ASEAN Power Grid: Gleaning Best Practices from Worst Cases

There is growing regional momentum towards the realisation of the ASEAN Power Grid (APG). The grid, which is a major initiative to link up Southeast Asia’s electricity networks, has at least six subsea and overland interconnection projects at various levels of implementation or negotiation (Table 1). Due to high levels of optimism, conversations about the APG have focused on the need to glean lessons from best practices from more advanced regional grids in Europe or South Africa. This is a logical approach — doing things right requires learning from good examples. Yet, what has been missing from the discussion is the need to consider worst practices — how to avoid mistakes.

In this context, the ever-expanding graveyard of energy megaprojects holds two key lessons for the APG: first, implement scalability and modularity — break up a big project into smaller parts that can operate independently. Second, embed interconnection projects within a broader vision of socio-economic integration — instead of focusing narrowly on energy trade, the narrative can be expanded to include regional development, including broader impacts on domestic economies.

Megaprojects like large hydropower dams, cross-border grids and solar farms have three definitive features: they are technically complex, cost huge sums of money and have enormous socio-economic impacts. Bent Flyvbjerg, Emeritus Professor at the University of Oxford has argued that megaprojects fail to be implemented not due to complexity, but because historically they have been designed as one-off projects that must be 100 per cent completed before operation. One example is Gobitec, a project proposed in 2009 to develop a 1 gigawatt (GW) solar farm in the Gobi Desert and 4,000 km of transmission lines from Mongolia, through China to South Korea and Japan. From the very start, Gobitec was encumbered by challenges — the costs of the cables and converter stations alone were estimated at a mammoth US$12.7 billion, while interconnecting four national grids increased the risk of cascading blackouts. As a result, the project was never implemented.

If energy projects are presented as part of a broader regional agenda towards development and connectivity, they are likely to have higher chances of success.

Flyvbjerg suggests that megaprojects like Gobitec fail not because they are huge but because they were not broken down into smaller parts, operationalised, improved upon and then replicated. He recommends the approach adopted by Tesla’s Gigafactory 1, a US$5 billion lithium-ion battery factory in Nevada. The design of Gigafactory 1 was split into individual, self-operating blocks that could become operational well before the entire factory was completed, allowing experimentation, learning and replication. Construction began in 2014 and the factory was producing batteries as early as 2015, by which time only a portion of the total construction was complete. An example of modularity closer to home is the Laos-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP), which started out as a unidirectional energy trade initiative in 2022, but expanded to become a multidirectional project in 2024 after a period of experimentation and learning.

While not as massive as Gobitec, upcoming APG projects are also complex. As shown in Table 1, the region’s subsea cable projects are not only about developing interconnections but also involve the construction of solar and wind farms, battery storage systems and in some cases, even solar panel and battery manufacturing factories to meet local content requirements. In this complex array of projects, policymakers will need to focus on two key priorities. First, they need to identify the most viable subsea cable project; and second, they need to hash out the minimum requirements to make the project operational as soon as possible. After the basic requirements are met, expanded objectives such as higher levels of generation, battery storage, additional cables, and more locally produced technologies can be added later into the project lifecycle.

In The Pipeline

Table 1. Upcoming ASEAN Power Grid Projects

History also shows that megaprojects that are conceptualised as simple conduits of energy trade divorced from a broader regional integration agenda are likely to fail. The Myanmar-Bangladesh-India Pipeline (MBI) was first proposed in 1997 to transfer 5 billion cubic metres of gas from the Swe field in Myanmar to India through Bangladeshi territory. Dhaka saw the MBI as an opportunity to address broader regional integration issues, such as India’s support for the development of electricity lines with Bhutan and Nepal and enhanced land connectivity. Indian policymakers perceived the project as a one-off initiative, the only purpose of which is to import gas. As the two countries could not come to an agreement, the MBI was ultimately shelved in 2005 and China ended up importing much of the gas from Swe.

If energy projects are presented as part of a broader regional agenda towards development and connectivity, they are likely to have higher chances of success. For example, the Trans-Balkan Electricity Corridor aims to the connect power grids of Serbia, Montenegro and Bosnia and Herzegovina to those of Croatia, Hungary, Romania and Italy. It is embedded in the economic vision of integrating the Balkan countries into the European Union. The recently signed Memoranda of Understanding between Singapore and Indonesia on the Sustainable Industrial Zone, along with those on cross border energy trade and carbon capture and storage, demonstrates how energy trade can be embedded within broader frameworks of development to appeal to the national interests of exporting nations.

Failed megaprojects offer important lessons in terms of what to avoid. Projects that are modular, scalable and embedded within a broader regional agenda are more likely to succeed. This should be foremost on the minds of Southeast Asian policymakers as they endeavour to build the APG.

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