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Hydrogen is gaining increased attention from industries and policymakers in China. However, most of the current demonstration projects in the country have relied on conventional energy sources, including industrial byproduct hydrogen and grey hydrogen produced from fossil fuels. Moreover, strategies and policy frameworks leading to a shift to green or low-carbon hydrogen have neither been explored in-depth nor been identified clearly in the context of China. This study aims at bridging such gaps. Roadmapping techniques enhanced by the Delphi method and SWOT analysis are used to survey hydrogen energy experts from government bodies, industries, and academia to achieve basic agreement on strategically enabling large-scale green hydrogen demonstrations followed by commercialisation in China. The outcome of two rounds of surveys showed that experts' opinions converged on a strategic roadmap with three stages of development. The corresponding policies needed in each stage are evaluated and selected to form a systemic framework.

In order to achieve carbon neutrality in a few decades, the clean energy proportion in power mix of China will significantly rise to over 90%. A consensus has been reached recently that it will be of great significance to promote hydrogen energy, that is produced by variable renewable energy power generation, as a mainstay energy form in view of its potential value on achieving carbon neutrality. This is because hydrogen energy is capable of complementing the power system and realizing further electrification, especially in the section that cannot be easily replaced by electric energy. Power system related planning model is commonly used for mid-term and long-term planning implemented through power installation and interconnection capacity expansion optimization. In consideration of the high importance of hydrogen and its close relationship with electricity, an inclusive perspective which contains both kinds of the foresaid energy is required to deal with planning problems. In this study, a joint model is established by coupling hydrogen energy model in the chronological operation power planning model to realize coordinated optimization on energy production, transportation and storage. By taking the carbon neutrality scenario of China as an example, the author applies this joint model to deploy a scheme research on power generation and hydrogen production, inter-regional energy transportation capacity, and hydrogen storage among various regions. Next, by taking the technology progress and cost decrease prediction uncertainty into account, the main technical–economic parameters are employed as variables to carry out sensitivity analysis research, with a hope that the quantitative calculation and results discussion could provide suggestion and reference to energy-related companies, policy-makers and institute researchers in formulating strategies on related energy development.

The significant achievements in economic growth and urbanization in China have recently led to substantial increases of and great inequality in household carbon footprints (HCFs). To achieve efficiency and justice in emissions reduction, policymakers need to fully understand the sources of HCFs and identify the major causes of carbon inequality. By applying the Unconditional Quantile Regression (UQR) model and decomposition method to the Chinese household survey data, this paper investigates the distributional features of HCFs and their determinants. We find that HCFs are unevenly distributed due to differences in the volume and pattern of consumption, which are further determined by household characteristics and lifestyles. The intertemporal lifestyle changes have played a major role in the rise of HCFs inequality measured by various quantile emissions differentials. In addition, considerable increases in HCFs come from the high carbon emission groups, and most of the HCFs inequality stems from the 90–50 emissions differential. To transform the current carbon-intensive economy, policies are required to enhance environmental equity and encourage low-carbon lifestyles.

The endowment of production factors is an important factor that restricts the choice of enterprise operation strategy, further affecting the regional industrial structure and the quality of economic development. Due to the fact of the divided power market and the administrative system with a spatial nesting structure in China, the power resource allocation policies have an important and heterogeneous impact on enterprise production behavior. Therefore, this study systematically explores the cross-level influence mechanism of regional power resource allocation on enterprise production efficiency, power efficiency, and location transfer with a hierarchical linear model (HLM) and the large sample data of 239,483 power-consuming enterprises in China's manufacturing industry from 2008 to 2015. The results indicate that: (1) There are nested relationships between the data and the HLM model is reasonable. That is, the enterprise production behavior under different provincial government management is heterogeneous. (2) The power resource allocation plays an important role in the choice of enterprise production behavior. Specifically, the increase of power resource allocation deepens the negative impact of enterprise factor substitution on enterprise production efficiency, weakens the positive impact of enterprise R&D intensity on enterprise power efficiency, and has a direct positive effect on enterprise location transfer. The above findings improve the research chain of economic consequences of resource allocation, deepen the understanding of the specific impact mechanism of energy policies on enterprise behavior, and provide a decision-making reference for the government to optimize the power supply structure and power grid layout.

Increasing household energy consumption, mainly due to consumption upgrading, will create tough challenges for China if that country is to achieve peak carbon emissions in 2030 and carbon neutrality in 2060. However, this critical issue has not been explored comprehensively in the literature. Using China Family Panel Studies data and the distribution dynamics approach, this article is the first study to examine the relationship between quality of life (QOL) (proxied by consumption upgrading) and relative household energy consumption (RHEC). The results show that convergence clubs exist in all QOL groups for the RHEC, but they are more evident in the groups with lower middle and low QOL. This is encouraging because they suggest that an improvement in QOL does not necessarily lead to a higher level of energy consumption. The dataset was then divided into rural-urban and regional subgroups to further explore the impacts of these different characteristics on energy consumption. Significant disparities are found among the same QOL groups between urban and rural households and among different regions. The results derived from this study lead to pragmatic policy suggestions in areas including energy saving, emissions reduction, and particularly alleviation of inequality.

While there is a proliferation of studies on China’s Belt and Road Initiative (BRI), there is a gap in the literature in terms of an exploration of the costs and benefits from the perspective of the energy sector, in both the areas of sectoral development and energy transition. This paper uses Australia as a case study. The paper is the first to quantify the impact of the BRI in the energy sector, and the analysis informs the current debates on the BRI in Australia. We find that energy cooperation under the BRI enhances the performance of energy companies, but the Chinese energy investment in Australia faces mounting challenges. We suggest some areas for cooperation and such cooperation could be extended to third countries. Amid the increasing trade and political tensions, the two countries need continued, level-headed discussions and debates about the potential cooperation areas at all levels.

This paper is an empirical study of per capita CO2 emissions divergence. Trade intensity reflects the strength of bilateral trade relations between China and the Belt and Road Initiative (BRI) countries. Using panel data covering 97 of the BRI countries from 2002 to 2017 and employing the dynamic panel system generalized method of moments (GMM) model with additional instrumental variables of remoteness and the Shapley value decomposition technique, this study has three main findings. First, the import intensity from China tends to restrain per capita CO2 emissions, but the export intensity to China tends to promote per capita CO2 emissions of BRI countries. Second, the Gini coefficient of per capita CO2 emissions continually decreases, representing a gradually weakened divergence. Third, from 2009 the impact of import intensity from China on the divergence changed from increasing CO2 emissions to restraining them. However, export intensity to China has continually promoted the divergence among the BRI countries, with the impact being largest in 2016. The results suggest that China should adjust the sources of its energy imports and the destinations of its exports, and develop green trade cooperation with the BRI countries to jointly tackle climate change.

This paper addresses the issues regarding the economics of clean energy transmission channels in Southeast Asia. The research developed an improved comprehensive model for the generation and transmission planning considering variable renewable energy characteristics, and it simulated the hourly resolution operation condition of a cross-regional interconnection grid of Southeast Asia, China, and South Asia. Additionally, we conducted a sensitivity analysis, and the assessment of the channels’ economics covered a variety of factors such as clean energy penetration, CO2, and pollutant reduction. Conclusions are drawn regarding the influence of different parameters and conditions on the economics of the transmission channel. Subsequently, several recommendations were proposed based on these analyses, which could support the development of the scheme of Southeast Asia power grid and the interconnection of the Belt and Road initiative.

Electricity generation is the largest sector with decarbonization potential for China and the world. Based on the new emission factors, this paper aims to identify the structural and technological determinants of provincial carbon intensity in the electricity generation sector (CIE) using the multiplicative LMDI-II method. Results demonstrate that (1) China’s overall CIE decreases by 7.3% in 2001–2015, and the research period can be divided into four stages according to CIE changes (i.e., rapid growth, rapid decline, slow growth, and transition). The CIE in the 12th FYP estimated in this paper, 24.9% lower than that using the emission factors from IPCC, is closer to China’s actual situation. (2) There exists huge heterogeneity in the determinants of provincial CIE changes in four stages. CIE growth in the Northwest and Northeast is caused by the coal-dominated energy structure. CIE growth in the Southwest is attributed to the electricity structure effect, while that of the Coast region is caused by the geographic distribution effect. The electricity efficiency effect is attributed to the CIE growth for these regions and the Southwest should also place focus on the electricity trade effect. The impact of electricity trade-related factors depends on the region being a net exporter or importer of electricity. (3) To achieve carbon intensity reduction targets, 30 provinces are categorized into four types based on various combinations of structural and technological determinants. The findings provide insights into capturing future emission-mitigating focus as well as defining the emission-mitigating responsibilities between electricity exporters and importers in China.

Global change caused by carbon emissions alone has become a common challenge for all countries. However, current debates about urbanization and carbon emissions generally do not take into account the heterogeneities in urbanization and economic development levels. The goal of this study is to revisit the urbanization–emissions nexus by considering such heterogeneities in the Chinese context. The results reveal that there is significant heterogeneity in the total factor carbon emission performance index across provinces. Specifically, the relationship between carbon emission performance and urbanization reflects a U-shaped curve. Urbanization is found to have a stronger inhibiting effect on carbon emission performance when economic development levels improve. The results suggest that tailoring policies to each region’s conditions, promoting investments in energy-saving and emissions-reducing technologies, and improving the use of public transportation could be mitigation strategies for global change that lead to low-carbon urbanization.

Towards decarbonizing the global economy, hydrogen produced through water electrolysis is expected to be one of the key solutions for variable renewable energy storage and sector coupling, in particular, via the transport sector in the next few decades. Even though water is an important aspect of the environmental impact, the impact assessment of hydrogen production on water is lacking. This paper proposes a comprehensive methodology for assessing the water footprints of hydrogen production from electrolysis. A major innovative aspect is to demonstrate the geographical distribution of the footprints along the supply chain. The water footprints for hydrogen produced from grid electricity, wind and solar power in Australia was analysed as a case study. Sensitivity analysis was used to evaluate the influence of key parameters including Solar Radiation Level, Silicon Efficiency, and Lifetime of PV Modules. The study finds that the water consumption footprint is much less than that reported in the literature and large part of the water could be consumed indirectly outside of hydrogen producing countries. The quantity of water footprint varies significantly among different assumptions. The findings provide insights into both domestic and cross-boundary water impacts of hydrogen electrolysis and can thus inform policy debates in each nation and beyond.

The Corona Virus Disease 2019 (COVID-19) has led to a decline in carbon emissions or an improvement in air quality. Yet little is known about how the pandemic has affected the "low-carbon" energy transition. Here, using difference-in-differences (DID) models with historical controls, this study analyzed the overall impact of COVID-19 on China's low-carbon power generation and examined the COVID-19 effect on the direction of the energy transition with a monthly province-specific, source-specific dataset. It was found that the COVID-19 pandemic increased the low-carbon power generation by 4.59% (0.0648 billion kWh), mainly driven by solar and wind power generation, especially solar power generation. Heterogeneous effects indicate that the pandemic has accelerated the transition of the power generation mix and the primary energy mix from carbon-intensive energy to modern renewables (such as solar and wind power). Finally, this study put forward several policy implications, including the need to promote the long-term development of renewables, green recovery, and so on.

Despite nearly over 30 years of efforts, power connectivity in the GMS remains rather low, limited to a few uncoordinated bilateral exchanges of electricity. Much of the existing thinking attributes this slow progress to factors that are proximate to the electricity industry, namely, insufficient infrastructure, lack of technical competence, and uncoordinated regulation. Through an analysis of the historical evolution of power connectivity in the GMS, this Policy Perspective demonstrates that this thinking (on industry-centric factors) is inadequate for providing a fuller appreciation for the reasons for the slow progress towards power connectivity and hence potential remedies to expedite the pace of connectivity. Such appreciation can instead be gained, this paper contends, by developing a wider discourse on the geopolitical and socio-economic issues, especially those issues that are central to creating a backdrop which is essential for converting GMS's growing physical electricity connectivity into a region-wide coordinated electricity market. Such issues include: reconciliation between geopolitical and regional interests; convergence of national and regional interests across the GMS countries; and national v regional identity.

Under the global value chain (GVC) division system, international trade not only drives the flows of value-added among economies but also facilitates the transfer of embodied energy around the world. Based on the newly released World Input-Output Tables and environmental accounts, this study applies the gross trade accounting method to trace the embodied energy in GVCs from 2000 to 2014. Results show that the volume of global energy embodied in exports shows a clear upward trend with the deepening of the GVC division. The sectoral distribution of energy embodied in the domestic value-added of different economies is generally attributed to their roles in the GVC division system, while the participation degree and division connections in GVCs crucially affect the energy embodied in the foreign value-added. Moreover, the global embodied energy transfer network shows prominent characteristics of multi-polarization, which coincides with the features of the GVC division network. In addition to the EU and the United States, China is emerging as the third center in the global embodied energy transfer network. The findings suggest that the GVC division system could be a feasible platform for global energy conservation, and central economies, especially the United States and China, should play leading roles in tackling climate change through energy cooperation.

While achieving the Paris climate goals and sustainable development goals (SDGs) are two major global challenges of our time, energy transition that plays an essential role in achieving climate targets may create socio-economic hardship. A quantitative assessment of the vulnerability of energy transitions is a prerequisite for national and international policymakers to advance a just energy transition that looks after coordination between energy transitions and socio-economic development. This study proposes to measure energy transition vulnerability from the dimensions of exposure, sensitivity, and adaptive capacity. The results of energy transition vulnerability index (ETVI) scores for 135 nations reveal a huge inequality across nations; moreover, the COVID-19 pandemic has interrupted the decade-long continuous improvement of energy transition vulnerability. Developed countries usually have low energy transition vulnerability than developing countries and the gaps even have been widened. The existing global transition vulnerability could be mitigated by 12.3 p.p and 5.2 p.p if each nation could follow the path of global or climate party group frontiers in achieving the SDGs, despite the scale and drivers of mitigation vary across countries. The study also suggests that heterogeneous transition policies that consider both emissions and vulnerability are required. Our framework and findings could advise policymakers to formulate policies and cooperation strategies to reduce vulnerability, protect vulnerable countries, and make fair energy transition policies nationally and internationally.

Coal phase-out is a key step for China to achieve carbon peak and carbon neutrality. The Chinese government introduced a coal de-capacity policy (CDP) in 2016. However, existing studies rarely discuss the effectiveness of China's implementation of the CDP, especially regarding the policy goal of “improving quality and increasing efficiency.” In this context, this study quantitatively evaluates the multidimensional effects of China's CDP in terms of economic efficiency, green production, and employee welfare using a sharp regression discontinuity design. Moreover, the spatial heterogeneity of policy effects is discussed through subsample analyses. The empirical results are as follows. First, the expected goal of the Chinese CDP has not been fully achieved. Although the CDP has achieved a significantly positive economic effect, the effectiveness of environmental benefits and social welfare remains far from ideal. Second, there is a statistically significant spatial heterogeneity in the CDP's multidimensional effects in different regions. Policy guidelines are proposed in line with the findings to support the adjustment and optimization of de-capacity policy measures for coal and other similar industries. This study thoroughly highlights the economic, environmental, and social effects of the CDP's implementation in China in 2016 and provides a periodical summary and assessment of policy effectiveness. Specifically, the findings provide valuable insights for designing coal de-capacity targets and plans for specific regions, which may help ensure better policy efficiency and feasibility in future coal capacity regulations.

This study extends the ambit of the debate on electricity transition by specifically identifying possible policy entry points through which transformative and enduring changes can be made in the electricity and socio—economic systems to facilitate the transition process. Guided by the “essence” of the multi-level perspective — a prominent framework for the study of energy transition, four such entry points have been identified: 1) destabilising the dominant, fossil fuel-based electricity regime to create room for renewable technologies to break through; 2) reconfiguring the electricity regime, which encompasses technology, short-term operational practices and long-term planning processes, to improve flexibility for accommodating large outputs from variable renewable sources whilst maintaining supply security; 3) addressing the impact of coal power phase-out on coal mining regions in terms of economic development and jobs; and 4) facilitating a shift in transition governance towards a learning-based, reflexive process. Specific areas for policy interventions within each of these entry points have also been discussed in the paper.

The invisible and complex transfer of embodied carbon emissions makes the traditional production or consumption approach insufficient to inform emissions abatement actions because carbon communities have emerged during the transmission procedure of embodied carbon emissions. The carbon community—a group of sectors with more intensive embodied carbon emissions trades within the group than outside—provides the missing critical information about carbon abatement beyond the commonly used production and consumption approaches. This research aims to detect the carbon communities and examine the effect of community structure on sectors' direct carbon emissions. Unlike the industrial agglomeration in traditional economics and management studies, where the border is predefined in a geographical or administrative region, the hybrid input-output analysis and network analysis method detects the carbon communities data-driven, focusing on the embodied carbon emissions trades. Moreover, the hierarchical linear model examines the effect of community structure on sectors' direct carbon emissions to inform climate change policy-making and planning. The findings suggest around 19 carbon communities existing in China, which can advise local governments on their external cooperation strategies for a synergy. In addition, the regression results indicate that the increasing size and density of carbon communities can help mitigate sectors' direct carbon emissions.

The outbreak of the COVID-19 epidemic has triggered adiscussion of the relationship between urbanization and the spread of infectious diseases. Namely, whether urbanization will exacerbate the spread of infectious diseases. Based on 31 provincial data from 2002 to 2018 in China, the impact of urbanization on the spread of infectious diseases from the dimensions of “population” and “land” is analyzed in this paper by using the GMM (generalized method of moments) model. The empirical study shows that the population increase brought by urbanization does not aggravate the spread of infectious diseases. On the contrary, urban education, employment and entrepreneurship, housing, medical and health care, and other basic public services brought by population urbanization can help reduce the risk of the spread of infectious diseases. The increasing density of buildings caused by land urbanization increases the risk of the spread of infectious diseases. Moreover, the impact of urbanization on the spread of infectious diseases has regional heterogeneity. Therefore, the prevention and control of disease play a crucial role.

The impact of the Belt and Road Initiative (BRI) on the environment is an important but controversial topic. But assessing it faces a significant challenge for separating its policy impact from the overall effect of economic development that will also have environmental impacts. This paper attempts to provide an evolutionary and counterfactual baseline to evaluate the environmental impact of BRI, based on the distribution dynamics approach and the mobility probability plots (MPPs). Our estimation results suggest that while the majority of BRI economies will lower their emission levels compared with the world average, there are significant differences between BRI and non-BRI countrie’s emission patterns and dynamics. The majority of non-BRI economies will have lower emission levels than their BRI counterparts in the absence of BRI policy, indicating that the difference in future emissions between BRI and non-BRI countries should not be completely attributed to the environmental impact of BRI. Instead, BRI should take measures to prevent certain countries from moving upwards energy intensity paths through policy intervention, international cooperation, and an inclusive project assessment process.

© 2020-Center for Economic Integration, Sejong Institution, Sejong University, All Rights Reserved. The Association of Southeast Asia Nations (ASEAN) Power Grid (APG) is an interesting case study on how and why beneficial economic integration may not proceed smoothly. This paper explores the discrepancy between the feasible and beneficial prosperity and the current modest progress for the APG, and its reasons and possible solutions informed by lessons from European power market integration. It compares Europe's experiences in energy market integration with the ASEAN's and identifies two models of regional power connectivity: the European Union (EU) and the Nordic Power Pool, respectively. The bottom-up approach in the Nordic Power Pool suggests that the ASEAN could still promote regional power connectivity even without a supranational authority as in the EU. The paper further suggests that the APG should not be limited by political boundaries. Full benefit recognition, cost-benefit sharing, soft enforcement mechanisms, and human capacity building are the ways forward for the ASEAN to attain power connectivity.

Purpose Consumption volatility is a key source of economic growth volatility; thus, it is an important factor in designing macroeconomic policy. The purpose of this paper is to investigate the factors that determine household consumption volatility, using urban household survey (UHS) data over the period 2002–2009 in 18 provinces in China. Design/methodology/approach Both a traditional variance decomposition method and an advanced variance decomposition method are used. Findings The traditional variance decomposition method suggests that heterogeneity of consumption goods is the key to analyze consumption volatility in China. Consumption of transportation makes the highest aggregate contribution and per-unit volatility in consumption volatility, whereas consumption of food makes the second highest aggregate contribution and the lowest per-unit volatility. Further investigation with the advanced variance decomposition method, which allows the authors to capture intertemporal dynamics and cross-household differences simultaneously, finds that the main factor determining the consumption volatility in China is intertemporal dynamics, rather than cross-household differences. Research limitations/implications Future research could fruitfully explore four issues. First, consumption upgrading has increased the volatility of China’s household consumption. How much will this affect economic growth in China under its “new normal” conditions, and how should the Chinese government respond? Second, differences between UHS data and aggregate data in the calculations of consumption risk sharing need to be investigated. Third, it is important to investigate the channels through which the Chinese government can enhance its ability to spread consumption risks and thus reduce consumer consumption volatility. Finally, further study could extend the current 18 provinces to a nation-wide sample and update the data beyond 2009 to estimate the impact of the global financial crisis. Practical implications The results suggest that when policy makers design macroeconomic policies to smooth consumption volatility, they should consider heterogeneity in household consumption goods, regional disparity and intertemporal dynamics simultaneously. Well-managed volatility of Chinese household consumption can contribute to a stable economic growth in China and the world. Social implications Well-managed volatility of Chinese household consumption can contribute to a stable economic growth in China and the world. Originality/value This paper fills this gap by using China’s UHS data to assess consumption volatility from the perspectives of heterogeneity in household consumption goods, cross-household differences and intertemporal dynamics. We make three contributions to the literature. The first contribution of this paper consists of demonstrating the contributions of heterogeneity in household consumption goods to consumption volatility. The second contribution consists of using the advanced variance decomposition method proposed by Crucini and Telmer (2012). This decomposition methodology allows the authors to examine whether household consumption volatility is due to cross-household differences or intertemporal dynamics. The third contribution is that this paper takes Chinese residents’ consumption fluctuations as the starting point to analyze the impact of consumption fluctuations on the future trend of China’s economy.

© 2019 World Scientific Publishing Company. Cutting the overcapacity in coal industry is a current critical issue in China and is a matter for the world. However, inappropriate capacity cut policies may induce huge fluctuations of energy price, creating a threat to energy security and even economic stability. This paper designs a capacity permit trading scheme to minimize the compliance cost of production capacity cut, and proposes the operational details of capacity permit trading scheme using China's coal industry as an example. We also construct a simple partial equilibrium model to examine the benefits and firm behaviors when adopting the permit trading scheme. The results demonstrate that the permit trading scheme will generate an overall positive social welfare as well as reduce firms' cheating incentives. The results confirm that the more heterogeneous the firms are in terms of compliance costs, the higher will be the social welfare gains and the trade volume. Our findings show that the proposed permit trading scheme is feasible and beneficial in achieving the capacity cut target in China.

This paper investigates the dynamic impacts of uncertainty in international crude oil prices on the Chinese economy. We use two measures, sample standard deviation and conditional standard deviation estimated from a GARCH (1,1) model, to calculate uncertainty in oil prices. We find that an increase in volatility in oil prices tends to reduce the real gross domestic product (GDP) and investment, which in turn encourages the Chinese government to stabilize the economy through expansionary fiscal and monetary policy. Furthermore, when we differentiate the impacts of increases and decreases in oil price uncertainty, we obtain a symmetric result. An increase in oil price uncentainty reduces real GDP and investment, while a decrease boosts the macroeconomy. We attribute the effect of decreasing uncertainty to the combined factor of falling uncertainty and an expansionary monetary and fiscal policy. A cross-sectional check related to economic geography indicates that uncertainty shocks to oil prices has a significantly greater negative impact on real GDP and investment in eastern China, where the economy is more industrialized and depends more heavily on oil than other regions.

Purchasing energy-saving appliances is a sensible and practical way to reduce carbon emissions from the residential sector in China. This study examines the relationship between pro-environment behavioral intention—undergirded by environmental attitude and concern as well as perceived psychological benefits—and the choice to purchase energy-saving appliances among Chinese households. Integrating psychological benefits (i.e., warm glow and self-express benefits) into the theory of planned behavior, a first of its kind for China, we designed and implemented a cross-sectional online survey in 2016. We conducted Probit regression analyses based on the 942 effective responses collected. The results reveal that behavioral intention has significantly positive effects on the choice to purchase energy-saving appliances. Environmental attitude and concern, as well as psychological benefits, have a significantly positive impact on respondents’ behavioral intention to buy energy-saving devices. Also, age and household size significantly and positively correlate with purchasing energy-saving appliance decision. These results point to useful policy implications to boost consumer support for energy-saving appliances in China and provide a foundation for similar research in other developing contexts.

ASEAN is an interesting case study of regional power connectivity in Asia and the Pacific due to its geographic location and ongoing power connectivity within and beyond ASEAN. This paper reviews ASEAN’s power connectivity within ASEAN and between ASEAN and its neighbours (hereafter ASEAN connectivity). Through literature survey, it identifies challenges to the ASEAN connectivity from political, legal, economic and technical perspectives. Based on these analyses, it then explores what, how and when regional cooperation may be able to facilitate ASEAN power connectivity. Keywords: Power connectivity, ASEAN, China, ASEAN Power Grid, GMS

Access to electricity continues to be a popular subject in empirical studies. However, the choice of key factors related to electricity access in the literature to date has been ad hoc due to the lack of a theoretical framework. This paper adopts a Bayesian Model Averaging (BMA) approach to selects important factors related to electricity access from 26 socioeconomic indicators using a sample of 48 developing countries, and reveal their long-term relationship with electricity access. The BMA approach allows us to identify the optimal empirical model when a theoretical foundation is not available. Moreover, it allows us to address the relative importance of variables using posterior inclusion probabilities and thus has clear policy relevance. Our results show that access to finance, education, economic development, infrastructure, and industrialisation are positively related to electricity access in the long-run. Although the long-run relationship does not indicate causality, it shows that to maintain this relationship, policy adjustments against any deviations from the relationship are needed. Our study suggests that electrification needs not only economic, educational and infrastructural development, but also private sector participation, governments’ commitment and political will, and integration with poverty reduction and other development schemes.

In the process of transferring from oil indexation to competitive pricing for natural gas, the number of potential gas trading hubs that underpin the competitive prices is a key question, but lack of empirical investigations. This study employs a Structure Vector Auto-regression model (SVAR) and monthly LNG price data of four East Asian importers to examine whether the natural gas markets are integrated among them. The study finds that LNG markets are fragmented in East Asia. The results suggest that there should be multiple LNG benchmark trading hubs at the time being so that each hub could reflect different fundamentals.

In order to promote ASEAN gas market integration, this paper offers four scenarios to renew momentum towards continuing with the marginalised Trans-ASEAN gas pipeline (TAGP) and further development of cross-border pipeline gas trading. The four subregional and regional market integration scenarios could be used as stepping-stones to achieve ASEAN gas market integration. The impact of each scenario was estimated with the least cost world gas market model and the impact is indicated by the difference between each integration scenario and the baseline scenario, respectively. The simulations suggest that integrated gas markets in ASEAN are beneficial through the reduction of total procurement costs for ASEAN and the World. The TAGP is also beneficial in terms of incentivising ASEAN production that can be transported cost-effectively to demand centres within the region. The development of marginal production due to the availability of lower cost transportation is in line with ASEAN's goals for resource optimisation and energy security enhancement. The paper suggests that ASEAN should advocate the gas market integration, and that ASEAN member states could take various institutional measures to achieve higher levels of integration.

This paper assesses how China’s Belt and Road Initiative (BRI) can bring investment and technology into ASEAN and its impact on ASEAN’s electricity market. With the theoretical framework of scenario analysis, this paper provides three scenarios for ASEAN electricity market integration: the Lao PDR–Thailand–Malaysia–Singapore (LTMS) arrangement, a power exchange between heterogeneous grids in the Greater Mekong Sub-region (GMS) region, and a fully competitive electricity market with a fully-developed ASEAN Power Grid (APG). Based on these scenarios, the paper examines the extent to which the BRI can assist electricity market integration in the ASEAN region. It is found that BRI can best fit with and facilitate the first scenario. Given the uncertain outlook for the electricity market integration in the GMS region, how China’s BRI can play a role in facilitating the GMS electricity market integration is not clear under the second scenario. Further, BRI may be less helpful in the third scenario in which the region’s master plan of APG would be realized. In any sense, how BRI can fit with and facilitate ASEAN’s electricity market integration would more depend on the host countries rather than the Chinese side.