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Laos, Malaysia and Thailand Kick Off ASEAN Multilateral Power Trading

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KUALA LUMPUR — Laos, Malaysia and Thailand on Wednesday have inked an agreement that paves the way for multilateral trade in electric power by 2018. This represents a push for regional cooperation to enhance connectivity and sharing of resources.

Under the Memorandum of Understanding signed by the three neighboring countries, Malaysia will import up to 100 megawatts of hydroelectric power from Laos, which will be transmitted on the existing power grid that passes through Thailand.

The agreement kicked off the initial phase of a multilateral power trading scheme that will eventually include Singapore, as countries in the region seek to enhance electricity connectivity. As the countries involved are connected through existing infrastructure, they will need to sign power purchase agreements before actual transmission can begin.

The 10 members of the Association of Southeast Asian Nations have identified 16 projects with investment of $6 billion under the ASEAN Power Grid initiative to achieve cross-border connectivity by 2020. This will allow countries with excess installed capacity to sell to others, not only during massive blackouts but also for industrial production and infrastructure projects.

For self-sufficient countries such as Malaysia, the hydro power purchasing will help reduce the need for fossil fuels in power generation. The initial capacity of 100 MW could be increased in the future under a commitment to boost the share of renewable energy in its fuel mix, the country’s Ministry of Energy, Green Technology and Water said in a press release.

Malaysia had an installed power capacity of nearly 30,000 MW as of the end of 2014, of which 81% was generated using coal, oil and gas. The remainder was from hydro and other renewable sources such as solar cells and biogas.

In May, the country began its first cross-border power trading with Indonesia, transmitting 70 MW from Mambong, Sarawak, to Bengkayang in western Kalimantan, the Indonesian half of the island of Borneo, on a 47km double-circuit grid line.

So far, ASEAN has completed over 1,700 MW of new interconnection capacity via eight cross-border transmission links, the pact said in a joint ministerial statement on Wednesday. It added that power utility authorities of each member country will work together to formulate a mechanism for multilateral power exchange for the region.

Source: Nikkei Asian Review