Realising the ASEAN power grid through unbundling: Takeaways from the Philippines’ and Singapore’s experience

Abstract

The ASEAN Power Grid (APG) is a flagship initiative mooted in 1997 to strengthen and promote power interconnection and trade in the ASEAN region. The ultimate aim of the APG is to ensure energy security and sustainability in the region, particularly the electricity. One way to achieve this, as demonstrated by the Nordic countries, is by having a regional electricity market, on top of the physical interconnection of the grids. Thus, taking the cue from the Nordic region, a pre-requisite to the regional electricity market is the liberalisation of the electricity supply industry (ESI) of each of the ASEAN member countries. Although there is no one-size-fits-all solution to the establishment of the regional electricity market, liberalisation of the ESIs can potentially be the path for the ASEAN countries too, with the necessary modifications and localisations in place. Furthermore, ESI liberalisation or unbundling is not entirely new to the ASEAN countries. Nine out of the ten of its member countries have implemented unbundling, although the degree of implementation varies. To date, two ASEAN countries have unbundled their ESIs fully, namely Singapore and the Philippines. However, the two countries underwent different experience in liberalising their ESIs. While it was a ‘bumpy ride’ for the Philippines, Singapore had a smoother and more orderly transition. As such, deliberation of their experience in liberalising their ESIs would provide good insights for the other ASEAN countries to consider in liberalising their ESIs, should it become the direction. This paper therefore presents a brief overview of the Philippines’ and Singapore’s experience in their transformation towards liberalised ESIs with the aim to identify the good practices, the challenges as well as the lessons learnt from these transformations. Findings from the study show the importance of the governance and legislative framework to instate reform, as well as the gradual introduction of the reform moves. This is especially necessary as the lack of homogeneity and harmonisation of the regulatory framework and ESI structure of the ASEAN countries was found to be amongst the barriers towards the full realisation of the APG. © 2020 Institute of Physics Publishing. All rights reserved.