Electricity Markets Design and Large Share of Renewables: Lessons for ASEAN
Publication Name
Economics, Law, and Institutions in Asia Pacific
Abstract
ASEAN economies such as Malaysia and Vietnam have ambitions of establishing liberalized and fully competitive wholesale electricity markets. However, skyrocketing natural gas prices have exposed the vulnerability that liberalized markets globally face from external energy price shocks. ASEAN also has a target of increasing the renewable energy share of its primary energy mix to 35% by 2025. This chapter examines how ASEAN can establish a competitive wholesale electricity market which delivers affordable and reliable electricity while lurching toward achieving greater sustainability. It begins by reviewing the wholesale market design features of Singapore and the Philippines, ASEAN's existing liberalized electricity markets. Next, it draws out market-based policy lessons for ASEAN from the case studies of the eastern Australian national electricity market, the Western Australia wholesale electricity market, and the UK electricity market. Then it argues that the liberalized wholesale electricity market model based on merit-order dispatch may not facilitate integration of large-scale renewables in the absence of appropriate supporting arrangements within wholesale market rules and design and public policy outside of markets. One option is alternative spot market design features such as one proposed in Greece based on market splitting and decoupling gas prices from electricity prices. Liberalized electricity markets require balancing the market with government to achieve renewable energy and net-zero emission targets, by aligning energy policy with climate policy.
Open Access Status
This publication is not available as open access
Volume
Part F2208
First Page
1
Last Page
19