47129-001: Harmonizing the Greater Mekong Subregion Power Systems to Facilitate Regional Power Trade | Asian Development Bank

Regional: Harmonizing the Greater Mekong Subregion Power Systems to Facilitate Regional Power Trade

Sovereign (Public) Project | 47129-001 Status: Active

This regional technical assistance (RETA) is designed to support the continuous work of the Regional Power Trade Coordination Committee, the Working Group on Performance Standard and Grid Code, the Working Group on Regulatory Issues, and eventually the Regional Power Coordination Center in laying the essential building blocks to facilitate GMS regional power trade. Through these institutions, much more will be done by the GMS members themselves in developing a full-fledged GMS power market where all countries can realize and share the full benefits of synchronous operations. Interventions include harmonizing performance standards and grid codes dictating the technical rules for the coordinated planning and operation of the regional electricity market; and harmonizing regulatory framework, pricing, legal framework for third party access to the grid and wheeling obligations all towards a unified, fair and transparent regional electricity market.

Project Details

Project Officer
Bui, Duy-Thanh Southeast Asia Department Request for information
Country
  • Regional
Modality
  • Technical Assistance
Sector
  • Energy
 
Project Name Harmonizing the Greater Mekong Subregion Power Systems to Facilitate Regional Power Trade
Project Number 47129-001
Country Regional
Project Status Active
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8830-REG: Harmonizing the Greater Mekong Subregion Power Systems to Facilitate Regional Power Trade
People's Republic of China Poverty Reduction and Regional Cooperation Fund US$ 500,000.00
Technical Assistance Special Fund US$ 1.00 million
TA 8830-REG: Harmonizing the Greater Mekong Subregion Power Systems to Facilitate Regional Power Trade (Supplementary)
Technical Assistance Special Fund US$ 1.50 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Energy / Energy sector development and institutional reform

Gender Equity and Mainstreaming No gender elements
Description

This regional technical assistance (RETA) is designed to support the continuous work of the Regional Power Trade Coordination Committee, the Working Group on Performance Standard and Grid Code, the Working Group on Regulatory Issues, and eventually the Regional Power Coordination Center in laying the essential building blocks to facilitate GMS regional power trade. Through these institutions, much more will be done by the GMS members themselves in developing a full-fledged GMS power market where all countries can realize and share the full benefits of synchronous operations. Interventions include harmonizing performance standards and grid codes dictating the technical rules for the coordinated planning and operation of the regional electricity market; and harmonizing regulatory framework, pricing, legal framework for third party access to the grid and wheeling obligations all towards a unified, fair and transparent regional electricity market.

To realize and share the full benefits of synchronous operations, the establishment of the RPCC will tangibly demonstrate members' ownership and leadership of the regional power trade and market development process.

This RETA is intended to continue to build on the achievements of RETA 6440: Facilitating Regional Power Trading and Environmentally Sustainable Development of Electricity Infrastructure in the GMS. Specifically, this RETA supports the necessary institutional works for the establishment of the RPCC, and the work plan and activities of WGPG and WGRI towards the development of a GMS power market. Ultimately, the RETA is designed to maintain the momentum of regional power trade.

Project Rationale and Linkage to Country/Regional Strategy

Subregional Greater Mekong Subregion (GMS) power trade based on interconnected electric power networks will provide long-term economic and environmental benefits for individual countries and the entire GMS subregion. Such trade will enable members to (i) reduce national investments in the power reserves maintained to meet peak demand; (ii) provide a more reliable supply of electricity, including power supply from an interconnected network in case of power failure; (iii) reduce operational costs; (iv) reduce greenhouse gas emissions and other pollutants; and (v) increase consumers' access to the cheapest and most environmentally sustainable source of electricity in the subregion.

Confirming that subregional power trade will develop in phases, the Regional Power Trade Coordination Committee (RPTCC) systematically anchored on four development stages: (i) Stage 1: bilateral cross-border connections through power purchase agreements (PPAs); (ii) Stage 2: grid-to-grid power trading between any pair of GMS countries, eventually using transmission facilities of a third regional country; (iii) Stage 3: development of transmission links dedicated to cross-border trading; and, (iv) Stage 4: most GMS countries with multiple seller buyer regulatory frameworks, towards the implementation of a wholly competitive regional market.

To-date, the GMS power market has built on cross-border interconnections associated with power exports and bilateral power purchase agreements (PPAs), as described in Stage 1. This was achieved through a two-pronged approach to develop the GMS power market focusing on policy and institutional framework for promoting power trade, and physical interconnections to facilitate cross-border power. Before 1992, the only significant cross-border power transmission in the subregion existed to export hydropower from Lao PDR to Thailand. Some low voltage lines also connected certain areas in Lao PDR to Thailand and separately to Cambodia, distributing power to remote border regions. By 2010, total electricity trade in the GMS was approximately 34,139 gigawatt-hours (GWh). Thailand is the largest importer at 6,938 GWh, comprising hydropower purchases from Lao PDR. Lao PDR, Myanmar and PRC are the region's net exporters, with Lao PDR exporting the largest electricity volume and offering the most competitive supply price. Competitively priced electricity from Lao PDR and PRC has helped Thailand and Viet Nam meet their large and rapidly growing demand. Likewise, Cambodia can access more affordable electric power (versus its own power production cost) from its GMS neighbors. Moreover, remote border regions of Cambodia, Lao PDR and Viet Nam have benefitted from accessing cross-border power supply based in neighboring countries. Overall, electricity access has roughly doubled from about 37% on average in 1994 to around 69% in 2009, mostly benefiting remote rural populations.

To progress further on regional power trade and to help accelerate graduation into the Stage 2, much more should be done by the GMS members themselves to realize and share the full benefits of synchronous operations. In this regard, the establishment of the Regional Power Coordination Center (RPCC) will tangibly demonstrate members' ownership and leadership of the regional power trade and market development process. The institution will have a legal identity and be fully dedicated to managing cross-border power infrastructure and trade in the GMS. Following the signing of the Intergovernmental Memorandum of Understanding for the establishment of the RPCC in December 2013 by all six members, the bids to host the RPCC headquarters will be opened and a venue selected. Subsequently, the RPCC's Articles of Association should be finalized for approval at the first RPCC board meeting.

Regional power trade necessitates regionally integrated power systems. They need a high degree of technical compatibility, careful system planning and operational coordination to minimize the threat of voltage collapse, dynamic and transient instability, or supply disruption. Otherwise, multiple systems across several countries may be downed by cascading outages arising from technical (or other) faults started in just one member country. Overall, various organizational frameworks, technical capabilities, and even cultural distinctions can all contribute significantly to supply interruption.

The Working Group on Performance Standard and Grid Code (WGPG) and Working Group on Regulatory Issues (WGRI) are needed to help bridge the gaps between GMS country technical standards and regulatory framework to enable the regional power trade. These include harmonizing (i) performance standards and grid codes that set down the technical rules for the coordinated planning and operation of the regional electricity market; and, (ii) regulatory frameworks, pricing, legal frameworks for third party access to the grid and wheeling obligations. These prerequisites are fundamental in constructing a unified, fair and transparent regional electricity market.

Impact Improved energy security through enhanced cross-border regional power trade
Project Outcome
Description of Outcome GMS performance standards, grid codes, and regulatory framework developed and harmonized at a regional level
Progress Toward Outcome In the recent RPTCC-24 meeting, the GMS members continue to foster power trade and interconnections.
Implementation Progress
Description of Project Outputs

RPCC established and operations commenced through continued support to RPTCC

GMS performance standards and grid codes considered for implementation by WGPG

Guidelines for GMS regulatory framework proposed by WGRI

Status of Implementation Progress (Outputs, Activities, and Issues)

Tasks and deliverables for the two working groups are being complied with. Ongoing working groups' meetings to discuss short-term trading rules and knowledge product, and draft transmission regulations, grid codes, finalization of performance standards, etc.

Knowledge product is being finalized for publication in Q4 2018.

Geographical Location Regional
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services

Issuance of request for proposals for consulting firm being finalized. The consulting firm's scope includes due diligence of four regional power projects to be commissioned from 2022-2030 for GMS regional power trade which have been proposed by the GMS countries.

ADB continues to administer the TA and recruit the consultants, manage the contract administration, and be responsible for ensuring that the consultants deliver the TA reports and contribute meaningfully to RPTCC and working group meetings. GMS members will actively participate in successfully delivering the studies by contributing significantly to data gathering and analyses. The consultants will be hired n accordance with ADB's Guidelines on the Use of Consultants (2013, as amended from time to time).

Procurement Not applicable.
Responsible ADB Officer Bui, Duy-Thanh
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Energy Division, SERD
Executing Agencies
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines
Timetable
Concept Clearance 30 Apr 2014
Fact Finding 18 Jun 2013 to 19 Jun 2013
MRM -
Approval 16 Dec 2014
Last Review Mission -
Last PDS Update 24 Oct 2018

TA 8830-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
16 Dec 2014 - 16 Dec 2014 31 Dec 2017 31 Dec 2019 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,000,000.00 2,000,000.00 0.00 0.00 0.00 0.00 3,000,000.00 16 Dec 2014 998,412.92

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Power System Generation Planning Specialist Individual - Consulting Closed 24 Jul 2018 28 Jul 2018
Regional Performance Standards and Grid Codes Specialist Individual - Consulting Closed 29 Nov 2017 05 Dec 2017
Harmonizing the Greater Mekong Subregion Power Systems to Facilitate Regional Power Trade Firm - Consulting Closed 11 Nov 2017 10 Dec 2017

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Policy and Advisory Technical Assistance 8830 13 Jul 2018 ELECTRICITE DE FRANCE(FRANCE) SAVOIE TECHNOLAC LE BOURGET DU LAC 73373 FRANCE Asian Development Bank 1,200,080.00

Procurement Plan

None currently available.