Memorandum of Understanding on ASEAN Power Grid being established to strengthen and widen the mutual cooperation on electricity interconnection and trading between ASEAN countries with the purpose of region energy sector security and sustainability. This paper was presented for The President Republic of Indonesia as an academic background for Presidential Decree on Ratification of MOU on ASEAN Power Grid

1. INDONESIA & ASEAN
POWER GRID
Indonesia Roles in ASEAN Power Grid
Memorandum of Understanding on ASEAN Power Grid being established
to strengthen and widen the mutual cooperation on electricity
interconnection and trading between ASEAN countries with the purpose of
region energy sector security and sustainability.
Ir. Noezran Azwar, MT
1 April 2008

2. 1 April 2008
INDONESIA & ASEAN POWER GRID
Indonesia Roles in ASEAN Power Grid
E
nergy sector including electricity, in recent With this background, the power utilities and
years becomes a factor of economic growth in all authorities of ASEAN countries established a joint
countries, which also in ASEAN countries. forum Heads of ASEAN Power Utilities/Authorities
Electricity is being massively produced from available (HAPUA) in 1981. One of this forum tasks is to
energy resources to meet the demand. Nevertheless, establish and develop electricity interconnection
the development of new transmission and distribution network between ASEAN countries. In 2003 HAPUA
of the electric power is also being accelerated. conducted a study “ASEAN Interconnection Master
plan Study” (AIMS). The main goal is to found better
But, unfortunately not all countries have the luxury to ASEAN electricity power interconnection master plan
produce and distribute electricity easily, especially the that suits the need for supply, distribution and
countries that geographically have large areas and transmission, security, and opportunities for electricity
separated into islands and the countries which trading between ASEAN countries. The study result is
demographically not distributed very well. These a proposal for electric power interconnections that
countries are experiencing high cost investment to should be established between years 2007 – 2020;
provide electricity to their people. In some cases, the
closest energy or electricity resources being located in Table 1 AIMS Proposal for ASEAN Interconnection
neighbor countries that open the possibilities for having
No Grid Interconnections Year of
electricity trading between countries. Implementation
1 Sarawak - P. Malaysia 2015
2 P.Malaysia - Sumatra 2012
3 Batam - Singapore 2015
4 Sarawak - West Kalimantan 2012
5 Philippines - Sabah 2015
6 Sarawak - Sabah - Brunei 2015
7 Thailand – Lao PDR
a) Roi Et - Nam Theun 2 2009
b) Udon - Nabong 2010
c) Mae Moh - Hong Sa 2013
8 Lao PDR - Vietnam 2010
9 Thailand-Myanmar 2014
10 Vietnam - Cambodia 2008
11 Lao PDR-Cambodia 2010
12 Thailand-Cambodia 2007
To follow-up AIMS, in 23 August 2007 in Singapore,
Memorandum of Understanding on The ASEAN Power
Grid (MOU on APG) signed by the ASEAN ministers.
MOU on APG is agreement between ASEAN countries
Picture 1 ASEAN Countries through ASEAN policies for strengthening and
widening mutual cooperation on interconnection and
In South East Asia region, the electricity trading
electricity trading.
occurred in 1966 between Lao PDR with Thailand. This
same cooperation also conducted in 1978 between
Thailand, Malaysia, and Singapore.
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3. 1 April 2008
GENERAL SITUATION AND ELECTRIC POWER
CONDITION ON INDONESIA INTERCONNECTION BETWEEN
ELECTRICITY SECTOR ASEAN COUNTRIES
Indonesia energy elasticity to economic growth is still The discretion and opportunities given by GOI have not
more than 1. It is showing that, Indonesia still has high yet being used optimally by the private sector whether
dependency to energy consumption for growing the for technical reason or financing problem. This kind
economy. In parallel with energy and electricity situation occurred in some areas in Indonesia.
efficiency effort for reducing energy dependency, to
have more sustained economic development, Indonesia Like in Kalimantan Barat province, electric power
still has to do extra effort on providing energy and supply still depends on old diesel generators (PLTD),
electricity. which the operation cost is getting higher since the
inclining of world’s oil crude prices. The electrification
Indonesia is one of energy resources rich countries, ratio in year 2007 is only 53.7%.
from the fossil fuel (oil, gas, and coal) to renewable
energy (hydro, wind, solar, biomass, and nuclear Kalimantan Barat electricity peak load in 2007 is 235
power). But with Indonesia geographic condition as an MW with production capacity of 1.197,5 GWh. Sixty
archipelago country, and demographically not percent of the load is mainly supplied by electric power
distributed very well, the efforts to provide energy and generators from Kapuas Connection System through
electricity by utilizing those energy resources or 150 kV transmission line and the balance from other
distributing the electricity, in some cases, are facing a off-grid generators. Electricity selling in 2007 is 1,038.7
lot of obstacles. This condition is driving high cost GWh with composition of; household 632.2 GWh,
investment on electricity production and distribution commercial buildings 207.6 GWh, industries 94.5 GWh,
and becomes the reason why Indonesia still has low and other public services 104.4 GWh.
electrification ratio, which less than 60%.
Electricity demand factors in Kalimantan Barat are
In the effort to raise electrification ratio and to population growth and economic growth. Population
accelerate electricity capacity development, growth projection until 2025 is 0.89 per year with the
Government of Indonesia (GOI) provide discretion for economic growth projection is 7.4%. With these
development electric power supply sector through numbers, the electrification ratio in 2025 is projected
policies and regulation. For example, through Law no. up to 99%. Electricity demand growth until 2025 is
15 Year 1985 About Electricity and Law no. 30 Year projected to be 4.3% per year with the peak load to be
2007 About Energy, Presidential Decree no. 5 Year 402 MW. Backup system is assumed 40% – 45%. The
2006 About National Policy on Energy, Ministerial electric powers plants have already integrated to the
Decree no. 1 Year 2006 About Procedures on Electric system are off-grid diesel generators (in total of 12 MW)
Power Purchasing and/or Grid Leasing in the Effort of and mini hydro generator (PLTM Merasap 1.5 MW).
Electricity Provision for Public, GOI gives discretion to There is plan to build 335 MW electric power plants to
private sector to have electric power plant meet year 2025 electricity demand of 402 MW which is
(Independent Power Producers – IPP) which sell the consist of coal generators (PLTU, 235 MW), diesel
electricity produced to National Electric Power generators (PLTD, 45 MW) and gas generators (PLTG,
Company (PLN) whom will distribute it to the people. 55 MW). The ongoing power plant projects are coal
generators; PLTU Kura-Kura (2 x 25 MW) and PLTU
Through those policies and regulation, and through Parit Baru 2 (2 x 50 MW) which will be on operation in
Ministerial Decree no.2 Year 2006 About the 2009.
Development on Medium Scale Renewable Energy
Power Plant, GOI also give the discretion and In our neighbor ground, Sarawak Malaysia, there is
opportunities for renewable energy power plant large hydro power plant which has already on
development. operation, Bakun hydro power plant 2400 MW.
Technically, this power plant is over production (since
the resource is over supply) and the electricity can be
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4. 1 April 2008
utilized to meet Kalimantan Barat electricity demand. All the interconnection plans have to be based and refer
If ASEAN Power Grid could be implemented as AIMS to Law no.30 Year 2007 About Energy, which give GOI
2003 results, then grid interconnection between discretions to establish international cooperation on
Kalimantan and Sarawak will be engaged in 2012. energy provision. That cooperation shall be based on
nation goals of:
a. Strong nation energy security;
b. Security of domestic energy supply
c. Increase the nation economic growth.
On above basis, the signature of MOU on APG has tobe
comply with above Law no.30 Year 2007.
THE ENFORCEMENT OF MOU ON
ASEAN POWER GRID
Inside the MOU on APG there is agreement between
countries to do studies in solving of cross border issues
which are:
1. Technical;
Picture 2 Kalimantan Barat Transmission and Distribution The studies shall subject to the harmonization
Master Plan of technical specifications for the ASEAN Power
Grid
If ASEAN electricity interconnection cooperation
2. Financing;
format to be business to business scheme, then the
The studies shall subject to available modes or
tariff on Malaysia – Kalimantan Barat to be set on each arrangements for the financing of the
business interest between PLN (the buyer) and Bakun construction, operation and maintenance of the
Hydro Power (the seller). If the tariff is referring to ASEAN Power Grid.
Malaysia basic price which is 0.085 $/kwh and in the 3. Taxation and tariff
other side PLN’s cost of generating electricity in The studies shall subject to arrangements for
Kalimantan Barat is 0.26 $/kwh1, and with a simple the mutually agreed imposition of, or exemption
from, import, export or transit fee, duty, tax or
calculation the PLN’s cost efficiency would be 0.175
other government imposed fees and charges on
$/kwh. Therefore with this interconnection, there is
the construction, operation, and maintenance of
benefit for PLN in the form of investment/ operating the ASEAN Power Grid.
cost reduction. 4. Regulatory and Legal Frameworks
The studies shall subject to harmonization of
Beside above interconnection plan, there are other
regulatory and legal frameworks within ASEAN
interconnections based on AIMS which are: Malaysia –
to hasten the implementation of bilateral or
Sumatera (2012) and Batam – Singapore (2015).
cross border power interconnection and trade.
In Malaysia – Sumatera interconnection plan there will 5. Electric Power Trade
be electricity exchange in each country peak load time. The studies shall subject to Institutional and
Indonesia will sell the electric power excess to Malaysia contractual arrangements for power trade.
in Malaysia peak load time (10.00 – 14.00) and will buy 6. Third Party Access
electric power from Malaysia in Indonesia peak load The studies shall subject to arrangement for
time (17.00 – 22.00). third party access for power interconnection and
trade in accordance with such internationally
In Batam – Singapore interconnection plan Indonesia accepted standards in the electricity supply
would be the electric power producer and will sell the industry and formulation of a transmission
electric power produced to Singapore. pricing framework within ASEAN.
1 Quote from Pontianak Post in www.plnkalbar.co.id
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5. 1 April 2008
MOU on APG delegates the responsibilities to Heads of would reduce deficit of electricity supply in
ASEAN Power Utilities/Authorities (HAPUA) to peak load time.
establish SEAN Power Grid Consultative Committee 3. Increasing of national income. The electricity
(APGCC). trading between Indonesia – Singapore will
give economic benefit.
To engage the enforcement of MOU on APG, there has 4. Affect the energy security, since there will be
to be a ratification of MOU on APG by each country2. dependency of electric supply to Malaysia in
Ratification instrument of MOU on APG in Indonesia certain amount and time.
shall be based on law and other regulation. The
references for establishing the ratification instrument On those natures, therefore, the suitable ratification
are: instrument format definition is by Law through
legitimating by the Parliament.
1. The Constitution 1945
2. Law no. 30 Year 2007 About Energy On the other side, MOU on APG still does not have the
3. Law no. 15 Year 1985 About Electricity mother law or treaty on the ASEAN level, yet. MOU on
4. Law no. 24 Year 2000 About International APG is not a technical implementation of any ASEAN
Treaty mother laws. Therefore there shall be establishment of
5. Law no. 10 Year 2004 About Establishment of the mother law first in order to enforce MOU on APG.
Laws
Based on above Laws, ratification instrument format CONCLUSION
definition shall be observed and determined by the The signing of MOU on APG is a right step in the effort
natures of the international cooperation will be of providing electricity for people also in increasing
conducted. The ratification instrument shall be agreed national income. The APG should be treated as mutual
and legitimated by the Parliament if there are: cooperation between ASEAN countries. To enforce
MOU on APG in order to implement the APG in time,
a) Impact on the nation
there is ratification instrument shall be established
b) Impact on national budget
soon.
c) Impact on conjunct laws and regulations;3
Ratification instrument on international treaty shall be
legalized in the format of Law if related to: References
a) Politics, peace, defense and security of the nation. 1. ASEAN, Memorandum of Understanding
b) National border; on ASEAN Power Grid, 2007
c) Nation sovereignty; 2. Republik Indonesia, UUD 1945
d) Human rights and environment; 3. Republik Indonesia, UU No. 30 Tahun 2007
e) Establishment of new Laws; Tentang Energi
f) International grant and loan4 4. Republik Indonesia, UU No. 15 Tahun 1985
Tentang Kelistrikan
The natures of ASEAN electric power grid
5. Republik Indonesia, UU No. 24 Tahun 2000
interconnection through MOU on APG for Indonesia
Tentang Perjanjian Internasional
are:
6. Republik Indonesia, UU No. 10 Tahun 2004
1. International electricity trading. Tentang Pembentukan Perudang-
2. Securing energy and electricity supply. undangan
Malaysia – Sumatera interconnection plan 7. Republik Indonesia, Peraturan Presiden
No.5 Tahun 2006 Tentang Kebijakan
2 Article X of Memorandum of Understanding on Energi Nasional
ASEAN Power Grid 8. Republik Indonesia, Peraturan Menteri
3 Article 11 UUD 1945 Energi dan Sumber Daya Mineral No. 1
4 Article 10 UU No. 24 Tahun 2000 Tentang Perjanjian
Tahun 2006 Tentang Prosedur Pembelian
Internasional
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6. 1 April 2008
Tenaga Listrik dan/ atau Sewa Menyewa
Jaringan Dalam Usaha Penyediaan
Listrik Untuk Kepentingan Umum
9. Republik Indonesia Departemen Luar Negeri,
Petunjuk Pelaksana Pembuatan
Perjanjian Internasional , 2000
10. PT. Energy Management Indonesia, Laporan
Akhir Penyiapan Kerjasama Antar Negara
ASEAN dalam Interkoneksi Sistem Tenaga
Listrik, 2007
11. REPSF, Preparing for Electricity Trading
in ASEAN, 2005
12. PLN, Perubahan Rencana Usaha
Penyediaan Tenaga Listrik 2006 – 2015,
2006
13. PLN, Rencana Usaha Penyediaan Tenaga
Listrik 2006 – 2015, 2005
14. Pontianak Post, Mesin PLTD Terbakar, 14
Juni 2006
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