Electricity Market Design in Southeast Asia

The document argues that Southeast Asian electricity market designs are anchored in an outdated fossil-fuel paradigm and require core redesign to leverage the cost-effectiveness of renewables. It focuses on four key economies—Indonesia, Thailand, Viet Nam, and the Philippines—noting that variable renewables contribute less than 5% of total power generation in most of the region, except for Viet Nam. The report proposes five interlinked objectives for renewables-ready power systems: long-term investment certainty, enhanced system flexibility, safeguarded system adequacy, managed retirement of carbon-intensive assets, and consumer affordability.

• Current electricity market and regulatory arrangements in Southeast Asia are based on an outdated fossil-fuel paradigm, which hinders the full utilization of renewable energy benefits and requires a core redesign rather than minor adjustments.
• Variable renewable energy deployment in Southeast Asia generally remains low, contributing less than 5% of total power generation in most countries, although Viet Nam exceeded 13% in 2023.
• The four focus countries exhibit diverse electricity sector configurations: Indonesia uses an integrated single-buyer system, Thailand a ring-fenced single-buyer system, Viet Nam an unbundled single-buyer system with nascent wholesale competition, and the Philippines a liberalised system with a central dispatch market.
• Effective market designs for renewable transitions must balance five interlinked objectives: long-term investment certainty for variable renewable energies, system flexibility for least-cost integration, system adequacy for decarbonisation, efficient retirement of carbon-intensive assets, and consumer affordability alongside financial sustainability.

APA

NewClimate Institute (2024). Electricity Market Design in Southeast Asia. https://newclimate.org/resources/publications/electricity-market-design-in-southeast-asia

Chicago

NewClimate Institute. Electricity Market Design in Southeast Asia. 2024. https://newclimate.org/resources/publications/electricity-market-design-in-southeast-asia.

Wikipedia

{{cite report |author=NewClimate Institute |title=Electricity Market Design in Southeast Asia |date=28 October 2024 |url=https://newclimate.org/resources/publications/electricity-market-design-in-southeast-asia |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{newclimateinstitute2024electricity, author = {{NewClimate Institute}}, title = {{Electricity Market Design in Southeast Asia}}, institution = {NewClimate Institute}, year = {2024}, month = oct, url = {https://newclimate.org/resources/publications/electricity-market-design-in-southeast-asia}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }