De-Regulation of Electricity Industry: A Malaysian Perspective

The Malaysian electricity industry has gone through an evolution over the years from vertically integrated utility into a single buyer market model currently. Many countries have de-regulated their electricity industry to increase efficiency and to introduce electricity price competitiveness. It is a natural path for any developing country like Malaysia to evolve into a fully functional market with complementary commercial instruments, such as whole-sale, balance, and network access arrangements. However, Malaysia must take the right path in pursuing de-regulation through energy market, thus ensuring a smooth transition from regulated into de-regulated electricity industry. This paper analyzed the energy market operation of three different countries. The analysis was based on the drivers for regulation, how the de-regulation was introduced to the vertically integrated system, the market model and the structure. From the comparative analysis, the hybrid model which combines single buyer model and pool market seems to be the potential approach for Malaysia in its path to de-regulation.