Establishing Multilateral Power Trade in ASEAN
The ASEAN member states have a long-standing goal to establish multilateral power
trading in the region. To date, regional power trading has been limited to a series
of uncoordinated bilateral cross-border arrangements. Multilateral power trading can
bring multiple benefits, including reduced system costs, increased energy security
and an ability to integrate higher shares of variable renewable energy. An examination
of international experiences shows that it is possible to establish multilateral trading
while allowing for stepwise and voluntary development and respecting local sovereignty.
At the same time, increased cross-border integration and power trade does require
increased co-ordination and regulatory harmonisation.
This report identifies a set of minimum political, technical and institutional requirements
that the ASEAN member states will need to meet in order to establish multilateral
power trading in the region. Some of these minimum requirements can be met by building
upon existing efforts in the region. The report also proposes a set of trading arrangements
of increasing levels of ambition which, taken together, will enable ASEAN to establish
multilateral power trading in a manner that is consistent with maximising national
sovereignty and the equitable sharing of benefits. These recommendations include a
summary of potential roles for regional institutions and an example transaction to
show how trading might potentially work in practice.
Published on September 17, 2019