This discussion paper is part of a KAPSARC research project initiated to develop insights that…May 29, 2019
Regionalization of energy markets is of global interest. If economies of scale can translate to electricity grids, a geographic spread of electricity generation could offset the intermittency of renewable energy. If optimal wind and hydro placement are possible, then regional markets could meet clean energy objectives, too.
Integration must also be feasible politically: regional policy must be harmonized and reconciled before markets can be integrated. Energy security, sovereignty, geopolitical tension and income redistribution concerns may shape national decision-makers’ views of regional power trading.
This research analyzes energy market integration among GCC countries and beyond, considering the efficiencies and cost savings possible through energy mix optimization, energy assets location, and the scope of integration. Studying these regional market integration factors should produce practical recommendations for Saudi Arabia’s policymakers.