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Regional Power Grid Connectivity for Sustainable Development in North Regional Power Grid Connectivity for Sustainable Development in North-East-Asia Maria Pastukhova Northeast Asia Regional Power Policies and Strategies Interconnection Cooperation Forum (NEARPIC) 10 December 2020 Structure of the Report 1. Purpose of the report, studies review 2. Energy Systems in Northeast Asia 3. Current Status of cross-border interconnections and projects under discussion 4. Benefits of cooperation and challenges 5. Potential next steps and policy recommendations 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 2 Structure of the Report 1. Purpose of the report, studies review 2. Energy Systems in Northeast Asia 3. Current Status of cross-border interconnections and projects under discussion 4. Benefits of cooperation and challenges 5. Potential next steps and policy recommendations 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 3 1.1 Purpose of the Report 1. Consolidate the extensive, but scattered research on regional power grid connectivity in North-East-Asia 2. Map the scope for action by the main stakeholders 3. Examine the potential of power grid connectivity from a sustainability perspective 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 4 Why now? Global trends: 1. global climate effort, rapidly decreasing prices of renewable power generation (solar), storage and transmission technology, increased competitiveness of renewable electricity. Regional trends: 1. growing electricity demand (CHN, MNG, ROK) vs. need to diminish the share of fossil fuels in electricity mix (CHN, ROK) and dependency on their imports for power generation (JPN, ROK); 2. Net-zero pledges by CHN, JPN, ROK; 3. JPN, KOR: national power grid close to its limits due to massive deployment of renewable generation capacity; land use issues. 4. MNG, DPRK: stronger, more flexible power grid needed to harness domestic renewable power potential. 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 5 1.2 Studies Review The report is based on 129 region-specific studies on power grid connectivity 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 6 1.2 Studies Review The report is based on 129 region-specific studies on power grid connectivity 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 7 1.2 Studies Review The report is based on 129 region-specific studies on power grid connectivity 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 8 3.1 Current Status of cross-border interconnections Countries involved End points Voltage Capacity (MW) • 2010s – new interconnections between CHN-RUS, CHN- Russia, Mongolia Gusinoozerskaya TPP (RUS) - 2*220 kV 250 MNG operational. Darhkan (MNG) Kharanorskay TPP (RES) - 110 kV n.a. Choibalsan (MNG) • 2017 – MoU on joint development of CHN-KOR Chadan (RUS) - Khandagaity- 110 kV 90 interconnection; JDA is being prepared. Ulanngom Russia, China Blagoveshensk (RUS) - Heihe 110 95 (China) Sivaki (RUS) - Sirius/Aigun (China) 110 kV 90 Blagoveshensk (RUS) - 2*220 kV 300 Sirius/Aigun (China) Amurskay (RUS) - Heihe (China) 500 kV 750 China, Mongolia Oyu Tolgoi-Inner Mongolia 2*220 kV 300 China, DPRK 66kV 2*66kV n.a. DPRK, ROK ROK-KIC 154kV 100 China, ROK (in Weihai (China) – Incheon (ROK) 500kV 2000 planning) 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 9 3.2 Proposals for region-wide power system integration Asia Super Grid, ASG by REI/EC 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 10 3.2 Proposals for region-wide power system integration North-East Asia Energy Interconnection (NEAEI) by SGCC/GEIDCO 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 11 3.2 Proposals for region-wide power system integration North-East Asian Power System Interconnection (NAPSI) by ADB/EDF 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 12 4. Benefits of cooperation and challenges Different priorities among NEA countries: JPN, ROK: Lower power prices MNG: Economic growth & development CHN, ROK: Alleviating air pollution, reducing carbon burden Ample synergies between NEA countries make the RPGI a mutually beneficial option. 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 13 Potential next steps and policy recommendations Strategy 1: Building Trust Strategy 2: Developing a Strategy 3: Developing and and Political Consensus Master Plan for Regional implementing Power Grid Intergovernmental Interconnection Agreements, creating a broader institutional framework Strategy 4: Coordinating, Strategy 5: Moving towards Strategy 6: Coordinating harmonizing and multilateral power trade cross-border transmission institutionalizing policy and creating competitive planning and system and regulatory cross-border electricity operations frameworks markets Strategy 7: Mobilize Strategy 8: Capacity- Strategy 9: Ensuring that investments in cross- building energy connectivity border grid and initiatives are compatible generation infrastructure with the Sustainable Development Goals 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 14 Potential next steps and policy recommendations Strategy 1: Building Trust and Political Consensus • Start of an inclusive governmental dialogue. • Negotiating clear principles for long-term cooperation on power grid connectivity. • Discussions on reframing the notion of regional energy security when it comes to power system interconnections. • Dialogue on “new” security issues. • Public-private dialogue to ensure fair distribution of benefits 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 15 Potential next steps and policy recommendations Strategy 2: Developing a Master Plan for Regional Power Grid Interconnection • Creating a business case to kick-off the implementation of the Master Plan. • Working out the minimum requirements for regional power grid interconnection. • Including the existing cross-border interconnections and domestic power grids in the picture. 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 16 Potential next steps and policy recommendations Strategy 3: Developing and implementing Intergovernmental Agreements, creating a broader institutional framework • Signing a comprehensive MOU on multilateral cooperation on power grid connectivity • Developing a set of agreements, creating framework for cooperation • Creating a formal institution in North-East Asia to support interconnection, including enabling technical, policy, and political collaboration 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 17 Potential next steps and policy recommendations Strategy 4: Coordinating, harmonizing and institutionalizing policy and regulatory frameworks • Harmonization of regulatory norms and standards for efficient operation of cross-border interconnections • Cooperation on climate regulations and carbon pricing • Dialogue and harmonization of environmental standards 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 18 Potential next steps and policy recommendations Strategy 5: Moving towards multilateral power trade and creating competitive cross-border electricity markets • Developing regulations for cross-border power exchange • Developing coordinated price-building mechanisms for power exchange • Decide on the currency (or currencies) for cross-border power trade • In the short-term: sets of regulations for separate interconnection projects • In the medium-term: from harmonized bilateral trade towards a multilateral power market • In the long-term: unbundling and liberalization of energy markets 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 19 Potential next steps and policy recommendations Strategy 6: Coordinating cross-border transmission planning and system operations • Including cross-border transmission planning into national energy strategies • Coordination of cross-border transmission planning and operation with domestic plans and Strategies • Cooperating on joint emergency response mechanisms • Coordination of ancillary services to secure faultless power supply • Mechanism for data sharing to enable faultless operation of the regional power system 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 20 Potential next steps and policy recommendations Strategy 7: Mobilize investments in cross-border grid and generation infrastructure • Transparent and efficient legal framework for investments in the regional power sector • Support though FTA agreements (bilateral, trilateral, multilateral – in the subregion) • Study on policies to support financing of the regional power grid interconnection (governmental loans, guarantees on investment return, subsidies, tax incentives etc.) 10.12.2020 Regional Power Grid Connectivity for Sustainable Development in North-East-Asia 21 Potential next steps and policy recommendations Strategy 8: Capacity-building • Publishing data in English for better accessibility and using UNESCAP as a platform • Engage in joint capacity-building programs • Learn from international experience • Raise
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