative”.
So what do these latest developments – the delays plaguing the extension of the LTMS project, and the subsequent announcements that additional energy import capacity will come from Malaysia’s mainly fossil-based grid – suggest?
Aside from the fact that countries need to align on key regulations to facilitate multilateral power trade, infrastructural challenges are hindering the region’s ability to generate clean electricity, despite its vast renewable energy potential.
In addition, there is also the immense financial undertaking of electricity grid upgrades – which the International Energy Agency estimated to be approximately US$21 billion (S$27.1 billion) annually from 2026 to 2030.
Even future expansions of the LTMS project would require all countries involved to upgrade their domestic infrastructure to allow more electricity to pass through, otherwise, the electricity traded would be limited to a maximum of only 300MW, according to the ISEAS report.
To that end, Singapore and Malaysia upgraded their shared transmission infrastructure, or interconnector, in 2022 to accommodate up to 1,000MW of electricity, while Malaysia and Thailand have been studying the feasibility of doing so, said the report.
Being able to import electricity from Malaysia’s power grid as part of the LTMS extension helps with “strengthening grid resilience” and “promoting energy integration”, said EMA on Sept 20.
Singapore already has an agreement from 2023 to import 100MW of electricity from Malaysia’s grid as part of a two-year trial, between local power generation company YTL PowerSeraya and Malaysia’s TNB Genco.
In April 2024, Malaysia also called for an auction for Singapore companies to purchase up to 100MW of green electricity from its domestic energy supply using the same interconnector, as part of a pilot.
Sharon Seah, senior fellow and coordinator of climate change in ISEAS’ South-East Asia programme, said that the extra energy supply is a way of stress-testing the newly upgraded interconnector.
“For Malaysia, this is a first step towards the liberalisation of its domestic electricity market, as it will allow more third-party access to the national grid, and introduce a new competitive element to the pricing (of electricity),” she added.
“Allowing more power producers to access the grid and interconnector helps to increase overall grid resilience and refine the trading process.”
When Malaysia begins integrating more renewables into its electricity mix, the source of these imports would soon be greener too.
Under its Malaysia Renewable Energy Roadmap, the government has set an ambitious target of renewable energy providing 31 per cent of the nation’s energy needs by 2025, reaching 40 per cent in 2035.
At 200MW, the scale of the LTMS project may be miniscule – about 1.6 per cent of Singapore’s current electricity generation capacity – but its outcomes quite clearly reflect the present state of regional clean energy cooperation.
With the push to net zero drawing closer into view, getting clean energy to be transmitted via the LTMS will require increasing willingness by countries to share their clean power.
This can be achieved only through greater alignment on regulation, and for more climate finance – particularly from the private sector – to facilitate the region’s effective decarbonisation. - The Straits Times/ANN
