5. Establishing multilateral power trade in an ASEAN context

The previous sections summarised the reasons to establish multilateral power trading across ASEAN, the existing situation within the various AMS and the region as a whole, and a set of international examples. This section will seek to lay out a foundation for establishing multilateral power trade in the ASEAN region. It will discuss minimum requirements, the role of regional institutions and the potential to build off existing efforts. Using this as a starting point, the next section will suggest a specific set of steps for establishing multilateral power trade among the AMS.

Minimum requirements for establishing multilateral power trade

As briefly summarised in Section 4 on international case studies, there are certain minimum requirements necessary for the establishment of secure, transparent and efficient multilateral trading. These minimum requirements span multiple areas, including technical and operational standards, regulations and laws, and financial and commercial terms.

As a first initial step towards greater regional co-operation, though, it is important to establish political support for regional integration. To this end, the relevant countries should consider developing and entering into relevant intergovernmental agreements. It is beyond the scope of this study to provide specific recommendations for which agreements may be necessary, if any. At a minimum, however, there may be a benefit in an agreement that states the ambition to establish multilateral trading in a voluntary and stepwise manner. This agreement would provide the national utilities and other relevant stakeholders the authority to move forward with any necessary developments. Without this political driver, it may be difficult to undertake some of the needed changes, which may require exemptions or changes to existing laws and regulations.

From a technical and operational standards perspective, there is a need for some harmonisation among interconnected countries to ensure co-ordinated and secure operations. In addition, it will also be important to agree on a common working language and to develop a secure method for data and information sharing. The level of needed technical and operational harmonisation and data sharing will depend on the level of system co-operation and co-ordination requested by the involved member countries.

To support the commercial trading of electricity across multiple countries, it is important that the AMS develop a transparent wheeling methodology and loss compensation regime to compensate grid owners for their transmission services. This should ideally be developed and defined on an ASEAN level, ensuring transparency and providing a common transmission pricing methodology for the region as a whole. However, as a first step it is possible to develop a methodology that involves only a subset of AMS.

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