The Economic Benefits of Generation Revenue and Demand Payment Assessment in Pool-based Market Model: The Case of Malaysia

Abstract

In Malaysia, as the Power Purchased Agreement is coming toward the end, pool market model is recognized as a conceivable model to overcome the shortcomings of the single buyer market. However, there are issues on the welfare of the generators involved. In context of Malaysian Electricity Supply Industry, this paper proposes a model, a pool hybrid introducing the minimum capacity payment involving the efficiency of the generators and base load sharing approaches. Under single auction power pool, a case study is conducted for the generators in Peninsular Malaysia for an economic analysis to highlight the merits of the proposed model compared with other pool-based market models in terms of generation revenue and demand payment. The load demand curves, the details of the MW-installed capacity, energy prices, capacity prices, and efficiency of the generators are the parameters taken into account in carry out analysis on each generator revenue. Results have shown that pool hybrid market ensures the intermediate value of generation revenue with all Independent Power Producers participation even at the lowest demand and decreased the demand payment.