Power interconnection in the ASEAN region

Is ASEAN ready to move to multilateral cross‐border electricity trade?

“…Brunei Darussalam, Cambodia, Lao PDR and Myanmar maintain largely vertically integrated market structures and traditional state‐owned utilities. Indonesia, Malaysia, Thailand and Vietnam have introduced some level of wholesale competition via private independent power producers at the generation level, with transmission and distribution remaining largely state‐run (Owen et al ., 2019). These countries have a single‐buyer wholesale market structure, with retail tariffs regulated and controlled by the government.…”

“…These include regulations on cross‐border licencing, non‐discriminatory access to networks, competition in generation and import tariffs (Li et al ., 2020; Yao et al ., 2021). A factor that reportedly contributed to Singapore being slow to join the Lao PDR‐Thailand‐Malaysia trading arrangement is that Singapore has a competitive wholesale market for electricity and is hesitant to contract for a fixed quantity of supply (Owen et al ., 2019). Greater Mekong Subregion countries have yet to finish technical standard harmonisation, despite starting this work with the assistance of the Asian Development Bank in 1995 (Owen et al ., 2019).…”

“…A factor that reportedly contributed to Singapore being slow to join the Lao PDR‐Thailand‐Malaysia trading arrangement is that Singapore has a competitive wholesale market for electricity and is hesitant to contract for a fixed quantity of supply (Owen et al ., 2019). Greater Mekong Subregion countries have yet to finish technical standard harmonisation, despite starting this work with the assistance of the Asian Development Bank in 1995 (Owen et al ., 2019). An APG, with a considerably bigger scale and more diverse setting, is much more complex.…”

“…Resistance from incumbent utilities augments these difficulties. State‐owned utilities in countries such as Indonesia are likely to not want to forego their current market dominance to enter a more competitive context (International Renewable Energy Agency, 2018; Owen et al ., 2019). Some high‐cost electricity generators (including those owned by state‐owned utilities) would also become uncompetitive if wholesale prices were to converge under a strong form of market integration (Oseni and Pollitt, 2016; International Energy Agency, 2019a).…”

“…Barriers to the realisation of an APG have also been discussed (e.g. Wu, 2016; Owen et al ., 2019; Shi et al ., 2019; Li et al ., 2020). However, discussions could pay more attention to when ASEAN should proceed to multilateral and unified cross‐border electricity trade.…”