International power grids and exchanges
In countries with large scale renewable energy capacity addition, variability and intermittency of renewable energy based power generation is a major concern. Often this acts as a barrier for capacity expansion plans at the national level. An important strategy for managing the variability of renewable energy is to spread the electricity supply and demand over large areas by building regional and international grids. Large catchment areas with multiple nodes of concentrated supply and demand, allow flexibility in the system. When power is traded real-time through market exchanges over this large catchment area, it leads to the realisation of the cheapest source of electricity delivering economic benefits for all countries involved. Nordpool and upcoming regional grids in the south-east asian region serve as good examples.
African clean energy corridor
The African Clean Energy Corridor (ACEC) programme was launched by IRENA in 2014 to meet the huge increase in energy demand projected in the African continent while fulfilling climate objectives. The initiative will be taken up in three regions: the Eastern Africa Power Pool (EAPP), the Southern African Power Pool (SAPP) and the West Africa Clean Energy Corridor (WACEC). A regional approach to power sector development will enable the trade of least-cost renewable and clean electricity, and an optimal utilisation of renewable energy. ACEC will involve the following steps: 1) zoning and resource assessment to site renewable power plants in areas with high resource potential and suitable transmission routes; 2) national and regional planning to integrate cost-effective renewable power options; 3) enabling frameworks for open markets and reduced financing costs; 4) capacity building to plan, operate, maintain and govern power grids and markets; and 5) public information and awareness outreach.
Sun Cable project
Australia / Singapore
The Sun Cable project, when implemented, will be a leading example of international renewable energy electricity trade, supplying clean energy to countries that do not have the land area or resources for domestic production. Launched in 2018, the Australia-ASEAN Power Link (AAPL) project operated by Sun Cable has the potential to become the world's biggest grid interconnection infrastructure based on renewable energy. The project involves the construction of a 10GW solar power plant in Australia, combined with battery storage facilities of up to 30GWh, and an HVDC subsea cable spanning 3,750 kilometres, linking Northern Australia to the ASEAN power grid. Electricity from the project will be sold to Singapore, meeting 20% of its electricity demand. In 2019, AAPL obtained a major project status, highlighting the strategic significance of the project to Australia. It is now at the heart of Australia's discussions around a green post-COVID recovery strategy.
Funding support for utility-scale batteries
Australia is successfully demonstrating the feasibility of large-scale battery storage to compensate for inadequate transmission infrastructure in some areas and integrate large scale renewable energy into the grid. The drive for large-scale batteries has been initiated predominantly by subnational governments, through ambitious decarbonisation policies and partial funding support. The state government of South Australia, for instance, has set a target of 100% renewable energy by 2030 and has launched a Renewable Technology Fund to initiate projects on energy storage. AGL, the coal-intensive electricity utility, has announced construction of big batteries (250MW/1,000MWh) expected to offer up to four hours of storage. In Victoria, big batteries (300MW/450MWh) will enable the Australian Energy Market Operator to secure a key interconnection for the region, providing 250MW of "virtual transmission" capacity that can be utilised when required. These developments will increasingly reduce market opportunities for coal and gas plants and contribute towards phasing out fossil fuels from the Australian energy mix.
Technical and economic benefits of regional grid integration
The ASEAN Plan of Action for Energy Cooperation (APAEC) 2016-2025 set a renewable energy target of 23% by 2025. Regional grid integration amongst member countries is a key component in the plan to reach this target. The IEA recently studied the impacts of such a regional grid integration on the ASEAN region, where grid integration initiatives are at an advanced stage. The study conducted in 2019 included four nodes C: Central (Thailand); E: East (Cambodia, Lao PDR and Viet Nam); NW: North-west (Myanmar) and S: South (Malaysia and Singapore). The study found that optimised regional power trade based on current infrastructure reduces annual grid operation costs by $1 billion over the ten-year period, significantly reduces renewable energy curtailment, and enables the grid to accommodate more renewable energy capacity. Regional grid interconnections combined with high renewable energy capacity plans are both essential to transition to a low-carbon economy.