Electricity market models in restructured electricity supply industry

Hassan, M. Y.; Abdullah, Md. Pauzi; Arifin, Ardian; Hussin, Faridah; Majid, M. S.

doi:10.1109/pecon.2008.4762618

Cited by 14 publications

(8 citation statements)

References 3 publications

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“…Thus, it is important to modify the existing pure pool model, so it can provide a fair market to supplier and user. It is reported at low load condition, the generators would gain more revenue under single buyer model compared to pool market model, whereas at high load demand, the generators would gain more revenue under pool market model [4]. Aifa [5] proposed an alternative electricity market model, hybrid model for MESI, which combines the pure pool market and pro-rata base load profile.…”

Section: Improvement Of Pool Based Market Model For Malaysia Electricmentioning

confidence: 99%

The Economic Benefits of Generation Revenue Assessment in Pool-Based Market Model for Restructured Electricity Supply Industry

2016

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Abstract. 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.

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Section: Improvement Of Pool Based Market Model For Malaysia Electricmentioning

confidence: 99%

The Economic Benefits of Generation Revenue Assessment in Pool-Based Market Model for Restructured Electricity Supply Industry

2016

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“…Designs representing two extremes of the spectrum of competitive outcomes can be identified. Under the least competitive design of the single buyer model, IPPs are used primarily as a source of additional capital to supplement the generation fleet of the VIPC, which retains overwhelming dominance in generating, dispatching and supplying electricity (Hassan et al 2009). There is no centralized or transparent mechanism by which the dispatch of IPPs or the VIPC's own generators are prioritised or coordinated.…”

Section: Model 2: Single Buyer/purchasing Agency Modelmentioning

confidence: 99%

Assessing The Current Indonesia’s Electricity Market Arrangements and The Opportunities to Reform

Setyawan¹

2015

Int. J. Renew. Energy Dev.

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Existing subsidy arrangements and institutional settings in the Indonesian electricity sector distort investment decisions and lead to higher cost. Electricity supply is characterized by natural monopoly characteristics, requiring different management by governments than sectors with more straightforward market characteristics. Many countries have undergone significant re-structuring of their electricity sectors, away from one, state owned and vertically integrated monopoly supplier to a setting whereby competition has emerged either at the generation level and/or the retail level. Transmission and distribution networks are typically heavily regulated and transparent access arrangements are put in place as part of the restructuring efforts. The analysis showed that the current structure of Indonesia’s electricity sector firmly within Model 2 (the single buyer model) and highlights that Indonesia is currently towards the less-competitive end of the spectrum of Model 2, identifying significant potential for efficiency enhancing reforms within this structure. Constitutional limitations have hampered previous efforts to restructure the sector in Indonesia but there is significant room for incremental reform to improve incentives in the sector and reduce the cost of generation in the process.

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“…This wholesale market takes form of pool/hybrid market. In the hybrid market model, the load demand is divided into two parts; base load demand and peak load demand [6]. For the base load demand, the load is distributed to the generators based on the pro-rata basis, while there is no competition among generators and the generators will share this load proportional to their available capacity, i.e.…”

Section: International Integrated Engineering Summit 2014mentioning

confidence: 99%

Review on Restructuring of Malaysia Electricity Supply Industry

Ngadiron

Radzi

Yassin

et al. 2015

AMM

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The global trend in electricity market has put pressure for Malaysia to restructure industry to be more reliable, transparent, efficient and sustainable. Besides, centralized power purchasing units that exist within a vertically-integrated entity have been criticized for failure to provide a truly playing field for the player in the generation sector competing to sell power to the single buyer. The Malaysian Electricity Supply Industry (MESI) has gone through various stages of reform and has evolved from predominantly single entity to a multiplayer industry particularly in the generation sector. This literature review covers the evolution of MESI from the introducing of the Independent Power Producers (IPPs), issues surrounding and implementation of single buyer which had continued until now. The MESI reformed a single buyer functional structure and framework is also included. However, this model does not offer transparent competition. Thus, other alternative electricity market model, pool/hybrid market model could be applied in order to carry on the MESI previous plan towards restructuring. The significance and relevance of the pool market model and its advantages in the Malaysian context is also discussed. IntroductionFor many years MESI has remained a regulated monopoly. Today, with a major challenge to be more responsive to the needs of the people, keeping the price to be affordable and competitive, MESI made a progress in transforming the industry to be more transparent and efficient including the generation capacity. The restructuring of Electricity Supply Industry (ESI) had begun in early 20th centuries, since then, MESI has aimed to change its structure to a wholesale market model in 2005. Malaysian Government has addresses issues of energy production, distribution and consumption. Therefore, Tenaga Nasional Berhad (TNB) is committed to support the national green agenda and by applying sustainable, efficient operation and delivery green energy through the application of appropriate technologies and investments. In 1992, due to a nationwide power blackout, series interruptions and rationing, the government decided to introduce Independent Power Producers (IPP) in generation sector, in order to overcome the electricity shortage issues, enlarge energy reserve margin, and to introduce competition bidding among the generators [1]. Until now, the competition valid for generation sector only, while transmission and distribution sector remained fully control by TNB.The future challenges may increase the cost of supply and subsidy, resulting in volatile fuel prices and IPP payments, as well as earnings below cost of capital. An alternative of electricity market model for MESI towards restructuring, pool/hybrid market model could be applied, in order to accommodate a fair competitive trading between power producers and to produce win-win situation to all involved parties, will illustrates guaranteed incomes for all IPPs. Therefore, this might influenced them to renegotiate the terms in the agreement.

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Electricity market models in restructured electricity supply industry

Cited by 14 publications

References 3 publications

The Economic Benefits of Generation Revenue Assessment in Pool-Based Market Model for Restructured Electricity Supply Industry

The Economic Benefits of Generation Revenue Assessment in Pool-Based Market Model for Restructured Electricity Supply Industry

Assessing The Current Indonesia’s Electricity Market Arrangements and The Opportunities to Reform

Review on Restructuring of Malaysia Electricity Supply Industry

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