The Philippines’ and Singapore’s Journeys towards Liberalised Electricity Supply Industries—Takeaways for Malaysia

Malaysia is in the process of liberalising its electricity supply industry (ESI) further, with the second reform series announced in September 2018. If everything goes as planned, Malaysia would be the third country in the Association of Southeast Asia Nations (ASEAN) to have a fully liberalised ESI after the Philippines and Singapore. A number of initiatives have been in the pipeline to be executed and a lot more will be planned. At this juncture, it is important for Malaysia to look for the best practices and lessons that can be learnt from the experience of other countries that have successfully liberalised their ESIs. Being in the same region, it is believed that there is a lot that Malaysia can learn from the Philippines and Singapore. This paper therefore presents and deliberates on the chronological development of the countries’ progressive journeys in liberalising their ESIs. The aim is to discern the good practices, the challenges as well as the lessons learnt from these transformations. Analysis is being made and discussed from the following four perspectives; legislative framework, implementation phases, market components and impact on renewable energy penetration. Findings from this study would provide useful insight for Malaysia in determining the course of actions to be taken to reform its ESI. Beyond Malaysia, the findings can also serve as the reference for the other ASEAN countries in moving towards liberalising their ESIs.

The generation revenue and demand payment assessment for pool based market model in Malaysia electricity supply industry

The objective of this paper is to address the economic benefits in term of generation revenue and demand payment for the pool based market model in Malaysia electricity supply industry (MESI). In pool market model, there are issues on the benefit of the generators such as too high system marginal price (SMP) during peak demand and no revenue during low demand. Therefore, conceptual study for two bus test system in MESI involving four generators around Peninsular Malaysia is conducted to perform the economic analysis in term of generation revenue and demand assessment considering existing single buyer model and pool based market model, i.e., pool model, spot market model and the proposed model, in order to identify which market model is superior. As a result, the proposed model managed to decrease the demand payment as it is proportional to generation revenue, even though the generation revenue is at intermediate value and succeed to increase the low and medium generator’s revenue.

Electricity Supply Industry Reform in Malaysia: Current State and Way Forward

The Malaysia electricity supply industry (MESI) has gone through a series of reforms and restructuring since it first started at the beginning of the last century. The latest series of reform, known as MESI 1.0 has been ongoing since 2010. The objectives are to achieve secure and reliable supply of energy, to have economically competitive tariffs, to be environmentally sustainable and to improve customer satisfaction/choice. MESI 1.0 is now coming to its end, and in a recent development, the government has announced the commencement of the next series of MESI reform, MESI 2.0. The objectives of MESI 2.0 are to increase the industry efficiency, to future proof the industry, structure, regulations and key processes, and to empower the consumers. MESI 2.0 is obviously the continuation of MESI 1.0. Thus, prior to the start of MESI 2.0, it is important to review the progress and achievements of MESI 1.0 in such a way that enables informed decisions to be made in designing MESI 2.0. This paper therefore presents a review on the progress and achievement of MESI 1.0, focusing on the initiatives undertaken and evaluating the extent to which the objectives of MESI 1.0 have been addressed by the initiatives. Analysis performed on the review results shows that the second objective of having competitive tariffs is mostly addressed by the initiatives whereas more work needs to be done to address the other objectives, particularly on being environmentally sustainable. Liberalization through the unbundling of MESI is also identified as the potential means to achieve the objectives of MESI 2.0. Findings from this study can serve as the reference point in identifying the current state of MESI reform and in determining the way forward for subsequent MESI reforms.