ASEAN energy interconnectivity: How Myanmar could benefit

13 March 2015
ASEAN energy interconnectivity: How Myanmar could benefit
Photo: Ye Min

Another piece of cross-border electricity cooperation in Southeast Asia is moving into place in a jigsaw of development projects that could ultimately benefit Myanmar.
The latest regional interconnectivity link involves transmission lines nearing completion on Borneo and linking Malaysia’s Sarawak State and Indonesia’s West Kalimantan Province.
The link, carrying hydroelectric power from the 2,400 megawatt Bakun Dam in the Sarawak jungle, will be the second permanent cross-border electricity connection in the 10-member Association of Southeast Asian Nations.
The other permanent exchange of electricity across borders in ASEAN is from Vietnam to Cambodia, where new connectivity is creating thousands of jobs.
The trans-Borneo power grid is 80 percent complete and on schedule, delegates were told at a meeting attended by Brunei, Indonesia, Malaysia and the Philippines in Kuala Lumpur on February 17.
The cross-border link, backed by loans totalling almost US$100 million, consists of two transmission lines of about 142 miles (230 kilometres), plus minor distributors and sub-stations.
“For West Kalimantan, the power system will help improve the quality and reliability of power supply, lower its cost and diversify the energy generation portfolio by retiring old, inefficient oil-based power plants,” reported the Malaysian news agency, Bernama.
Brunei, Indonesia, Malaysia and the Philippines are working to optimise regional power resources to improve their economic development, Bernama said, quoting Syed Mohamad Fauzi Shahab, the director of electricity at the Sarawak Public Utilities Ministry.
The aim is to eventually connect Indonesia’s five provinces on Kalimantan and those of Sulawesi, Maluku and West Papua, with Sarawak and Sabah states in Malaysia, Brunei, and the big islands of Mindanao and Palawan in the Philippines.
This will be one-way traffic with energy-rich Sarawak exporting its surplus power. Kalimantan is rich in coal and potentially large volumes of methane gas but has poor infrastructure, while eastern Indonesia and much of the Philippines have few known energy resources and are desperately short of electricity.
With the Sarawak-Kalimantan electricity link nearing completion, the socalled BIMP initiative, comprising Brunei, Indonesia, Malaysia and the Philippines, is preparing a feasibility study on further power connections, said Mr Syed.
The study’s finding will be presented to an ASEAN energy ministers’ meeting in November.
There have been other cross-border exchanges of electricity in ASEAN but they were short-term solutions to sudden energy shortfalls. They have occurred between Singapore and Malaysia and Malaysia and Thailand.
Undeveloped Cambodia, one of ASEAN’s poorest countries, is receiving permanent electricity supplies from neighbouring Vietnam which have begun to spawn clusters of light industry that have created 10,000 jobs, said the Asian Development Bank, which backed the project.
Almost 124 miles (200km) of trans-mission lines have been built from the Vietnamese side of the border to provide grid electricity to Cambodia’s southern Kampot Province and further east to Sihanoukville, on the Gulf of Thailand.
“Two projects supported by ADB helped changed the equation in Kampot, providing reliable, affordable energy to businesses and to tens of thousands of poor rural households who had never enjoyed electricity in their homes,” the ADB said in a statement.
One cross-border possibility that could benefit Myanmar in the medium term is a surge of hydroelectric projects in Laos.
With a population of less than ten million, Laos is building more electricity generating capacity than it needs. In the short term much of this is destined for Thailand, but it would not be difficult for Myanmar to also tap into this energy source via grid interconnectivity – once eastern Myanmar’s infrastructure has been improved.
The Thai authorities are tapping the hydroelectric potential of Laos because of public opposition in Thailand to dam building – an issue that is also controversial in Myanmar.
These grid-connecting lines are part of the Greater Mekong Subregion Transmission Project that groups the ASEAN countries through which the Mekong flows – Myanmar, Laos, Thailand, Cambodia and Vietnam.
The interconnectivity on Borneo is supported by the ADB with a loan of almost US$49.5 million, plus a matching loan from France’s Française de Dévelopment.
Indonesia’s state power company PLN estimated last year that the electricity from Sarawak would reduce its annual oil bill by $100 million a year, but that was before crude prices collapsed.
Indonesia and Malaysia are cooperating on another cross-border energy project, but in the other direction.
Malaysia’s Sarawak State is energy rich but peninsular Malaysia is increasingly suffering from power shortages as demand outstrips supply. Sarawak is on the verge of selling surplus electricity from Bukun to Indonesia because initial plans to transmit the dam’s electricity by undersea cable to the Malaysian peninsula were abandoned as too costly to build and maintain across hundreds of miles of ocean.
Instead, Malaysia plans to import electricity from Indonesia’s Sumatra island across a section of the Malacca Strait that is only about 30 miles (50km) wide. This $2 billion cooperation project involves the state power companies, Tenaga Nasional of Malaysia and Indonesia’s PLN, as well as the Indonesian state-owned coal miner, Bukit Asam.
The ambitious plan for the project includes building a coal mine with a capacity of 6 million tonnes a year at Peranap, in Sumatra’s Riau Province, plus a coal-fired power plant with a capacity of 1,200 MW.
The electricity it generates will be shared between the two power firms and a swap system via cable under the strait.
However, as is often the case in Indonesia, elements of the project have stalled due to licensing and finance issues, and it is doubtful that it will be completed on target in 2017. The undersea cable is still in the planning stage.
However, despite sometimes crushing bureaucracy, cross-border energy cooperation among ASEAN countries is positive and increasing.
The trend is being driven by two factors: need and the creation of the ASEAN Economic Community, or AEC, a tariff-free and open labour economic market.
The official start-up date is the end of this year but it is doubtful that all the elements of the AEC will be finalised by then.
There is a wide economic development gap between, for example, Myanmar and Singapore, but all ten ASEAN countries are keen to cooperate.
All ten countries, with the exception of Singapore, share a common need regardless of economic status: demand for more electricity.
Southeast Asia is far from the kind of interconnectivity discussed when ASEAN ministers meet and make grandiose statements, but the jigsaw is definitely taking shape
This Article first appeared in the March 5, 2015 edition of Mizzima Weekly.
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