This chapter defines forward contracts and future contracts, and discusses their advantages as well as their fair market price. Other instruments such as power purchase agreements (PPAs) and contracts for differences (CfDs) are defined. Financial transmission rights (FTRs) are defined and their role in managing risk on networks is discussed. FTR auctions and revenue adequacy are discussed. Call options and callable forward contracts are defined, and their role in enabling demand response is discussed, as well as their pricing. The modeling of risk aversion through risk measures is discussed. Coherent risk measures are defined. Value at risk and conditional value at risk are defined. The worst-case characterization of coherent risk measures through risk-adjusted probability measures is developed. This allows us to quantitatively formalize the back-propagation of prices to forward markets. The representation of risk through utility functions and the specific application of Markowitz risk measures is covered.

This chapter introduces the unit commitment model. The fixed (startup and min load) and variable cost of a unit are discussed. Initial conditions, transitions, min up/down times, temperature-dependent startups, startup/shutdown profiles, ramp rates, heat rate curves, and reserves are discussed and represented in a mixed integer linear programming model of unit commitment. The extension of the basic model to uncertainty in the stochastic unit commitment model is discussed. The two-settlement system of day-ahead markets is described. Portfolios followed by nominations are compared to unit-based market models. Exchanges are compared to power pools. The possibility of inexistence of a market clearing price in non-convex market clearing models is discussed. Paradoxically rejected orders in European market models are described. Lost opportunity cost as a metric of deviation from equilibrium is introduced, and related notions such as make-whole payments, uplifts, and potential congestion revenue shortfall are introduced. Convex hull pricing is defined and compared to pricing based on linear relaxations and fixing integer variables. The products of the European electricity market (continuous and block orders) are described. The treatment of European pricing rules in the EUPHEMIA algorithm through a branch-and-cut scheme is discussed.

This chapter presents the generation capacity expansion planning problem and provides an economic analysis of the model. Scarcity rents in energy-only markets are defined, and the equivalence of the centralized expansion planning problem to a decentralized long-term economic equilibrium is established. The missing money problem is discussed, and various approaches for overcoming it are analyzed through models. The value of lost load pricing mechanism remunerates units when the system is scarce at the estimated value of lost load. Capacity mechanisms introduce a separate revenue stream for paying investors to build or maintain capacity. The cost of new entry is defined, and is related to the loss of load expectation. A model for capacity auctions is introduced and the shape of the capacity auction demand curve and role of capacity credit is discussed. The role of reliability options in capacity auctions is discussed. Alternative mechanisms such as installed capacity obligations, capacity payments, decentralized capacity mechanisms, and strategic reserves are discussed. The operating reserve demand curve mechanism remunerates units for offering flexible capacity in the form of reserve. The ORDC model of chapter 6 is revisited in the context of a long-term equilibrium.

The economic, political, strategic and cultural dynamism in Southeast Asia has gained added relevance in recent years with the spectacular rise of giant economies in East and South Asia. This has drawn greater attention to the region and to the enhanced role it now plays in international relations and global economics.

The sustained effort made by Southeast Asian nations since 1967 towards a peaceful and gradual integration of their economies has had indubitable success, and perhaps as a consequence of this, most of these countries are undergoing deep political and social changes domestically and are constructing innovative solutions to meet new international challenges. Big Power tensions continue to be played out in the neighbourhood despite the tradition of neutrality exercised by the Association of Southeast Asian Nations (ASEAN).

The Trends in Southeast Asia series acts as a platform for serious analyses by selected authors who are experts in their fields. It is aimed at encouraging policymakers and scholars to contemplate the diversity and dynamism of this exciting region.

INTRODUCTION

The momentum on methane reduction is picking up as governments and private sectors acknowledge its crucial role in meeting the Paris Agreement goals. The International Energy Agency (IEA) has called for fossil fuel methane emissions to be cut by 75 per cent by 2030 to keep the 1.5-degree goal in sight. Compared to carbon dioxide, methane (the second most abundant greenhouse gas) has a much stronger impact on warming temperatures. Within a 100-year time horizon, a tonne of methane in the atmosphere could cause about twenty-five times the warming as the same amount of carbon dioxide. So far, methane has accounted for about 30 per cent of global temperature rise since the Industrial Revolution.

Methane is emitted in a wide variety of human activities, especially in the agricultural, energy and waste sectors. 40 per cent of anthropogenic methane emissions are traced to the energy sector, including coal mining as well as multiple stages in the oil and gas supply chain. Fossil fuel production and usage contributed 118 Mt of global methane emissions (equivalent to 2,950 MtCO2e of emissions) in 2023. Methane emissions in the coal sector come from leakages in coal mines, while emissions in the oil and gas sector mostly come from leakages or routine flaring (burning) and venting of gases. Besides being the second-largest contributing sector to methane emissions, around 40 per cent of annual fossil fuel methane emissions can be avoided using current technologies at no net cost, giving it considerable methane abatement potential compared to other sectors like waste or agriculture. This has led some to describe methane abatement in the energy sector as a “low-hanging fruit” for climate action.

In Southeast Asia, the agriculture sector contributed the largest share of methane emissions (over 51 per cent) followed by the waste sector (25 per cent) and fugitive emissions from the coal mining, oil and gas sectors (18 per cent) in 219. Fugitive emissions make up a significant share of emissions for Brunei (88 per cent), Malaysia (31 per cent), Indonesia (25 per cent) and Singapore (23 per cent). While accounting for a smaller portion of Vietnam's (15 per cent) and Thailand's (16 per cent) overall methane emissions, they still amount to large quantities. For instance, Vietnam emitted 80.9 MtCO2e of methane overall, of which 48.1 MtCO2e were fugitive emissions—similar to that of Malaysia. As such, methane is an area of concern for all six countries.

Tidal range generation, tidal stream generation and wave power are discussed. The tidal energy resource is described, together with the use of harmonic constituents to predict the height of the tide and velocity of the tidal flow at a location. The principles of tidal range generation are discussed and ebb generation is illustrated. The main components of a tidal range scheme are explained as well as the potential environmental impact of any large tidal range scheme. Tidal barrages are compared with tidal lagoons. The generation of electricity from tidal streams is discussed and examples of the tidal stream resource provided. Tidal stream turbines are described and compared with wind turbines using axial momentum theory. Simple water wave theory is summarized and the use of the wave height and wave period to describe of the wave power resource is described. Prototyped devices for wave power generation are described and the power that would be generated by a wave power device wave climate is shown. The chapter is supported by 8 examples, 15 questions with answers and full solutions in the accompanying online material. Further reading and online resources are identified.

The second edition of this popular textbook has been extensively revised and brought up-to-date with new chapters addressing energy storage and off-grid systems. It provides a quantitative yet accessible overview of the renewable energy technologies that are essential for a net-zero carbon energy system. Covering wind, hydro, solar thermal, photovoltaic, ocean and bioenergy, the text is suitable for engineering undergraduates as well as graduate students from other numerate degrees. The technologies involved, background theory and how projects are developed, constructive and operated are described. Worked examples demonstrate the simple calculation techniques used and engage students by showing them how theory relates to real applications. Tutorial chapters provide background material supporting students from a range of disciplines, and there are over 150 end-of-chapter problems with answers. Online resources, restricted to instructors, provide additional material, including copies of the diagrams, full solutions to the problems and examples of extended exercises.

Photosynthesis takes carbon dioxide from the atmosphere and stores the carbon in the biomass of plants and trees. This carbon is released when the biomass is converted to energy but the overall cycle of growing biomass through photosynthesis and converting it to useful energy can be considered to produce limited net emissions of greenhouse gases. The processes by which biomass is converted into energy are described, including the thermochemical processes of combustion and gasification of solid biomass, the biochemical processes of anaerobic digestion, and alcoholic fermentation and the extraction of oil from plants. Combustion of biomass to generate electricity is described and the gasification of biomass is discussed. Anaerobic digestion to produce biogas and the alcoholic fermentation of crops to produce biofuel are described. The production of biodiesel by the extraction and purification of vegetable oil from plants is also described. The chapter is supported by 5 examples, 16 questions with answers and full solutions in the accompanying online material. Further reading and online resources are identified.

The solar heating of buildings, the solar heating of water and solar thermal electricity generation are discussed. The importance of solar energy in determining the temperature of buildings is emphasized. The circuit representation of low-temperature heat transfer is used to estimate the heat loss and solar gain in buildings. The use of degree-days to predict the long-term performance of a building is illustrated and the behaviour of glass in capturing solar energy is described. The principles of solar water heating using a flat-plate or evacuated-tube solar collector is shown and the performance of a flat-plate solar collector is analysed. The use of selective absorber surfaces to improve the performance of a solar thermal system is discussed. High-temperature concentrated solar thermal systems are described with particular applications for electricity generation. Parabolic trough and Fresnel lens linear collectors are described as well as solar power tower schemes. The chapter is supported by 4 examples, 13 questions with answers and full solutions in the accompanying online material. Further reading and online resources are identified.

Photovoltaic (PV) systems generate electricity directly from the light of the sun, and grid-connected systems are becoming increasingly important in many electricity supply networks. The photovoltaic effect is described and the use of standard test conditions to define the performance of PV equipment explained. The bond and band models are used to explain the behaviour of an illuminated silicon p–n junction and the shape of its V–I characteristic. Operation of a PV cell at varying irradiance and cell temperature is demonstrated and the importance of operating at the maximum power point explained. The equivalent circuit of a PV cell is shown. The connection of multiple cells into a PV module is described together with the metrics that are used to describe the performance of PV arrays. The principle of operation of a grid-connected PV system and its inverter are described. A final section summarizes the main technologies used to manufacture the different generations of PV cells. The chapter is supported by 7 examples, 16 questions with answers and full solutions in the accompanying online material. Further reading and online resources are identified.