A pool based electricity market design for Malaysia electricity supply industry

Abstract

In the era of acheiving the target of restructuring of electricity supply industry which had began in early 20th centuries, Malaysian Electricity Supply Industry (MESI) has aimed to change its structure to a wholesale market model in 2005. The first step taken in 1992 is by introducing the Independent Power Producers (IPPs) and since then MESI had applied the Single Buyer Model which had continued until this moment of time. Tenaga Nasional Berhad (TNB) acts as the power off taker that is produced by all IPPs and TNBG. However, this model does not provide transparent competition as it supposed to. TNB on the other hand, has suffered massive profit erosion as a result of TNB’s payouts to IPPs based on a monthly rate regardless of electricity usage. This is based on the initial IPPs that were awarded licences to pursue the IPP model under Power Purchased Agreement (PPA) that would spans periods of up to 21 years. This thesis proposed an alternative electricity market model for MESI, which could be applied in order to carry on the MESI previous plan towards restructuring. The proposed model is designed to include the Pool Trading model with several market policies in order to accommodate a fair competitive trading between power producers and produce win-win situation to all involved parties especially to IPPs. The analysis in the proposed model illustrates guaranteed incomes for all IPPs and this might influenced them to renegotiate the terms in the agreement.