A Cooperative Game Theoretic Approach on the Stability of the ASEAN Power Grid

Affiliations

(a) Department of Economics, Seoul National University, Republic of Korea

(b) School of Business, Singapore University of Social Sciences, Singapore

(c) Department of Economics, Seoul National University, Republic of Korea

(d) Economic Research Institute for ASEAN and East Asia, Indonesia

Abstract

The ASEAN Power Grid (APG) is the grand plan for an integrated regional power grid system in Southeast Asia designed to benefit its member countries by optimizing the use of energy resources. In this paper, we study how to fairly distribute the benefit of the APG to its member countries by focusing on the Greater Mekong Subregion (GMS), which includes Cambodia, Laos, Myanmar, Thailand, and Vietnam. Using data from two different years, 2012 and 2020, we analyze 12 scenarios with different combinations of the generation and the transmission capacities together with the maximum percentage of power trade allowed. We propose to allocate the total cost saving of the GMS by using the Myerson (1977) value. We show that the resulting Myerson value allocation from the 2020 plan satisfies two stability properties: (1) core stability, which implies that it belongs to the core when the core is nonempty, so that no country has an incentive to leave the APG, and (2) pairwise stability, which implies that no country has an incentive to add a new transmission line or delete an existing transmission line.

Cite

Her, Y., Chang, Y., Chun, Y., Li, Y. 2018. A Cooperative Game Theoretic Approach on the Stability of the ASEAN Power Grid. Energy Economics, Volume 75, 2018, Pages 492-502, ISSN 0140-9883, https://doi.org/10.1016/j.eneco.2018.09.008.