Economic Integration in Southeast Asia: The Case of the ASEAN Power Grid

Shi, Xunpeng; Yao, Lixia

doi:2020.35.1.152

Journal of Economic Integration 2020 March;35(1) :152-171.
DOI: https://doi.org/10.11130/jei.2020.35.1.152

Economic Integration in Southeast Asia: The Case of the ASEAN Power Grid

^1,2Australia-China Relations Institute, University of Technology Sydney, Australia
Center of Hubei Cooperative Innovation for Emissions Trading System, Hubei University of Economics, China
³Energy Studies Institute, National University of Singapore, Singapore

Corresponding Author: Xunpeng Shi ,Fax: +61 2 95143189, Email: xunpeng.shi@uts.edu.au

ABSTRACT

The Association of Southeast Asia Nations (ASEAN) Power Grid (APG) is an interesting case study on how and why beneficial economic integration may not proceed smoothly. This paper explores the discrepancy between the feasible and beneficial prosperity and the current modest progress for the APG, and its reasons and possible solutions informed by lessons from European power market integration. It compares Europe's experiences in energy market integration with the ASEAN's and identifies two models of regional power connectivity: the European Union (EU) and the Nordic Power Pool, respectively. The bottom-up approach in the Nordic Power Pool suggests that the ASEAN could still promote regional power connectivity even without a supranational authority as in the EU. The paper further suggests that the APG should not be limited by political boundaries. Full benefit recognition, cost-benefit sharing, soft enforcement mechanisms, and human capacity building are the ways forward for the ASEAN to attain power connectivity.

JEL Classification

F02: International Economic Order
Q48: Government Policy

Keywords: Economic Integration | Power Connectivity | ASEAN Power Grid | Southeast Asia | Europe.