How Electricity Trades Progress in ASEAN

By Aloysius Damar Pranadi

Friday, 7 Oct 2016

The Association of Southeast Asian Nations (ASEAN) is the 3rd most populated region and becomes the 7th economically developed region in 2015. The remarkable economic growth in ASEAN has contributed to the growth of energy supply and demand within all ASEAN Member States (AMS). In 2013, the recorded total energy supply and demand were 619 Mtoe and 436.8 Mtoe, respectively. Those numbers will grow nearly to 1,685 Mtoe and 1,107 Mtoe by 2035, respectively.  Electricity generation will also grow from 5% to 6% per year for the period of 2016-2020.

To meet the electricity demand, the Heads of ASEAN Power Utilities/Authorities (HAPUA) had set up arrangements in the form of ASEAN Power Grid (APG) project for cross-border bilateral and multilateral trades among AMS. The cross-border bilateral trades involved all AMS as shown in the ASEAN Plan of Action for Energy Cooperation (APAEC) 2016-2025, Phase I: 2016-2020. 2015.

In 2015, The APG interconnection capacity is at 3,489 MW. This number grew to a total of 5,212 MW as of March 2016.  HAPUA has accelerated the programmes and resolved the issues between the Member States, in particular for the electricity tariff issue. For the issues, as recommended in the 34th ASEAN Ministers on Energy Meeting (AMEM) in Nay Pyi Taw, Myanmar, the ASEAN Power Grid Consultative Committee (APGCC) will establish a new task force to further the multilateral power trade and report to Senior Officials Meeting on Energy (SOME). In addition, as mentioned in the ASEAN Plan of Action for Energy Cooperation (APAEC), HAPUA’s strategy is also gradually expanding on a sub-regional basis, namely; System A (North System), System B (South System) and System C (East System), and eventually to a fully integrated APG system. In addition, the HAPUA’s new strategy is to embark on multilateral interconnections.

In regard to the Lao PDR, Thailand, Malaysia, Singapore Power Integration Project (LTMS-PIP) initiative, Lao PDR, Thailand and Malaysia have signed a Memorandum of Understanding to act upon the initiative.  Thus the project is currently named the LTM Project. This will be the first multilateral interconnection as well as HAPUA’s strategy to achieve regional interconnection.  Lao PDR is the only Member State with almost 100% electricity generated from hydropower, and with the Project, it will expand its electricity connection to Malaysia through Thailand.

Under the framework of LTM, the participating Member States have agreed that the transmission will pass through Thailand to Malaysia. Thailand will use none of the electricity that will be transmitted on the lines. This multilateral trade is currently undergoing electricity tariff deals between participating Member States. When the Member States agree on the deal, the project will come into realisation and this strategy will be implemented for the first time.

HAPUA in cooperation with ASEAN Centre for Energy and AMS will boost related activities to reach the goal of APG (APAEC programme area no. 1).  The APG will connect all the AMS through transmission lines to fulfil the electricity demand in ASEAN. The cross-border bilateral and multilateral electricity trades will be beneficial for each AMS, particularly to provide electricity in border areas that are inaccessible by national transmission lines.  For example, in Indonesia, North Kalimantan is far beyond the reach of the national grid. The Government of Indonesia has agreed to buy electricity from Malaysia, which is cheaper than connecting a transmission line to North Kalimantan.  Myanmar would also like to buy electricity from Lao PDR for their border areas to boost their electrification ratio which is the lowest among the ASEAN Member States.

Photo Credit:  HAPUA, APAEC 2016-2025


  • ASEAN Centre for Energy. (2015). 4th ASEAN Energy Outlook, ASEAN Centre for Energy, Jakarta.
  • ASEAN Centre for Energy (2015), ASEAN Plan of Action for Energy Cooperation (APAEC) 2016-2025, ASEAN Centre for Energy, Jakarta.
  • ASEAN Secretariat (2015), Fact Sheet – ASEAN Economic Community, ASEAN Secretariat, Jakarta.
  • Yosiyana, B. (2016, June 15), Overview of ASEAN RE Policy, presentation. Bangkok.
The views, opinions, and information expressed in this article were compiled from sources believed to be reliable for information and sharing purposes only, and are solely those of the writer/s. They do not necessarily reflect the views and opinions of the ASEAN Centre for Energy (ACE) and/or the ASEAN Member States. Any use of this article’s content should be by ACE’s permission.

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