Economic Analysis in Restructured Electricity Supply Industry (ESI) for Malaysian Market Model

Before 1980s, the generation, transmission and distribution vertically related sectors have typically been tied together within a utility. It has been either, investor owned and state-regulated or owned by the local municipality. Each sector was thought of as a natural monopoly. During that era, there were two main reasons accelerated for restructuring needs. The first one was to widen up the choices of electricity for customers. And the second one was due to rapid expansion capacity needs in generation, transmission and distribution. In Malaysia, the Malaysian Electricity Supply Industry (MESI) has aimed to restructure its current model to become a wholesale market model. In 1992, by introducing the Independent Power Producers (IPPs) in the loop, MESI applies Single Buyer model. Single Buyer model is one of the existing models available under the restructuring apart from Pool and Bilateral. This paper evaluates the economic benefits for Malaysia with the current structure from the side of electricity provider. A case study with load variation for three different maximum demands is considered in this paper. The mathematical equation developed by zero Loss of Load Probability is applied to evaluate the economic benefits.