Infrastructure investments for power trade and transmission in ASEANÂ +Â 2: Costs, benefits, long-term contracts and prioritized developments

- Systemic approach assesses the feasibility of regional power grid interconnection.
- Whole-system simulation of financial and commercial viability of transmission lines
- Optimized plan of investment on new cross-border transmission capacities
- The existing APG + interconnection plan stands financially and commercially viable.
- There is room to improve the APG + by integrated planning to enhance feasibility.

This study establishes a systemic approach in assessing the feasibility of power infrastructure investment for GMS and APG in the ASEAN + 2 (ASEAN plus China and India) region. It aims to identify the financial and finance-related institutional barriers of implementing such a regional power interconnection. A whole-system simulation model is built to assess the financial viability as well as commercial viability, which imply bankability for financiers and profitability for investors respectively, of new transmission projects under the optimized pattern of power trade. It also determines the optimized planning of new transmission capacities. According to our results, the existing development plan of power transmission infrastructure in the region, so called APG +, appears to stand as a financially and commercially viable plan. However, there is room for improvement in the planning in terms of timing, routes and capacity of the cross-border transmission lines and the GMS-related projects should be prioritized.