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New Energy World
New Energy World embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low carbon technologies.
Cross-border energy networks could cut $800bn from ASEAN’s decarbonisation costs
24/4/2024
News
Decarbonising the energy supply across the 10 member states of the Association of South-East Asian Nations (ASEAN) could see a reduction of $800bn in costs through power interconnectors, hydrogen networks and energy storage infrastructure, according to new research by DNV.
A long-standing goal in the region is to establish an ASEAN power grid. This could be used to support decarbonisation efforts by transporting clean energy from countries with excess renewable power to countries with shortages. However, most decarbonisation efforts to date remain confined to individual nations, the report says.
DNV models three scenarios for a decarbonised ASEAN power sector by 2050. In one (‘Individual Approach’), countries try to fully decarbonise alone from their own resources. In another (‘Moderate Interconnection’), there are several cross-border power interconnectors but with limited transmission capacity and no hydrogen network. The third DNV scenario (Regional Cooperation) envisages unconstrained resource-sharing between countries, involving power interconnectors and hydrogen networks.
The study underscores that the primary advantage of regional cooperation lies in minimising the necessary levels of renewable generation and energy storage to attain net zero. It finds that the large interconnector capacities allow for significant quantities of energy to be transported from countries with high renewable potential to countries with less diverse supply or lower-quality resources, paving the way for several to become main exporters or importers. Countries with diverse resources of solar, wind and hydropower, such as Thailand and Lao PDR, will be the engines of the transition as large-scale exporters of clean energy.
The results suggest that with regional cooperation, the energy transition from fossil fuels to renewables can reduce the required total installed solar generating capacity by up to 600 GW (20%) by 2050 compared to the case without interconnection. In addition, the region would need 1.2 TWh less electrical storage and 16 TWh less hydrogen storage. One of the largest benefits is that the need for hydrogen storage could be reduced by 24% and 58% under the moderate interconnection and regional cooperation cases, respectively, when compared with the individual approach. Regional cooperation also reduces by 13% the spatial footprint required for south-east Asia’s energy transition, largely due to the reduction in solar capacity needed for a fully interconnected ASEAN.
The paper finds that regional cooperation can cut $800bn (approximately 11%) from the overall net present cost of ASEAN decarbonisation by 2050 compared with the individual approach, and $300bn (approximately 5%) compared with moderate interconnection.
Drawing on its findings and on discussions with stakeholders, the study makes recommendations on how technical, economic and policy hurdles to decarbonisation can be resolved in the short, medium and long term.
‘Decarbonisation is a global challenge and ASEAN countries should not address this individually. With increased cooperation and resource-sharing, we can increase the speed of the energy transition while reducing the cost to consumers and the environment,’ said Mats de Ronde, Team Lead, Energy Markets & Strategy APAC, Energy Systems at DNV.
