Good news for an Asia-wide energy network

A framework for a region-wide energy infrastructure across Asia is progressively taking shape.

The latest developments are the Asia Submarine-cable Express  (NEC-Fujitsu) and the Southeast Asia-Japan cable (Globe Telecom-Phlippines). Both link Singapore and Tokyo. They now join the dozens of others laid in Asia since the 1990s.

Collectively, all these fiber projects create a blueprint for a Pan-Asian Energy Infrastructure, a larger network that would include electricity power lines and natural gas pipelines.

Such a project would enhance regional energy supply security, increase regional economic growth, reduce regional geopolitical tension and reduce regional carbon emissions.

It would do so by increasing market efficiency through distributing energy via a flexible, ubiquitous, open-access, common-carrier network stretching from the Southern Ocean to Siberia.

This, coupled with carbon prices, would spur regional energy market innovation and trade. It would offer a solution to reducing climate change.

Asean member states are already discussing an Asean Power Grid that enables the exchange and trade of energy between the countries. The concept is timely.

Asia will soon become the world’s largest regional economic bloc. The region requires more investment into infrastructure such as roads, rail and air transport. But Asia’s biggest infrastructure need is in energy  — both generation and distribution. Carbon pricing can steer investment toward low emission energy generation technologies.  A Pan-Asian Energy Infrastructure can distribute that low-emission generation.

In a large-scale Pan-Asian Energy Infrastructure, power lines would distribute everything from solar to wind energy to geothermal to tidal and wave energy. Pipelines would carry everything from conventional and unconventional gas to hydrogen, biofuels and waste carbon. Pipelines have this flexibility. Liquid Natural Gas infrastructure doesn’t.

Combining carbon pricing with an interconnected distribution network creates a whole greater than the sum of the parts. Sharing electricity generation capacity across borders would reduce the expensive spare capacity needed in each market. That would lower average electricity prices. Sharing across borders would also enable generation scale economies to lower costs.

Asia’s biggest low-emission energy sources are sun and wind.  These could be supplemented by geothermal, biomass, hydro and gas resources.

At present, Asia remains a collection of largely isolated national energy markets.  Interconnecting them and opening national markets would encourage greater competition. With carbon prices added to the mix, the market would determine the most efficient, low-carbon combination of energy technologies.

To better understand the concept, consider what’s occurred in the telecommunications industry due to fiber optics (i.e. transmission hardware), the Internet protocol (a uniform technical standard) and market reforms (i.e. opening up the industry to new players).

Today low cost, cross-border transit of data is taken for granted. And all this was made possible in just 20 years.

In the energy industry,  the transmission equivalent of fiber optics is now being developed. It’s called High Voltage Direct Current (HVDC) power lines. These are high-capacity, long-distance, low-loss transmission lines. These can span continents, even oceans.

HVDC’s been around since the 1950. China is now taking the technology to the next level through developing more efficient Ultra High Voltage Direct Current power lines. China plans to build dozens of these to bring sun, wind and hydro power from her remote interior to her coastal cities. As UHVDC technology spreads, Asia’s fiber optics cables can provide the pathways deeper energy market interconnection.

These fiber and HVDC cables could then be joined by natural gas pipelines, creating a fully integrated system.Power lines would carry electricity. Natural gas pipelines would carry gases convertible into electricity. Fiber optic cables would handle the data to manage the system.

Grenatec’s research indicates a Pan-Asian Energy Infrastructure could be in place by 2030. We believe a comprehensive Asian energy and data infrastructure could be built with the proceeds of a roughly $10 per tonne carbon tax on Asia’s carbon emissions.

A Pan-Asian Energy Infrastructure would provide a level-playing field for regional innovation in the energy sphere. It would provide a flexible, long-term infrastructure that could serve the region well into the 22nd century. It would be one of the long-term solutions to climate change.

Stewart Taggart is the principal of Grenatec, a Sydney-based research consultancy studying the benefits and challenges involved in building out a Pan-Asian Energy Infrastructure.

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