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A Review on Institutional Framework, Principles, and Key Elements for Integrated Electricity Market: Implications for ASEAN


  • Tsani Fauziah Rakhmah
  • Yanfei Li

    (Economic Research Institute for ASEAN and East Asia (ERIA))


ASEAN member countries are becoming large energy consumers and growing participants in the global energy market. Cross-border electricity trade becomes increasingly important particularly in the context of fast-rising energy demand and growing urban population. This paper attempts to set out the common principles, methodologies, institutions, and structure for designing an integrated cross-border electricity market and delivering practical policy implications for ASEAN. To allow cross-border electricity trade, the region will need a target model, common vision, and principles that govern electricity market and grid operation. In the country level, energy prices administratively determined by the government should be shifted to market-oriented pricing mechanism. Integrated electricity market has an enormous potential that can be realised at reasonable costs. When individual countries pursue regional cooperation mechanism to secure their energy supply, investment comes and contributes to optimisation of available energy resources throughout the region.

Suggested Citation

  • Tsani Fauziah Rakhmah & Yanfei Li, 2016. "A Review on Institutional Framework, Principles, and Key Elements for Integrated Electricity Market: Implications for ASEAN," Working Papers DP-2016-26, Economic Research Institute for ASEAN and East Asia (ERIA).
  • Handle: RePEc:era:wpaper:dp-2016-26

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    References listed on IDEAS

    1. Möller, Christoph & Rachev, Svetlozar T. & Fabozzi, Frank J., 2011. "Balancing energy strategies in electricity portfolio management," Energy Economics, Elsevier, vol. 33(1), pages 2-11, January.
    2. Tooraj Jamasb and Michael Pollitt, 2005. "Electricity Market Reform in the European Union: Review of Progress toward Liberalization & Integration," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 11-42.
    3. Scherer, Marc & Zima, Marek & Andersson, Göran, 2013. "An integrated pan-European ancillary services market for frequency control," Energy Policy, Elsevier, vol. 62(C), pages 292-300.
    4. Cavaliere, Alberto & Giust, Valentina & Maggi, Mario, 2013. "Efficient mechanisms for access to storage when competition in gas markets is imperfect," Energy Economics, Elsevier, vol. 36(C), pages 481-490.
    5. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-1150, September.
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    More about this item


    electricity market; operational planning; ASEAN; European Union;

    JEL classification:

    • N75 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Asia including Middle East
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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