$26-bn savings seen in Laos-Singapore power line

During a press conference after the 32nd Asean Energy Ministers Meeting on Tuesday, 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 higher.

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

Laos envisages itself as the “Battery of Asia”, with plans to generate hydropower for sale to Asean countries other thanThailand. Energy connectivity was also a theme endorsed by Asean ministers at the AMEM hosted by Laos from Monday to Wednesday. The AMEM chair informed the meeting about the Laos-Thailand-Malaysia-Singapore Power Integration project, which is backed by energy officials from the region.

They also made significant progress in the various areas of cooperation such as renewable energy, an 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 $23 billion and $26 billion over 10 years of operations.

Li said they had studied 10 years of power trading among the four countries, especially Laos 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 10-year period but it could actually be more than that because power transmission lines stand for more than 10 years. It could last up to 40 years.”

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 10 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.

The Jakarta-based ERIA invited the Lao news media to the launch of its two latest studies on Tuesday at the AMEM 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.