Establishing multilateral power trade in ASEAN

The ASEAN member states have a long-standing goal to establish multilateral power trading in
the region. To date, regional power trading has been limited to a series of uncoordinated
bilateral cross-border arrangements. Multilateral power trading can bring multiple benefits,
including reduced system costs, increased energy security and an ability to integrate higher
shares of variable renewable energy. An examination of international experiences shows that it
is possible to establish multilateral trading while allowing for stepwise and voluntary
development and respecting local sovereignty. At the same time, increased cross-border
integration and power trade does require increased co-ordination and regulatory
harmonisation.
This report identifies a set of minimum political, technical and institutional requirements that
the ASEAN member states will need to meet in order to establish multilateral power trading in
the region. Some of these minimum requirements can be met by building upon existing efforts
in the region. The report also proposes a set of trading arrangements of increasing levels of
ambition which, taken together, will enable ASEAN to establish multilateral power trading in a
manner that is consistent with maximising national sovereignty and the equitable sharing of
benefits. These recommendations include a summary of potential roles for regional institutions
and an example transaction to show how trading might potentially work in practice.