asean power grid: multilateral power trade · hvdc – frequency limit control more reliable system...
TRANSCRIPT
REGIONAL POWER MARKET AND
CROSS-BORDER POWER INTERCONNECTION
ASEAN Power Grid:
MULTILATERAL POWER TRADE
Presented By:
Bambang Hermawanto
Chairman, ASEAN Power Grid Consultative Committee
(APGCC)
ADB Workshop - Seoul 14 November 2017
Regional Power Interconnection: Introduction
ASEAN Connectivity
Regional Power Interconnection in ASEAN
ASEAN Power Grid
Challenges to Realize the APG
ASEAN Multilateral Power Trade
Multilateral Power Trade: LTMS Case
Conclusion
REGIONAL POWER INTERCONNECTIONS
a) Promote more efficient, economic and secure operation of individual power system Sharing of reserve margin, including spinning reserves Power exchange during difference of peak load
b) Optimize usage of diverse energy resources in the region Enable power transfer from efficient generation in the region to load
centers
c) Reduce capital investment required for generation capacity expansion Capitalizing difference of demand peaking time
d) Facilitate cross-border power purchases /exchanges within the region Allows for effective development and utilization of resources
Objectives of Regional Interconnection
Benefits of Interconnections An interconnected grid system brings not only technical and economic advantages, but also an overall political, societal & environmental benefits
Interconnected System
Economic
Benefits
Political,
Societal &
Enviromen
tal Benefit
chnical
enefits
BENEFITS OF ITERCONNECTIONS
Economic Benefits When discussing the reasons for developing a power grid interconnection between countries, economic benefit is the top of the list as the key driver.
Economies of scale
Collective cost reduction
Investment in larger plants result in lesser cost per unit
Optimal cost of investment & operation
Delay in new power plants construction Target peak load with cheaper resources Sharing of spinning reserve Different peak load time
Improve adequacy while reducing cost
Reduce import of fuel from outside ASEAN
Less reliance from other region
Savings for importer while extra
income for exporter of energy
BENEFITS OF ITERCONNECTIONS
BENEFITS OF ITERCONNECTIONS
Technical Benefits The technical rationales for grid interconnections include improving reliability and pooling reserves.
Larger interconnected system is more stable
Emergency response – fast reserve More
stable & reliable
HVDC – frequency limit control
More reliable system
Share of reserve – spinning & non-
spinning
Coordinated outage and maintenance of generators and lines Asynchronous
systems can also be connected (HVDC)
Improving load factor
Minimizing usage of non-efficient plants such as OCGT
Less ramping up/down of power plants
Incorporating of intermittent resources such as solar plants
BENEFITS OF ITERCONNECTIONS
Political, Societal & Environmental Benefits The interconnection is also foreseen to strengthen regional cooperation between member countries
Strengthening regional cooperation
Stimulate regional and domestic economies
Opportunities for local business & transfer of technologies
Provide more employment, technical expertise & knowledge database
More reliance on greener source of energy thus less pollution
Development of hydropower potentials
Exploring of greener alternatives due to stronger supporting systems
Fossil Fuel
ASEAN CONNECTIVITY
“Connectivity creates Stronger,
Safer, Better Economics”
“Stronger Economics, stronger
ASEAN, stronger Member States”
Source: ASEAN Secretariat
ASEAN has a huge of natural resources, high energy demand, high economic growth
Why we need ASEAN Connectivity
The three pronged strategies to achieve overall ASEAN connectivity
People to People
Connectivity
-Education & Culture
-Tourism
Physical
Connectivity
-Transport
-ICT
-Energy
Institutional
Connectivity
-Trade liberalization
& facilitation
-Regional Transport
Agreement
-Cross border
procedure etc.
The vision of ASEAN Leaders to build an ASEAN Community by 2015 calls for a well-connected ASEAN that will contribute towards a more competitive and resilient ASEAN.
Background of ASEAN Connectivity
Source: http://www.asean.org/
BACKGROUND ASEAN Community
ASEAN Ministerial Meeting
ASEAN Regional Forum
Defense
Law
Transnational Crime
(AMM)
(ARF)
ASEAN
Political- Security
Community ASC ASEAN Economic Ministers
ASEAN free trade area
Energy
Food, Agriculture & Forestry
Finance
Investment
Etc.
ASEAN
Economic Community
AEC
(AEM)
(AFTA)
ASEAN
Socio-Cultural Community
ASC
Culture & Arts
Disaster Management
Education
Environment
Haze
Health
Information
Etc.
ASEAN has emphasized regional cooperation in the “three pillars”, which are political-security, sociocultural integration, and economic integration.
“Enhancing Energy Connectivity and Market Integration in ASEAN to Achieve Energy Security, Accessibility, Affordability and Sustainability for All”
TAGP
CCT
EE&C
RE
REPP
NEC APG
APAEC
• Development of the APAEC
• Global Energy Landscape
• ASEAN Energy Development
APAEC
ASEAN ENERGY COOPERATION IN ASEAN CONNECTIVITY
TAGP
APG
APAEC
ASCOPE
HAPUA
APAEC
Infr
astr
uct
ure
ASE
AN
C
on
ne
ctiv
ity
ASEAN – Energy Cooperation
REGIONAL POWER INTERCONNECTION
in ASEAN
Blessed with abundance of natural resources. Potentials yet to be explored Transmission networks need to be expanded Grid density is still low
ASEAN abundant energy resources
The thirst for energy can be fulfilled by the region’s wealth of natural resources
ASEAN’s POTENTIAL ENERGY RESOURCES
Need for efficient utilization of energy sources
ASEAN’s POTENTIAL ENERGY RESOURCES
Fosil Energy Resources: Oil
Gas
Coal
Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Thailand, Vietnam
Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Thailand, Vietnam
Indonesia, Malaysia, Philippines, Thailand, Vietnam
Renewable Energy Resources:
Hydro
Geothermal
Solar
Wind
Biomas
Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Vietnam
Indonesia, Philippines
All Countries has various amount
Limited potential
All Countries has various types and amount
APG
The APG is the key infrastructure to enable power
trade between ASEAN countries.
Diversified Resources
Price-demand disparity
ASEAN’s availability of abundant of natural resources, e.g. Hydro (Myanmar, Laos), Gas & Oil(Malaysia, Brunei), Coal
(Indonesia)
Cheaper system can sell to more expensive system
Enablers for ASEAN Power Trade
Three key drivers that enable Power Trade among ASEAN countries
ENABLERS FOR ASEAN POWER TRADE
Opportunities for Power Trade among ASEAN countries The completion of APG highway open doors of opportunities for ASEAN countries to
benefit from power trade, be it Bilateral or Multilateral
ASEAN countries rely
mostly on fossil fuel
based power plants to
generate electricity.
With power trade
enable across the
region, more hydro
will be utilized.
Lower system cost
Pull factor for power trade: carbon tax, fuel price volatility
Push factor : intensive capital investment, readiness of transmission network
OPPORTUNITIES
Source:Southeast Asia Energy Outlook 2013 & CIMB ASEAN Research Institute (2013)
Sell to Expensive
System
Demand increase, selling price may increase
Then overall electricity price may increase
Electricity price may decrease
31 Source:Beni Suryadi (2014)
Cheaper
System
Electricity Trade Pricing Lower average system cost is envisioned with the realization of interconnection projects
OPPORTUNITIES
The ASEAN Power Grid (APG) is a flagship program mandated in 1997 by the ASEAN
Heads of States/Governments under the ASEAN Vision 2020.
The 17th AMEM in Bangkok July 1999 has adopted The APAEC 1999- 2004 tasked to implement the ASEAN
Power Grid (APG) program
Objective: to strengthen and promote power interconnection and trade to help ensure greater regional energy security and
sustainability on the basis of mutual benefit
LEGAL BASIS: The MOU of ASEAN Power Grid (APG)
*): The MOU of APG signed by
ASEAN Energy Minister in July 2007
Facilitate cross-border power purchases/exchanges within the region
Allows effective development and utilization of resources
Optimize usage of diverse energy resources in the region
Enable power transfer from efficient generation in the region to load centers
Reduce capital investment required for generation capacity expansion
Capitalizing difference of demand peaking time
ENCHANCING
REGIONAL ENERGY
SUSTAINABILITY,
SECURITY,
RELIABILITY, TOWARD
MORE EFFICIENT,
ECONOMIC AND
SECURE OPERATION
OF POWER SYSTEM
Objectives of APG
Greater economic generation and transmission of electricity
Greater reliability and security of electricity supply in member
countries
Provision of a platform for future ASEAN electricity trade
BENEFITS OF ASEAN POWER GRID
National impediments to
promotion of power trade
• Differing national policies of AMS
• Countries desire for self‐sufficiency before interconnection is allowed
• Countries concerns over restructuring of ESI under Multilateral Electricity Trading
Electricity industry restructuring and
evolution into a multilateral power
trading
• No harmonized operational & regulatory framework or tariff structure
• No mechanisms for power wheeling, pool rules, power bidding, regulatory framework and ensuring system reliability & security
• Financing Modalities for funding sources
Enviroment Awareness
• High penetration of intermittent renewable energy sources
• Aware and concern on environment impact
APG’s CHALLENGES
ASEAN Interconnection Master-plan Study (AIMS)
• Objective : To identify possible interconnections between ASEAN countries, which eventually form APG
• Encompass the 20 years horizon of power system development (2000~2020)
• AIMS–I completed in year 2003, reviewed in year 2010 o 11 interconnections identified in AIMS-I o Additional 5 identified in AIMS-II (total 16)
• Methodology of study o Optimization of power plant development by comparing
individual plan (consider indigenous resource) vs integrated ASEAN plan
o Derive the least-cost plan that satisfies reliability, stability, and fuel supply constraints
Earliest COD 1) P.Malaysia – Singapore
• Plentong – Woodlands Existing
• P.Malaysia – Singapore post 2020
(2nd link Plentong – Woodlands)
2) Thailand – P.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) P.Malaysia – Sumatra 2021
5) Batam – Singapore post 2020
6) Sarawak – West Kalimantan Existing
7) Philippines – Sabah TBC
8) Sarawak – Sabah – Brunei 2020
• Sarawak – Sabah 2020
• Sarawak – Brunei 2019
9) Thailand – Lao PDR
• Nakhon Phanom 2 - Thakhek - Theun Hinboun Existing
• Ubon Ratchathani 2 - Houay Ho Existing
• Roi Et 2 – Nam Theun 2 Existing
• Udon Thani 3 - Na Bong - Nam Ngum 2 Existing
• Nakhon Phanom 2 – Thakhek – Then Hinboun (Exp.) Existing
• Mae Moh 3 – Nan – Hong Sa Existing
• Udon Thani 3 – Nabong (converted to 500KV) 2019
• 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 - 2020
• Xekaman 3 – Tranhmy Existing
• Xekaman 1 – Pleiku 2 2016
11) Thailand – Myanmar 2018-2026
12) Vietnam – Cambodia (New)
• Chau Doc – Takeo – Phnom Penh Existing
• Tay Ninh – Stung Treng TBC
13) Lao PDR – Cambodia
• Ban Hat - Kampong Sralao Existing
• Ban Hat - Stung Treng post 2018
14) Thailand – Cambodia (New) post 2020
• Aranyaprathet – Banteay Meanchey Existing
• Thailand – Cambodia post 2020
15) East Sabah – East Kalimantan TBC
16) Singapore – Sumatra post 2020
The earliest COD information is as of May 2017
The original COD is according to AIMS II results.
The Priority Projects, which refer to the APAEC 2016-2020, are underlined and indicated in Red.
TBC stands for to be confirmed
UPDATED LIST OF ASEAN POWER GRID PROJECTS
Remarks: - Ongoing Projects are projects with Tariff MOU/Contract signed. - TBC stands for To Be Confirmed. - The Priority Projects, which refer to the APAEC 2016-2020, are underlined and indicated in Red.
Exist
On-going (Up to 2021)
Future Total
Northern System 4,152 2,469 15,774-18,924 22,395-25,545
9 Thailand - Lao PDR 3,584 1,879 1,865 7,328
10 Lao PDR -Vietnam 248 290 TBC 538
11 Thailand - Myanmar - - 11,709-14,859 11,709-14,859
12 Vietnam - Cambodia 200 - TBC 200
13 Lao PDR - Cambodia TBC 300 - 300
14 Thailand - Cambodia 120 - 2,200 2,320
Southern System 450 600 1,800 2,850
1 P.Malaysia - Singapore 450 - 600 1,050
4 P.Malaysia - Sumatra - 600 - 600
5 Batam - Singapore - - 600 600
16 Singapore - Sumatra - - 600 600
Eastern System 230 30-100 600 860-930
6 Sarawak - W.Kalimantan 230 - - 230
7 Philippines - Sabah - - 500 500
8 Sarawak - Sabah - Brunei - 30-100 100 130-200
15 E.Sabah - E.Kalimantan - - TBC -
Northern - Southern System 380 100 300 780
2 Thailand - P.Malaysia 380 100 300 780
Southern - Eastern System - - 1,600 1,600
3 Sarawak- P.Malaysia - - 1,600 1,600
Grand Total 5,212 3,199-3,269 20,074-23,224 28,485-31,705
CURRENT STATUS OF ASEAN POWER GRID PROJECTS
Background
• AMIS-II was completed in 2010, need to be updated.
• The National Power Development was not really considered in AIMS
• High penetration of intermittent renewable energy sources in the region
• Awareness and concern on environment impact
Objectives
• To incorporate the proper mechanisms and incentives that would allow it to deliver full benefits of power interconnection,
• To deploy the renewable energy; expansion of access to electricity, and optimization of regional resources
Resource for the Study
• Funding has been discussed with and proposed to USAID.
• Expected to commence in 2018 for one year study period.
PLAN to REVIEW THE AIMS - II
MULTILATERAL POWER TRADING
Realization of a more efficient use of energy resources.
Achieve a more efficient utilization of energy sources across the region, connecting countries with surplus power generation capacity to countries facing a deficit;
Delivery of economic benefits.
Realize financial benefits across the region, from potential infrastructure savings as well as lower energy costs. It would also help utilities balance their excess supply and demand, improve access to energy services, and reduce costs of developing energy infrastructure;
POTENTIAL BENEFIT
Optimization of regional investment. Reduce the costs of developing national energy infrastructure, by reducing investments in power reserves to meet peak demand, lowering operational costs while achieving a more reliable supply and reducing system losses.
Expansion of renewable energy. a) The abundant hydropower yet to be fully developed. b) Sharing of renewable energy sources would also help substitute hydropower to
present coal and other fossil fuels, thereby helping to curb emissions; c) Accelerate the development and integration of renewable power generation
capacity
Improvement in the access to electricity. a) expand power networks and client base, in a region where millions of people still
lack access to electricity and clean cooking energy sources. b) access to electricity will prove more economically viable through connections to
the APG rather than extensions of the national grid, when additional investments are required.
c) countries with an energy surplus can benefit from regional interconnections by servicing their deficit areas more efficiently with power imports from the APG.
POTENTIAL BENEFIT
APG MULTILATERAL POWER TRADE
Abundant hydropower and natural
gas resources, their development is
vital to support economic growth
Source: Southeast Asia Energy Outlook 2013
ASEAN Energy Policy There is a need for greater stability and consistency in the application of energy -related policies. Currently, energy policies vary for each of the ASEAN countries depending mainly on the availability of the local fuel resources and government’s direction
APG Cross-Border Power Trading Principle
To clearly determine and design the operating platform for APG Cross - Border Power Trading Activities in accordance with APG power trading objectives only
The Platform should comply with the rights of each member country to have its power systems operation related to bilateral power cooperation agreement between two countries
To practically implement Performance Standard and Grid Code, are described as top priorities for ASEAN countries, in order to form an APG power system operating standard in this region
To strongly consider the Formulation of Power Trading Mechanism for implementation to enable third party access power trading scheme under the condition to minimize the effect to the internal power systems operation of each member country
To carry out a research survey to identify any obstacle in terms of regulatory issues which may block the development of APG
ASEAN MEMBER STATES
ELECT.
XCHANGE
BILATERAL ARRANGEMENT
A P
G
BILATERAL +
THIRD PARTY
X-BORDER
LINK
MULTI -
LATERAL
POWER
TRADING
ROAD TO MULTILATERAL POWER TRADE
The Nordic Pool Model ASEAN Multilateral Electricity Exchange
Objectives:
a) achieve long-term security, availability
and reliability of energy supply;
b) enhances efficiency by optimizing the
region’s energy resources; and
c) Allow access to affordable energy to
populations across the region
The key benefits:
a) the system enhances efficiency,
b) delivers electricity at the most cost-
effective price,
c) maximizing the benefits of both
producers and consumers.
1. No interference with the national electricity supply industry,
2. No need to : - modify national pricing systems (including subsidies),
- change the ownership structure of utilities (privatization),
3. No need to create regional bodies to supersede national regulatory authorities.
4. No need to unbundled and privatized the utilities and
regulatory agency in each participant country can be retained.
5. each country has its own market transmission system operator, working closely
with the regional operator.
A step wise approach is necessary, rather than a big bang where
everything is attempted at the same time
Approach Conduct FS
Can Nordic
model works?
LESSON LEARNT FROM NORDIC MODEL
MULTILATERAL POWER TRADE: LTMS Case
LTMS TO ASEAN Multilateral Power Trade
THAILAND
SINGAPORE
MALAYSIA
An evolution
from bilateral
(emergency
power) exchange
to multi-lateral
power trading.
LAO PDR
Lao PDR, Thailand, Malaysia and Singapore
(LTMS) Power Trade
THAILAND
LAO PDR
SINGAPORE
MALAYSIA
From emergency exchange and sharing spinning reserve to economic exchange
ITEM DESCRIPTION
1. Seller Lao PDR
2. Buyer Singapore
3. Capacity [MW] 100
4. Transit Thailand & Malaysia
5. Interconnector Existing
TH MY
LA SG PPA
WHEELING
CHARGE
Thailand/Malaysia Transit
License transmission company
Wheeling arrangement
Interconnector capacity arrangement
Taxes/GST
LAO PDR
License generator
License transmission
company
License exporter
Power Purchase
Agreement (PPA)
Commercial and Legal
Arrangements
Taxes/GST
SINGAPORE
License importer
Market Participant
PPA
Commercial and Legal
Arrangements
Taxes/GST
LAO PDR
exporter SINGAPORE
importer
LTMS Power Trade Principles
Final Energy Price = PPA (Energy
Charge) + Transmission/Wheeling
Charge + Others*)
100 MW
*) Congestion Costs, System
losses, Administration Cost,
Tax, etc.
Technical Feasibility Allowable capacities
Time and duration of cross border power trade
System security and system reliability of the Parties
Planning and operation mechanism of system operators of the Parties
System Losses and Treatment of System Losses
LTMS Power Trade Principles
1. LTMS-PIP Working Group (WG) and four Technical Task Forces (TTFs) were formed in November 2015 to look into technical, commercial, legal and tariff aspects of the project;
2. TTFs completed the Study on LTMS-PIP in September 2017 with findings/recommendation to implement the project in two phases:
3. Phase 1- 2018-2019 (LTMS-PIP): Power Trade of up to 100MW between Lao PDR and Malaysia via Thailand utilising only existing network interconnections;
Phase 2 - 2020 or beyond (LTMS-PIP): Possible expansion to include Singapore when second interconnection cable between Singapore and Malaysia is back in service.
MOU for Phase 1 (between LTM Governments) was signed on 21 September 2016 at the 34th AMEM in Nay Pyi Taw, Myanmar which is valid until 20 September 2021;
Update on the LTM(S) - PIP
6. Completion of key milestones of LTM-PIP implementation such as the draft Energy Purchase and Wheeling Agreement (EPWA), Interconnection Operation Manual, and agreement on pricing were completed in June 2017
7. The EPWA has been signed during the 35th AMEM Meeting in Manila, Philippines on 18-22 September 2017 to allow electron transfer for LTM-PIP on 1 January 2018
8. Commercial Agreement for Phase 1 of the (EPWA) structure is consist of:
a) Main Agreement, which applies to all three utilities and cover residual issues or matters such as commencement date for the agreement, conditions precedent, obligations of parties to be responsible for their own country’s laws and taxes;
b) Part 1-Energy Sale & Purchase between EDL and TNB, which sets out the issues that are relevant to EDL and TNB relating to the sale by EDL and purchase by TNB of the LTM energy; and,
c) Part 2-Wheeling Charge between EDL and EGAT, which sets out the issues that are relevant only to EDL and EGAT relating to the wheeling obligations of EGAT.
Update on the LTM(S) - PIP
First electron flow LTMS PIP Phase I,
January 2018
Study on the Formation of APG Institutions
ATGP & ATSO
Feasibility Study on Multilateral Power Trade
Review AIMS to include National Power Development, Renewable Energy Sources and Environmental Impact
Continue to accelerate the development of the physical link between neighboring countries
CURRENT AGENDA OF APG
ASEAN countries collectively need to benefit from the abundance of indigenous resources within the region
APG is a step towards the optimization and conservation of energy in the ASEAN region
APG creates bilateral arrangement through cross border electricity trading toward multilateral trading
arrangement
Need feasibility study on the Multilateral Power Trade to be implemented in ASEAN
Support and commitment are required from ASEAN Member States to realize the multilateral power trade
arrangement
CONCLUSION
THANK YOU
Contact: [email protected]