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Energy market integration and regional institutions in east Asia

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  • Aalto, Pami

Abstract

This article assesses the case made for energy market integration in East Asia by comparing the role of institutions in South East Asia and North East Asia. The types and functions of institutions and their overall structure are examined in light of global energy market trends. In South East Asia, the shift attempted by ASEAN towards more competitive markets is hampered by the remaining statist variants of the trade institution and bilateral energy diplomacy, which, as regards transaction cost functions, are sub-optimal. As for institutions with order-creating functions, the unresolved status of sovereignty within ASEAN hampers regulatory harmonisation; the great power management institution has since ASEAN׳s establishment reduced conflicts without providing decisive leadership conducive to integration. North East Asia׳s dependence on global energy markets overshadows the regional integration potential of the diverse liberalisation efforts and interconnection projects. Bilateral energy diplomacies, new trilateral institutions combined with ‘Track Two’ institutions and remaining great power competition co-exist. In both regions the institutional structure allows for step-wise, technical infrastructure integration. The environmental stewardship institution co-exists with statist energy security and development objectives while it supports cooperation on green energy. The overall structure of informal institutions constrains deeper energy market integration in several ways.

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  • Aalto, Pami, 2014. "Energy market integration and regional institutions in east Asia," Energy Policy, Elsevier, vol. 74(C), pages 91-100.
    • Handle: RePEc:eee:enepol:v:74:y:2014:i:c:p:91-100
    DOI: 10.1016/j.enpol.2014.08.021
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    3. Yang, Muyi & Sharma, Deepak & Shi, Xunpeng & Mamaril, Kristy & Jiang, Han & Candlin, Alison, 2022. "Power connectivity in the Greater Mekong Subregion (GMS) – The need for a wider discourse," Energy Policy, Elsevier, vol. 165(C).
    4. Sergei Podkovalnikov & Lyudmila Chudinova & Ivan L. Trofimov & Leonid Trofimov, 2022. "Structural and Operating Features of the Creation of an Interstate Electric Power Interconnection in North-East Asia with Large-Scale Penetration of Renewables," Energies, MDPI, vol. 15(10), pages 1-29, May.
    5. Westphal, Kirsten, 2014. "Institutional change in European natural gas markets and implications for energy security: Lessons from the German case," Energy Policy, Elsevier, vol. 74(C), pages 35-43.
    6. Saswata Chaudhury & Raktimava Bose & Debanka Samanta & Venkatachalam Anbumozhi (ed.), 2023. "Renewable Energy Transition in South Asia: Role of Regional Energy Trade," Books, Economic Research Institute for ASEAN and East Asia (ERIA), number 2023-RPR-10, July.
    7. Amoiralis, Eleftherios I. & Andriosopoulos, Kostas, 2017. "Challenges for a compliance officer in the liberalized EU energy market: A case study on the Greek gas transmission system operator," Energy Policy, Elsevier, vol. 110(C), pages 117-125.
    8. Aalto, Pami, 2014. "Institutions in European and Asian energy markets: A methodological overview," Energy Policy, Elsevier, vol. 74(C), pages 4-15.

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