- •Abstract
- •Foreword
- •Acknowledgements
- •Executive summary
- •Many models of multilateral power trade
- •Minimum requirements
- •Proposed trade models for ASEAN
- •Findings and recommendations
- •Highlights
- •Overview of study
- •Categories of multilateral power trade
- •International experiences in multilateral power trading
- •Minimum requirements for establishing multilateral power trading
- •Political requirements
- •Technical requirements
- •Institutional requirements
- •Building upon existing efforts
- •LTMS–PIP
- •Proposed trade models for ASEAN
- •Harmonised bilateral trading
- •Secondary trading model
- •Primary trading model
- •Conclusion
- •1. Introduction
- •Models of cross-border power trade
- •ASEAN principles for developing multilateral power trade
- •Overview of ASEAN’s energy sector
- •References
- •2. AMS perspectives
- •APG region: North
- •Cambodia
- •Planned development, including cross-border integration
- •Planned development, including cross-border integration
- •Myanmar
- •Planned development, including cross-border integration
- •Thailand
- •Planned development, including cross-border integration
- •Viet Nam
- •Planned development, including cross-border integration
- •APG region: South
- •Indonesia (Sumatra)
- •Planned development, including cross-border integration
- •Malaysia (Peninsular)
- •Planned development, including cross-border integration
- •Singapore
- •Planned development, including cross-border integration
- •Malaysia (Sarawak and Sabah)
- •Planned development, including cross-border integration
- •APG region: East
- •Brunei Darussalam
- •Planned development, including cross-border integration
- •Indonesia (West Kalimantan)
- •Planned development, including cross-border integration
- •The Philippines
- •Planned development, including cross-border integration
- •References
- •3. Regional perspectives
- •Existing regional integration efforts among AMS
- •LTMS–PIP
- •BIMP–EAGA interconnectivity project
- •Building off existing efforts: The GMS grid codes
- •References
- •4. International case studies
- •Primary power trading arrangements
- •Power pooling in PJM’s eastern territory
- •The measurable value of markets in the PJM region
- •ISO New England
- •Market overview
- •Market structure
- •Nord Pool
- •Governing agreements and regulation
- •Market overview
- •Market structure
- •Policy and regulation
- •Secondary power trading arrangements
- •SAPP
- •SIEPAC
- •Market overview
- •Nascent power trading arrangements
- •SARI/EI
- •Market overview
- •Market structure
- •Key findings: Lessons for ASEAN
- •Drivers and benefits
- •Design options and minimum requirements
- •The need for enabling institutions
- •Financial implications of regional institutions
- •References
- •5. Establishing multilateral power trade in an ASEAN context
- •Minimum requirements for establishing multilateral power trade
- •Harmonised technical standards (grid codes)
- •Summary of minimum level of grid code harmonisation
- •Building off existing efforts: The GMS grid codes
- •External (third-party) access to domestic grids
- •Wheeling charge methodology
- •Data and information sharing requirements
- •Dispute resolution mechanism
- •Other minimum requirements
- •Funding implications of stepwise implementation
- •Role of institutions
- •Overview of existing ASEAN regional institutions
- •ASEAN Secretariat
- •HAPUA
- •AERN
- •Mechanism for settling transactions
- •Potential role of a CCP
- •Optional requirement: Trading currency or currencies
- •Potential options for regional institutions in ASEAN
- •References
- •6. Models for establishing multilateral power trade in ASEAN
- •Overview of proposed models
- •Establishing harmonised bilateral trade with wheeling
- •Overview of trade model
- •Additional requirements and analytical gaps
- •Potential role of institutions
- •Example transaction
- •Establishing a secondary trading model
- •Overview of trade model
- •Additional requirements and analytical gaps
- •Potential role of institutions
- •Example transaction
- •Establishing a primary trading model
- •Overview of trade model
- •Additional requirements and analytical gaps
- •Potential role of institutions
- •Example transaction
- •7. Implications for ASEAN stakeholders
- •Utilities
- •Regulators
- •Investors
- •Consumers
- •Acronyms and abbreviations
- •Table of contents
- •List of figures
- •List of tables
Establishing Multilateral Power Trade in ASEAN |
AMS perspectives |
Figure 27. Indonesia (West Kalimantan) power mix, 2018
Source: ASEAN Centre for Energy.
The primary source of generation is fossil fuels, with oil generating 44% of the total power generation.
Planned development, including cross-border integration
PLN developed the RUPTL, which is summarised in the section on Indonesia (Sumatra) above. Figure 28 shows the contribution to the PDP for Kalimantan.
In the same PDP, the existing cross-border interconnection with Sarawak is expanded to an extra-high voltage line that will continue on to Sabah. At that point, all of Kalimantan’s system would be interconnected in a so-called Grid Borneo. Should interconnectors be developed, Indonesia’s Kalimantan system is likely to be a net importer of electricity.
Figure 28. Capacity additions in Kalimantan, 2018-27
Source: ASEAN Centre for Energy.
Fossil fuels make up the majority of the planned generation additions in Kalimantan.
The Philippines
In the Philippines, the demand and supply for electricity has been steadily increasing as shown in Figure 29 below. Furthermore, the margin between supply and demand is kept constant year-by-year (about 15 GW). The total installed capacity in 2017 was approximately 21.6 GW. Coal is the largest source of generation, followed by hydro, natural gas, oil and geothermal.
41
Establishing Multilateral Power Trade in ASEAN AMS perspectives
Renewable energy capacity increased significantly between 2015 and 2016, due to the introduction of the feed-in tariff regulation.
In generation terms, coal is the largest single source of power, followed by natural gas. Geothermal is also abundant in this archipelagic country, and so it is used widely, producing more power than hydropower or oil.
The Philippines is one of two ASEAN countries that currently have restructured (competitive) wholesale markets. The market in the Philippines was opened as part of the Electric Power Industry Reform Act, passed in 2001 and effective from 13 March 2002, with a more recent reform passed in 2018.
Figure 29. Power mix – total generation and demand in the Philippines, 2011-17
Source: ASEAN Centre for Energy.
The main source of fuel for power generation is fossil fuels; however, renewables have seen increases since 2015. The difference between demand and generation is due to losses.
As a competitive market, power trading is managed via the Whole Electricity Spot Market (WESM). WESM’s rules of operations and its price determination methodology are subject to Department of Energy and ERC approval. All the distribution retailers are regulated under the ERC, and the electric co-operatives are supervised by the National Electrification Administration.
There are currently no interconnections between the Philippines and neighbouring countries.
Planned development, including cross-border integration
According to the Philippines’ most recent PDP (covering the years 2016 to 2040), total capacity additions are expected to be 43.7 GW. The PDP does not break this total down into specific technologies, but does categorise them according to the role they would play in the generation mix. In particular, the PDP indicates that baseload generation will make up more than half of the total (25.6 GW), followed by mid-merit plants (14.5 GW) and peaking plants (4 GW) (Figure 30).
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