VIENTIANE - Thailand and Malaysia concluded a deal on Wednesday which will see Malaysia buy 100 MW of electricity from Laos via Thailand's power grid.
Top energy officials of the three countries signed the Memorandum of Understanding (MoU) on the sidelines of the 34th ASEAN Ministers on Energy Meeting (AMEM) in the Myanmar capital of Nay Pyi Taw, according to the Lao Ministry of Energy and Mines.
Officials hailed the landmark agreement as the first multilateral power trade to be implemented under the ASEAN Power Grid Initiative.
"Under the agreement, Malaysia will buy up to 100 MW of power from Laos, to be transmitted through Thailand's national power grid," the ministry said in a press release.
The MoU was signed by Lao Deputy Minister of Energy and Mines Viraphonh Viravong, Malaysia's Minister of Energy, Green Technology and Water Datuk Seri Panglima Dr Maximus Johnity Ongkili, and Thai Energy Minister Gen. Anataporn Kanjanarat.
A joint statement said the initiative is aimed at enhancing energy security in ASEAN through the establishment of a network of interconnections between the three member states.
"It is also hoped that this pilot project will pave the way for other multilateral power trading in ASEAN as a means to enhance energy security in the region," the statement said.
Viraphonh was quoted as saying that there is more work to be done, and many more details to be ironed out.
"However, we believe our hard work will pay off, billions of dollars will be saved, and our people will benefit for decades to come," he said.
It is anticipated that the power integration project will be extended to Singapore.
"While Singapore is not a party to this MoU, we salute Singapore for the support and expertise given over many months and many meetings," Viraponh added.
"Together we will make the dream of sharing clean energy over three national grids - from Laos to Singapore - a reality."
Citing the Energy, Green Technology and Water Ministry, Malaysia's The Star reported that the MoU would pave the way for Malaysia to purchase up to 100MW of hydro power from Laos via Thailand's network by 2018.
The MoU also marked Malaysia's commitment to increase the share of renewable energy in its fuel mix by 2020 as part of mitigation action to reduce carbon emissions in the power sector, it said.
"The initial capacity of 100 MW could be increased in the future and would positively balance our fuel mix to be more environmentally friendly," the Malaysian ministry was quoted as saying by The Star.
In a separate session, Lao and Myanmar officials discussed an MoU calling for the two countries' national utilities to conduct feasibility studies on how they can optimise benefits from power sharing, according to the Lao ministry.
A small amount of power is already exchanged in the Lao-Myanmar border area.
Earlier in the day, Vice Minister Viraphonh told AMEM delegates that Laos can produce far more clean, green, renewable energy than it can use.
"Laos is keen to promote power trades in ways everyone can benefit from. We are unapologetic about building dams and developing all of our abundant hydropower resources as rapidly and responsibly as possible," he said.
"We urge you to further the momentum for ASEAN power sharing by establishing high-voltage interconnections between national grids."
Speaking on behalf of senior leaders on energy from the ASEAN states, Myanmar's U Htein Lwin said development of renewable energy technologies will help address the challenges of sustainable energy growth, and reduce greenhouse gas emissions as climate change impacts the region.