The Thai government, distracted by renewed political upheaval on the streets of Bangkok, has finally signed up for the Greater Mekong power grid which aims to link up Cambodia, Laos, Myanmar, Thailand and Vietnam plus regions of southern China.
The signing coincided with a meeting in the Lao capital, Vientiane, in December co-sponsored by the Asian Development Bank, which has been a leading promoter of a regional cross-border power-sharing system.
The power sharing is part of a planned US$50 billion regional economic development plan, the Regional Investment Framework (RIF), envisaged by the ADB for the Greater Mekong Sub-region (GMS).
“Along with developing urban and logistics centres, the RIF will attempt to create a sub-regional power market, something of crucial importance given the energy security issues facing the sub-region,” ADB vice-president Stephen Groff told the Vientiane meeting.
Adequate access to electricity will be essential to economic development and food security in the region, Groff said.
Electricity demand in the GMS is forecast by the ADB to rocket to more than 148,000 MW by 2015– a rise of nearly 80 percent from 2010 consumption.
The goal of a Greater Mekong region cross-border electricity grid should benefit countries such as Myanmar, Cambodia and Vietnam which are desperately short of energy to develop their economies.
But will it? At present the more developed countries are sucking energy from the less advanced ones.
Thailand buys electricity from Laos; Vietnam is also planning to import from Laos, plus Cambodia; China’s southwest Yunnan province takes power from Myanmar. However, there are signs that it could work both ways: Laos gets some electricity from China, as does Vietnam.
The GMS power grid plan is only part of a wider attempt to create greater connectivity, embracing all 10 member countries of the Association of Southeast Asian Nations.
Thai Energy Ministry permanent secretary Suthep Liumsirijarern told the Bangkok Post in December that ASEAN members are preparing to discuss the development of a regional high-voltage transmission power transmission system in 2014.
ASEAN comprises Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Laos, Philippines, Singapore, Thailand and Vietnam.
The group, which has an ambitious plan to create a European Union-style trading bloc starting from the end of 2015, wants to build a transmission system by 2020. But major issues need addressing first, said Suthep, including technical standards and commercial and legal regulations.
Areas of ASEAN outside the GMS group have already begun to tentatively trade electricity, but so far on a piecemeal emergency basis rather than via a regular cross-border permanent structure.
The most significant permanent cross-border power transmission plans have been agreed between Malaysia and Indonesia.
The two countries’ Borneo island land border will act as a conduit for Malaysian electricity from Sarawak and Sabah states to be pumped into Indonesia’s Kalimantan, which is rich in coal but desperately short of power.
Meanwhile, transmissions are scheduled to move in the opposite direction via a project in northern Sumatra’s Riau province. A 1,250 MW coal-fuelled power plant, still to be built, will feed electricity into an undersea cable planned to cross the Malacca Strait into southwest peninsular Malaysia.
This is a joint venture between two state-owned entities, Malaysia’s power monopoly Tenaga, and Indonesia’s PLN.
But problems facing ASEAN’s cross-border grid connectivity ambitions go beyond technical and legal issues. There is a vision but a lack of financial commitment at this stage. There is no funding to begin building an ASEAN grid, especially with some of the member countries most in need of power also being the poorest.
“What we are seeing now are bilateral deals to try to fill emergency shortages or develop links,” Platts energy news agency said. Thailand was able to buy electricity from Malaysia this year to fill a short-term gap, and Malaysia has turned to Singapore on a similar basis.
“There is no big pot of cash in ASEAN to push a bloc grid forward. The poorer countries tend to rely on aid from the Asian Development Bank or the World Bank for small improvements. It is going to take a bigger commitment from the richer ASEAN countries to realise the ambition.”
This point was illustrated recently when the ADB announced it would contribute about US$60 million to pay for improvements in Myanmar’s dilapidated electricity grid. Nearly 20 percent of generated power is lost on its way to consumers due to poor equipment.
The ADB is also providing the impetus to encourage private investment in Myanmar’s power sector. It has carried out a study with the international technical services consulting firm Accenture and the World Economic Forum to assess Myanmar’s “current energy architecture challenges.”
The study reached some sobering conclusions: “Even if electricity output doubled every five years, it would take five years just to meet today’s needs. In that time, demand would have grown by 12 percent a year.”
Only one quarter of Myanmar’s population has access to electricity, 70 percent of the population burns wood for energy use such as cooking, and “for those who do have access to power, supply is intermittent at best due to the seasonality of hydropower production and inadequate transmission and distribution infrastructure.”
The GMS group also includes the poorest and most electricity-starved countries of the entire region. Only about 26 percent of Myanmar’s 55 million people have access to grid power and the situation is not much better in Cambodia. In Vietnam, a more economically-advanced country, 50 percent of the population of 88 million is still waiting to be connected.
Access to electricity must be a core element of regional development, said Groff.
“New, second generation projects in the RIF include urban development along existing transport corridors; better road, rail, and multi-modal transport links; building up regional power grids; establishing sustainable tourism projects; boosting environmental planning and management; and shoring up human resource capacity,” he told the Vientiane meeting.
Clearly, the power problems facing the region are manifold with bizarre contradictory situations. As the ADB says, although Myanmar is desperately short of electricity to develop its economy it plays an important role in regional energy security by exporting large volumes of natural gas to feed Thailand’s power generating sector, and also supplies China.
“This extreme export-oriented energy strategy has left many Myanmar people literally in the dark,” said the ADB.
There seem to be boundless opportunities beyond public sector loans and World Bank grants for the international private energy sector to invest in the region’s emerging economies, from Myanmar to Vietnam and southern China down to the vast Indonesian archipelago. The question is will they be held back by the fumbling legalistic bureaucracythat plagues some of those countries most in need.
source: Mizzima
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