Characterizing Malaysia's Transition into a Liberalized Electricity Market
Abstract
Malaysia is in the process of reforming its power sector towards a liberalized market. Although enabling competitive fuel sourcing by domestic power producers is a key aspect of the process, the country still regulates the prices of natural gas and coal as inputs for power generation. Considering natural gas and coal currently comprises about 84% of the fuels for power generation, a fuel subsidy reform would have an impact on the power system operations as well as the penetration of renewables. In this study, we developed a power system model with a high spatial and temporal resolution to evaluate the impact of removing such subsidies. In particular, we run the model under a broad spectrum of fuel prices and show that there are instances in which the generation mix can shift towards a higher share of renewables. Although there is a cost increase in operating the power system, the Malaysian government could save a large portion of its expenditure which could be in turn reinvested in support programs. Our findings suggest coupling fuel subsidy reform to additional capacity from renewables provides environmental and economic benefits.
- Publication:
-
AGU Fall Meeting Abstracts
- Pub Date:
- December 2022
- Bibcode:
- 2022AGUFMGC51E..02F