ABSTRACT
The OECD (Organisation for Economic Co-operation and Development) or ‘standard’ model of electricity sector reforms have been widely adopted in non-OECD Asian countries since the 1990s. However, despite two decades of attempts at reforms, no notable progress has been made towards the original objectives of reform. While in OECD countries, reforms were implemented against excess capacity and stable institutions, in developing non-OECD Asian countries they were implemented against chronic electricity shortages, fiscal constraints, weak institutions, and complex political factors. In recent years the debate also focuses on the suitability of electricity market reforms originally designed around fossil fuels in delivering low-carbon electricity systems. With electricity demand set to double over the next two decades, reforms in non-OECD Asian countries have important economic as well as environmental implications in terms of global energy use and emissions. This chapter assesses the application of the OECD model of electricity reform in Asia. We analyse the experience of three South Asian countries – India, Nepal and Bhutan – to illustrate the economic and environmental conflicts in electricity market reform against the context of cross-border regional electricity trade.
