India is considering trading electricity with Southeast Asian countries through Myanmar and Thailand in a bid to boost regional diplomatic engagement. Sources familiar with the plan have revealed that New Delhi wants to use its growing renewable energy capacity to do so. The grid project is expected to take at least four years to complete and follows India's previous attempts to trade electricity with Middle Eastern countries such as the United Arab Emirates.
Although the plan has not been made public, officials from the Ministry of Power and Industry have been in talks with several countries to advance regional grid interconnections. These discussions took place during the Group of 20 (G20) ministerial meeting in the Indian state of Goa. Support from G20 members is seen as crucial to securing financial backing for the project from bankers and developers.
The government of Indian Prime Minister Narendra Modi has sought to strengthen political and economic ties with its neighbors in response to China's growing regional influence.
To help implement this plan, India has hired the French company EDF to help develop the regulatory framework. This will address various challenges, including pricing issues. EDF's report is expected to be completed by the end of this year, according to industry officials.
Emerging opportunities
In 2020, the ASEAN region faces serious challenges related to greenhouse gas (GHG) emissions from the power sector, which reached 668 Mt CO2e. Countries such as Indonesia, Vietnam, Malaysia, Thailand, and the Philippines are the top five contributors to GHG emissions in the region.
The fact that GHG emissions continue to rise makes ASEAN one of the most vulnerable regions to climate change, with half of ASEAN countries among the top 20 most vulnerable to extreme weather events in the world.
To address this challenge, ASEAN countries have taken a step forward by establishing or updating their Nationally Determined Contribution (NDC) targets for 2020 and 2021. They have also developed plans to achieve their NDC targets by 2030.
Thailand itself has set an ambitious target to reduce GHG emissions by 20-25% below projected BAU (business as usual) levels by 2030. Through the Long-Term Low Greenhouse Gas Development Strategy and the Climate Change Act, Thailand aims to move towards achieving its NDC targets.
On the other hand, ASEAN members have been trying for decades to establish a regional network to facilitate multilateral electricity trade. So far, however, their progress has been limited to bilateral agreements between member states.
Thailand and Cambodia are the two largest energy importers in the region (as a percentage of their total energy consumption). Thailand alone imports about 13% of its total electricity consumption. This is to meet the expected increase in domestic demand and also to improve their energy security as part of Thailand's strategy to promote the use of diverse energy sources.
On the other hand, to quote from the Down to Earth page, Myanmar itself is the gateway to the ASEAN power grid from the South Asian region. By strengthening the grid connection between India and Myanmar, Myanmar can access the large electricity market in India, which will provide reliable access to electricity supply. This advantage will enable Myanmar to utilize resources more effectively and initiate a broader integration process between the South Asian and ASEAN power grids.
Cooperation between India, Myanmar and Thailand has the potential to open up opportunities for more flexible cooperation between ASEAN countries and countries outside the region. In addition to bilateral cooperation within ASEAN, this partnership could also attract interest from countries outside the region.
Reference:
Karthik, Maitreyi., & Rajiv Ratna Panda. (2023). Myanmar, India’s Gateway to ASEAN, Can Solve Its Power Issues by Shifting to Renewables. downtoearth.org.in
Varadhan, Sudarshan. (2023). Exclusive: India Aims to Trade Electricity With Southeast Asia. reuters.com
Regional Electricity Trade in ASEAN the Road Ahead to an Integrated and Greener Electricity Future. 2022. pwc.com
