A bilateral based electricity market design for Malaysia electricity supply industry

Abstract

The purpose of this project is to study and design a bilateral market model for Malaysia Electricity Supply Industry (MESI). Current MESI is adopting Single Buyer Model, which produces no competition either on generation and demand side. Tenaga Nasional Berhad (TNB) is the only one company that buying and selling energy to all relevant parties. On the other hand, the tariff is determined by the government, in other words, customer cannot do anything to the energy tariff. A bilateral market model bring the energy trading to more open and competitive environment, TNB will no longer monopolising the market, where as the parties involving selling and buying energy freely negotiate among themselves based on their demand and needed. It will be forming an electricity wholesale market. Due to the market forces, expected resulting in reduction of cost of wholesale electricity, further to reduce retail energy prices, and benefit to the end user of the reduction of the tariff. A few assumption cases study will be made to simulate the bilateral trading process. The case study for Single Buyer Model (SBM) to be included capacity payment, and assumed that there is no competition among generators. The generators will be only involving Independent Power Producers (IPPs) in Malaysia. On the other hand, a few cases will be studied under bilateral model, stimulate competition among generators will be the essential, and how to make a fair competition environment will also be taken into account. Both results of SBM and bilateral model were compared and discussed. This project has demonstrated the potential of replacing Malaysia’s Single Buyer Model to bilateral market model, towards an open and competitive electricity trading market.