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Renewable energy and policy options in an integrated ASEAN electricity market: Quantitative assessments and policy implications

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  • Chang, Youngho
  • Li, Yanfei

Abstract

Energy market integration (EMI) in the ASEAN region is a promising solution to relieve the current immobilization of its renewable energy resources and would serve the fast increasing demand for electricity in the region. EMI could be further extended with coordinated policies in carbon pricing, renewable energy portfolio standards (RPS), and feed-in-tariffs (FIT) in the ASEAN countries. Using a linear dynamic programming model, this study quantitatively assesses the impacts of EMI and the above-mentioned policies on the development of renewable energy in the power generation sector of the region, and the carbon emissions reduction achievable with these policies. According to our results, EMI is expected to significantly promote the adoption of renewable energy. Along with EMI, FIT appears to be more cost-effective than RPS and is recommended for the ASEAN region, albeit political barriers for policy coordination among the countries might be a practical concern. In addition, an RPS of 30% electricity from renewable sources by 2030, which is considered politically a “low-hanging fruit”, would achieve moderate improvements in carbon emissions reductions and renewable energy development, while incurring negligible increases in the total cost of electricity.

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  • Chang, Youngho & Li, Yanfei, 2015. "Renewable energy and policy options in an integrated ASEAN electricity market: Quantitative assessments and policy implications," Energy Policy, Elsevier, vol. 85(C), pages 39-49.
    • Handle: RePEc:eee:enepol:v:85:y:2015:i:c:p:39-49
    DOI: 10.1016/j.enpol.2015.05.011
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    2. Choi, Gobong & Huh, Sung-Yoon & Heo, Eunnyeong & Lee, Chul-Yong, 2018. "Prices versus quantities: Comparing economic efficiency of feed-in tariff and renewable portfolio standard in promoting renewable electricity generation," Energy Policy, Elsevier, vol. 113(C), pages 239-248.
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    9. Yanrui Wu, 2016. "Electricity Market Integration in ASEAN: Institutional and Political Barriers and Opportunities," Chapters, in: Yanfei Li & Shigeru Kimura (ed.), Achieving an Integrated Electricity Market in Southeast Asia: Addressing the Economic, Technical, Institutional, and Geo-political Barriers, chapter 4, pages 109-125, Economic Research Institute for ASEAN and East Asia (ERIA).
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    12. Kumar, Subhash, 2016. "Assessment of renewables for energy security and carbon mitigation in Southeast Asia: The case of Indonesia and Thailand," Applied Energy, Elsevier, vol. 163(C), pages 63-70.
    13. Fan Yang & Yongrok Choi & Hyoungsuk Lee, 2021. "Convergence or Divergence? Emission Performance in the Regional Comprehensive Economic Partnership Countries," Sustainability, MDPI, vol. 13(18), pages 1-15, September.
    14. Thapar, Sapan & Sharma, Seema & Verma, Ashu, 2016. "Economic and environmental effectiveness of renewable energy policy instruments: Best practices from India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 66(C), pages 487-498.
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    16. Sharvini, S.R. & Noor, Z.Z. & Stringer, L.C. & Afionis, S. & Chong, C.S., 2022. "Energy generation from palm oil mill effluent: A life cycle cost-benefit analysis and policy insights," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
    17. Yi, Bo-Wen & Xu, Jin-Hua & Fan, Ying, 2019. "Coordination of policy goals between renewable portfolio standards and carbon caps: A quantitative assessment in China," Applied Energy, Elsevier, vol. 237(C), pages 25-35.
    18. Jha, Amit Prakash & Mahajan, Aarushi & Singh, Sanjay Kumar & Kumar, Piyush, 2022. "Renewable energy proliferation for sustainable development: Role of cross-border electricity trade," Renewable Energy, Elsevier, vol. 201(P1), pages 1189-1199.
    19. Xu, Jin-Hua & Yi, Bo-Wen & Fan, Ying, 2020. "Economic viability and regulation effects of infrastructure investments for inter-regional electricity transmission and trade in China," Energy Economics, Elsevier, vol. 91(C).
    20. Li, Yanfei & Chang, Youngho, 2015. "Infrastructure investments for power trade and transmission in ASEAN+2: Costs, benefits, long-term contracts and prioritized developments," Energy Economics, Elsevier, vol. 51(C), pages 484-492.
    21. Yanfei LI & Youngho CHANG, 2014. "Infrastructutre Investments for Power Trade and Transmission in ASEAN+2: Costs, Benefits, Long-Term Contracts, and Prioritised Development," Working Papers DP-2014-21, Economic Research Institute for ASEAN and East Asia (ERIA).
    22. Hanh Hoang Thanh & Huy Dinh Tran Ngoc & Phuong Nguyen Thi Thanh & Nga Le Thi Viet & Anh Pham Tuan, 2020. "Impact of Macro Economic Factors and Financial Development on Energy Projects - Case in ASEAN Countries," Management, Sciendo, vol. 24(2), pages 146-157, December.
    23. Yi, Bo-Wen & Xu, Jin-Hua & Fan, Ying, 2016. "Inter-regional power grid planning up to 2030 in China considering renewable energy development and regional pollutant control: A multi-region bottom-up optimization model," Applied Energy, Elsevier, vol. 184(C), pages 641-658.
    24. M. Mofijur & T.M.I. Mahlia & J. Logeswaran & M. Anwar & A.S. Silitonga & S.M. Ashrafur Rahman & A.H. Shamsuddin, 2019. "Potential of Rice Industry Biomass as a Renewable Energy Source," Energies, MDPI, vol. 12(21), pages 1-21, October.
    25. Ahmed, Tofael & Mekhilef, S. & Shah, Rakibuzzaman & Mithulananthan, N., 2017. "Investigation into transmission options for cross-border power trading in ASEAN power grid," Energy Policy, Elsevier, vol. 108(C), pages 91-101.

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