ASEAN-EU energy cooperation:sharing best practices to implement renewable energy sources in regional energy grids

1 Introduction

Among the different fields of cooperation between the Association of Southeast Asian Nations (ASEAN) and the European Union (EU),energy is one of the most crucial fields for the long term.Both international actors are staunchly committed to implementing a decarbonization process aimed at cutting polluting emissions to combat climate change and its negative effects.

However,the achievement of this global goal must be pursued in a manner that also preserves energy security,defined as “the availability of energy at all times,in various forms,in sufficient quantities,and at affordable prices” [1].Energy security is essential because it is one of the foundations of economic growth,development,and modernization.ASEAN and the EU share the same approach to this challenge with diversification of the energy mix and development of a regional energy grid fueled mainly with renewable sources,which will allow these regions to produce “clean electricity” that will be progressively allocated to meet rising domestic demand.

Furthermore,cooperation between ASEAN and the EU can also contribute to global energy security because three crucial international maritime bottlenecks (the Straits of Malacca,Sunda,and Lombak-Makassar) lie in ASEAN’s territorial waters.Because these points could potentially restrict transport along the sea lanes of communication (SLOC) that are the main energy supply routes for China and other North Asian countries,ensuring security at these points is a global concern that must be supported by common effort and reliable dialogue among all involved international actors.

2 ASEAN:current and future energy scenario

Cooperation in the energy field is one dimension of the bilateral relations between ASEAN and the EU,as stipulated in the recent ASEAN-EU Plan of Action 2018-2022.According to this document,ASEAN-EU energy cooperation must be focused on:

● “Strengthen[ing]ASEAN-EU cooperation by sharing best practices on promoting energy access,energy security and multilateral measures to support competitive global energy markets,including with reference to the ASEAN Plan of Action for Energy Cooperation (APAEC) 2016-2025”;

● “Cooperat[ing]to promote energy efficiency and conservation (EE&C) measures and technologies,renewable energy and other clean energy programmes including research; promote the development of alternative energy and cooperate on civilian nuclear safety,as well as promote public awareness and capacity building in this area” [2].

Preserving energy security,as defined above,is one of the main targets for these international actors in their collaborations to ensure access to energy reserves in global markets and support common initiatives to combat climate change.As they strive to meet these objectives,ASEAN and the EU face similar energy landscapes,characterized by the depletion of existing hydrocarbon reserves,high energy demand and consequent rising imports,and the need to diversify the energy mix necessary for electricity production using mainly renewable sources to meet international commitments to cut emissions.

Energy security is key to achieving the ASEAN Economic Community,which aims for a well-connected ASEAN to drive an integrated,competitive,and resilient region.Therefore,the demand for primary energy is expected to grow to satisfy rising domestic needs,fuel economic growth,and support efforts to promote greater regional integration [3].ASEAN is now one of the most dynamic and fastest growing economic regions in the world:if ASEAN were a single country,it would be the world’s fifth largest economy,after the United States,China,Japan,and Germany.The expected population increase in the ASEAN region—from approximately 615 million in 2014 to 715 million by 2025—is projected to result in 4% annual growth in energy demand until 2025,an increase of 50% over 2014 levels and doubling of electricity demand between 2014 and 2025 [4].Compared to 2014,growth in the use of fossil fuels by 2025 will range from 31% for oil,90% for coal,and 65% for natural gas.Most of the projected increase in electricity demand over this period will be supplied by coal (42% of total generation),natural gas (23%) or large hydroelectric installations (20%).The remaining 15% is expected to come from a mix of renewable sources,including geothermal (5%),bioenergy (4%),wind (3%),solar photovoltaic (2%) and small hydroelectric installations (1%) [5].However,excluding Brunei,Darussalam,and Indonesia,the region has limited oil and natural gas supplies to meet this rising demand:stagnating oil and natural gas reserves have reduced ASEAN production and some countries that have historically been exporters,such as Indonesia,Malaysia,and Vietnam,have begun to import fossil fuels.The region is thus expected to become a net gas importer between 2020 and 2030,and the large coal reserves in some ASEAN countries will be reduced by approximately 60% [6].

Increasing energy imports to meet the growing domestic demand will challenge the region’s energy security,and most of the ASEAN energy demand will be met with imported fossil fuels that will boost carbon dioxide (CO2) emissions and exacerbate local air pollution.Moreover,rising imports of hydrocarbon-based fuels will have a higher economic cost than current domestic sources,and will thus deprive national budgets of significant resources that would be better allocated to develop locally available renewable energy sources [7].Furthermore,the potential for a regional approach to provide energy security is weakened by inadequate or incomplete energy and transportation infrastructure and insufficient or fragmented investments in new technologies [8].

In this context,renewable energy sources appear to be the best option to increase the region’s energy security through greater diversification of the energy mix and reduction of the demand for imported fossil fuels.Following the global trend,ASEAN countries have showed a greater political sensibility towards the impact of renewable energy sources in the energy mix:in 2015,during the meeting of ASEAN Ministers on Energy in Kuala Lumpur (Malaysia),ASEAN countries adopted the Plan of Action for Energy Cooperation (APAEC) 2016-2025,which includes the ambitious goal to achieve 23% renewable energy in the total primary energy supply (TPES) by 2025 [9].The realization of this key objective requires a two-and-a-half-fold increase in the modern renewable energy share (RES) compared to 2014,as follows:

where RES/TPES (target 2025) is the ASEAN renewable energy target for 2025 and RES/TPES (2014) is the share of renewables in 2014.

Therefore,this ambitious goal represents a stimulating challenge for ASEAN members that will require full political and economic engagement and concentrated effort to achieve.This challenge is particularly evident when considering that at current levels of development,the ASEAN region's RES in 2025 is expected to increase to just under 17%.

Defining the current expected share of RES over TPES in 2025 (17%) as the reference case,then the gap between the ASEAN target for 2025 and the reference case can be computed as follows:

Thus,ASEAN will need to close a 6% gap between the reference case and the 23% RES target by increasing renewable production.

The main theme that emerged during the summit that produced the new APAEC is “enhancing energy connectivity and market integration in ASEAN to achieve energy security,accessibility,affordability,and sustainability for all” [10].This theme outlines the main political,economic,and energy drivers that ASEAN political authorities will have to address as they work to satisfy the rapidly increasing energy demand.

According to IRENA,the additional renewable sources required to close the 6% gap can be expected from solar photovoltaic (15%); wind,geothermal,and bioenergy-based power (15%); solar thermal (25%); biogas and modern bioenergy (35%); and other renewable sources (10%) [11].In economic terms,the ASEAN region will need to invest $27 billion annually in renewable energy capacity,a total of $290 billion by 2025,in order to meet the 23% renewable energy goal [12].

3 Developing a regional energy power grid:similarities and differences between ASEAN and the EU

ASEAN and the EU share the same approach to enhancing energy security by developing a long-term diversification strategy and implementing an ambitious regional energy grid mainly fueled with renewable sources.ASEAN’s project to implement a trans-regional power grid was patterned on EU efforts to create an EU-Mediterranean electricity ring by building regional interconnections and producing electricity from renewable sources (mainly solar and wind).Moreover,ASEAN initiatives to increase energy interconnectivity through the implementation of the Trans ASEAN Gas Pipeline and liquefied natural gas (LNG) regasification terminals were conceived as a means to reduce dependence on coal by using gas as a transit fuel,as well the promotion of clean coal technologies.

Since the signing of the 1986 Agreement on ASEAN Energy Cooperation,the Association’s leaders have expressed their strong support to advance ASEAN energy connectivity [13].ASEAN members appreciate the critical role that an efficient,reliable,and resilient electricity infrastructure has in stimulating regional economic growth and development.To meet the rising electricity demand,huge investments in power generation capacity will be required,and member states may need to combine resources to implement more integrated regional projects with greater capacity [14].Enhanced cooperation among member states could reduce developer costs and barriers to obtaining necessary permits,which would attract more investment in renewable energy within the region.

The EU is also engaged in achieving energy security by implementing a resilient and integrated energy system; geographically diversifying energy suppliers,mainly to reduce dependence on oil and gas imports from Russia; and increasing domestic production of renewable sources [15].At present,the EU is the only major economic actor producing 50% of its electricity without greenhouse gas emissions,of which 23% comes from renewable sources and 27% comes from nuclear energy.Moreover,the European Commission has recognized that “a regional approach has been and will continue to be decisive for the integration of the European energy market in terms of cross border exchanges as well as security of supply.” Further,the development of energy transport infrastructure,mainly at key cross-border interconnections between member states,has been the EU’s main approach to implementing an integrated and competitive internal energy market [16].

Table 1 European Union share of renewables in gross inland energy consumption (2017)

Countries Renewable energy European Union 13.9 %Belgium 7.2 Bulgaria 10.3 Czechia 10.5 Denmark 32.8 Germany 13.3 Estonia 18.4 Ireland 9 Greece 12 Spain 13 Francia 10.4 Croatia 21.4 Italy 18.1 Cyprus 6.5 Latvia 42.5 Lithuania 21.2 Luxembourg 6.3 Hungary 11.1 Malta 5.3 Netherland 5.5 Austria 28.9 Poland 8.5 Portugal 20.1 Romania 18.1 Slovenia 15.9 Slovakia 9.2 Finland 34.7 Sweden 41.2 United Kingdom 9.8

ASEAN and the EU share the aim of increasing the use of renewable sources in the energy mix,and this commitment reflects their mutual willingness to address climate change with national and regional energy policies based on reducing reliance on fossil fuels with renewable sources that produce very little or zero global warming emissions.The ASEAN region is highly vulnerable to climate change,which poses a particular threat to farmers and coastal communities.Vietnam’s Mekong Delta—home to 18 million inhabitants—is among the most vulnerable places in the world to the rising waters,storm intensification,and on-shore salinity induced by climate change [17].Both ASEAN and the EU signed and supported the 2016 Paris Agreement under the United Nations Framework Convention on Climate Change that delineated a global response to the growing threat of climate change [18],and ASEAN countries have engaged with each other to work collectively toward two principal initiatives:the ASEAN Power Grid (APG) and the Trans ASEAN Gas Pipeline (TAGP).These projects are intended to provide greater stability and security to the region’s energy supply.

3.1 ASEAN power grid (APG)

The APG project was conceived first as a set of crossborder bilateral initiative that then expanded to sub-regional jurisdictions and finally to an all-inclusive integrated regional system.This project will become the centerpiece of the regional power architecture,encompassing all 10 members of ASEAN,divided into three sub-systems:the Upper West System,located in the Greater Mekong Sub-Region (GMS) will encompass Cambodia,Lao PDR,Myanmar,Thailand,and Vietnam; the Lower West System will cover Thailand,Indonesia (Sumatra and Batam),Peninsular Malaysia,and Singapore; the East System will include Brunei,Malaysia (Sabah and Sarawak),Indonesia (West Kalimantan),and the Philippines [19].The APG is expected to enhance electricity trade across regional borders,which would help to meet the rising energy demand with clean and sustainable electricity supplies delivered through integrated infrastructure.

At present,six of the 16 power interconnection projects for the APG have been implemented,connecting Singapore and Peninsular Malaysia; Thailand and Peninsular Malaysia; and via Thailand to Cambodia,Lao PDR,and Vietnam.To date,the APG has facilitated a total of 3,489 MW in power exchanges and purchases,and following the implementation of additional APG interconnection projects,power exchanges and purchases are expected to almost triple to 10,800 MW in 2020,and further increase to 16,000 MW after 2020 [20].

The APG project exemplifies regional cooperation in combining different renewable energy sources that ASEAN countries are able to produce and considering the different energy needs and the composition of the energy mix of each country.For example,Thailand has imported 60% of its energy needs to meet its goal,from its 2015 20-Year Power Development Plan,of sourcing one-third of its energy needs from renewable energy [21].In addition,one of the main projects under the APG is the Lao-Thailand-Malaysia-Singapore Power Integration Project.This project involves Malaysia purchasing up to 100 MW of hydropower from Lao through Thailand’s transmission grid.This is beneficial for Malaysia because it would also improve the share of sustainable energy in its total energy mix [22].

The ASEAN region would benefit considerably from an extensive and differentiated renewable potential,which would support ASEAN’s ambitious objective to increase endogenous production of clean electricity.Lao is the leading ASEAN country in terms of hydropower potential:the nation currently has 39 hydropower plants and will have over 90 in operation by 2020,and exports electricity to Thailand,Vietnam,China,Cambodia,and Myanmar [23].

Table 2 Interconnection projects in the ASEAN power grid (HAPUA,2015)

Interconnection projects Earliest COD Status 1 Peninsular Malaysia - Singapore (New)Post 2020 2 Thailand - Peninsular Malaysia Sadao - Bukit Keteri Existing Khlong Ngae - Gurun Existing Su Ngai Kolok - Rantau Panjang TBC Khlong Ngae - Gurun (2nd Phase,300MW) TBC 3 Sarawak - P.Malaysia 2025 4 Peninuslar Malaysia - Sumatra 2020 Priority Project 5 Batam - Singapore 2020 6 Sarawak - West Kalimantan 2015 7 Philippines - Sabah 2020 8 Sarawak - Sabah - Brunei Sarawak - Sabah 2020 Sabah - Brunei Not Selected Sarawak - Brunei 2018 Priority Project 9 Thailand - Lao PDR Roi Et 2 - Nam Theun 2 Existing Sakon Nakhon 2 - Thakhek - Then Hinboun (Exp.) Existing Mae Moh 3 - Nan - Hong Sa 2015 Udon Thani 3- Nabong (converted to 500KV) 2019

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Interconnection projects Earliest COD Status Ubon Ratchathani 3 - Pakse - Xe Pian Xe Namnoy 2019 Khon Kaen 4 - Loei 2 - Xayaburi 2019 Nakhon Phanom - Thakhek 2015 Thailand - Lao PDR (New) 2019-2023 10 Lao PDR - Vietnam 2016-TBC 11 Thailand - Myanmar 2018-2026 12 Vietnam - Cambodia (New) TBC 13 Lao PDR - Cambodia 2017 Priority Project 14 Thailand - Cambodia (New) Post 2020 15 East Sabah - East Kalimantan Post 2020 16 Singapore - Sumatra Post 2020

Furthermore,Southeast Asia is home to 25% of the world’s geothermal generation capacity,whereby heat from the earth is leveraged to meet energy needs.Geothermal energy is considered a form of renewable energy and is considerably safer than other energy sources,in that unlike fossil fuel plants,geothermal power does not produce greenhouse gases that are harmful to the environment.Most of the regional geothermal capacity is located in the Philippines and Indonesia,the second and third largest producers of geothermal energy in the world.Indonesia in particular holds tremendous geothermal resources that could be developed,considering that the country uses just 4-5% of its geothermal capacity,which is estimated at 28,000 MW,and large geothermal reserves remain untapped [24].

Solar power development is another attractive option for the region,given that solar irradiance in the region is very strong,averaging over 1,500-2,000 kWh per square meter annually.The extent of this resource indicates that investing in solar power plants would not only promote environmental sustainability but would also be economically profitable.Vietnam’s significant solar radiation potential has motivated the country’s national authorities to declare that solar power will become the country’s main renewable energy source to reduce energy production costs and satisfy increasing demand.Thailand,Singapore,and Malaysia are also keen on expanding their solar industries [25].

The political cooperation and good relations that characterize the ASEAN region are among the main preconditions for success in the implementation of the APG,which will help these countries to diversify their energy mixes,reduce dependence on imports,and distribute regionally produced clean electricity.

From the EU perspective,the cooperation among Nordic countries (Finland,Sweden,Denmark,and Norway) has enabled the realization of the Northern electricity ring that provides markets with clean electricity from wind resources.In spite of this successful model,attempts to realize an integrated energy grid along the southern shore of the Mediterranean Sea have been negatively affected by the long-standing instability in North Africa (particularly following the Arab Spring events in 2011).The tremendous solar power potential of the semi-desertic lands in that region had been previously identified as a potential producer of clean electricity to help the EU meeting its energy demand with alternative renewable sources.

The development of electricity corridors linking the European and African shores of the Mediterranean has been a strategic target for the EU to reduce CO2 emissions via diversification in the energy mix.To achieve these targets,the European Commission proposed,in 2008,the “completion of a Mediterranean energy ring,linking Europe with the Southern Mediterranean through electricity and gas interconnections to improve energy security and to help develop the vast solar and wind energy potential” [26].The purpose of the Mediterranean Electricity Ring is “to promote a coherent development of interconnections among the power systems of the Mediterranean Basin.The interconnection system must be reliable and aim to match electricity demand with electricity generation in each country surrounding the Mediterranean Sea,and beyond in so far as these countries are interconnected with other power systems,as is the case in the European Union” [27].To achieve these goals,the Mediterranean Electricity Ring would link the following three geographical “paths.”

Fig.1 EU-Africa clean electricity interconnections:solid lines indicate operational connections and dashed lines indicate desired installations

● The West Path,connecting North Africa with the Iberian Peninsula,is the only currently operational interconnection through the electricity transmission corridor from Morocco via Spain to the rest of Europe.However,this path is currently limited mainly due to the insufficient interconnection between Spain and France.

● The Central Path would consist of a north-south axis where future undersea cables would link Tunisia,Algeria,and Libya (and possibly Malta) with Italy,and from there with the Central European power system.

● The East Path would consist of a terrestrial electricity corridor linking Egypt and Middle East countries (Jordan and Syria) to Turkey and then onwards to Eastern Europe [28].

The Morocco-Spain interconnection became operational in 1997 with a maximum capacity of 1400 MW.In spite of the existence of several sub-regional interconnections,several intractable challenges must be resolved in order to close the electricity ring with a regionally integrated system that could deliver energy from the Morocco in the west to Syria in the east.Severe and dangerous instabilities in Syria and Libya have hampered the realization of the necessary electricity interconnections between Syria and Turkey,with Libya and bordering Egypt and Algeria indefinitely delaying the project of realizing an integrated energy grid across the Mediterranean region [29].

3.2 Trans ASEAN gas pipeline (TAGP)

The other major infrastructure project conceived as part of the ASEAN Vision 2020 is the TAGP,which aims to interconnect existing and planned gas pipeline infrastructure within ASEAN to facilitate the transport of gas across borders and thereby ensure greater security of the gas supply.A combination of pipelines (both underwater and overland) and regasification terminals has been identified as the best solution to create physical links among ASEAN countries and markets,considering the geographic conditions in the region.

According to APAEC,13 bilateral gas pipeline interconnection projects have been successfully commissioned,connecting six countries bilaterally and with a total length of approximately 3,673 km [30].At present,four regasification terminals are operating (in Malaysia,Singapore,Indonesia,and Thailand) with 17.8 million tonnes per annum (mtpa) of nominal capacity,and at least one additional regasification terminal is expected to be operational by 2020.

The planned infrastructure will allow ASEAN states to meet the growing demand for natural gas in the region,and the planned interconnectivity in the ASEAN region will avoid disruption of energy supplies and thereby enhance energy security.At present,Singapore and Thailand are the largest importers of gas,importing 16 and 12 billion cubic meters (bcm),respectively.Although the Philippines and Vietnam are currently self-sufficient,they will become net importers of natural gas (mainly LNG) in forthcoming years [31].If current forecasts prove correct,the region will become the largest LNG importer after Japan and China [32].This level of growth in the LNG demand in ASEAN countries is expected because natural gas is globally conceived as the preferred transit fuel in the ongoing process of decarbonization.Moreover,some ASEAN countries have adopted energy strategies based on a high use of natural gas:this energy source accounts for 95.5% of Singapore’s electricity needs,and in Thailand,the share of natural gas in the power mix is 68%,and these countries can be expected to increase LNG demand to meet their growing domestic demand [33].

The expansion of LNG capacity in the ASEAN region could also reshape the current energy scenario because countries such as Indonesia,Malaysia,and Brunei are LNG exporters (Malaysia is the third largest LNG exporter in the world) [34].In the next decade,these countries can reorient their gas exports to the regional ASEAN market,contributing to increased regional energy security with regular and geographically closer supplies.At present,Indonesia and Malaysia have developed a profitable energy partnership based on mutual import and export of gas both by pipelines and in LNG form.Malaysia also delivers gas exports to Thailand mainly via overland pipeline but also in LNG form (together with Indonesia) [35].

Table 3 Regasification terminals within ASEAN

Regasification terminal Capacity Commenced operations 1 Map Ta Phut LNG Receiving Terminal,Thailand 5 mtpa 2011 2 West Java FSRU,Indonesia 3 mpta 2012 3 Singapore LNG (SLNG) 6 mpta 2013 4 Sungai Udang,Melaka,Malaysia 3.8 mpta 2013

The EU also expanded interconnectivity in the natural gas sector to enhance energy security.Since 2008,the European Commission has promoted a strategy to upgrade LNG facilities,which has attracted gas imports from different countries and lessened the EU’s dependence on Russian gas imports.At present,80% of Europe’s gas imports arrive there as pipeline gas and 20% as LNG.LNG imports are expected to double,reaching 91 bcm,by 2020.There are 25 LNG terminals in the EU operating at approximately one fourth of their capacity of nearly 200 bcm of capacity,and this capacity is more than the total Russian gas volumes imported to the EU [36].

The realization of key interconnections for distributing gas supplies to EU countries has been the key strategy that enabled successful LNG deployment in the EU.The LNG terminals established in Poland and Lithuania (in the north) and Croatia and Italy (in the south) gave the EU the benefits of accessing several gas hubs,which have been progressively interlinked with sub-regional and EU grids.

Given the similarities between the goals and strategies of these two regions,cooperation between ASEAN and EU can also contribute to global energy security,particularly around the three crucial international SLOC bottlenecks at the Straits of Malacca,Sunda,and Lombak-Makassar.To support ASEAN’s strategy to expand LNG capacity in the region and the role of certain countries (particularly Indonesia and Malaysia) as regional gas suppliers,ASEAN member states must be aware of the need to provide security along the SLOC to avoid dangerous energy disruptions [37].Given their geographically strategic position,ASEAN countries have the geopolitical opportunity to contribute significantly to strengthening global energy security.In addition,a collective commitment to security for the SLOC will allow Singapore to achieve its aim of becoming Asia’s LNG trading hub,and will enable Indonesia and Malaysia to expand their energy partnership with the energy-deficient countries of Northeast Asia.

4 Conclusion

ASEAN and the EU are both engaged in addressing climate change through improved connectivity via an efficient and integrated energy grid that can deliver clean electricity produced from endogenous renewable sources.These common goals and strategies offer significant potential as a platform for further cooperation between these international actors towards energy security targets.As signatories of the Paris Agreement,member states of ASEAN and the EU will have to pursue comprehensive approaches to tackling the impacts of climate change and promoting sustainable development,and the Paris Agreement thus offers a promising framework for enhanced cooperation.The commitments made under the Paris Agreement afford a potentially profitable window of strategic opportunity to diversify the energy mix and increase domestic and regional production of renewable energy.

In the ASEAN region,the implementation of two flagship initiatives,AGP and TAGP,is proceeding successfully,even if additional investments and modern technologies to maximize renewable production will be required.In this case,China represents as a key energy partner to implement projects based on renewable sources in the region,and that nation has decided to invest billions of dollars to develop hydropower projects in the ASEAN region,with the aim of increasing regional interconnectivity and satisfying Chinese domestic demand.The availability of additional clean electricity from Vietnam,Laos,or Cambodia would be a particularly attractive option for China’s diversification of its energy mix.

The convergence of strategic energy interests among ASEAN countries and their good relations with one another has been essential to the creation of a regionally integrated power grid.This level of cooperation could also be a reference model for the EU,within which member countries often appear to be primarily concerned with preserving their own energy security rather than working together to achieve common goals.Increased cooperation between ASEAN and the EU would also help to provide security along the maritime energy and trade routes that cross the Indian Ocean.ASEAN and the EU could enhance dialogue and express common positions to maintain open SLOC and avoid destabilizing disruptions of energy supplies and the associated global repercussions.Considering that in 2016,the Strait of Malacca was crossed daily by 16 million barrels of oil per day,constituting the world’s second busiest transit bottleneck,the geopolitical ramifications of ensuring security along maritime routes through the ASEAN region are increasingly relevant to all nations.