U.S. Trade and Development Agency Advances Energy Sector Integration in Indonesia, Malaysia

Photo caption: (L-R) ASEAN Centre for Energy Manager of power, fossil fuel, alternative energy, and storage Beni Suryadi, ASEAN Centre for Energy Executive Director Dr. Nuki Agya Utama, President Director of PLN Dr. Darmawan Prasodjo, PLN Director of Finance Sinthya Roesly, and U.S. Ambassador to the Association of Southeast Asian Nations Yohannes Abraham.

U.S. Trade and Development Agency Advances Energy Sector Integration in Indonesia, Malaysia
© U.S. Trade and Development Agency

On Wednesday, the U.S. Trade and Development Agency (USTDA) signed a grant agreement with Indonesian national utility PT Perusahaan Listrik Negara (PLN) for a feasibility study to support of the development of two cross-border power interconnections between Indonesia and Malaysia. The project, which advances a key power sector objective for the Association of Southeast Asian Nations (ASEAN), will facilitate efficient resource sharing to help meet growing energy demands, enhance energy security, and implement policies for clean energy and climate protection goals in both countries.

“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,” said Enoh T. Ebong, USTDA’s Director. “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.”

Interconnections allow countries to share electricity across borders, which helps match power supply to local demand, and are particularly valuable for maximizing power generated by variable renewable energy sources. USTDA’s study will assess the feasibility of interconnections between Sumatra in Indonesia and peninsular Malaysia (Sumatra Interconnection) and between Kalimantan, Indonesia and Sabah, Malaysia (Kalimantan Interconnection).

PLN has selected Washington, D.C. based advisory firm Delphos International, Ltd. to carry out 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 the numerous stakeholders in both countries who will benefit from its implementation.

“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. This ambitious dream can only be achieved through collaboration, as demonstrated by the recent signing of the grant agreement between PLN and USTDA,” said President Director of PLN Darmawan Prasodjo.

Darmawan acknowledged while the establishment of this interconnected system poses challenges in terms of policy, technical, and commercial aspects, these obstacles can be overcome with a unified approach.

“Collaboration with 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,” added Darmawan.

This new infrastructure will form part of a network of 18 potential cross-border interconnections identified in the ASEAN Interconnection Masterplan Study, which was developed through funding from the U.S. Agency for International Development.

U.S. Ambassador to the Association of Southeast Asian Nations Yohannes Abraham said, “Energy cooperation is a key part of the unprecedented expansion of U.S. engagement with ASEAN through our Comprehensive Strategic Partnership. USTDA’s partnership with PLN will enhance U.S. support of ASEAN’s clean energy transition, including through the development of electrical power interconnections for expanded regional power trade and system reliability. This partnership will strengthen connectivity and resilience in ASEAN.”