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Regional Grid Interconnection for Low-Cost, Low-Carbon, and Low-Conflict Energy
The power sector and electricity market in the Greater Mekong Subregion (GMS) is developing rapidly and, driven by the fast-growing economies of the subregion, will likely sustain its growth over the coming decades. Energy demand in the GMS is expected to rise more than threefold, from 486 TWh (Tera Watt Hour) in 2021 to 1,645 TWh by 2050. This presents both challenges and opportunities. Electricity is a key component in national and regional development, as well as in achieving the decarbonization commitments articulated in nationally determined contributions. How the sector evolves in the GMS will significantly affect energy security, sectoral decarbonization, and its impact on nature and people.
The report postulates that a smartly-designed regional power grid for the GMS can facilitate the transition to 100 percent renewable electricity without sacrificing nature, people, or rivers. Following baseline power development trajectories in the GMS, this modeling shows that expanding cross-border interconnector transfer capacity enables a higher deployment of variable renewable energy at a lower overall system cost. Further, against the backdrop of a targeted 100 percent renewable energy in the GMS electricity mix, expanding cross-border transfer capacity yielded significant savings in annual power system costs and investment requirements while optimizing the use of assets, including existing hydropower, exploiting the highest potential of variable renewable energy resources, and establishing substantial volumes of regional energy trading by 2050.