Southeast Asia Cross-Border Clean Energy Trade Boosted by Laos-Singapore Sales | News | Eco-Enterprise


Laos-Singapore Trade

According to a two-year power purchase agreement announced on Thursday by Singaporean electricity distributor Keppel Electric and its Laotian counterpart Électricité Du Laos (EDL), Singapore will import up to 100 megawatts of electricity from Laos. The anchoring of the agreement comes eight years after the implementation of the plan.

The price of imported electricity was not disclosed. However, the amount imported represents less than 1% of Singapore’s current power generation capacity. This amount traded will also drop to 30 megawatts during the dry season, when water levels in Lao dams drop, media from Laos and Vietnam said.

Elrika Hamdi, an analyst at the US think tank Institute for Energy Economics and Financial Analysis (IEEFA), said the Laos-Singapore transmission is a new milestone for power interconnections in Southeast Asia.

But the eight-year gestation period highlights the challenges these projects face, Hamdi said.

“Cross-border interconnections still face geopolitical, security, regulatory and socio-economic challenges, in addition to technical issues,” she said.

“Scaling the project will not be easy. Singapore, where land is limited, may not have much choice to accelerate its decarbonization goal unless neighboring countries agree to work with the city-state,” she added. Indonesia recently announced a halt to clean energy exports to focus on meeting local needs.

The new Laos-Singapore power purchase agreement is the first time that electricity has been transmitted from seller to buyer in four Southeast Asian countries. Previous sales in the region have been either bilateral or through an intermediary country.

Lao Hydro is Singapore’s first overseas delivery of renewable energy. Singapore has an ongoing energy import trial with Malaysia, but Malaysia bans clean energy exports.

Authorities in Singapore and Laos say the deals will guide the development of multilateral power trade in Southeast Asia – an idea first mooted in 1997, but which has faced obstacles in developing.

“Interconnected power grids can accelerate the deployment of renewable energy, promote supply diversification and enhance grid stability for the region,” said Ngiam Shih Chun, director general of China’s Power Market Authority. Singapore.

“We believe that this project is just the beginning of a new era where distance is no longer an obstacle,” added Chanthaboun Soukaloun, Managing Director of EDL.

Singapore wants 30% of its energy needs to be met by clean energy imports from its neighbors by 2035. A tender launched last year received bids to get power from Indonesia, from Laos, Malaysia and Thailand.

Laos is one of the largest electricity exporters in the world, due to its nearly 80 hydroelectric dams. Nearly 250 other hydropower projects are in the planning stages, according to the Washington-based Center for Strategic and International Studies.

Laos already sells electricity to countries like Cambodia, Myanmar, Thailand and Vietnam.

While hydroelectricity is considered renewable, the construction of river dams in Laos has led to warnings of silt buildup and loss of wildlife in one of the most biodiverse places in the world.

Australia-Singapore cable

The Australia-Asia PowerLink, or AAPowerLink, is now one of eight proposals the Australian government considers to be of national importance and is prepared to accept funding.

The project was announced in 2019 and included in Australia’s priority development list in early 2021.

It involves building solar panels on 12,000 hectares of land in northern Australia to generate a maximum of 20 gigawatts of electricity, coupled with storage batteries. More than three gigawatts are reserved for the Darwin region in Australia, while around two gigawatts will be sent by submarine cables to Singapore, 4,200 kilometers away.

Sun Cable, the Australian company behind the project, said it expected to create 14,000 jobs, $5.5 billion in investment in Australia and $1.4 billion in annual export revenue at from 2028.

The project is valued at around $20 billion in total. Sun Cable raised $150 million in March to work on the project.

Construction is expected to begin in 2024, with power to be delivered to Darwin in 2027 and Singapore by 2029, the company said. Indonesia has accepted maritime studies in its waters for the necessary submarine cables.

“This is clearly positive and a step in the right direction towards a final investment decision. It would, however, be an additional boost to have an accurate view of the drawdown of this electricity in Singapore – and in the Australian Northern Territory If there was evidence provided of power purchase agreements, that would definitely help a lot,” said Marc Allen, energy consultant and co-founder of Singapore climate platform Unravel Carbon.

Singapore’s Ministry of Trade and Industry said last November that Sun Cable must first file a proposal if it intended to sell power to the city-state. Sun Cable could not be reached on Friday to find out whether it has filed a claim or intends to do so.

“This is an innovative project and certainly the kind of visionary thinking that is needed, but the overall business case remains difficult – especially as Singapore has started importing renewable electricity from Laos and the beginnings of an ASEAN power grid are beginning to be seen,” Allen added.

Australia is currently the world’s second largest supplier of coal, one of the most polluting forms of fossil fuels. The country’s new prime minister, Anthony Albanese, elected last month, has promised to make it a renewable energy superpower.

“The Sun Cable project will position the territory as a renewable energy powerhouse,” Natasha Fyles, chief minister of Australia’s Northern Territory, said in a statement, echoing Albanese’s campaign promise.

Australia also has a 26 gigawatt “Asian Renewable Energy Hub” located in the state of Western Australia and led by a group of energy companies. The British oil giant BP has acquired a 40% of capital in the project last week to use wind and solar energy to produce hydrogen, which can be shipped to other countries in Asia-Pacific.


About Author

Comments are closed.