Singapore’s role as a catalyst in Southeast Asia’s renewable energy revolution

VIETNAM : Southeast Asia is witnessing the expansion of international renewable energy agreements as the region takes steps to reduce its reliance on fossil fuels.

Leading the charge is Singapore, a nation heavily dependent on natural gas, which aims to import four gigawatts (GW) of low-carbon electricity by 2035, constituting 30% of its total supply.

This ambitious plan has opened doors for neighbouring countries as they ramp up renewable power generation, according to Nikkei Asia.

In 2022, Singapore initiated its imports with hydropower transmission from Laos through Thailand and Malaysia, totalling 100 megawatts over two years.

Regulatory approvals have been granted for the importation of two GW from five solar projects in Indonesia, and Singapore will also purchase electricity from a floating solar farm off Indonesia’s coast.

Furthermore, Singapore’s Keppel Infrastructure Holdings signed a monumental deal in March to acquire one GW of renewable power from Cambodia-based Royal Group through an undersea cable spanning over 1,000 kilometers.

This project is expected to catalyse the regional power grid and accelerate the growth of renewable energy within the Aseanregion, as stated by Keppel Infrastructure CEO Cindy Lim.

According to estimates by the International Energy Agency, Southeast Asia could generate over 40% of its electricity from renewable sources by 2030 and reach 95% from renewables and ammonia by 2050, should countries meet their commitments under the Paris climate accord.

Achieving this necessitates an annual growth of approximately 10% in renewable capacity to accommodate the rising demand due to economic expansion.

This presents opportunities for countries like Laos, where about 70% of power generation relies on hydroelectric sources, primarily from the Mekong River.

Laos currently exports roughly 80% of its electricity, with significant portions going to Thailand and Vietnam.

In 2022, it began exporting electricity to Singapore and established transmission infrastructure this year to supply power to Cambodia.

In some instances, countries act as both buyers and sellers.

Vietnam, with its substantial wind power potential estimated at 600 GW, intends to export electricity to Singapore from its southern regions.

Meanwhile, central Vietnam will receive power from a new US$950 million wind power project in neighbouring Laos, which also provides northern Vietnam with hydropower.

As businesses seek alternatives to China, particularly in northern and central Vietnam, the country is racing to address persistent energy shortages.

The recent surge in oil prices following Russia’s invasion of Ukraine underscored the vulnerabilities of relying on fossil fuels, given the concentration of reserves among a few nations.

Cross-border renewable energy agreements aim to diversify the region’s energy supply, providing greater resilience against disasters and geopolitical risks.

Hiroshi Takahashi, a renewable energy policy expert at Japan’s Hosei University, views the development of cross-border electrical grids as a form of “collective energy security” and sees Asean as an ideal candidate for such initiatives.

Asean’s ten member states are economically interconnected, despite their diverse political systems.

However, the successful completion and operation of such a grid remain uncertain.

Progress has stalled on the Australia-Asia Power Link, a planned $30 billion Australian dollar (US$19 billion) project by Sun Cable to transmit electricity from a 20 GW solar farm in Australia to Singapore through a 4,200-kilometer undersea cable.

The project’s fate may change following Sun Cable’s recent acquisition, with new owners expressing intentions to revive the initiative.