IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v110y2019icp348-367.html
   My bibliography  Save this article

A review of electricity pricing in peninsular Malaysia: Empirical investigation about the appropriateness of Enhanced Time of Use (ETOU) electricity tariff

Author

Listed:
  • Sulaima, Mohamad Fani
  • Dahlan, Nofri Yenita
  • Yasin, Zuhaila Mat
  • Rosli, Marlinda Mohd
  • Omar, Zulkiflee
  • Hassan, Mohammad Yusri

Abstract

This paper presents the foundation of the Peninsular Malaysia's electricity market reform and development towards successful of Incentive Based Regulation (IBR) implementation, when revising also the Special Industry Tariff (SIT), Time of Use (TOU) and Enhanced Time of Use (ETOU) tariff. The Malaysian characteristics of Price Based Program (PBP) pointed out are compared with other countries across several continents. Since PBP benefits the energy providers in order to enhance power system efficiency, the effectiveness of consumer side strategies to gain benefit from PBP should be given attention too. In this study, investigation has been focused on one of the PBP which is ETOU tariff; with regard to the impact of this new tariff in communicating to selected real data energy profile for all commercial and industrial tariff types through congruent analysis. Without any effort towards load management as well as Demand Side Management (DSM) strategies implementation, the dedicative consumers' electricity bill has increased significantly to approximately 0.5%–12% during ETOU tariff shifting. In order to overcome this issue, a novel formulation by using simultaneous demand side management strategies such as valley filling, load clipping and load shifting for the ETOU tariff optimization is proposed. Meanwhile, the momentous simulation analysis results has demonstrated that major commercial and industrial consumers should find out for about 20%–50% of load management; by selecting PBP activities before they can switch to new tariff program.

Suggested Citation

  • Sulaima, Mohamad Fani & Dahlan, Nofri Yenita & Yasin, Zuhaila Mat & Rosli, Marlinda Mohd & Omar, Zulkiflee & Hassan, Mohammad Yusri, 2019. "A review of electricity pricing in peninsular Malaysia: Empirical investigation about the appropriateness of Enhanced Time of Use (ETOU) electricity tariff," Renewable and Sustainable Energy Reviews, Elsevier, vol. 110(C), pages 348-367.
    • Handle: RePEc:eee:rensus:v:110:y:2019:i:c:p:348-367
    DOI: 10.1016/j.rser.2019.04.075
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032119302965
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2019.04.075?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Faruqui, Ahmad & Sergici, Sanem & Lessem, Neil & Mountain, Dean, 2015. "Impact measurement of tariff changes when experimentation is not an option—A case study of Ontario, Canada," Energy Economics, Elsevier, vol. 52(PA), pages 39-48.
    2. Zhang, Wenbin & Tian, Lixin & Wang, Minggang & Zhen, Zaili & Fang, Guochang, 2016. "The evolution model of electricity market on the stable development in China and its dynamic analysis," Energy, Elsevier, vol. 114(C), pages 344-359.
    3. Kim, Min-Jeong, 2017. "A field study using an adaptive in-house pricing model for commercial and industrial customers in Korea," Energy Policy, Elsevier, vol. 102(C), pages 189-198.
    4. Petinrin, J.O. & Shaaban, Mohamed, 2015. "Renewable energy for continuous energy sustainability in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 967-981.
    5. Cosmo, Valeria Di & O’Hora, Denis, 2017. "Nudging electricity consumption using TOU pricing and feedback: evidence from Irish households," Journal of Economic Psychology, Elsevier, vol. 61(C), pages 1-14.
    6. Wang, Chen & Zhou, Kaile & Yang, Shanlin, 2017. "A review of residential tiered electricity pricing in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 533-543.
    7. Mohammad Rozali, Nor Erniza & Wan Alwi, Sharifah Rafidah & Manan, Zainuddin Abdul & Klemeš, Jiří Jaromír, 2015. "Peak-off-peak load shifting for hybrid power systems based on Power Pinch Analysis," Energy, Elsevier, vol. 90(P1), pages 128-136.
    8. Alasseri, Rajeev & Tripathi, Ashish & Joji Rao, T. & Sreekanth, K.J., 2017. "A review on implementation strategies for demand side management (DSM) in Kuwait through incentive-based demand response programs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 617-635.
    9. Venizelou, Venizelos & Philippou, Nikolas & Hadjipanayi, Maria & Makrides, George & Efthymiou, Venizelos & Georghiou, George E., 2018. "Development of a novel time-of-use tariff algorithm for residential prosumer price-based demand side management," Energy, Elsevier, vol. 142(C), pages 633-646.
    10. Bjørndal, Endre & Bjørndal, Mette & Midthun, Kjetil & Tomasgard, Asgeir, 2018. "Stochastic electricity dispatch: A challenge for market design," Energy, Elsevier, vol. 150(C), pages 992-1005.
    11. Ma, Jinlong, 2011. "On-grid electricity tariffs in China: Development, reform and prospects," Energy Policy, Elsevier, vol. 39(5), pages 2633-2645, May.
    12. Bigerna, Simona & Andrea Bollino, Carlo & Polinori, Paolo, 2015. "Marginal cost and congestion in the Italian electricity market: An indirect estimation approach," Energy Policy, Elsevier, vol. 85(C), pages 445-454.
    13. Yang, Changhui & Meng, Chen & Zhou, Kaile, 2018. "Residential electricity pricing in China: The context of price-based demand response," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 2870-2878.
    14. Shirazi, Elham & Jadid, Shahram, 2017. "Cost reduction and peak shaving through domestic load shifting and DERs," Energy, Elsevier, vol. 124(C), pages 146-159.
    15. Sun, Chuanwang, 2015. "An empirical case study about the reform of tiered pricing for household electricity in China," Applied Energy, Elsevier, vol. 160(C), pages 383-389.
    16. Nelson, Tim & McCracken-Hewson, Eleanor & Whish-Wilson, Patrick & Bashir, Stephanie, 2018. "Price dispersion in Australian retail electricity markets," Energy Economics, Elsevier, vol. 70(C), pages 158-169.
    17. Li, Ran & Wang, Zhimin & Gu, Chenghong & Li, Furong & Wu, Hao, 2016. "A novel time-of-use tariff design based on Gaussian Mixture Model," Applied Energy, Elsevier, vol. 162(C), pages 1530-1536.
    18. Fahrioglu, Murat, 2016. "Effect of demand management on regulated and deregulated electricity sectors," Energy Policy, Elsevier, vol. 90(C), pages 115-120.
    19. Wang, Yong & Li, Lin, 2013. "Time-of-use based electricity demand response for sustainable manufacturing systems," Energy, Elsevier, vol. 63(C), pages 233-244.
    20. Wang, Yong & Li, Lin, 2015. "Time-of-use electricity pricing for industrial customers: A survey of U.S. utilities," Applied Energy, Elsevier, vol. 149(C), pages 89-103.
    21. Schlereth, Christian & Skiera, Bernd & Schulz, Fabian, 2018. "Why do consumers prefer static instead of dynamic pricing plans? An empirical study for a better understanding of the low preferences for time-variant pricing plans," European Journal of Operational Research, Elsevier, vol. 269(3), pages 1165-1179.
    22. Saidur, R. & Hasanuzzaman, M. & Yogeswaran, S. & Mohammed, H.A. & Hossain, M.S., 2010. "An end-use energy analysis in a Malaysian public hospital," Energy, Elsevier, vol. 35(12), pages 4780-4785.
    23. Summerbell, Daniel L. & Khripko, Diana & Barlow, Claire & Hesselbach, Jens, 2017. "Cost and carbon reductions from industrial demand-side management: Study of potential savings at a cement plant," Applied Energy, Elsevier, vol. 197(C), pages 100-113.
    24. Thakur, Jagruti & Chakraborty, Basab, 2016. "Demand side management in developing nations: A mitigating tool for energy imbalance and peak load management," Energy, Elsevier, vol. 114(C), pages 895-912.
    25. Song, Kwonsik & Kim, Sooyoung & Park, Moonseo & Lee, Hyun-Soo, 2017. "Energy efficiency-based course timetabling for university buildings," Energy, Elsevier, vol. 139(C), pages 394-405.
    26. Eid, Cherrelle & Koliou, Elta & Valles, Mercedes & Reneses, Javier & Hakvoort, Rudi, 2016. "Time-based pricing and electricity demand response: Existing barriers and next steps," Utilities Policy, Elsevier, vol. 40(C), pages 15-25.
    27. Knaut, Andreas & Tode, Christian & Lindenberger, Dietmar & Malischek, Raimund & Paulus, Simon & Wagner, Johannes, 2016. "The reference forecast of the German energy transition—An outlook on electricity markets," Energy Policy, Elsevier, vol. 92(C), pages 477-491.
    28. Loi, Tian Sheng Allan & Ng, Jia Le, 2018. "Anticipating electricity prices for future needs – Implications for liberalised retail markets," Applied Energy, Elsevier, vol. 212(C), pages 244-264.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yong, Wen Ni & Liew, Peng Yen & Woon, Kok Sin & Wan Alwi, Sharifah Rafidah & Klemeš, Jiří Jaromír, 2021. "A pinch-based multi-energy targeting framework for combined chilling heating power microgrid of urban-industrial symbiosis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 150(C).
    2. Alaa A. F. Husain & Maryam Huda Ahmad Phesal & Mohd Zainal Abidin Ab Kadir & Ungku Anisa Ungku Amirulddin & Abdulhadi H. J. Junaidi, 2021. "A Decade of Transitioning Malaysia toward a High-Solar PV Energy Penetration Nation," Sustainability, MDPI, vol. 13(17), pages 1-16, September.
    3. Gilson Dranka, Géremi & Ferreira, Paula & Vaz, A. Ismael F., 2022. "Co-benefits between energy efficiency and demand-response on renewable-based energy systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 169(C).
    4. Zhou, Yuekuan, 2023. "Sustainable energy sharing districts with electrochemical battery degradation in design, planning, operation and multi-objective optimisation," Renewable Energy, Elsevier, vol. 202(C), pages 1324-1341.
    5. Jahangir Hossain & Aida. F. A. Kadir & Ainain. N. Hanafi & Hussain Shareef & Tamer Khatib & Kyairul. A. Baharin & Mohamad. F. Sulaima, 2023. "A Review on Optimal Energy Management in Commercial Buildings," Energies, MDPI, vol. 16(4), pages 1-40, February.
    6. Shi-Yi Song & Hong Leng, 2020. "Modeling the Household Electricity Usage Behavior and Energy-Saving Management in Severely Cold Regions," Energies, MDPI, vol. 13(21), pages 1-22, October.
    7. Máximo A. Domínguez-Garabitos & Víctor S. Ocaña-Guevara & Félix Santos-García & Adriana Arango-Manrique & Miguel Aybar-Mejía, 2022. "A Methodological Proposal for Implementing Demand-Shifting Strategies in the Wholesale Electricity Market," Energies, MDPI, vol. 15(4), pages 1-28, February.
    8. Kapitonov, Ivan A. & Patapas, Aleksandras, 2021. "Principles regulation of electricity tariffs for the integrated generation of traditional and alternative energy sources," Renewable and Sustainable Energy Reviews, Elsevier, vol. 146(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richstein, Jörn C. & Hosseinioun, Seyed Saeed, 2020. "Industrial demand response: How network tariffs and regulation (do not) impact flexibility provision in electricity markets and reserves," Applied Energy, Elsevier, vol. 278(C).
    2. Charwand, Mansour & Gitizadeh, Mohsen, 2018. "Optimal TOU tariff design using robust intuitionistic fuzzy divergence based thresholding," Energy, Elsevier, vol. 147(C), pages 655-662.
    3. Tomas Baležentis & Dalia Štreimikienė, 2019. "Sustainability in the Electricity Sector through Advanced Technologies: Energy Mix Transition and Smart Grid Technology in China," Energies, MDPI, vol. 12(6), pages 1-21, March.
    4. Wang, Chen & Zhou, Kaile & Yang, Shanlin, 2017. "A review of residential tiered electricity pricing in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 533-543.
    5. Nirbheram, Joshi Sukhdev & Mahesh, Aeidapu & Bhimaraju, Ambati, 2023. "Techno-economic analysis of grid-connected hybrid renewable energy system adapting hybrid demand response program and novel energy management strategy," Renewable Energy, Elsevier, vol. 212(C), pages 1-16.
    6. Richstein, Jörn C. & Hosseinioun, Seyed Saeed, 2020. "Industrial demand response: How network tariffs and regulation (do not) impact flexibility provision in electricity markets and reserves," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 278.
    7. Cui, Weiwei & Li, Lin, 2018. "A game-theoretic approach to optimize the Time-of-Use pricing considering customer behaviors," International Journal of Production Economics, Elsevier, vol. 201(C), pages 75-88.
    8. Jörn C. Richstein & Seyed Saeed Hosseinioun, 2020. "Industrial Demand Response: How Network Tariffs and Regulation Do (Not) Impact Flexibility Provision in Electricity Markets and Reserves," Discussion Papers of DIW Berlin 1853, DIW Berlin, German Institute for Economic Research.
    9. Fang, Debin & Wang, Pengyu, 2023. "Optimal real-time pricing and electricity package by retail electric providers based on social learning," Energy Economics, Elsevier, vol. 117(C).
    10. Meyabadi, A. Fattahi & Deihimi, M.H., 2017. "A review of demand-side management: Reconsidering theoretical framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 367-379.
    11. Y, Kiguchi & Y, Heo & M, Weeks & R, Choudhary, 2019. "Predicting intra-day load profiles under time-of-use tariffs using smart meter data," Energy, Elsevier, vol. 173(C), pages 959-970.
    12. Li, Lanlan & Luo, Xuan & Zhou, Kaile & Xu, Tingting, 2018. "Evaluation of increasing block pricing for households' natural gas: A case study of Beijing, China," Energy, Elsevier, vol. 157(C), pages 162-172.
    13. Ussama Assad & Muhammad Arshad Shehzad Hassan & Umar Farooq & Asif Kabir & Muhammad Zeeshan Khan & S. Sabahat H. Bukhari & Zain ul Abidin Jaffri & Judit Oláh & József Popp, 2022. "Smart Grid, Demand Response and Optimization: A Critical Review of Computational Methods," Energies, MDPI, vol. 15(6), pages 1-36, March.
    14. Xu, Fangyuan & Zhu, Weidong & Wang, Yi Fei & Lai, Chun Sing & Yuan, Haoliang & Zhao, Yujia & Guo, Siming & Fu, Zhengxin, 2022. "A new deregulated demand response scheme for load over-shifting city in regulated power market," Applied Energy, Elsevier, vol. 311(C).
    15. Matthew Gough & Sérgio F. Santos & Mohammed Javadi & Rui Castro & João P. S. Catalão, 2020. "Prosumer Flexibility: A Comprehensive State-of-the-Art Review and Scientometric Analysis," Energies, MDPI, vol. 13(11), pages 1-32, May.
    16. Chen Wang & Kaile Zhou & Lanlan Li & Shanlin Yang, 2018. "Multi-agent simulation-based residential electricity pricing schemes design and user selection decision-making," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 90(3), pages 1309-1327, February.
    17. Pereira, Diogo Santos & Marques, António Cardoso, 2022. "An analysis of the interactions between daily electricity demand levels in France," Utilities Policy, Elsevier, vol. 76(C).
    18. Andruszkiewicz, Jerzy & Lorenc, Józef & Weychan, Agnieszka, 2020. "Seasonal variability of price elasticity of demand of households using zonal tariffs and its impact on hourly load of the power system," Energy, Elsevier, vol. 196(C).
    19. Golmohamadi, Hessam, 2022. "Demand-side management in industrial sector: A review of heavy industries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
    20. Venizelou, Venizelos & Philippou, Nikolas & Hadjipanayi, Maria & Makrides, George & Efthymiou, Venizelos & Georghiou, George E., 2018. "Development of a novel time-of-use tariff algorithm for residential prosumer price-based demand side management," Energy, Elsevier, vol. 142(C), pages 633-646.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:rensus:v:110:y:2019:i:c:p:348-367. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.