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

GENERATION REVENUE ASSESSMENT ON RESTRUCTURING THE MALAYSIA ELECTRICITY SUPPLY INDUSTRY

ABSTRACT The Malaysia Electric Supply Industry (MESI) has been a regulated monopoly for many years. Tenaga Nasional Berhad (TNB) is vertically integrated from generation to distribution. Since 1992, Independent Power Producers (IPPs) and competitive bidding is introduced, which has opened for a level playing field in the generation sector, while others remained the same. Therefore, MESI had applied the single buyer model until today. In 2005, MESI has aimed to change its structure to a wholesale market model. Now, the single buyer model had passed several processes of evolution, but it still a form of imperfect competition because there is only one buyer and many sellers of a product. Thus, other alternatives of electricity market models have been proposed to carry on the MESI previous plan towards restructuring. This paper discusses three electricity market models; single buyer, pool, and hybrid market model. The case study is carried out to compare the three market models in term of generation revenue. Four busses of generator power plant have been chosen for the case study. Single buyer model shown an unfair trading. The generators can still generate revenue even without any contribution to supply the load demand and gained the largest revenue due to the existence of both capacity and energy payment. Furthermore, this market does not provide competition due to long term agreement. Thus, the results show that the single buyer is the most profitable for generation revenue compared to other market model due to capacity payment regardless the usage of real capacity based on the demand. Nevertheless, the pool and hybrid market model provide a fair trading as it based on energy bid price only

The economic benefits of generation revenue assessment in pool-based market model for restructured electricity supply industry

The electricity supply industry had undergo deregulation and restructuring toward becoming a more transparent and competitive electricity market environment. The pool market model is amongst the most preferred electricity market model. Even though it is a safe option to be more competitive and transparent electricity supply industry, there are issues on the welfare of the generators involved. This paper addresses the pricing issue in the pool market by extending the capacity payment mechanism in the single auction power pool. In the proposed model, the approach of minimum capacity payment involving the efficiency of the generators is introduced. A case study is conducted to illustrate the proposed model. An economic analysis is performed to highlight the merits of the proposed model with the pure pool in term of generation revenue. © 2016 The Authors, published by EDP Sciences

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