Electricity market integration: Global trends and implications for the EAS region

Abstract

Electricity market integration in East Asia is an important component of the energy market integration (EMI) initiatives supported by the East Asian Summit (EAS) group. The objectives of this study are twofold, namely, a) to present a review of the trends in regional electricity market integration and b) to draw implications for electricity market development in the EAS area. Specifically, this project will review the trends of integration in the world's major electricity markets and analyze the experience and lessons in those markets. It will provide an examination of the electricity sectors in East Asia in terms of market development and connectivity. The findings in this study lead to several policy recommendations. First, the findings imply that all EAS members should strengthen their national electricity markets and hence promote internal market integration. Second, members are encouraged to explore the possibility of sub-regional interconnectivity and cross-border electricity trade. Third, it is proposed that regulatory standards and rules should be harmonized over time. Finally, it is suggested that coordination in national policy making and development planning in the electricity sector could lead to more efficient allocation of resources within the region.