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ACCELERATING
THE ASEAN
POWER GRID .
Lessons from the
Lao PDR-Thailand-Malaysia-Singapore
Power Integration Project (LTMS-PIP)
Policy Report
Mirza Sadaqat Huda
Sharon Seah
Qiu Jiahui
Accelerating the ASEAN Power Grid 2.0: Lessons from the
Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP)
is published by the Climate Change in Southeast Asia Programme at
ISEAS - Yusof Ishak Institute and available electronically at www.iseas.edu.sg
If you have any comments or enquiries about the report, please email us at
climatechange@iseas.edu.sg
Published on 12 December 2023
Print ISBN: 978-981-5104-98-1
Online ISBN: 978-981-5104-99-8
REPORT COMPILED AND WRITTEN BY:
Mirza Sadaqat Huda
Sharon Seah
Qiu Jiahui
The authors are researchers at the
Climate Change in Southeast Asia Programme,
ISEAS - Yusof Ishak Institute.
ISEAS - Yusof Ishak Institute
30 Heng Mui Keng Terrace, Singapore 119614
Tel: (65) 6870 4509 Fax: (65) 6778 1735
All rights reserved.
ISEAS - Yusof Ishak Institute (formerly Institute of Southeast Asian Studies) is an autonomous organisation established in 1968. It is
a regional centre dedicated to the study of socio-political, security, and economic trends and developments in Southeast Asia and its
wider geostrategic and economic environment. The Institute’s research programmes are grouped under Regional Economic Studies
(RES), Regional Social and Cultural Studies (RSCS) and Regional Strategic and Political Studies (RSPS). The Institute is also home to
the ASEAN Studies Centre (ASC), the Temasek History Research Centre (THRC) and the Singapore APEC Study Centre. The Climate
Change in Southeast Asia Programme (CCSEAP) was established in 2020 to examine the phenomenon of climate change, its impact,
and policy responses across the regions. The Programme hopes to cultivate a network of scholars at the forefront of climate change
research and build on ISEAS’ thought leadership to advance climate discourse and knowledge in Southeast Asia through a series of
publications and seminars.
The report can be cited as: Huda, M.S., Seah, S., Qiu, J. Accelerating the ASEAN Power Grid 2.0: Lessons from the Lao PDR-Thailand-
Malaysia-Singapore Power Integration Project (LTMS-PIP) (Singapore: ISEAS - Yusof Ishak Institute, 2023)
Foreword 04
Key Findings 06
Executive Summary 08
1Introduction 09
2Methodology 11
3 The ASEAN Power Grid and Energy Transition in Southeast Asia 12
4 The Pathfinder: An Overview of the LTMS-PIP 16
5 Best Practices of the LTMS-PIP 19
5.1 Political Endorsement 19
5.2 Coordination and Governance Structures 21
5.3 Policy and Technical Maturity 21
6 Challenges of the LTMS-PIP 22
6.1 Technical Limitations 22
6.2 The Impact of Climate Change and Human Activities on Hydropower Generation 22
6.3 Environmental and Social Impacts of Hydropower Dams 22
7 From LTMS-PIP to BIMP-PIP and APG 2.0: Challenges and Recommendations 23
7.1 Political Requirements 24
7.2 Technical Requirements 26
7.3 Institutional and Capacity Requirements 29
8Conclusion 33
9Annexes 34
A List of Stakeholder Organisations in Conversation with Authors 34
B Renewable Potential for Electricity Generation in ASEAN 34
C Selected agreements and studies on the ASEAN Power Grid 35
D Proposed projects under the BIMP-PIP 35
10 References 36
Contents
02 Accelerating the ASEAN Power Grid 2.0
Figure 1 Summary of Methodology for the Policy Report 11
Figure 2 The ASEAN Power Grid 15
Figure 3 Electricity Generation By Source 16
Figure 4 The Lao PDR-Thailand-Malaysia-Singapore Power Integration Project 18
Figure 5 Governance Structure of the LTMS-PIP 19
Figure 6 Minimum Requirements for Establishing Multilateral Power Trade 24
Figure 7 ASEAN Power Grid 2.0 25
List of Figures
List of Tables
List of Boxes
Box 1 Political Context in the Trans-Balkan Electricity Corridor 27
Box 2 Drivers of Technical Cooperation in the Nord Pool 30
Box 3 Institutional Governance of the ENTSO-E 32
Table 1 Selected Major Renewable Energy Projects Completed in 2020-2021 12
Table 2 Regional Grids Around the World 13
Table 3 Stages in the Development of Regional Power Markets 14
Table 4 Energy Sector Structures of LTMS Countries 17
Table 5 Electricity Industry Statistics of LTMS Countries 17
Table 6 Selected Energy Policies/Planning Documents of LTMS Countries 20
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 03
Abbreviations
Box 1 Political Context in the Trans-Balkan Electricity Corridor 27
Box 2 Drivers of Technical Cooperation in the Nord Pool 30
Box 3 Institutional Governance of the ENTSO-E 32
Table 1 Selected Major Renewable Energy Projects Completed in 2020-2021 12
Table 2 Regional Grids Around the World 13
Table 3 Stages in the Development of Regional Power Markets 14
Table 4 Energy Sector Structures of LTMS Countries 17
Table 5 Electricity Industry Statistics of LTMS Countries 17
Table 6 Selected Energy Policies/Planning Documents of LTMS Countries 20
ACE ASEAN Centre for Energy
ACCEPT ASEAN Climate Change and Energy Project
ADB Asian Development Bank
AMEM ASEAN Ministers on Energy Meeting
APAEC ASEAN Plan of Action for Energy Cooperation
APCI ASEAN Projects of Common Interest
APG ASEAN Power Grid
APGCC ASEAN Power Grid Consultative Committee
ASEAN Association of Southeast Asian Nations
BIMP Brunei Darussalam-Indonesia-Malaysia-Philippines
BIMP-PIP Brunei Darussalam-Indonesia-Malaysia-Philippines Power Integration Project
CASE Clean, Aordable and Secure Energy for Southeast Asia
COcarbon dioxide
EDL Électricité du Laos
EGAT Electricity Generating Authority of Thailand
ERIA Economic Research Institute for ASEAN and East Asia
ETP Southeast Asia Energy Transition Partnership
GDP gross domestic product
GIS Geographic Information System
GMS Greater Mekong Subregion
GW gigawatt
GWh gigawatt-hour
HAPUA Heads of ASEAN Power Utilities/Authorities
HVDC High-Voltage Direct Current
IEA International Energy Agency
IRENA International Renewable Energy Agency
kV kilovolt
LTMS Lao PDR-Thailand-Malaysia-Singapore
LTMS-PIP Lao PDR-Thailand-Malaysia-Singapore Power Integration Project
Mt metric tonne
MtCOe metric tonne of carbon dioxide equivalent
MW megawatt
TWh terawatt-hour
UNESCAP United Nations Economic and Social Commission for Asia and the Pacific
USAID US Agency for International Development
US TAD United States Trade and Development Agency
04 Accelerating the ASEAN Power Grid 2.0
Foreword
The majority of Southeast Asian countries aim to
transition to a low-carbon energy future between
2050 and 2065. Regional electricity interconnections
can play a vital role in this transition by enabling
the sharing of renewable energy resources and
reducing reliance on fossil fuels. While regional
electricity markets have emerged across the world,
newer regional initiatives in Southeast Asia are up
against time to overcome political, technical and
economic challenges to meet climate and
sustainability goals.
The ASEAN Power Grid (APG) initiative, first
identified as an area of cooperation for ASEAN
in 1999, aims to expand cross-border electricity
interconnections to create an integrated regional
electricity grid system. The Lao PDR-Thailand-
Malaysia-Singapore Power Integration Project
(LTMS-PIP), which came into operation in 2022, is
the first multilateral cross-border electricity trading
initiative in the region. It is seen as a pathfinder
project that moves the region one step closer to
the APG.
Future projects will need to replicate the successful
launch of the LTMS-PIP and make even greater
strides in energy cooperation, technical and
infrastructural capacities, and market solutions. The
research underpinning this report, carried out by the
Climate Change in Southeast Asia Programme at
the ISEAS – Yusof Ishak Institute, aims to identify
region-specific lessons from the LTMS-PIP that can
be applied to future multilateral interconnection
projects, such as the Brunei Darussalam-Indonesia-
Malaysia-Philippines Power Integration Project.
ISEAS researchers undertook a detailed analysis
of the LTMS-PIP, including a literature review of
country- and region-specific political, technical
and economic contexts, and conversations with
key stakeholders. In this report, their findings are
synthesised in an assessment of best practices,
limitations and recommendations for the further
expansion of the APG.
To ensure the accuracy of the report, ISEAS organised
a closed-door workshop in September 2023 in
partnership with the United Nations Economic and
Social Commission for Asia and the Pacific, where
researchers presented their preliminary findings to
expert government oicials from Laos, Thailand,
Malaysia and Singapore.
To our knowledge, this is the most extensive and
holistic study to be carried out on the LTMS-PIP,
and we believe it will be a valuable resource for
researchers and practitioners working in the field
of energy transition in Southeast Asia.
Choi Shing Kwok
Director & CEO
ISEAS – Yusof Ishak Institute
04 Accelerating the ASEAN Power Grid 2.0
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 05 Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 05
06 Accelerating the ASEAN Power Grid 2.0
The ASEAN Power Grid (APG) initiative stands at a critical juncture. The implementation of the region’s
first multilateral pathfinder project, the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project
(LTMS-PIP) in 2022, has led to a growing momentum towards regional energy cooperation. The key findings
including best practices and recommendations from the LTMS-PIP are as follow:
Develop a targeted communication strategy highlighting the positive
benefits of regional interconnections for local communities, economic
development and the environment. A collective ASEAN net-zero
target in the power generation sector can motivate collective action
and help resolve issues of resource nationalism.
Ensure continuity of regional energy interconnection plans by facilitating
long-term contracts and developing consistent domestic policies. Develop
broad-based support for energy interconnections through inclusive
governance mechanisms that incorporate the views of multiple stakeholders
in the routing of energy grids as well as their social and environmental impacts.
Identify and prioritise ASEAN Projects of Common Interest (APCI)
to ensure that regional eorts are concentrated towards initiatives
that are critical to the APG initiative. APCI can be developed through
consultations with energy stakeholders and through collaborative
research on the benefits and costs of particular interconnections.
Facilitate the development of resilient regional interconnection
infrastructure that can withstand the impacts of climate
change. Invest in climate modelling of existing and proposed
interconnections to identify potential vulnerabilities from extreme
weather events. Implement policies to enhance resilience, such
as laying grids underground, designing better cooling systems
and retrofitting existing infrastructure.
Key Findings
Undertake feasibility studies to examine the technical, infrastructural,
legal, environmental and financial implications of subsea cables.
Conduct cost-benefit analysis of subsea cables compared to overland
grids, taking into consideration the impacts on communities, the
environment and geopolitics.
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 07
Include financial institutions and other commercial actors
in the Working Groups of interconnection projects. Multilateral
Development Banks can play an important role by providing advice on
financial inclusivity and assessing the bankability of projects. In some
instances, financial institutions may facilitate negotiations between
public sector oicials and guide the implementation of social and
environmental safeguards.
Upskill the energy workforce in Southeast Asian countries to facilitate
the integration of variable renewable energy and enhance resilience and
stability of domestic grids. Training and education in collaboration with
international partners should focus on the harmonisation of grid and
market codes, flexibility, grid congestion, digitalization and enhanced
cybersecurity measures.
Utilise coordination and communication to bridge dierences in energy
markets in the short to medium term, while undertaking research on
the impacts of market reforms on regional energy trade. In the
long-term, apply market reforms that are politically and economically
feasible. Protracted eorts to liberalise markets are important, as they
send positive market signals to the private sector and play a crucial
role in facilitating regional energy integration by providing a framework
for eicient and transparent electricity trade, enabling cross-border
investments and promoting competition.
Establish a regional institution that can drive energy integration
processes by sharing real-time data, implementing long-term energy plans,
enforcing market regulations, administering payments and coordinating a
dispute resolution mechanism. The study on the establishment of the ASEAN
Power Grid Generation and Transmission System Planning Institution
highlights some key pathways towards regional institution-building.
Develop a common wheeling charge methodology based on four
internationally recognised principles: promoting eiciency; recovering
costs; ensuring transparency, fairness and predictability; and promoting
non-discriminatory behaviour. Undertake consultations and training on
best practices from developed economies, such as the Nord Pool, and
emerging economies, such as the Southern African Power Pool.
08 Accelerating the ASEAN Power Grid 2.0
Executive Summary
Southeast Asia’s first multilateral power trading
project, the Lao PDR-Thailand-Malaysia-Singapore
power Integration Project (LTMS-PIP), started
operations in 2022, more than 20 years after the
ASEAN Power Grid (APG) was first proposed as
an integrated regional electricity grid system. The
success of the LTMS-PIP has led to a renewed
momentum in regional energy integration. The
project is a potential blueprint for new multilateral
initiatives such as the Brunei Darussalam-Indonesia-
Malaysia-Philippines Power Integration Project. At the
bilateral level, multiple projects are at various stages
of negotiation or implementation, including subsea
and overland interconnectors between Singapore
and Cambodia, Laos and Vietnam, Indonesia and
Malaysia, and Singapore and Vietnam.
The region’s rising energy demands and the climate
imperative have driven contemporary progress in
interconnection projects. Demographic and economic
pressures will triple electricity demand in Southeast
Asia by 2040. Growing economically without paying
heed to the environment is no longer tenable as
the region is extremely vulnerable to the impacts of
climate change. Transitioning to renewable energy
is thus of primary importance to regional countries’
ability to meet their mitigation targets. One of the key
drivers of a successful transition from fossil fuels to
wind, solar and other forms of renewable energy in
Southeast Asia is multilateral power trade.
The APG is the region’s primary blueprint for
facilitating energy trade. It aims to integrate the power
systems of Southeast Asian countries through cross-
border energy interconnections, the harmonisation
of rules and procedures, and the development of a
regional energy market. Despite being technically
feasible and oering multiple benefits towards energy
security, economic eiciency and mitigation, the
implementation of the APG has been delayed by a
number of critical challenges. Given that the APG is
critical for the region to develop sustainably, there
is a need to systematically identify these challenges
and evaluate policy responses.
The success of the LTMS-PIP provides an opportunity
for the identification of best practices that can drive
the APG as well as the challenges that constrain
it. To this end, this report aims to examine lessons
from the LTMS-PIP for the development of the APG.
Using a mixed-methods research approach including
the review of existing literature on power grids,
analyses of oicial documents and published sources,
media reports, extrapolation of statistical sources,
geographic information system representation,
conversations with stakeholders, and feedback
from a closed-door stakeholder workshop, the final
analysis assesses the contribution of the LTMS-PIP to
the regional ambition of expanding existing bilateral
arrangements to multilateral and bidirectional
energy trade facilitated by reliable, efficient and
integrated grids.
This report unpacks the best practices of the LTMS-
PIP including the extent of political endorsement
received, the coordination and governance structures
in place, the level of political and technical maturity
in the region, as well as attendant challenges such
as technical limitations of aging grid infrastructures,
the impacts of climate change and anthropogenic
activities on hydropower generation, and the
environmental and social impacts of hydropower
dams. To derive lessons for the broader APG initiative,
the analysis uses lessons from the LTMS-PIP to
propose policy pathways that can meet the minimum
requirements for multilateral power trade. These
are grouped into three categories: political, technical
and institutional.
Besides providing recommendations that are
contextually relevant for Southeast Asia, this report
also studies projects in other regions that successfully
met the minimum requirements for multilateral power
trade. The findings aim to support the realisation
of multiple cross-border projects that are currently
being developed. In light of the dynamic and rapidly
evolving landscape of interconnections in Southeast
Asia, the authors of this report hope to contribute to
the development of an ‘APG 2.0’, where clean-energy
trade is facilitated by bidirectional and multilateral
grids, sound regional institutions and cross-border
trading frameworks.
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 09
Regional interconnections are at the very heart of
Southeast Asia’s ambition to address increasing
energy demand while implementing rapid
decarbonisation of the power sector. The ASEAN
Power Grid (APG) is an initiative to integrate the
power systems of Southeast Asian countries through
cross-border energy interconnections, harmonisation
of rules and procedures, and the development of a
regional energy market.
The technical and economic feasibility of the APG
has been established by numerous studies since the
initiative was mooted in 1999.1 The economic rationale
of interconnections was elucidated as early as 1979
in a study by ASEAN power utilities and authorities.2
Bilateral discussions between Thai and Malaysian
utilities culminated in the region’s first cross-border
interconnection between the two countries in 1981.3
Had the subsea interconnection between Sarawak
and Peninsular Malaysia been seriously studied and
implemented back in the 1980s, it would have become
the world’s longest HVDC transmission link.4 Fast
forward to the 2020s, there is now academic and
political consensus on the benefits of the APG, such
as integration of a higher share of renewable sources,
increase in system security and greater economic
efficiency.5 Intergovernmental and international
organisations such as the ASEAN Centre for Energy
(ACE)6, the United Nations Economic and Social
Commission for Asia and the Pacific (UNESCAP)7
and the International Energy Agency (IEA)8 have
identified pathways, trading models and minimum
requirements for the realisation of the APG.
Yet, thirty years since its conception, the APG and
energy integration in Southeast Asia remain at a
nascent stage.
Currently, the APG is dominated by bilateral
arrangements and less than half of the proposed
interconnections have been completed. Given that
the feasibility, benefits and prerequisites to the APG
have been established, the main puzzle that energy
researchers in the region are grappling with is not
so much why interconnections should be developed
but why they have not been developed to their
fullest potential.
1 Introduction
10 Accelerating the ASEAN Power Grid 2.0
This report aims to assess the root causes for the
slow progression of the APG and suggests policy
responses to address them. It does this by identifying
the best practices and challenges of the Lao PDR-
Thailand-Malaysia-Singapore Power Integration
Project (LTMS-PIP), the region’s first multilateral
energy trading initiative.
The rationale for undertaking a case study on
the LTMS-PIP is to understand the impact of this
pathfinder projecta on the broader APG plan. While
the energy trade facilitated through the LTMS-PIP is
relatively modest, the project has had an enormous
impact on the milieu of energy cooperation in
Southeast Asia. The success of the LTMS-PIP has
led to a growing momentum in regional energy
cooperation.
The Brunei Darussalam-Indonesia-Malaysia-
Philippines Power Integration Project (BIMP-PIP)9
announced at the 41st ASEAN Ministers on Energy
Meeting (AMEM) in August 2023 aims to follow the
LTMS-PIP’s example. In addition, several bilateral
interconnections that were not part of the original
APG plan are now at various stages of development
(Figure 7). Statements by the AMEM and the ASEAN
Power Grid Consultative Committee (APGCC) have
attributed the contemporary progress in energy
integration to the success of the LTMS-PIP.10
The contemporary drive towards integration—
buoyed by strong political will, increased commercial
interest, the need to meet the countries’ Nationally
Determined Contributions11 as public demand
for climate ambition grows,12 and the promise of
technological innovation—may lead to a new era
of energy interconnections that can be envisioned
as an ‘APG 2.0’ where reliable, efficient grids
facilitate multilateral, multidirectional and real-time
trade in renewable energy. In addition to physical
infrastructure, the APG 2.0 will require sound regional
institutions, innovative financial tools, integrated
markets and highly skilled labour forces.
Yet, the path to better and more robust
interconnections is impeded by a number of critical
challenges. The experience of the LTMS-PIP oers
an opportunity to understand how challenges to
integration can be overcome and what more can
be done to facilitate bidirectional, multilateral energy
trade.
This report aims to contribute to the contemporary
momentum in regional energy interconnection
projects by identifying key policy considerations in
the LTMS-PIP that can accelerate multilateral power
trade through the APG. The research aims to identify
the technocratic, political and economic processes
that facilitated the successful implementation of
the initiative, which can inform the development
of similar projects in other parts of Southeast Asia.
It also aspires to contribute to the regional goal of
re-envisioning the succeeding APG agreement,
following the anticipated expiration of the current
memorandum of understanding in 2025.
The report is divided into eight sections. The first
is the introduction, followed by a description of the
methodology. The third section provides an overview
of the importance of regional interconnections to
energy transition. The fourth describes the LTMS-PIP,
while the fifth and sixth sections delve into the best
practices and challenges gleaned from the LTMS-
PIP. The seventh section describes the implications
of the LTMS-PIP for meeting the minimum political,
technical and institutional requirements of the
BIMP-PIP and the broader APG initiative, followed
by a conclusion.
a The LTMS-PIP has been called a ‘pathfinder’ as it demonstrates the feasibility of multilateral power trade beyond immediate
neighbouring countries in Southeast Asia.
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 11
This report uses a mixed-methods research
approach. As seen in Figure 1, the methodology has
four components. First, we undertook a review of
existing literature on the LTMS-PIP and the APG.
The literature review covered reports, media releases
and journal articles. While substantial research exists
on the APG, there is less literature on the LTMS-PIP
due to it being a relatively new project. Data was
also collected through conversations with public
and private stakeholders in the energy sector in
ASEAN on a non-attributable basis. Between April
and August 2023, the authors of this report held
more than 30 meetings with energy stakeholders in
Laos, Thailand, Malaysia and Singapore (Annex A).
A majority of these meetings included government
oicials employed at utility companies, regulatory
bodies and policy ministries in the four LTMS-PIP
countries. The researchers also interacted with civil
society organisations, academia and other private
sector stakeholders. The conversations were useful
for understanding stakeholder perceptions regarding
the drivers and challenges of the LTMS-PIP.
The methodology also included the use of geographic
information system (GIS) software to develop spatial
representations of grid infrastructures. Figures 2, 4
and 7 were developed through ArcGIS Pro 2.9.5, using
a series of open-sourced datasets. Administrative
boundaries of all ten Southeast Asian countries were
first visualised on ArcGIS Pro. Electricity grid lines
were extracted from Overpass Turbo, a web-based
data-mining tool for OpenStreetMap. To ensure that
the plotting of the interconnections was accurate
and reflective of the real world, cross-checking of
the names of the interconnection projects with their
locations on Google Maps was conducted before they
were mirrored over to ArcGIS Pro. Manual drawing
and labelling were used to illustrate upcoming
projects under the APG.
The final step was soliciting feedback on initial
research findings from a hybrid closed-door workshop
held in Bangkok on 14 September 2023. More than
twenty participants attended the workshop, which
included stakeholders from LTMS. At the workshop,
the authors of the report delivered a presentation
on the preliminary findings of the literature review,
fieldwork and GIS mapping. Feedback on the
research findings from the stakeholders of LTMS
were then incorporated into the study.
2 Methodology
Figure 1. Summary of Methodology for the Policy Report
Literature review
Conversations
with stakeholders
Spatial
mapping
Feedback from workshop
with stakeholders
Final policy report
12 Accelerating the ASEAN Power Grid 2.0
3 The ASEAN Power Grid and Energy Transition in Southeast Asia
Southeast Asia is expected to become the fourth-
largest economy in the world with a population of 770
million by 2040.13 ASEAN’s gross domestic product
(GDP) is projected to grow 4.4 per cent annually in
the next five years, making it the second-fastest-
growing economy after India.14
Demographic and economic pressures will triple
electricity demand from 1,002 terawatt-hours (TWh)
in 2017 to 3,123 TWh in 2040.15 In 2020, more than
76 per cent of electricity generation in the region
was dependent on fossil fuels.16 In a business-as-
usual scenario, coal accounts for the largest share of
electricity generation in the region—as much as 25
per cent, causing ASEAN’s CO emissions to increase
by nearly 2.5 times, from 1,686 metric tonnes (Mt) in
2017 to 4,171 Mt by 2040, which will undermine the
region’s ability to meet its climate targets as well as
environment and energy security.17
In the last decade, momentum in energy transition
in Southeast Asia has been increasing (Annex B). In
2020, more than 80 per cent of new power generation
capacity in the region was from renewable sources.18
The collective regional ambition of achieving 23 per
cent renewable energy in total primary energy supply,
along with a 35 per cent share of renewable energy
in installed capacity by 2025,19 has led to increased
investments in wind, solar and hydropower in several
Southeast Asian countries (Table 1). Despite the
positive momentum, renewable energy makes up
only 33 per cent of the region’s total installed capacity
and 14.2 per cent of the total primary energy supply
as of 2020.20
Project Country Capacity Year completed
Solar Power Farm, Thuan Nam Vietnam 450 MW
2020
Floating Solar, Dengkil Selangor Malaysia 13 MW
Floating Solar, Ubon, Ratchathani
Thailand
12.5 MW
Hydro-Floating-Solar Hybrid,
Sirindhorn Dam 45 MW
2021
Sembcorp Tengeh Floating Solar Farm Singapore 60 MW
Table 1. Selected Major Renewable Energy Projects Completed in 2020-2021
Source: Compiled by authors
A number of challenges have impeded the rapid
deployment of renewables, including the lack of
finance, provision of fossil fuel subsidies, entrenched
corporate and political interests in coal, and poor
government policies. One challenge to energy
transition that is frequently mentioned is the gap
in finance.21 While the region needs investments
of around US$230 billion annually up to 2050 to
meet the 1.5°C target, the annual average energy
investment in Southeast Asia is approximately
US$70 billion; out of these, less than US$30 billion
are funds allocated to renewables.22 In terms of
international public development finance, only around
US$12.8 billion flowed to the region’s energy sector
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 13
from 2000–2019.23 Another impediment to energy
transition that is often overlooked is the low number
of regional interconnections relative to potential.
At the global level, regional interconnections play
an increasingly important role in energy transition.
Interconnections have a number of advantages.
First, they facilitate the utilisation of multiple types
of clean and renewable sources, which can be used
to overcome the intermittent nature of solar and
wind power. Second, interconnections can provide
economies of scale, thereby oering wider energy
access and greater investment in renewable energy
projects. Third, interconnections increase system
reliability and flexibility, while also enhancing energy
security and regional integration.24 As seen in Table
2, multiple regions, from Europe to Central America
and Africa, have developed multilateral grids and
Regional Market Level of
Integration Year of Establishment Total Capacity
Eastern Africa Power Pool Early stage
of market
integration
2005 60.7 GW (2015)
Greater Mekong Subregion 1995 118.9 GW (2012)
Central America Power Market Shallow market
integration
2013 16.5 GW (2016)
South African Power Pool 1995 62 GW
European Union Deep market
integration
1990s (creation of Nordpool)
2018 (intraday market
involving 14 countries)
995 GW (2017)
Western Energy Imbalance Market 2014 No data
Table 2. Regional Grids Around the World
Source: IRENA (2019), Innovation Landscape Brief: Regional Markets, International Renewable Energy Agency, Abu Dhabi
related market systems and policies to exploit the
benefits of interdependence. The level of cooperation
varies from region to region, ranging from early stage
to deep market integration (Table 3).
In Southeast Asia, the APG was included in the
ASEAN Plan of Action for Energy Cooperation
(APAEC) as early as 1999. The goal of the APG is to
increase physical interconnections and facilitate the
harmonisation of markets and procedures. Improved
integration through the APG could save US$1.87
billion by 2025, while increasing the utilisation of
the region’s abundant renewable energy resources.25
As shown in Annex C, several important studies and
agreements have been signed for the APG under
the auspices of organisations such as the Heads of
ASEAN Power Utilities/Authorities (HAPUA)b and
the ASEAN Power Grid Consultative Committee
(APGCC)c in the last decade.
b HAPUA aims to promote cooperation among its members to strengthen regional energy security through interconnection
development and enhancing private sector participation, and to improve the quality and reliability of electricity supply systems.
c The APGCC aims to strengthen and promote a broad framework for member countries to cooperate towards the development
of a common ASEAN policy on power interconnection and trade, and ultimately towards the realisation of the APG.
14 Accelerating the ASEAN Power Grid 2.0
Table 3. Stages in the Development of Regional Power Markets
Source: IRENA (2019), Innovation Landscape Brief: Regional Markets, International Renewable Energy Agency, Abu Dhabi
Market
Integration
Level
Interconnectivity
Level
Trading
Arrangements
Harmonisation
Rules
Early stage Physical interconnection
between two countries
Long-term, bilateral,
over-the-country power
purchase agreements
(PPAs)
Simple rules agreed
for the operation
of the interconnection
system
Shallow
Physical interconnection
between several
neighbouring countries
Long-term PPAs
supplemented with
short-term wholesale
markets
Harmonisation of
market rules, grid
codes and
transmission taris
Deep
Full synchronous operation
of a multi-country
interconnected system
Well-functioning markets
with competition achieved
through trading in
dierent timeframes and
various markets
Regional regulatory
agencies, regional
market operators, and
harmonisation of market
rules, grid codes and
transmission taris
d The Greater Mekong Subregion (GMS) comprises five ASEAN countries—Cambodia, Laos, Myanmar, Thailand and Vietnam—as
well as the Guangxi Zhuang Autonomous Region and Yunnan Province of China. Currently, cross-border grid-to-grid transmission
interconnections are approximately 100- to 1,500-kilometre long and carry power transfers exceeding 1,000 MW. Of the five
ASEAN members in the GMS, Thailand and Vietnam have the most extensive 500 kV and 220 kV networks that export electricity
from Laos. For more information, please see https://www.adb.org/sites/default/files/publication/846471/power-trade-greater-
mekong-subregion_0.pdf.
The APG is envisioned as progressing through
three steps: starting with bilateral trade, followed
by subregional trade and, finally, an integrated
regional system. The initiative is divided into three
subregions: North System (Cambodia, Lao PDR,
Myanmar, Thailand and Vietnam), South System
(Indonesia, Malaysia and Singapore) and East System
(Brunei Darussalam, Indonesia, Malaysia and the
Philippines).26 Currently, energy trade is dominated
by bilateral exchanges that are mostly undertaken
through long-term power purchase agreements,
particularly in the Greater Mekong Subregion
(GMS).d While eight out of ten ASEAN countries
have cross-border interconnections, many of these
infrastructures are used for mitigating emergencies
rather than for energy trade.
As shown in Figure 2, 19 out of 36 projects across
18 identified borders27 have been completed,
increasing regional cross-border transmission
capacity to 7,720 MW. To meet the regional
goal of 23 per cent renewable energy in its total
primary energy supply by 2025, interconnection
capacity needs to be increased to 19,918 MW.28
If planned interconnections are completed, the
future capacity of the APG can range from 18,369–
21,769 MW.29
The success of the LTMS-PIP has raised
prospects for the timely completion of the ten key
interconnections planned under the APG and several
others that are not covered in the original APG plan.
Despite the positive momentum, completing these
interconnections and moving towards the APG 2.0
vision as described above will require addressing
critical challenges. In this context, the best practices
and lessons learnt from the LTMS-PIP pathfinder
may oer some valuable policy insights.
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 15
Figure 2. The ASEAN Power Grid
Map created by ISEAS-Yusof Ishak Institute © (2023) (Subject to scale)
Existing Interconnections
1) Mae Moh 3 — Nan 2 — Hong Sa
2) Khon Kaen 4 — Loei 2 - Xayaburi
3) Udon Thani 3 — Na Bong -— Nam Ngum 2
4) Udon Thani 3 — Na Bong
5) Nakhon Phanom - Thakhek — Theun Hinboun
6) Nakhon Phanom 2 - Thakhek — Theun Hinboun
7) Roi Et 2 — Suvannakhet — Nam Theun 2
8) Ubon Ratchathani 2 - Houay Ho
9) Ubon Ratchathani 3 — Pakse -— Xe Plan Xe Namnoi
10) Sadao- Chuping
11) Khlong Ngae - Gurun
12) Plentong - Woodlands
13) West Kalimantan - Sarawak
14) Xekaman 1 — Pleiku 2
15) Xekaman 3 — Thanh My
16) Chau Doc — Takeo — Phnom Penh
17) Ban Hat- Kampong Sralao
18) Ban Hat- Stung Treng
19) Watthana Nakhon — Aranvaprathet — Industrial Estate
Potential Interconnections
A) P. Malaysia - Sumatra
B) Lao PDR-Vietnam (Nam Mo-Ban Ve)
C) Lao PDR-Vietnam (Luang Prabang-Nho Quan)
D) Vietnam-Cambodia (Tay Ninh-Stung Treng)
E) Singapore -Batam
F) Sarawak-Brunei
G) Sarawak-Sabah
H) Philippines-Sabah
I) Su Ngai Kolok — Rantau Panjang
J) Khlong Ngae — Gurun
K) Sarawak - P. Malaysia
L) East Sabah — North Kalimantan
M) Lao PDR — Myanmar
N) Thailand — Myanmar
O) Singapore - Sumatra
P) Kalimantan - Java
Q) Sumatra - Java
Interconnection points
APG Potential Power Lines
Power Lines
16 Accelerating the ASEAN Power Grid 2.0
Thailand
62.8%
20.6%
9.1%
4 The Pathfinder: An Overview of the LTMS-PIP
The LTMS-PIP was first proposed in 2013 at the
ASEAN Senior Officials Meeting on Energy in
Manado, Indonesia.30 The LTMS-PIP was initially
implemented as the LTM-PIP (without Singapore)
in 2018, which involved the transfer of 100 MW
of electricity from Laos to Malaysia. In 2022,
Singapore joined the project, and currently the
LTMS-PIP facilitates the import of up to 100 MW of
electricity from Laos to Singapore via Thailand and
Malaysia using existing interconnections (Figure 4).
The current agreement lasts until 2024, after which
the volume of import may be increased to 300
MW and the project length extended from two to
five years. The motivation for the LTMS-PIP was
the enormous hydroelectric potential of Laos and
increasing energy demand in neighbouring countries.
Currently, 78 dams are operational in Laos with a
generation capacity of approximately 8,108 MW as
of 2021.31
Meanwhile, Singapore plans to import as much as 4
GW of low-carbon electricity by 2035.32 The LTMS-
PIP pathfinder is believed to be an economically
viable project because of the demand for clean
energy in Singapore and the excess capacity in Laos.
The project will also contribute towards reducing the
use of fossil fuels, which dominates the electricity
mix of all LTMS countries with the exception of Laos
(Figure 3).
Figure 3. Electricity Generation by Source (2022)
Source: International Energy Agency (202 2), World Energy Statistics and Balances, IEA
% of total electricity generation (2020)
100
90
80
70
60
50
40
30
20
10
0
Natural gas
Hydro
Geothermal
Coal
Biofuels
Wind
Others
Singapore
95.2%
Malaysia
36.3%
14.4%
47.0%
Laos
71.3%
28.4%
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 17
As shown in Tables 4 and 5, the LTMS-PIP navigated
different domestic electricity market structures
and also dierent peak loads and reserve margins.
Singapore operates a liberalised electricity market,
Thailand operates under an enhanced single-
buyer model, while Malaysia and Laos have single-
buyer markets. Laos and Malaysia have relatively
high reserve margins, while electricity imports
are set to become a key element of Singapore’s
energy security.
Country Type of Domestic
Power Market
Generation Transmission Distribution
Laos Single-buyer • Électricité du Laos
• Independent power
producers
Électricité du Laos
Thailand Enhanced
single-buyer
• Electricity Generating
Authority of Thailand
• Independent power
producers
Electricity
Generating
Authority of
Thailand
• Provincial
Electricity
Authority (PEA)
• Metropolitan
Electricity
Authority (MEA)
Malaysia Single-buyer Independent power
producers
Tenaga Nasional Berhad
Singapore Liberalised • SP Group
• Independent power
producers
SP Group
(SP PowerAssets, SP PowerGrid)
Table 4. Energy Sector Structures of LTMS Countries
Source: Compiled by authors
Country Total Electricity
Generated
(Excluding Imports)
Peak
Load
Total
Imports
Total Exports Reserve
Margins
Laos 19,862 GWh
(2022)
1,540 MW
(2022)
872.57 GWh
(2022)
5,547.85 GWh
(2022)
52.6%
(2023 forecast)
Thailand 215,838 GWh
(2022)
33,177 MW
(2022)
35,471.76 GWh
(2022)
1,327 GWh
(2022)
34% (2022)
Malaysia 17,479 GWh
(2021)
18,808 MW
(2020)
17.96 GWh
(2020)
1,571 GWh
(2020)
52% (2021
projected)
Singapore 55.8 TWh
(2021)
7.8 GW
(2022)
270 GWh
(Jun 2022–
Aug 2023 under
LTMS -PIP)
NA 50% (2022)
Table 5. Electricity Industry Statistics of LTMS Countries
Source: Compiled by authors
18 Accelerating the ASEAN Power Grid 2.0
Interconnections Between LTMS Countries
1) Khon Kaen 4 — Loei 2 — Xayaburi
2) Udon Thani 3 — Na Bong — Nam Ngum 2
3) Udon Thani 3 — Na Bong
4) Bueng Kan — Pakxan
5) Nakhon Phanom — Thakhek — Then Hinboun
6) Roi Et 2 — Suvannakhet — Nam Theun 2
7) Ubon Ratchathani 2 — Houay Ho
8) Sadao - Bukit Keteri
9) Khlong Ngae - Gurun
10) Plentong - Woodlands
Map created by ISEAS-Yusof Ishak Institute © (2023) (Subject to scale)
10
10
Interconnection points
Power lines
Singapore
Malaysia
Thailand
Laos
Indonesia
Figure 4. The Lao PDR-Thailand-Malaysia-Singapore Power Integration Project
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 19
Cooperation under the LTMS-PIP is framed by
four main agreements. Keppel Electric Pte Ltd, a
subsidiary of Keppel Infrastructure Holdings Pte
Ltd, and Électricité du Laos signed an exclusive
framework agreement in 2021 and a two-year power
purchase agreement in 2022. To facilitate the transit of
electricity through Thai and Malaysian grids, separate
energy wheeling agreements were signed between
Électricité du Laos and the Electricity Generating
Authority of Thailand and Tenaga Nasional Berhad
respectively.
The LTMS-PIP is governed by a working group and
four taskforces focusing on technical viability; legal
and regulatory framework; commercial arrangement;
and tax and tari structure. As seen in Figure 5, each
country led a taskforce, which collectively contributed
to the development of the project.
In the coming years, the outcomes of the LTMS-
PIP are likely to determine how the broader goal
of regional energy integration is conceived and
implemented in ASEAN. The following sections
share some of the best practices and challenges
of the project.
Figure 5. Governance Structure of the LTMS-PIP
LTMS-PIP Working Group
Tech n ical
Viability
Legal and regulatory
framework
Commercial
arrangement
Tax and tari
structure
Political leadership is one of the key prerequisites
to the development of multilateral grids.33 Cross-
border grids require large investments and face
a number of security, environmental and political
challenges.34 In Central and South Asia, governments
have played a key role in driving the momentum
for energy integration by developing institutional
frameworks and legislation that facilitate cooperation,
providing incentives to investors and financing
upfront costs.35
Research on energy integration points towards
two mechanisms for the endorsement of energy
integration by political leaders.36 The first involves the
championing of cross-border projects to domestic and
international audiences, which builds broad support
for energy integration.37 The second mechanism is
the alignment of national development plans, such
as power development plans, with regional goals.38
Both these mechanisms of political endorsement
were used by governments to drive the LTMS-PIP.
Public stakeholders employed multiple channels
to build support for the LTMS-PIP. The project has
been mentioned in every Joint Ministerial Statement
from the 32nd to the 41st AMEM over a span of nine
years. The key messages in these statements prior
to the implementation of the project had focused
on the importance of developing feasibility studies
and governance frameworks to facilitate energy
trade. After the project commenced in 2022, the
AMEM statements expressed the collective goal of
examining opportunities to expand the generation
capacity of the LTMS-PIP and to use the experience
5.1 Political Endorsement
5 Best Practices of the LTMS-PIP
20 Accelerating the ASEAN Power Grid 2.0
Plan/Policy Document Key Energy- and Climate-related Targets/Actions
Laos
Electricity Development Strategy
of Lao PDR (2021–2030)
• Develop an electricity mix of 75% hydropower, 14% coal thermal
power and 11% renewable energy
• Develop transmission systems and stations domestically
• Develop connections for electricity trade in the Greater Mekong
Subregion and ASEAN
• Back up power production to reach 15 per cent of total demand
• Electricity exports to reach over 9,000 MW to Thailand, 5,000
MW to Vietnam, 3,000 MW to Cambodia, 500 MW to Myanmar
and 300 MW to Malaysia
Thailand
National Energy Plan
• Focus on clean-energy transition to achieve carbon neutrality
by 2050
• Increase share of new renewable power plants to more than 50%
• Energy eiciency greater than 30%
• Implement 4D1E strategy: Decarbonisation, digitalisation,
Decentralisation, Deregulation and Electrification
Power Development Plan 2018
Revision 1 (2018–2037)
• Increase share of renewable generation to more than 50%
• Transition away from imported coal
• CO2 emissions to reach below 63 MtCO2e
Malaysia
Malaysia Renewable Energy
Roadmap (2021)
• Increase share of renewable energy to 31% by 2025 and 40%
in 2035
National Energy Transition
Roadmap (2023)
• Installed renewable capacity of 70% by 2050
• Allow cross-border renewable energy trade
Singapore
Singapore Green Plan 2030 (2021) • Increase solar energy deployment to at least 2 gigawatt-peak
by 2030
Media release by Energy Market
Authority (2021) • Import up to 4 GW of electricity by 2035
Table 6. Selected Energy Policies/Planning Documents of LTMS Countries
Source: Compiled by authors
to develop other multilateral grids in Southeast
Asia.39 In addition, the energy ministers of LTMS-
PIP countries released four joint statements on the
project between 2014–2023 on the sidelines of the
AMEM, which further publicised political consensus
on the project.40
The LTMS-PIP and the broader vision of the
APG also received mention in discussions at the
highest levels in countries involved in the project41
and in statements by foreign ministry officials.42
At the 43rd ASEAN Summit, the development of the
APG was mentioned by regional leaders as a key
pathway to economic prosperity and deeper regional
integration.43
The second mechanism—aligning regional energy
goals with domestic power development plans—
was also effectively utilised by Southeast Asian
governments (see Table 6). Malaysia’s National
Energy Transition Roadmap,44 launched in August
2023, emphasises cross-border trade as a key
pathway for enhancing energy security and reducing
greenhouse gas emissions. Laos’ Electricity
Development Strategy aims to enhance trade with
ASEAN countries,45 while Singapore envisions the
import of up to 4 GW of low-carbon electricity by
2035.46 Political endorsement of the LTMS-PIP
through statements and policy documents is one
of the key factors that contributed to the success
of the project, and this approach can be replicated
for future cross-border grid projects.
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 21
in market structures, existing balancing mechanisms
and interconnection operations were updated to
prevent financial risks to wheeling countries (Thailand
and Malaysia). A new web-based communication
platform was also developed to facilitate coordination
between system and market operators.
Overall, the Working Group facilitated a high level
of coordination across dierent levels of seniority in
ministries, utilities and other institutions. The Working
Group structure provided an important and flexible
approach to coordinating cross-border projects,
which can be replicated with contextual adjustments
for other cross-border grids in Southeast Asia.
Cross-border energy projects require a high level of
coordination across multiple types of stakeholders.
Coordination is required to harmonise grid codes,
exchange information, increase energy security and
develop protocols for trade and emergencies. Studies
show that technocratic cooperation facilitated by
eective institutions and governance frameworks
can play a key role in energy integration and natural
resource management.47
As mentioned, coordination of the LTMS-PIP
was facilitated by the Working Group and
four Taskforces. This framework was seen
as widely successful in bringing officials
from utilities, regulatory bodies and ministries
to coordinate energy trade. The structure of
the Working Group allowed equal participation,
without the need to cede control of national energy
generation and transmission infrastructures.
In addition, by allocating portfolios to each
country, the Taskforces took ownership of the
coordination process and the project itself.48
The Working Group also provided a flexible
mechanism for other countries to join the project,
even if it was not involved from the beginning. This
flexible arrangement facilitated Singapore’s
participation in the LTMS-PIP after the LTM project
was already up and running.49
One key impediment to the LTMS-PIP was the
dierence between Singapore’s open, liberalised
electricity market and the single-buyer model in
other countries. The energy sectors in the LTMS-PIP
countries also dier in decision-making structures
and communication protocols. To overcome these
differences in energy markets, the LTMS-PIP
Working Group prioritised coordination rather
than consolidation, which has been suggested
by researchers as a pragmatic pathway towards
regional energy integration.50 The Working Group
meetings brought together high-level officials
to identify priorities in cooperation, while the
groundwork in coordinating the project was carried
out through more than a hundred meetings between
technocrats. These meetings were crucial in
providing training and information that helped bridge
differences in market structures and developing
common protocols on trade, regulation, emergencies
and information sharing. To account for dierences
5.2 Coordination and Governance Structures
Regional energy trade is contingent on a highly
skilled workforce. Engineers, economists, financial
experts, lawyers, negotiators and other stakeholders
involved in energy trade need to be aware of the latest
technological developments, innovative means of
finance as well as technical and financial disparities
within a regional market. One of the key factors for the
success of the LTMS-PIP is the growing policy and
technical maturity among stakeholders in ASEAN.
The level of professionalism of the energy workforce
in ASEAN is partly an outcome of capacity-building
exercises undertaken with international partners. In
conversations with stakeholders, the cooperation
between Germany and Vietnam was highlighted
as having a particularly strong impact on the
development of wind power generation in ASEAN.
This type of collaboration has a spillover eect on
the whole region and multiple countries can benefit
from the exchange of knowledge and best practices.
For example, a Thai company is currently leading
the Monsoon Wind Power Project in southern Laos,
which will export electricity to Central Vietnam. Other
examples of capacity-building include the US Agency
for International Development’s (USAID) Regional
Southeast Asia Smart Power Program that focuses
on knowledge sharing on advancing power trade
and grid integration.51
Capacity-building programmes such as those
highlighted above were perceived by stakeholders
as a key factor that enhanced the skills required to
implement the LTMS-PIP.
5.3
Policy and Technical Maturity
22 Accelerating the ASEAN Power Grid 2.0
The LTMS-PIP is a multilateral project because it
involves more than two countries. However, its trade
and power flows are unidirectional and there is no
framework allowing energy trade between multiple
combinations of participating countries, e.g., Malaysia
and Laos, Singapore and Thailand.52 The LTMS-PIP is
thus limited in scope, and its lack of multidirectional
power flow and the absence of a framework that
allows trade between all four countries have cast
doubt on whether it truly is a multilateral project.53
One critical technical challenge to energy trade in
ASEAN is the region’s aging grid infrastructures. The
use of variable renewable energy can pose challenges
to grid stability, increase operational costs of grids and
decrease eective utilisation hours.54 The LTMS-PIP
currently uses domestic infrastructures to transfer
electricity. Several officials expressed concern
regarding the reliability of existing infrastructures in
conversations with the researchers. In addition, the
current maximum capacity of the grids used for the
LTMS-PIP is 300 MW, which will limit the expansion
of the project in the future.
Some measures are being taken to upgrade the
interconnections between LTMS-PIP countries. For
example, Singapore and Malaysia have upgraded their
interconnection between Plentong in Johor Bahru
and Woodlands in Singapore to accommodate 1,000
MW in 2022.55 Thailand and Malaysia are undertaking
feasibility studies on the upgrading of the Sadao–
Chuping and Khlong Ngae–Gurun interconnections.
While these developments are encouraging, some
stakeholders shared that the capacity of the
hydropower dams in Laos that supply electricity to
the LTMS is also limited, which indicates that an
expansion of the LTMS-PIP may require importing
electricity from other hydropower dams in Laos or
energy plants in Thailand or Malaysia.
Another key challenge to energy cooperation
highlighted by the LTMS-PIP is the diversity of views
among stakeholders regarding the formulation of the
wheeling charges. Some stakeholders opined that
the wheeling charges were too high, while others felt
that they were too low. Overall, most stakeholders
6 Challenges of the LTMS-PIP
6.2 The Impact of Climate Change and
Human Activities on Hydropower Generation
Currently hydropower accounts for around 20 per
cent of Southeast Asia’s energy mix.56 Climate
change is expected to have an adverse impact on
the capacities of the region’s hydropower dams.
Inconsistent waterflows from intense rainfalls and
prolonged droughts will reduce hydropower capacity
in Cambodia, Lao PDR, Myanmar, Thailand and
Vietnam. Hydropower capacity of Southeast Asia is
expected to decrease by 5.9 per cent in the Below
2°C Scenario and by 8.2 per cent in the Above 4°C
Scenario.57
Conversations with stakeholders revealed that the
impacts of climate change on hydropower generation
are already being felt today. Droughts have led to
declines in the capacities of hydropower dams that
supply electricity to the LTMS-PIP. This issue is not
limited to Laos. In June 2023, the El Niño season
reduced the availability of water for hydropower
generation in Vietnam, resulting in blackouts.58
Stakeholders expressed that El Niño can be an
important factor in the development of hydropower
as a renewable energy source in the future.
Hydropower capacity in Laos is also threatened
by anthropogenic activities. Communities living
around certain hydropower dams are economically
marginalised and engage in the plantation of cash
crops such as cassava through slash-and-burn
agriculture. In addition to the climate impacts of
deforestation, slash-and-burn activities also reduce
hydropower generation by increasing sedimentation
in the reservoir, thus slowing waterflow through the
generation turbines. There have been some measures
to provide alternative livelihoods to communities
such as rice planting and fishing, as well as eorts
to increase awareness about the impacts of slash-
and-burn activities on the environment.
6.1 Technical Limitations
indicated that the wheeling charges of the LTMS
was not developed according to any strict formula,
but rather with an attitude to greater cooperation
with a view to start the project as soon as possible.
The LTMS-PIP experience reveals that wheeling
charges for proposed interconnections can be a
complex issue that requires building consensus
between stakeholders with dierent starting points
for cooperation.
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 23
6.3 Environmental and Social Impacts of
Hydropower Dams
7 From LTMS-PIP to BIMP-PIP and APG 2.0:
Challenges and Recommendations
As mentioned earlier, the LTMS-PIP has
provided much-needed momentum for regional
interconnections in Southeast Asia. New subsea cable
projects are being considered between Peninsular
Malaysia and Sarawak, Peninsular Malaysia and
Sumatra, Singapore and Sarawak, Cambodia and
Singapore, Vietnam and Singapore, and Indonesia and
Singapore, which would benefit from the lessons of the
LTMS-PIP (please see Figure 7). Further afield, there
are projects under discussion between Singapore
and Australia as well as Singapore and India via the
Andaman and Nicobar Islands.60
The LTMS-PIP has also provided a boost to multilateral
projects such as the BIMP-PIP. The BIMP project is
underpinned by the Brunei Darussalam-Indonesia-
Malaysia-Philippines East ASEAN Growth Area,61
a subregional cooperation initiative established in
1994 focusing on economic collaboration between
these countries. Launched at the 41st AMEM in 2023,
the BIMP-PIP envisions interconnections between
the grids of the four countries by 2025. Currently a
US$2 million feasibility study on the BIMP-PIP is
being undertaken with support from the USAID.62
The BIMP-PIP includes the Trans Borneo Power
Grid,e which facilitates the export of hydropower
from Sarawak to West Kalimantan via a 275-kilovolt
grid-to-grid transmission line.63 The BIMP-PIP is
an ambitious project that envisions as many as
17 interconnections between the four countries
(Annex D). A study by the Economic Research Institute
for ASEAN and East Asia (ERIA) demonstrates that
the BIMP-PIP will reduce the use of fossil fuels and
result in lower electricity prices.64
The LTMS-PIP experience has significance for the
BIMP-PIP for two key reasons. First, Malaysia is a
member of both the LTMS-PIP and the BIMP-PIP and
is thus well positioned to utilise and share lessons. One
of the issues that led to the timely implementation of
the LTMS-PIP was that the LTM countries had already
developed contracts and governance mechanisms
that were then built into the LTMS-PIP processes.
Similarly, Malaysia can utilise the mechanisms of the
LTMS-PIP to accelerate the BIMP-PIP.
Second, the exchange of knowledge and best
practices between the two projects can develop into
regional norms and principles for the development of
the APG, as collectively the two projects involve seven
out of the ten ASEAN countries (excluding Cambodia,
Myanmar and Vietnam).
The sections below will systematically examine the
implications of the LTMS-PIP for the BIMP and the
broader APG 2.0 initiative (Figure 7). We frame our
analysis through the three minimum requirements
for multilateral power trade as identified by IEA
(2019), which are political, technical and institutional
(Figure 6). We highlight the challenges to meeting the
minimum requirements in ASEAN, while examples
of international best practices for each category of
requirement are provided in Boxes 1 to 3.
The electricity traded through the LTMS-PIP
comes from hydropower dams that existed prior
to the commencement of the project in 2022. Laos
implemented a domestic environmental impact
assessment process starting in 2010,59 with room
for improvement. Conversations with stakeholders
revealed some dierences in perception regarding
the environmental impacts of developing hydropower
e The Trans Borneo Power Grid was commissioned in 2016. The project is estimated to benefit 8,000 households and cut power
costs by US$0.18 per kilowatt-hour.
dams in Southeast Asia. Some stakeholders feel that
environmental and social impacts of hydropower
dams can be minimised, while others view that large
dams have irreversible impacts on communities and
biodiversity. To counter the externalities of large dams,
stakeholders recommended a continuous process
of measuring and responding to impacts on the
environment and communities. Corporate social
responsibility programmes can benefit the nearby
communities through the provision of education and
healthcare facilities.
24 Accelerating the ASEAN Power Grid 2.0
POLITICAL TECHNICAL INSTITUTIONAL
Figure 6. Minimum Requirements for Establishing Multilateral Power Trade
Source: IE A (2019), Establishing Multilateral Power Trade in ASEAN
• Political will
• Intergovermental
agreement(s)
• Common working
language
• Harmonised technical
standars (grid codes)
• Harmonised wheeling
charge methodology
• Third-party access for
external resources
• Data and information
sharing
• Interconnector capacity
calculation methodology
• Institutional
arrangements
• Settlement and
payment mechanism
• Dispute resolution
mechanism
7.1 Political Requirements
Political requirements of multilateral energy trade
include relevant intergovernmental agreements and
a common working language.65
• Challenge: Resource nationalism
The LTMS-PIP successfully overcame one of the most
critical impediments to energy interconnections: the
lack of regional trust. While the success of this project
has increased confidence in regional integration, the
issue of resource nationalism continues to hamper
political consensus in regional energy agreements.
Resistance to energy cooperation sometimes results
from the notion that renewable energy sources should
be reserved to meet the needs of the country where
the resources are located. In some cases, resource
nationalism can intertwine with regional rivalries,66
and this undermines the assertion of political will,
which is crucial for energy integration. The critical
issue in this context is that the presentation and
framing of energy projects tend to isolate some
stakeholders as well as amplify resource nationalism
and regional rivalries.
• Recommendation: Targeted communication
strategies to promote regional cooperation
Political endorsement of the LTMS-PIP was a key
factor in its success. The BIMP-PIP can build upon
this experience but also develop communication
strategies to counter resource nationalism. One of
the ways to promote energy cooperation is to develop
a communication strategy that clearly identifies the
positive impacts of regional interconnections on local
communities such as jobs, schools, energy access
and housing. Proposals for interconnections should
highlight the collective benefits of interconnections
to energy security and mitigation to counter regional
rivalries and competitions. The prospects for regional
energy cooperation need to be presented in a way
that inspires stakeholders with diering views to
collaborate. An ASEAN net-zero target in the power
generation sector can provide a stronger motivation
for collective action and to help resolve issues of
sovereignty in terms of meeting climate targets.
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 25
Figure 7. ASEAN Power Grid 2.0
Interconnection points
APG Potential Power Lines
Power Lines
New Proposed Power Lines
Map created by ISEAS-Yusof Ishak Institute © (2023) (Subject to scale)
New Proposed Subsea &
Overland Interconnections
i) Lao PDR-Vietnam
(Monsoon Wind Power)
ii) SG-Riau
iii) SG-Sarawak
iv) SG-Cambodia
v) SG-Vietnam
APG Existing Interconnections
1) Mae Moh 3 — Nan 2 — Hong Sa
2) Khon Kaen 4 — Loei 2 - Xayaburi
3) Udon Thani 3 — Na Bong -— Nam Ngum 2
4) Udon Thani 3 — Na Bong
5) Nakhon Phanom - Thakhek — Theun Hinboun
6) Nakhon Phanom 2 - Thakhek — Theun Hinboun
7) Roi Et 2 — Suvannakhet — Nam Theun 2
8) Ubon Ratchathani 2 - Houay Ho
9) Ubon Ratchathani 3 — Pakse -— Xe Plan Xe Namnoi
10) Sadao- Chuping
11) Khlong Ngae - Gurun
12) Plentong - Woodlands
13) West Kalimantan - Sarawak
14) Xekaman 1 — Pleiku 2
15) Xekaman 2 — Thanh My
16) Chau Doc — Takeo — Phnom Penh
17) Ban Hat- Kampong Sralao
18) Ban Hat- Stung Treng
19) Watthana Nakhon — Aranvaprathet — Industrial Estate
Potential Interconnections
A) P. Malaysia - Sumatra
B) Lao PDR-Vietnam (Nam Mo-Ban Ve)
C) Lao PDR-Vietnam (Luang Prabang-Nho Quan)
D) Vietnam-Cambodia (Tay Ninh-Stung Treng)
E) Singapore -Batam
F) Sarawak-Brunei
G) Sarawak-Sabah
H) Philippines-Sabah
I) Su Ngai Kolok — Rantau Panjang
J) Khlong Ngae — Gurun
K) Sarawak - P. Malaysia
L) East Sabah — North Kalimantan
M) Lao PDR — Myanmar
N) Thailand — Myanmar
O) Singapore - Sumatra
P) Kalimantan - Java
Q) Sumatra - Java
26 Accelerating the ASEAN Power Grid 2.0
• Challenge: Lack of continuity in energy trade
policies
One of the concerns regarding energy cooperation
is the lack of continuity in government policies.
Changes in government can lead to some projects
being abandoned due to a shift in priorities
or bans on energy exports. For instance, the
Malaysian government decided to ban the export of
renewable energy in 2021, though this did not
extend to the passage of electricity through
Malaysia to third countries.67 The decision was
reversed in 2023 to help build Malaysia’s renewable
power generation capacity, reflecting a change in
government priorities.68
The current agreement of the LTMS-PIP lasts
two years and will expire in 2024, by which
time a longer contract of five years will be
negotiated. The move towards longer contracts
is encouraging as energy integration and the
development of cross-border grids are protracted
processes. For instance, the average timeline of
developing a HVDC interconnection project is
between six to ten years, depending on the level
of complexity.69 Sudden changes in energy trade
policies therefore do not provide the long-term
stability that is required to attract investors for
interconnection projects.
• Recommendation: Policy support for long-term
energy agreements
Developing energy interconnections requires
consistent policy support. For example, the North
Sea Link between the United Kingdom and Norway
was proposed in 2003 and only became operational
in 2021. The BIMP-PIP and other interconnection
projects in the region will require enormous
investments, which can only be supported through
long-term energy contracts and consistent policies
that are resilient to changes in domestic politics.
Pathways to ensure the continuity of energy projects
include building broad-based support for regional
energy integration across political divides. This can
be done through inclusive governance mechanisms
that incorporate the views of multiple stakeholders
in the routing of energy grids, as well as their social
and environmental impacts.70
7.2 Technical Requirements
Technical requirements include the rules, procedures
and assets that facilitate cross-border energy trade.71
• Challenge: Diering perceptions on wheeling
charge methodology
A common wheeling charge methodology is
necessary to facilitate multilateral energy trade.
For the LTMS-PIP, there are differences in how
stakeholders and studies perceive wheeling
charges. For example, one study72 states that the
LTMS-PIP wheeling charges are based on the
following: distance of the trade (megawatts per mile),
loss charge (per megawatt hour), balancing charge
(per megawatt hour) and fixed administrative charge.
However, some stakeholders expressed the view that
the wheeling charges for the LTMS-PIP was not
calculated through a formula strictly rooted in financial
or technical considerations but with the goal of piloting
the project as soon as possible. More importantly,
some stakeholders feel that the wheeling charge is too
high compared to operational costs, while others feel
that it is too low and discourages investment in cross-
border projects. Given these diverse perceptions for
existing infrastructures, negotiations for wheeling
charges for new infrastructures are likely to be
complex and protracted.
• Recommendation: Utilise international best
practices on wheeling charge methodology
Some studies propose that wheeling charges for
the LTMS-PIP can be replicated for the BIMP-
PIP and even the APG.73 However, conflicting
perceptions on the wheeling charges for the LTMS-
PIP can prevent it from becoming a blueprint
for the region. The BIMP-PIP initiative may draw
upon international best practices in developing a
wheeling charge methodology, which is based on
four principles: promoting eiciency; recovering costs;
ensuring transparency, fairness and predictability;
and promoting non-discriminatory behaviour.74
A real-world example is the Southern African Power
Pool, where the wheeling charge applicable through
a third-party network has three components: (1)
proportion of the country’s network capacity used
(based on thermal rating); (2) age of the assets
and current replacement cost of the assets; and (3)
allowance for the operational and maintenance costs
of assets involved in wheeling.75
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 27
Box 1
Political Context in the Trans-Balkan Electricity Corridor
ROMANIA
BULGARIA
BOSNIA AND
HERZEGOVINA
MONTENEGRO KOSOVO
Trans-Balkan Electriciy Corridor is on
the list of Projects of Energy Community
Interest, being located in one of the Energy
Community Treaty Contracting Parties and
connecting to EU Member States.
The Trans-Balkan Electricity Corridor can be seen as
part of a bigger story of the regional integration of
Western Balkan countries and the EU as individual
states make their way towards accession into the
EU. The Corridor will connect the energy systems
of Bosnia and Herzegovina, Montenegro and Serbia
with Croatia, Hungary, Romania and Italy, bringing
them closer to neighbouring EU markets.76
The EU is committed to including the Western
Balkan countries in its enlargement through the
Berlin Process—a series of meetings aimed at
developing and implementing agreements for
economic cooperation between the EU and the
region. The Western Balkan Investment Framework
supports the region’s countries towards EU
membership through investments in energy as
well as environmental, social, transport and digital
infrastructure,77 while the EU’s Instrument for Pre-
accession Assistance (IPA) sets aside funds for the
co-financing of such investments together with
international financial institutions and bilateral
donors. The Serbian section of the Trans-Balkan
Electricity Corridor, which links Montenegro, Bosnia
and Herzegovina, Serbia and Romania as well as
Montenegro and Italy via a submarine cable, is one
of five priority interconnection projects under the
IPA 201578 as agreed upon by the Western Balkan
energy ministers in a joint statement.79
From the perspective of Western Balkan countries,
dire infrastructure gaps that have long hindered
economic development provide a strong driver for
energy cooperation with their European neighbours.
Furthermore, the Balkans is rich in renewable energy
potential, which could transform the region into an
energy exporter and advance its economies while
reducing dependence on Russia, which currently
supplies almost all of their natural gas.80
While the Berlin Process has had limitations such
as slow or delayed implementation of projects, it
has grown in priority since the Russia–Ukraine war.
In this case, cooperative eorts and the availability
of finance are directly linked to one of the EU’s key
geopolitical aspirations: the integration of Eastern
Europe. These motivations are aligned with both
the economic and security goals of Western
Balkan countries (especially Serbia81), which not only
need to meet domestic demand for more advanced
energy infrastructure, but have also already begun
laying the foundation for accession through other
economic and infrastructure-related collaborations
with the EU.
Source: EU Za tebe, “The Trans-Balkan Electricity Corridor,” EU Projects in Serbia,
2023, https://www.euzatebe.rs/en/projects/the-trans-balkan-electricity-corridor-
Legend
existing line
planned line
28 Accelerating the ASEAN Power Grid 2.0
• Challenge: Harmonisation of Grid Codes
Harmonisation of grid codes in ASEAN is a
fundamental requirement for facilitating smooth,
optimal, secure and reliable power trade.82 At
the national level, grid codes ensure proper
coordination between utilities, system operators,
power producers and consumers and adherence
to regulation and standards. While the LTMS-PIP
successfully addressed dierences in grid codes
through coordination, upcoming projects such as
the BIMP-PIP are more complex initiatives that will
involve the integration of diverse energy systems
and regional coordination between stakeholders
in generation, transmission, distribution and other
sectors. Harmonisation of grid codes are important
for optimisation, and to reduce the risks associated
with regional interconnections, such as cascading
grid failures. Yet, ASEAN currently does not have a
regional grid code and each country develops their
own rules and procedures.
• Recommendation: Undertake consultation
and develop communication channels for grid
harmonisation
Harmonisation of grid codes will require inclusive
but structured consultations. At the initial stages,
consultation between national grid committees
can identify priority areas, which can be studied
by technical working groups and consultants.
This can be done through the aegis of an ASEAN
Grid Code Committee. Streamlining grid code
documents at the national level can assist
harmonisation efforts.83 The ASEAN community
can also seek inspiration from the Greater
Mekong Subregion Regional Grid Code, which
lays out detailed policies and requirements for
regional electricity trade.84 In addition, as regional
grid codes are living documents that require
constant updating, online communication platforms,
such as the one used for the LTMS-PIP project, can
be used to facilitate timely coordination between
stakeholders. Grid codes will also need to adapt to
accommodate the higher integration and intermittent
nature of renewable energy and distributed
generation which will make grid management
increasingly complex.
• Challenge: Outdated Infrastructure
The LTMS-PIP is based on existing infrastructure,
which has limited capacities. While steps are being
taken to upgrade the infrastructure of the LTMS-
PIP, the broader goal of regional interconnections
is impeded by outdated grids that are susceptible to
congestion, extreme weather events and transmission
losses. Some countries such as Thailand and Vietnam
have drafted policy frameworks on developing smart
grids, with a view to increasing flexibility and reliability
and reducing transmission losses. However, these
plans are contingent on the availability of public
finance. To accelerate interconnections and energy
transition, Southeast Asia will need to invest as much
as US$200 billion into upgrading both domestic and
regional energy infrastructures by 2030.85
• Recommendation: Identify and prioritise
ASEAN Projects of Common Interest
Critical regional interconnections can be classified
as ASEAN Projects of Common Interest (APCI),
which will ensure that regional eorts are directed
towards initiatives that can form the backbone of the
APG. This classification can draw from the Projects
of Common Interest (PCI) initiative by the European
Union (EU), which facilitates the accelerated
implementation of projects that have a significant
impact on the EU’s energy security and climate
goals.86 To promote open sharing of information,
an interactive map of all the PCI can be made
available for stakeholders including investors and
regulators to access details of interconnection
projects such as location, implementation schedules,
costs, contribution by the EU and project status.87
The APCI can be developed through consultations
with energy stakeholders in ASEAN member
countries as well as collaborative research on the
benefits and costs of particular interconnections.
An open and transparent process of developing the
APCI will increase its acceptance and impact, and
garner interest from investors. In this context, the key
projects identified by the ASEAN Interconnection
Masterplan Study III can provide a guiding framework.
• Recommendation: Examine the feasibility of
subsea cables
Subsea cables may be a game changer for the region
as they allow energy cooperation to overcome the
challenges posed by the archipelagic geography of
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 29
Southeast Asia. The world’s longest 590-kilometre
subsea power cable between the UK and Norway
will soon be overtaken by a new 765-kilometre
subsea cable—the Viking Link—between the UK and
Denmark which is due to be operational at the end
of 2023.88 Subsea cables will play a key role in the
ASEAN region by allowing energy exchange between
the continental and maritime countries of Southeast
Asia. However, for subsea cables, traversing territorial
waters will be a new issue in terms of the legal,
technical, environmental and financial challenges.89
There are some concerns regarding the cost and
technical complexity of subsea cables as well as their
environmental and geopolitical implications. Despite
their potential, the opportunities and challenges of
subsea cables will need to be carefully examined. In
this regard, a feasibility study covering all aspects of
subsea cables including the technical, infrastructural,
legal and financial aspects is needed.
• Recommendation: Develop resilient energy
infrastructures
Energy infrastructures in Southeast Asia are becoming
increasingly vulnerable to extreme weather events.
Most countries in the region have not addressed the
issue of climatic impacts on energy infrastructures.
Climate change does not only impact hydropower
generation as experienced in the LTMS-PIP project;
higher temperatures decrease the amount of water
required for cooling thermal plants and reduce
the efficiency of electricity grids, while storms
and typhoons routinely cause blackouts in some
regional countries. There is an urgent need for the
region to invest in modelling the impact of climate
change on energy infrastructures and develop
resilient grids. The region’s policymakers can
refer to best practices such as building grids
underground and using legislation to facilitate
a proactive rather than reactive approach to
developing resilient infrastructure.90 Such initiatives
are ongoing in countries like Finland, which
predicted increased storms and precipitation due
to climate change that may lead to costly damages
or power outages. To minimise risk and adhere to
national outage requirements, distribution system
operators should ensure that new distribution lines
are weather-proof while exploring alternatives like
underground cabling.91
7.3 Institutional and Capacity Requirements
Institutional requirements include governance
structures and stakeholder coordination, while
capacity requirements encompass human resource,
training, and knowledge development.92
• Challenge: Existing institutional limitations
The LTMS-PIP Working Group has facilitated a high
level of coordination between various stakeholders
involved in the project and can be used as a blueprint
for future initiatives. However, there is a dearth of
representation by international financial institutions
such as multilateral development banks in the
Working Group, which may inhibit opportunities for
expanding the project. Government-to-government
collaboration has been very successful in driving
energy trade in Southeast Asia but it should be
noted that public finance alone may not be suicient.
Involving more financial institutions early in the
process can enhance the viability and bankability
of interconnection projects.
• Recommendation: Include financial institutions
and other commercial players in the working
group
The BIMP-PIP Working Group can include more
private sector stakeholders to facilitate investment
in energy infrastructures, such as multilateral
and national development banks as well as
international financial institutions. These stakeholders
can play a key role in assessing bankability and
providing expert advice on the financial risks of
energy investments. Private sector stakeholders
can also facilitate the utilisation of nontraditional
financial tools such as green bonds and sustainability-
linked loans and green asset-backed securities.
Existing energy projects show that financial
institutions can have a key role in facilitating
negotiations between public sector officials and
ensuring that the benefits of regional energy projects
percolate to communities.93
• Recommendation: Develop regional energy
institutions
On a broader level, ASEAN needs to establish a
supranational institution94 that can drive the energy
integration process by sharing real-time data,
implementing long-term energy plans, enforcing
30 Accelerating the ASEAN Power Grid 2.0
Box 2
Drivers of Technical Cooperation in the Nord Pool
The Nord Pool is an electricity exchange and trading
platform operating in Germany, Poland, France,
the Netherlands, Belgium, Austria, Luxembourg
and the UK. It was established as the world’s first
international power exchange in 1996 (involving
Norway and Sweden before expanding to other
countries), years before the first edition of the Nordic
Grid Code in 2004. By then, three key drivers and
enablers of technical cooperation on grid codes
had been in place.
Firstly, many bilateral trade interconnections had
been set up in the pan-European region since the
1910s, driven by the countries’ varying electricity
mixes. The main motivator of these interconnections
was not necessarily export profits but savings
from pooling electricity resources and optimising
production—made possible by sharing information
on their marginal costs of production.95
Secondly, Nordel, the cooperative body between
member countries set up in 1963, had begun
responding to shared technical concerns of control
and stability in the region’s power systems as cross-
border interconnections grew. Its recommendations,
while nonbinding, were unanimously accepted:
besides enjoying a strong tradition of cooperation,
all parties shared the desire for an ‘eective common
system’ and its associated benefits.96 As such, a
basic level of operational grid coherence had already
existed between countries.
Thirdly, electricity sector reforms beginning in
Norway, Sweden, Finland and Denmark in the 1990s
helped facilitate the development of a regional power
exchange. As the Nordic power market developed,
the need for coordinated operations across the
region grew.97
Today, the Nord Pool has a variety of users including
both buyers and sellers. Users pay an access tari
to the owner of the network in which the point
of connection is located, allowing them to trade
within the entire network system. Local network
owners pay network fees to their respective
regional network owners, which then pay fees to
the national transmission network owners. These
fees are determined by the regulatory oices of
each respective country for recouping the costs
of operating their transmission networks. Besides
transmission access fees, each country also
determines its own mechanism for calculating loss
pricing and congestion pricing.98 This gives each
country and transmission operator some control
over their own pricing rather than adhering to a
fixed formula.
While these factors contributed to the establishment
of a common Nordic Grid Code, complete
harmonisation of rules was not achieved from
the outset. It was acknowledged at the time of
publishing that electricity subsystems might not
immediately be able to follow identical rules as they
were still under dierent legislation and supervisory
bodies. Nevertheless, the Grid Code was a starting
point that put forth minimum technical requirements
while still operating within the national rules of each
Nordic country, with a view to further harmonisation.
Submarine cables
Finnish, Norwegian, and
Swedish players trade on
equal terms.
From outside the free trade
area Danish participants
trade on special terms.
Finland
Norway
Sweden
Denmark
Source: Carlsson, Lennart. “International Power Trade —
The Nordic Power Pool.” Note. Public Policy for the Private Sector.
World Bank, 1999. https://documents1.worldbank.org/curated/
en/674141468746743919/pdf/19063-Replacement-file-171CARLS.pdf
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 31
market regulations, administering payments and
coordinating a dispute resolution mechanism.
The study on the establishment of the ASEAN
Power Grid Generation and Transmission System
Planning Institution highlights some key pathways
for regional institution-building.99 The main
challenge to the establishment of a supranational
institution is that most countries in the region are
unwilling to cede control of national energy resources
and institutions.
• Challenge: Limited human resources
Although the success of the LTMS-PIP is partly
an outcome of the growing professionalism of
the region’s energy sectors, managing complex
multilateral grid systems will require a greater level
of expertise. Currently, there are skills and knowledge
gaps in areas such as the formulation of wheeling
charges, market deregulation, harmonisation of grid
codes and construction of subsea cables which can
impede the progress of the APG.
• Recommendation: Targeted capacity-building
Within the region, ACE is undertaking multiple
projects to enhance capacities in the energy sector.
The ASEAN Climate Change and Energy Project
Phase 2 (ACCEPT II) programmesf aim to enhance the
level of knowledge and policy implications of a low-
carbon economy among the region’s policymakers.100
ACE has also collaborated with Energy Foundation
China to develop specific policy approaches to
enhance capacity-building in the energy investment
sector, with a focus on increasing awareness of the
private funding of mature and emerging technologies
and acquiring knowledge and skills to engage
eectively with financial providers.101 However, much
more needs to be done to enhance the technical
skills of the energy workforce in Southeast Asia to
enable the integration of more variable renewable
energy and to boost the resilience and stability of
domestic grids. To facilitate regional interconnections,
there needs to be more training and education on the
harmonisation of grid and market codes, flexibility,
grid congestion, digitalisation and enhanced
cybersecurity measures. ASEAN energy oicials
should continue to engage in training programmes
on renewable energy certification, smart grids and
virtual power purchase agreements.
Capacity-building in wheeling charge methodology
and developing a common language on energy
regulation will be key to supporting the BIMP-PIP
and other proposed projects. While international
collaboration in developing the region’s capacity
for energy transition is necessary, the challenges
of interconnections are different in Southeast
Asia compared with Europe and other places,
which will require a contextual application of global
best practices.
• Challenge: Resistance to market reforms
The LTMS-PIP has demonstrated that regional
interconnections can be implemented despite
differences in market structure. In the case of
the BIMP-PIP, the competitive wholesale and
retail electricity market in the Philippines can be
a challenge but the case of the LTMS-PIP shows
that these market differences can be overcome.
Yet, research suggests that higher levels of energy
integration will require that steps are taken to
reform domestic electricity markets, including the
revision of regulations on cross-border licencing,
non-discriminatory access to networks, competition
in generation, and import taris.102 These measures
are likely to face resistance from state-owned utilities,
which would not want to change the status quo of
enjoying government support and forego their current
dominance for a more competitive environment.103
• Recommendation: Country-based market
sector reforms
Electricity market reforms play a crucial role in
facilitating regional energy integration by providing
a framework for eicient and transparent electricity
trade, enabling cross-border investments and
promoting competition. The establishment of a
regional market structure and regulatory frameworks
can create a level playing field and thus ensure fair
competition among market participants, including
f ACCEPT II is a collaborative project between ACE and the Norwegian Institute of International Aairs. It aims to support the
implementation of the ASEAN Plan of Action for Energy Cooperation’s programme area no. 6, ‘Regional Energy Policy and Planning’,
Outcome-based strategy 6, ‘Promote Information Sharing on the Energy-Climate Nexus’, which was initiated by ACCEPT Phase 1
32 Accelerating the ASEAN Power Grid 2.0
Box 3
Institutional Governance of the ENTSO-E
ENTSO-E (European Network of Transmission
System Operators) is the platform for cooperation
between the transmission system operators
(TSOs) of 35 countries across Europe. It focuses
on electricity operations, markets, systems
development, information and communications
technologies, and innovation. Its objectives are
to maintain the security, optimal functioning and
development of the region’s electricity markets. It
also aims to contribute to Europe’s 2050 climate
neutrality goals. TSOs are considered independent,
regulated and neutral in pursuing their mandates.104
ENTSO-E is helmed by an assembly of all 39 TSOs,
followed by a board, secretariat, legal and regulatory
group, and four committees: System Development
Committee; Systems Operations Committee; Market
Committee; and Research, Development and
Innovation Committee. Each committee consists
of working groups overseeing multiple subtopics.
The System Development and Market committees
also contain regional groups pertaining to specific
geographical subregions such as the Baltic Sea.
Additionally, ENTSO-E has three expert groups on
strategic data governance, data and EU aairs.
ENTSO-E is officially an international nonprofit
association governed by Articles of Association105
that determine its operation, membership, roles,
ENTSO-E bodies and voting rights. They consist
of the following:
• definitions;
• rules for membership;
• ENTSO-E bodies and their responsibilities;
• election processes;
• financial arrangements; and
• miscellaneous provisions.
For example, disputes relating to the Articles of
Association are under the jurisdiction of courts of
the registered oice of the Association, which is
currently the Brussels-Capital Region. In addition,
Internal Regulations106 provide more detailed
practical rules and procedures for adhering to the
Articles of Association.
Pan-European transmission network.
A simplified pan-European
transmission network, where
countries are treated as ideal nodes
and are linked by interconnectors.
Source: Rodriguez, R .A ., Dahl, M., Becker,
S. et al. Localized vs . synchronized exports across
a highly renewable panEuropean transmission
network. Energ Sustain Soc 5, 21 (2015).
https://doi.org/10.1186/s13705-015-0048-6 Mediterranean Sea
Baltic
Sea
North Sea
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 33
both domestic and international players. Reforms
often involve aligning rules, regulations and technical
standards to enable seamless electricity transfers.
It can also provide an impetus for investment in
interconnection infrastructures, allow for more
eicient utilisation of energy resources, and promote
the integration of diverse energy sources, including
renewable energy.107 Importantly, price stability based
on supply and demand dynamics and the security
of supply—e.g., by providing access to alternative
sources during peak demand or in the event of supply
disruption—can be assured. However, we note that
the specific electricity market reforms required for
regional energy integration may vary depending on
the context and existing energy systems.
Discussions around the idea of establishing
an ASEAN Power Pool have been gathering
momentum since the initiation of the LTMS-
PIP. Nord Pool Consulting’s ASEAN Power Pool:
Guideline, Implementation Plan and Roadmap,
commissioned by the ASEAN Secretariat, was
part of a Study on the Formation of the ASEAN
Power Grid Transmission System Operator, aligned
with the Tokyo Electric Power Company’s study
on transmission system planning.108 The Asian
Development Bank (ADB) has embarked on a pilot
study of a regional power market (day-ahead market)
using existing interconnections in the ASEAN/GMS
grid from 2023–2026.109 This study aims to establish
a common methodology for the management of
cross-border flows and prices. The completion of
the ADB’s pilot in 2026 would facilitate the region’s
understanding of a power trading mechanism that
would work and hence a better understanding of
the reforms needed. To complete the picture, in-
depth and contextualised country-level studies
would be useful for stakeholders to understand how
market sector reforms can aid in regional energy
integration.
The vision of an integrated, eicient and smart APG
that is powered by renewable energy sources is
ambitious, but it is an opportunity for ASEAN member
states to significantly enhance their energy security
through connectivity, foster economic growth and
meet their climate obligations. Furthermore, the
potential of the APG 2.0 in promoting renewable
energy integration, maximising resource utilisation
and reducing greenhouse gas emissions at a regional
level cannot be understated. The key findings of this
policy report underscore the importance of regional
collaboration, political will and consensus, the need
for robust governance structures, harmonisation
of technical standards and enhanced institutional
capacities to fulfil this vision.
This report has acknowledged the challenges and
complexities associated with this vision, such as
financing, market reforms, institutional limitations
and lack of human resource, but these challenges
can be addressed through regional cooperation. The
recommendations put forth in this report include
targeted communication strategies to counter
resource nationalism; providing policy support
for long-term energy agreements; utilisation of
international best practices to standardise a
common wheeling charge methodology; examining
the feasibility of subsea cables; developing resilient
energy infrastructures; early inclusion of financial
institutions in the institutional governance; and
initiating market reforms. The report also calls for
targeted capacity-building initiatives and the sharing
of best practices to facilitate knowledge transfer and
expertise sharing among ASEAN member states.
The APG 2.0 has the potential to change the energy
landscape of Southeast Asia, drive greater economic
integration, improve energy security, and advance the
region’s sustainable development agenda. However,
it requires collective eorts, long-term commitment,
and coordination among stakeholders to unlock
the potential for creating a climate-secure future
for ASEAN.
8 Conclusion
34 Accelerating the ASEAN Power Grid 2.0
Annexes
Renewable Energy Potential by Source (GW)
Country Solar Onshore Wind Oshore Wind Biomass Hydro Geothermal
Brunei Darussalam 1.9 – – – 0.1 –
Indonesia 2,898 19.6 589 43.3 94.6 29.5
Cambodia 1,597 2.5 88.8 –10 –
Lao PDR 983 11.9 –1.2 26 0.1
Myanmar 5,310 2.4 – 1 40.4 –
Malaysia 337 – 53.3 4.2 28 –
Philippines 122.5 3.5 69.4 0.2 10.5 4
Singapore 0.3 0.3 – – – –
Thailand 3,509 32.4 29.6 18 15 –
Vietnam 844 31.1 322.1 8.6 35 0.3
Source: IRENA (2022), Renewable Energy Outlook for ASEAN: Towards a Regional Energy Transition. 2nd Edition
• eCEOs
• Economic Planning Unit, Malaysia
• Électricité du Laos (EDL)
• Electricity Generating Authority of Thailand (EGAT)
• Embassy of the Republic of Singapore in Vientiane
• Energy Market Authority (EMA), Singapore
• Energy Commission, Malaysia
• Energynautics GmbH
• Energy Studies Institute (ESI), National University
of Singapore
• Foundation for Local Development, Thailand
• German Embassy in Vientiane, Lao PDR
• Deutsche Gesellschaft für Internationale
Zusammenarbeit (GIZ)
• Institute of Electrical and Electronics Engineers
(IEEE), Thailand
Annex A: List of Stakeholder Organisations in Conversation with Authors
• Impact Electrons Siam
• Institute of Foreign Aairs, Lao PDR
• Ministry of Energy, Thailand
• Nam Theun 2 Power Company, Lao PDR
• Faculty of Engineering, National University of Laos
• Oice of Energy Regulatory Commission (OERC),
Thailand
• OFFIS - Institute for Information Technology
• Parliament of Malaysia
• Reporting ASEAN
• Stimson Center, USA
• Tenaga Nasional Berhad (TNB), Malaysia
• Thammasat University, Thailand
• Universiti Malaya
Annex B: Renewable Potential for Electricity Generation in ASEAN
Lessons from the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) 35
Agreements and Plans
Joint Statement of the Lao PDR, Thailand, Malaysia and Singapore Power Integration Project
(LTMS PIP) (2014)
ASEAN Plan of Action for Energy Cooperation (APAEC) 2016-2025 Phase I (2016-2020)
ASEAN Plan of Action for Energy Cooperation (APAEC) 2016-2025 Phase II (2021-2025)
Bandar Seri Begawan Joint Declaration of the 39th ASEAN Ministers on Energy Meeting on Energy
Security and Energy Transition (2021)
Joint Declaration of the 41st ASEAN Ministers on Energy Meeting on Sustainable Energy Security Through
Interconnectivity (2023)
Studies and projects Institutions involved
Study on the Formation of the ASEAN Power Grid Generation
and Transmission System Planning Institution (2018) ERIA
Study on the Formation of the ASEAN Power Grid Transmission
System Operator Institution (2018)
Feasibility Study for ASEAN Multilateral Power Trade (2019) IEA
ASEAN Interconnection Masterplan Study III (ongoing) ACE
Feasibility Study for ASEAN Regional Interconnector (ongoing) ACE, HAPUA, USTDA
Intergovernmental Agreement Study (ongoing) ACE, ERIA
ASEAN Power Grid Program (ongoing) ACE, ETP, CASE, UNESCAP, USAID
Projects Identified in APAEC
2016–2025
Projects Identified in the ADB study, ‘An Evaluation of the
Prospects for Interconnections among the Borneo and
Mindanao Power Systems’ (2014)
Sarawak–Peninsular Malaysia, 1,600
MW (2025). Power Purchase. Sarawak–Peninsular Malaysia, 500 kV HVDC, 2,000 MW (2020)
Sarawak–West Kalimantan, 230
MW (existing). Initially power
purchase; later economic exchange. Sarawak–West Kalimantan, 275 kV, 300 MW (existing)
Sarawak–Brunei, 30–100 MW
(2019), 100 MW (post-2020).
Economic exchange. Sarawak–Brunei–Sabah, 275 kV, 300 MW (2016)
Sarawak–Sabah, 100 MW (2020).
Power purchase. Sarawak–Sabah, 250 HVDC, 300 MW (2025)
Philippines–Sabah, 500 MW
(post-2020). Economic exchange. Sarawak–Sabah–Luzon, 500 kV HVDC, 2,000 MW (2025)
Sabah–West Mindanao, HVDC, 600 MW (2025)
East Sabah–East Kalimantan, TBC
MW (post-2020). Power purchase. East Sabah–East Kalimantan, 275 kV, 600 MW (2020)
West Kalimantan–South Kalimantan, 250 kV HVDC, 300 MW (2018)
South Kalimantan–East Kalimantan, 275 kV, 600 MW (2018)
South Kalimantan–Java, HVDC, 2,000 MW (2025)
South Kalimantan–Northern Sulawesi, HVDC, 300 MW (2025)
Source: ERIA (2016), Achieving an Integrated Electricity Market in Southeast Asia:
Addressing the Economic, Technical, Institutional, and Geo-political Barriers
Annex C: Selected agreements and studies on the ASEAN Power Grid
Annex D: Proposed projects under the BIMP-PIP
36 Accelerating the ASEAN Power Grid 2.0
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2 Serafin D. Talisayon, Designing for Consensus: The ASEAN
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3 Ibid.
4 Ibid.
5 International Renewable Energy Agency (IRENA) and
ASEAN Centre for Energy (ACE), Renewable Energy Outlook
for ASEAN: Towards a Regional Energy Transition 2nd edition
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6 ASEAN Centre for Energy, The 6th ASEAN Energy Outlook
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7 UNESCAP, Regional Road Map on Power System
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9 ASEAN Secretariat, Joint Declaration of the 41st ASEAN
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10 Ibid; Heads of ASEAN Power Utilities/Authorities
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97 Carlsson, International Power Trade— The Nordic Power
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99 Tokyo Electric Power Company Holdings, Inc, Study on
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100 Capacity Building, ASEAN Climate Change and Energy
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101 ASEAN Centre for Energy, ASEAN Capacity Building
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103 Ibid.
104 ENTSO-E, Our Governance, 2023, https://www.entsoe.
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105 ENTSO-E, Articles of Association, 2023, https://
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106 ENTSO-E, Internal Regulations, 2023, https://
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107 Phoumin Han et al., Electricity Market Reforms in the
ASEAN, China, India, and Japan, vol. 01, Series in Energy
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SCIENTIFIC, 2023), https://doi.org/10.1142/13256.
108 Study Team, Summary of the ASEAN Power Pool
Guideline Document, in Study on the Formation of the
ASEAN Power Grid Transmission System Operator
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Research Institute for ASEAN and East Asia, 2019):48-56,
https://www.eria.org/uploads/media/Research-Project-
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109 Asian Development Bank, presentation during ISEAS –
Yusof Ishak Institute and the United Nations Economy and
Social Commission for Asia and the Pacific (UNESCAP)
closed-door workshop on “Lessons from the LTMS-PIP for
the ASEAN Power Grid”, September 14, 2023.
The authors wish to express their deepest gratitude to the anonymous experts and
stakeholders who generously shared their time, knowledge and insights on the LTMS-
PIP and regional energy integration. We also wish to record our appreciation to
Mr. Matthew Wittenstein and Ms. Randi Kristiansen of UNESCAP for their partnership
in this project; Ms. Badariah Yosiyana and colleagues at IRENA for their support;
Dr. Lee Poh Onn for his valuable feedback; and Mr. Thanawat Pumprakobsri,
Mr. Santi Kondavong, Ms. Indira Zahra Aridati and Mr. Damon Chee for their crucial
research and fieldwork assistance. Finally, our deepest appreciation to Ms Rebecca Neo
for her expert work on the GIS maps that are created for this study.
AcknowledgemenAcknowledgemen
This report is printed on FSC-certified paper.
