The International Political Economy of Electricity Markets: Cross-Border Electricity Trade & Interconnections in East Asia

This research examines the extent to which climate change has created imperatives for cross-border electricity trade and power sector reform in East Asia; this will include assessing the role of the dominant sub-regional governance structure, the Association of Southeast Asian Nations (ASEAN), in progressing energy market integration (EMI) efforts among member economies. This research argues there are gaps in current literature on East Asian cross- border interconnections: theoretically, the dominant East Asian studies development paradigm, developmental statism (DS), doesn’t accurately account for neoliberal market engagement; technically, the current literature argues for fully liberalised power sectors in order to engage in cross-border interconnections, which is not reflected in market realities. This research will address these gaps using a combination of elite interviews and market analysis, resulting in an updated, East Asian studies-based interpretation of the international political economy (IPE) of Southeast Asian cross-border electricity trade. This research includes: analysis of the background and development patterns in East Asian countries and the Southeast Asian sub-region; focus on the evolution of DS and creation of neo-developmental statism as an explanatory tool of sub- regional IPE; an explanation of the role for electricity trade given global and sub- regional climate goals and contradictions between these goals and national policy. This research expounds on limits to ASEAN EMI using a case study analysis of the Brunei-Indonesia-Malaysia-Philippines East Asia Growth Area (BIMP-EAGA). Three major themes emerged in data analysis: importance of sub- regional market factors, primacy of national market factors in progressing sub- regional reforms, and governance challenges to EMI and increased interconnections. These themes reveal findings unique to this research: ASEAN EMI targets don’t align with national efforts; national EMI efforts appear driven by economic not climate incentives; engagement in global climate commitments remains performative, reflecting sub-regional priority to engage in the global, neoliberal market system; finally, neo-developmental statism offers an evolved development paradigm for understanding the IPE of cross-border electricity trade.