Advertisement

Deregulating the Electricity Market for the Peninsula Malaysian Grid Using a System Dynamics Approach

  • Darren Teck Liang Lee
  • Andrew Huey Ping Tan
  • Eng Hwa YapEmail author
  • Kim-Yeow Tshai
Conference paper
Part of the Communications in Computer and Information Science book series (CCIS, volume 1015)

Abstract

Competition among power producers is minimal in the current Peninsula Malaysia’s electricity market structure as it only happens during the proposal stage to build new power plants. Therefore, electricity generation is over-dependent on current national gas reserves and the importation of cheap coal from Indonesia to keep tariffs low as there is minimal competition among power producers. However, this is not a suitable long term and environmental-friendly solution as it increases carbon dioxide and other greenhouse gases (GHG) emission. Hence, this research utilises system dynamics method to study the effects of a single buyer model (SBM) transitioning into a wholesale competition market, and to propose a framework to deregulate Peninsula Malaysia’s electricity market. Results have shown that tariffs for end consumers are lower in the wholesale competitive market than the current SBM market even after incorporating expensive large-scale renewable energy.

References

  1. 1.
    Malaysia Energy Commission: Peninsular Malaysia Electricity Supply Industry Outlook (2013)Google Scholar
  2. 2.
    Borenstein, S., Bushnell, J.: The U.S. electricity industry after 20 years of restructuring, 1–31 (2015). Energy Institute HAAS.  https://doi.org/10.1146/annureveconomics-080614-115630.1
  3. 3.
    Strickland, C.: Energy efficiency in World Bank power sector policy and lending New opportunities. Energy Policy 26, 873–883 (1998).  https://doi.org/10.1016/S0301-4215(98)00007-XMathSciNetCrossRefGoogle Scholar
  4. 4.
    McGovern, T., Hicks, C.: Deregulation and restructuring of the global electricity supply industry and its impact upon power plant suppliers. Int. J. Prod. Econ. 89, 321–337 (2004).  https://doi.org/10.1016/j.ijpe.2004.03.006CrossRefGoogle Scholar
  5. 5.
    Woodcock, R.: Regulated and deregulated energy markets, explained. In: Energy Smart (2014). http://www.energysmart.enernoc.com/regulated-and-deregulated-energy-markets-explained/
  6. 6.
    Jacob, F.X.: Privatization and regulation in Malaysia’s power sector. Energy Sustain. Dev. 3, 80–88 (1997)CrossRefGoogle Scholar
  7. 7.
    Oasis Energy Deregulation Explained - Oasis Energy. https://www.oasisenergy.com/index.php/energy-resources/deregulation-explained. Accessed 12 July 2017
  8. 8.
    Lefevre, T., Todoc, J.L.: Energy Deregulation in Asia : Status, Trends, and Implications on the Environment by Overview of Energy-Environment Situation, pp. 1–25 (1999)Google Scholar
  9. 9.
    Foo, K.Y.: A vision on the opportunities, policies and coping strategies for the energy security and green energy development in Malaysia. Renew. Sustain. Energy Rev. 51, 1477–1498 (2015).  https://doi.org/10.1016/j.rser.2015.07.041CrossRefGoogle Scholar
  10. 10.
    Teljeur, E., van der Hoven, Z., Kagee, S.: Why we need alternative ESI structures. In: The Electricity Retail Competition Unicorn, 2nd Annual Competition and Economic Regulation (ACER) Conference, Southern Africa (2016)Google Scholar
  11. 11.
    Omar, A., Omar, O., Mohd Nazri, A.A., et al.: Energy Malaysia. Energy Comm. 1, 48 (2014)Google Scholar
  12. 12.
    Kasim, N.N.B.: Study on Single Buyer Model and Pool Trading Model in Deregulated Electricity Market, p. 54 (2014)Google Scholar
  13. 13.
    Laszlo, L.: The single-buyer model. Privatesector 225, 4 (2000)Google Scholar
  14. 14.
    Bacon, R.: Competitive contracting for privately generated power: what to do in the absence of competition in the market 47, 1–4 (1995)Google Scholar
  15. 15.
    Energy Commission: Malaysia Energy Statistics Handbook 2015, p. 84 (2015)Google Scholar
  16. 16.
    Energy Commission: Malaysia Energy Statistics Handbook 2016 (2016)Google Scholar
  17. 17.
    Rahman Mohamed, A., Lee, K.T.: Energy for sustainable development in Malaysia: energy policy and alternative energy. Energy Policy 34, 2388–2397 (2006).  https://doi.org/10.1016/j.enpol.2005.04.003CrossRefGoogle Scholar
  18. 18.
    Ali, R., Daut, I., Taib, S.: A review on existing and future energy sources for electrical power generation in Malaysia. Renew. Sustain. Energy Rev. 16, 4047–4055 (2012).  https://doi.org/10.1016/j.rser.2012.03.003CrossRefGoogle Scholar
  19. 19.
    Economic Transformation Programme: Powering the Malaysian Economy with Oil, Gas and Energy, chapter 6. Economics Transformation Program. A Roadmap Malaysia, p. 27 (2010)Google Scholar
  20. 20.
    Oh, T.H., Pang, S.Y., Chua, S.C.: Energy policy and alternative energy in Malaysia: issues and challenges for sustainable growth. Renew. Sustain. Energy Rev. 14, 1241–1252 (2010).  https://doi.org/10.1016/j.rser.2009.12.003CrossRefGoogle Scholar
  21. 21.
    Hydroelectric Power: Hydropower Scenario in Malaysia (2014). http://hydroelectricp.blogspot.my/2014/12/hydropower-scenario-in-malaysia.html. Accessed 24 Aug 2017
  22. 22.
    Ho, Y.J.: Out of gas weighing our energy options. In: Penang Mon (2014)Google Scholar
  23. 23.
    Lee, J.: A growing solar industry. Star Online (2017)Google Scholar
  24. 24.
    Kenning, T.: PV Talk: the policies needed to drive Malaysian solar. In: PVTECH (2016)Google Scholar
  25. 25.
    Chua, S.C., Oh, T.H.: Solar energy outlook in Malaysia. Renew. Sustain. Energy Rev. 16, 564–574 (2012).  https://doi.org/10.1016/j.rser.2011.08.022CrossRefGoogle Scholar
  26. 26.
    MBIPV: Compared Assessment of Selected Environmental Indicators of Photovoltaic Electricity in Selected OECD Cities and Malaysian Cities, p. 20 (2006)Google Scholar
  27. 27.
    Hassan, M.Y., Hussin, F., Othman, M.F.: A Study of Electricity Market Models in the Restructured Electricity Supply Industry, p. 168 (2009)Google Scholar
  28. 28.
    Arifin, A.: A pool based electricity market design for malaysia electricity supply industry. Universiti Teknologi Malaysia (2008)Google Scholar
  29. 29.
    De Pinho, H.: Systems Tools for Complex Health Systems: A Guide to Creating Causal Loop Diagrams. Mailman School Public Health, Columbia University, pp. 1–25 (2015)Google Scholar
  30. 30.
    Coal | 2009–2017 | Data | Chart | Calendar | Forecast | News. In: Trading Econ. https://tradingeconomics.com/commodity/coal. Accessed 8 Aug 2017
  31. 31.
    Clearing the air on tariffs - Nation | The Star Online. Star Online (2017)Google Scholar
  32. 32.
    Najib touts Malaysia’s CO2 Successes - Clean Malaysia (2016)Google Scholar
  33. 33.
    TNB: GHG Emissions Reduction Project for Power Sector (2015)Google Scholar

Copyright information

© Springer Nature Singapore Pte Ltd. 2019

Authors and Affiliations

  • Darren Teck Liang Lee
    • 1
  • Andrew Huey Ping Tan
    • 2
  • Eng Hwa Yap
    • 3
    Email author
  • Kim-Yeow Tshai
    • 1
  1. 1.Faculty of EngineeringUniversity of Nottingham MalaysiaSemenyihMalaysia
  2. 2.School of Engineering, Computing and Built EnvironmentKDU Penang University CollegeGeorgetownMalaysia
  3. 3.Faculty of Transdisciplinary InnovationUniversity of Technology SydneySydneyAustralia

Personalised recommendations