Institutional and governance dimensions of ASEAN Energy Market Integration


Effective governance is a key requirement for multi-lateral energy cooperation and for AEMI. This is because the objectives of AEMI are not only to deliver direct economic efficiency gains but also a range of external benefits that have the character of regional public goods. While some measures such as bilateral energy transmission connections can be undertaken on an ad hoc basis, sustained moves towards a regional energy market require the delegation of authority or pooling of sovereignty to an agency charged with implementation in order to overcome the national obstacles.

The obstacles to implementing AEMI are numerous.

First is the long-standing importance of sovereignty and nationalism to the ASEAN members, which easily translates into protectionism.

Second, some member States have relatively weak capacity to govern a sector as technically and economically complex as energy.

Third, the degree of variability across ASEAN is very high.

In the short term, efforts should be directed towards making progress incrementally, either by focusing on a limited number of activities that cover most or all of the ASEAN members or by building closer energy market integration among a sub-set of ASEAN members that are able and willing to participate. In the longer term, it is essential to enhance the authority and capacity of ASEAN’s energy leadership and administration (e.g., the ASEAN Secretariat, AMEM, SOME and ACE) if progress towards energy market integration is to be sustained. This will necessarily involve the progressive delegation of authority or pooling of sovereignty. Without this step being taken, progress towards AEMI will be seriously constrained.

Philip Andrews-Speed, Principal Fellow, Energy Studies Institute, National University of Singapore, Singapore

Adnan Hezri, Senior Fellow, Technology, Innovation, Environment, and Sustainability (TIES), Institute of Strategic and International Studies (ISIS), Malaysia

(September 2013)

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