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Infrastructure investments for power trade and transmission in ASEAN+2: Costs, benefits, long-term contracts and prioritized developments

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  • Li, Yanfei
  • Chang, Youngho

Abstract

This study establishes a systemic approach in assessing the feasibility of power infrastructure investment for GMS and APG in the ASEAN+2 (ASEAN plus China and India) region. It aims to identify the financial and finance-related institutional barriers of implementing such a regional power interconnection. A whole-system simulation model is built to assess the financial viability as well as commercial viability, which imply bankability for financiers and profitability for investors respectively, of new transmission projects under the optimized pattern of power trade. It also determines the optimized planning of new transmission capacities. According to our results, the existing development plan of power transmission infrastructure in the region, so called APG+, appears to stand as a financially and commercially viable plan. However, there is room for improvement in the planning in terms of timing, routes and capacity of the cross-border transmission lines and the GMS-related projects should be prioritized.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:eneeco:v:51:y:2015:i:c:p:484-492
    DOI: 10.1016/j.eneco.2015.08.008
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    Cited by:

    1. Shigeru Kimura & Yanfei Li, 2016. "Study on Power Grid Interconnection and Electricity Trading in Northeast Asia," Books, Economic Research Institute for ASEAN and East Asia (ERIA), number 2015-rpr-09 edited by Shigeru Kimura & Yanfei Li, July.
    2. Shigeru Kimura & Yanfei Li, 2016. "Achieving an Integrated Electricity Market in Southeast Asia: Addressing the Economic, Technical, Institutional, and Geo-political Barriers," Books, Economic Research Institute for ASEAN and East Asia (ERIA), number 2015-rpr-16 edited by Yanfei Li & Shigeru Kimura, July.
    3. Her, Yunji & Chang, Youngho & Chun, Youngsub & Li, Yanfei, 2018. "A cooperative game theoretic approach on the stability of the ASEAN power grid," Energy Economics, Elsevier, vol. 75(C), pages 492-502.
    4. 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).
    5. Geoffrey Mabea, 2023. "Simulating Generalised Locational Marginal Pricing for Power Markets in East Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 450-460, September.
    6. Wang, Hongye & Su, Bin & Mu, Hailin & Li, Nan & Jiang, Bo & Kong, Xue, 2019. "Optimization of electricity generation and interprovincial trading strategies in Southern China," Energy, Elsevier, vol. 174(C), pages 696-707.
    7. 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).
    8. Huang, Yu Wen & Kittner, Noah & Kammen, Daniel M., 2019. "ASEAN grid flexibility: Preparedness for grid integration of renewable energy," Energy Policy, Elsevier, vol. 128(C), pages 711-726.
    9. 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.
    10. Xu, Zhen & Das, Debasish Kumar & Guo, Wei & Wei, Wendong, 2021. "Does power grid infrastructure stimulate regional economic growth?," Energy Policy, Elsevier, vol. 155(C).
    11. Yanfei Li & Youngho Chang & Choo Fook Hoong & Swati Sharma, 2016. "Business Model and Market Design for ASEAN Electricity Market Integration: Principles, Practicalities, and Conditions for Success," 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 3, pages 59-108, Economic Research Institute for ASEAN and East Asia (ERIA).

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    More about this item

    Keywords

    Cross-border power trade; Power infrastructure; Financial viability; Commercial viability;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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