USTDA and ACE Signed Agreement to Advance Energy Integration in Indonesia - Malaysia

13 Mar 2024
Authors: USTDA
Authoring Organisations: Asia Clean Energy Partners

Jakarta, 6 March 2024 - The ASEAN Centre for Energy (ACE) has announced its leadership role in a feasibility study that will explore potential new power interconnections between Indonesia and Malaysia. This initiative was made possible through a grant agreement signed between the U.S. Trade and Development Agency (USTDA) and PT Perusahaan Listrik Negara (Persero) (PLN) in Jakarta, Indonesia. It represents a significant step forward in enhancing energy security and connectivity within the ASEAN region.

The study, scheduled to begin in early 2024, will assess the feasibility of establishing power interconnections between Sumatra and Peninsular Malaysia, as well as between Kalimantan and Sabah. These proposed interconnections, recommended by the ASEAN Interconnection Masterplan Study (AIMS III), are crucial for facilitating a more integrated, sustainable, resilient, and affordable energy landscape across Southeast Asia.

Dr. Nuki Agya Utama, Executive Director of ACE, stated, "ACE, as the lead and initiator of this study, perfectly aligns with our mission to accelerate interconnectivity and sustainability among the ASEAN Member States. With the invaluable support of USTDA, ACE will assist PLN in identifying new opportunities for regional energy cooperation and contribute to a more secure and sustainable energy future for ASEAN."

Enoh T. Ebong, USTDA's Director, said, "Deploying this cross-border power transmission infrastructure will further Indonesia and Malaysia's renewable energy, climate, and economic ambitions and catalyze benefits across ASEAN member nations. This partnership with PLN holds great opportunity to expand economic development across Indonesia and Malaysia by connecting them and their partners to the technical and technology solutions offered by U.S. industry."

Darmawan Prasodjo, PhD, President Director of PT PLN (Persero), emphasized the significance of the study for Indonesia and Malaysia. He stated, "The exploration of these interconnections is a critical step forward in enhancing our national and regional energy resilience, as well as bringing mutual prosperity to the Southeast Asian region. Collaborating with ACE and USTDA allows us to leverage international expertise and resources, bringing us closer to realizing our vision for a more connected and sustainable power network across ASEAN."

Interconnections allow countries to share electricity across borders, aligning power supply with local demand. They are particularly valuable for maximizing power from variable renewable energy sources. USTDA's study will evaluate the feasibility of interconnections between Sumatra in Indonesia and peninsular Malaysia (Sumatra Interconnection) and between Kalimantan, Indonesia, and Sabah, Malaysia (Kalimantan Interconnection).

Delphos International, Ltd., a Washington, D.C.-based advisory firm, will conduct the study in coordination with Malaysian power utilities Tenaga Nasional Berhad and Sabah Electricity Sdn Bhd. The ASEAN Centre for Energy will support the project by engaging with stakeholders in both countries who stand to benefit.

This new infrastructure will be part of a network of 18 potential cross-border connections identified in the ASEAN Interconnection Masterplan Study, funded by the U.S. Agency for International Development. U.S. Ambassador to the Association of Southeast Asian Nations, Yohannes Abraham, emphasized the significance of energy cooperation while discussing the impressive growth of U.S. engagement with ASEAN through our Comprehensive Strategic Partnership. The partnership between USTDA and PLN will further enhance U.S. support for ASEAN's transition to clean energy by developing power connections, promoting expanded regional power trade, and ensuring system reliability. As a result, this partnership will improve connectivity and resilience within ASEAN.

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