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

A Cooperative Game Theoretic Approach on the Stability of the ASEAN Power Grid
Date:
30 September 2018
Authors:
Yunji Her, Youngho Chang, Youngsub Chun, Yanfei Li
Tags:
ASEAN, Power Grid, Greater Mekong Subregion, Myerson value, Core, Pairwise stability

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About the Journal

Energy Economics, Volume 75, September 2018, Pages 492-502.

Authors

  • Yunji Her, Department of Economics, Seoul National University, Republic of Korea
  • Youngho Chang, School of Business, Singapore University of Social Sciences, Singapore
  • Youngsub Chun, Department of Economics, Seoul National University, Republic of Korea
  • Yanfei Li, Economic Research Institute for ASEAN and East Asia, Indonesia

Highlights

  • The ASEAN Power Grid (APG) is the grand plan for an integrated regional power grid system in the Southeast Asia.
  • We study how to fairly distribute the benefit of the APG by focusing on the Greater Mekong Subregion.
  • Using data from 2012 and 2020, we analyze 12 different scenarios.
  • We propose to allocate the total cost saving of the GMS by using the Myerson (1977) value.
  • WWe show that the Myerson value allocation satisfies core stability and pairwise stability.

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.

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