A Pan-Aisan Energy Infrastructure

There's never been a better time to re-engineer Asia's energy system.

Oct 25, 2009 - Desertec Asia

Coal-fired power plants are getting old. The electricity transmission system needs upgrading. New supplies of natural gas are coming on line that need a route to market. The regional economy is becoming increasingly integrated. Climate change looms large.

A Pan-Asian Energy Infrastructure could link Australia to China Source: DESERTEC-Asia

Energy market reforms that remove the deadweight costs of the status quo will encourage application of new technology. The result will be industrial reinvigoration, higher economic growth rates and improved living standards.

The challenge? Asia should treat its rising energy needs as a collective, multilateral concern in which the overarching goal is the 'greatest good for the greatest number.'

A flexible, robust and open regional energy transmission network would achieve this goal. It would last a century or more. It would be adaptable to tomorrow's energy sources (renewables) and tomorrow's fuels (like hydrogen).

Thinking short term, by contrast, could result in wasteful investment and stranded assets.

Several assumptions underpin the conceptual viability of a Pan-Asian Energy Infrastructure.

1. A continuing trend toward increasing cross-border trade
2. The need to turn over aging energy generating capacity while also creating new sources of supply.
3. The need for upgraded transmission infrastructure
4. The need to combat global warming.

All are largely self-evident.

Needed investment could be funded through universally-applied carbon pricing and removal of perverse subsidies. This is economic common sense.

When the net present costs of avoided climate change and environmental damage are then added in, a massive net present positive sum is generated.

China is a huge energy consumer. Australia is a clean energy powerhouse.

Developing and linking Australia's clean energy supply to China's clean energy demand will benefit not just Australia and China, but all the ASEAN countries that lie in between -- as well as Japan and South Korea.

The result: a virtuous circle of economic development, industrial reinvigoration, greater social inclusion through deepened electrification and longer human life-spans through greater environmental protection and remediation.