Boosting cross-border electricity trade offers an important way for the Greater Mekong Sub-region (GMS) countries to improve their ability to meet the region’s increasing electricity demand in an economically advantageous, environmentally sustainable, and socially just manner. Regional interconnectivity could also result in more stable and efficient grid systems due to geographical diversification of electricity generation. GMS power interconnectivity has been estimated to be able to reduce the present value of overall energy costs by around one-fifth in an integrated scenario versus a business-as usual scenario (Asian Development Bank, 2009).
Other than relatively large-scale purchases by Thailand from Lao PDR, electricity trade between most countries in the GMS has been limited. This think piece reviews barriers to cross-border electricity trade in the region in the contemporary context in which low-emission electricity sector outcomes are highly desirable. It recommends solar and wind power together with off-river pumped-hydro energy storage and boosted cross-border electricity trade as a promising way forward. Other recommended enabling strategies include: 1) focusing on bilateral interconnection development with regional planning and coordination over the short term (2021– 2025); 2) improving information sharing on the operation of existing hydro dams; 3) enhancing political and social support; and 4) developing a super high voltage direct current grid.