Illustration; Source: DNV

ASEAN countries can knock off $800 billion from decarbonization bill with cross-border energy networks, DNV finds

As the momentum of the energy transition continues to build, countries around the globe are working on slashing their greenhouse gas (GHG) footprint. Based on new research from DNV, the member states of the Association of South East Asian Nations (ASEAN) have the opportunity to cut their decarbonization costs by $800 billion by pursuing regional collaboration for projects entailing power interconnectors, hydrogen networks, and energy storage infrastructure.

Illustration; Source: DNV

While estimating the costs of ASEAN member states decarbonizing individually, with moderate cross-border power interconnection, or with full regional cooperation involving interconnectors, hydrogen networks, and energy storage, the latest DNV white paper, titled ‘ASEAN Interconnector Study: Taking a Regional Approach to Decarbonization,’ evaluates the advantages of a unified regional strategy towards decarbonizing the power sector and addressing hurdles such as efficiently integrating the substantial influx of renewable energy.

All ASEAN member states share the goal of reaching net-zero carbon emissions by 2050, with a longstanding aspiration to establish an ASEAN power grid to meet the region’s growing energy needs while strengthening energy security. DNV believes that such a grid could support decarbonization efforts by transporting clean energy from countries with excess renewable power to countries with shortages, as most current emission reduction efforts remain confined to individual nations.

With this in mind, DNV presents three scenarios for a decarbonized ASEAN power sector by 2050. While in the ‘individual approach,’ countries try to decarbonize using their own resources, the situation is different in the ‘moderate interconnection’ pathway, where there are several cross-border power interconnectors with limited transmission capacity and no hydrogen network. The third one, dubbed the ‘regional cooperation’ scenario, envisages full, unconstrained resource-sharing between countries, involving power interconnectors and hydrogen networks.

As a result, DNV’s study underscores that the primary advantage of the third scenario lies in minimizing the necessary levels of renewable generation and energy storage to attain net zero, thanks to the enhanced utilization and sharing of resources from regions abundant in renewable potential. This research underscores that such collaborative efforts can yield substantial cost savings, optimize material resource utilization, and reduce the acreage footprint required for renewable energy development.

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Brice Le Gallo, Vice President and Regional Director APAC, Energy Systems at DNV, remarked: “At DNV we aim to support the energy sector with insights to realize a clean, affordable and reliable energy transition. We hope that stakeholders in the ASEAN power sector find the paper useful and helps them transition faster.

“Our study forecasts power flow between ASEAN countries and regions under different scenarios. A key finding is that moderate interconnection offers substantial cost savings and requires limited interconnectors, meaning less resources and investment. This can be seen as a moderate step towards decarbonization as key stakeholders recognize the benefits of cross-border interconnectors.”

Moreover, DNV has estimated that regional cooperation can cut $800 billion or approximately 11% from the overall net present cost of ASEAN decarbonization by 2050 compared with the individual approach, and $300 billion or about 5% compared with moderate interconnection, which is seen as a potential stepping stone to regional cooperation.

Mats de Ronde, Team Lead, Energy Markets & Strategy APAC, Energy Systems at DNV, commented: “Decarbonization 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.”

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