This book combines the fundamentals of industrial organization theories based on microeconomic foundations, applied econometrics and environmental and natural resource economics in undertaking a comprehensive review of reforms of the power sector and its impact on industrial and socio-economic performance. The book provides the reader with the intellectual groundwork necessary for understanding the workings and interactions of today’s reforming power markets such as in the ASEAN and East Asia that are striving to achieve the energy policy trilemma of affordability, energy sustainability and energy security. The topics addressed in this book include application of welfare theorems such as competition in and for the market in the electricity sector, market failures such as lack of electricity access, analysis of forecasting models under volatility, energy resource allocation such as renewable energy and competitive market designs of energy markets. Country-specific and region-specific case studies are used to analyze the progress and outcomes of market-driven electricity reforms across the reforming and advanced electricity markets. Therefore, the book derives policy lessons and provides policy recommendations in reforming power markets for the ASEAN and East Asia taking stock of more than three decades of global experience with power sector reforms. The electricity markets case studies are carefully chosen and supported by extensive data analyses as appropriate. This book on energy economics and policy is highly recommended to readers who seek an in-depth and up-to-date integrated overview about the evolving literature and status on electricity market reforms with a particular reference to Asia.
Author(s): Han Phoumin, Rabindra Nepal, Fukunari Kimura, Gazi Salah Uddin, Farhad Taghizadeh-Hesary
Publisher: Springer
Year: 2022
Language: English
Pages: 303
City: Singapore
Preface
Acknowledgments
Contents
About the Editors
From the Market to the State: New Lessons from Regional Experiences with Power Sector Reform
1 Introduction
2 New Drivers of Electricity Reforms in the 2010s
2.1 Climate Policy and Renewable Energy Targets
2.2 Security of Supply
2.3 Inconsistencies in the Design of Market Reforms
2.4 Regional Electricity Trade
3 Electricity Reforms in Non-OECD Asia
3.1 Independent Power Producers
3.2 Independent Regulation
3.3 Restructuring and Corporatisation
3.4 Open Access
3.5 Privatisation
4 Evidence from Regional Experiences
5 Discussion and Policy Implications
6 Conclusions
Appendix: Country Case Summaries
References
What Have Reforms Delivered So Far?—A Quantitative Analysis of Power Sector Reform Impacts in the ASEAN Economies
1 Introduction
2 The Standard Model of Electricity Reforms
3 Hypotheses, Model Specification, and Data
4 Methodology
4.1 Cross-Sectional Dependence (CSD)
4.2 Panel Unit-Root Test
4.3 Two-Stage Least Square
4.4 Panel Corrected Standard Error (PCSE)
5 Results and Discussions
6 Conclusions and Policy Implications
References
Electricity Market Development in Viet Nam: Historical Trends and Future Perspectives
1 Introduction
2 Review of Electricity Market Development in Viet Nam
2.1 Historical Trends
2.2 Future Perspectives
3 Empirical Analysis of Viet Nam’s Electricity Supply Security
3.1 Brief Review of the Literature
3.2 Methodologies
3.3 Empirical Results
4 Concluding Remarks
References
Australia’s National Electricity Market: An Analysis of the Reform Experience 1998–2021
1 Introduction
2 Industrial Organisation and Industry Restructuring
3 NEM Market Bodies
4 Energy-Only Market Design and Resource Adequacy
5 Overview of NEM Performance
5.1 Climate Change Policy Discontinuity
5.2 Gas Market Dynamics
5.3 NEM Plant Stock: Entry and Exit
5.4 NEM Spot Prices, 1998–2021
5.5 Plant Entry Dynamics: Investment Commitments and the Rise of VRE
5.6 NEM Resource Adequacy: Reliability Performance
5.7 On the Security of Supply
6 The South Australian Black System Event
7 Policy Reflections
8 Concluding Remarks
References
Analysis of Forecasting Models in Electricity Market Under Volatility: What We Learn from Sweden
1 Introduction
2 Swedish Electricity Market
3 Methodology
3.1 ARMA-GARCH Forecasting Models
3.2 Wavelet-Based ARMA-GARCH Forecasting Models
4 Data and Summary Statistics
5 Empirical Analysis
6 Nodal Pricing Experiences in the ASEAN Region
7 Conclusion and Implications
Appendix
References
Modelling and Forecasting the Volatility of the Nordic Power Market: An Application of the GARCH-Jump Process
1 Introduction
2 Nordic Electricity Markets
3 Data
4 Methodology
5 Empirical Results
5.1 Results of the GARCH-Jump Models
5.2 Out-of-Sample Forecast Results
5.3 Additional Tests
5.4 Jumps and Outliers
6 Conclusion
References
An Econometric Assessment of the Effects of Electricity Market Reform on Bangladesh Economy
1 Introduction
2 Literature Review
2.1 Theoretical Discussion
2.2 Empirical Discussion
3 Electricity Market Scenario in Bangladesh
3.1 Electricity Generation Capacity
3.2 Per Capita Electricity Consumption (PCEC)
3.3 Access to Electricity and System Loss
3.4 Fuel Mix Options in Electricity Generation
3.5 Move Towards Competitive Market Environment and Investment Trend
4 Electricity Reform Initiatives in Bangladesh
4.1 Reform Policies
4.2 Energy Sector Reforms in Bangladesh
5 Econometric Estimation
6 Conclusion and Policy Recommendations
References
The Role of Electricity Market Reform and Socio-economic Conditions in Electricity Consumption in India
1 Introduction
2 Overview of Energy Policy in India and Predictive Patterns
2.1 Energy Reform in India
2.2 Consumption Patterns of Electricity Through the Lens of Time
3 Data and Empirical Strategy
4 Results and Discussions
4.1 Distributive Analysis and Trends
4.2 Understanding Heterogeneous Effects: Quantile Regression Results
5 Conclusion and Policy Implications
5.1 Key Takeaways From the Study
5.2 Policy Implications
Appendix
References
Have Competitive Electricity Markets Rewarded Flexible Gas-Powered Generation? Australia’s Lessons for ASEAN
1 Introduction
2 Background and Research Hypotheses
2.1 The Australian National Electricity Market (NEM) in Transition
2.2 Energy Transition in Australia’s Electricity Generation
2.3 Development of GPG and VREs
2.4 Regional Generation Mix
2.5 Gas Demand
2.6 The Electricity and Gas Price
2.7 Research Hypothesis
3 Data and Methodology
3.1 Data and Sources
3.2 Methodology
4 Empirical Results
4.1 Unit Root Test for Time Series
4.2 Natural gas’s Flexibility Role in the Power System
4.3 GPG’s Response to Market Price Signals
4.4 Interrelationship Between Gas and Electricity Prices
4.5 Interrelation Between the GPG and Gas Prices
5 Policy Implications for ASEAN and Latecomers
6 Conclusion
References
Decarbonizing Emissions in the Electricity Sector of the Mekong Subregion: Policy Implications
1 Introduction
2 Energy Landscape and the Rising Electricity Demand in the Mekong Subregion
3 Decarbonising the Electricity Sector in the Mekong Subregion
3.1 Low-Cost Renewables with Hydrogen Are the Game Changer
3.2 The Need to Strengthen Environmental Standards for Power Generation in the Mekong Subregion
3.3 Moving Towards ASEAN Power Connectivity
4 Conclusion
References
Sustainable Energy Policy Reform in Malaysia
1 Introduction
2 Country Background
2.1 Geography
2.2 Recent Industries
2.3 Recent Politics
2.4 Economics
3 Malaysia’s Energy Sector
3.1 Sources of Energy
3.2 Electricity Supply
3.3 Government Energy Institutions
3.4 Private Sector, National Operators, and Independent Power Producers (IPPs)
4 Potential for Sustainable Energy in Malaysia
5 Policy Landscape for Sustainable Energy
5.1 Sustainable Energy Policy Evolvement in Malaysia
5.2 Empirical Analysis of Policy Performance and Transition Towards RE Development in Malaysia
5.3 Effects of RE Policy Transition
6 Energy Policy Reform Players in Malaysia
6.1 Financial institutions
6.2 Private Interest
6.3 Government
6.4 Conclusion
7 Barriers to Sustainable Energy Policy Reforms
7.1 Technology Stigma
7.2 Capital Cost
7.3 Siting and Transmission
7.4 Market Entry
7.5 Unequal Playing Field
7.6 Reliability Misconceptions
7.7 Lack of Data
7.8 High Hope
8 Conclusions
References
Digitalisation in the Context of Electricity Market Reforms and Liberalisation: Overview of Opportunities and Threats
1 Introduction
2 Electricity Market Reforms and Liberalisation Worldwide and in ASEAN
3 Liberalised Electricity Markets Challenges in ASEAN
4 The Impact of Digitalisation on the Electricity Sector
5 Digitalisation Opportunities for the Electricity Market Reforms
6 The Threats of Digitalisation in the Electricity Sector
7 Digital Resilience in Electricity Market Liberalisation
References
