IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v146y2015icp217-229.html
   My bibliography  Save this article

A decision support system for evaluating effects of Feed-in Tariff mechanism: Dynamic modeling of Malaysia’s electricity generation mix

Author

Listed:
  • Shahmohammadi, M. Sadegh
  • Mohd. Yusuff, Rosnah
  • Keyhanian, Sina
  • Shakouri G., Hamed

Abstract

Malaysia has abundant potentials of renewable energy resources mainly because of its rich agriculture that makes high potential in bio-power and its tropical climate, which provides sufficient sunlight for utilization of solar systems. Feed in Tariff mechanism has been applied since 2011 in Malaysia to expand utilization of renewable energy for electricity generation. In this study, a broad range of data is gathered to develop a comprehensive system dynamics model to evaluate the impacts of Feed in Tariff mechanism on the generation mix of Malaysia during a 20-year period between 2011 and 2030. Results demonstrate that although the policy may lead to a satisfactory level of target achievement but the Malaysian government may face an increasing shortage in its RE fund budget starting around 2019 unless it increases its income sources by rising the surcharges on electricity bills or decreases its expenditures by optimizing the amount of FiT payments in different periods. The sensitivity analysis illustrates that the more funding will not lead to a more sustainable generation mix unless it is paid in the right time and in the right direction. Using this model, policymakers can carry out analysis to determine the amount of money that must be collected from the electricity consumers through the surcharges on electricity bills as well as the amount of feed in tariff to be paid for different renewable resources in different periods.

Suggested Citation

  • Shahmohammadi, M. Sadegh & Mohd. Yusuff, Rosnah & Keyhanian, Sina & Shakouri G., Hamed, 2015. "A decision support system for evaluating effects of Feed-in Tariff mechanism: Dynamic modeling of Malaysia’s electricity generation mix," Applied Energy, Elsevier, vol. 146(C), pages 217-229.
    • Handle: RePEc:eee:appene:v:146:y:2015:i:c:p:217-229
    DOI: 10.1016/j.apenergy.2015.01.076
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261915001129
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2015.01.076?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. Teufel, Felix & Miller, Michael & Genoese, Massimo & Fichtner, Wolf, 2013. "Review of System Dynamics models for electricity market simulations," Working Paper Series in Production and Energy 2, Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP).
    2. Arango, Santiago, 2007. "Simulation of alternative regulations in the Colombian electricity market," Socio-Economic Planning Sciences, Elsevier, vol. 41(4), pages 305-319, December.
    3. Chua, Shing Chyi & Oh, Tick Hui, 2010. "Review on Malaysia's national energy developments: Key policies, agencies, programmes and international involvements," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 2916-2925, December.
    4. Hasani, Masoud & Hosseini, Seyed Hamid, 2011. "Dynamic assessment of capacity investment in electricity market considering complementary capacity mechanisms," Energy, Elsevier, vol. 36(1), pages 277-293.
    5. Chua, Shing Chyi & Oh, Tick Hui, 2011. "Green progress and prospect in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(6), pages 2850-2861, August.
    6. Kathirvale, Sivapalan & Muhd Yunus, Muhd Noor & Sopian, Kamaruzzaman & Samsuddin, Abdul Halim, 2004. "Energy potential from municipal solid waste in Malaysia," Renewable Energy, Elsevier, vol. 29(4), pages 559-567.
    7. Midttun, Atle & Gautesen, Kristian, 2007. "Feed in or certificates, competition or complementarity? Combining a static efficiency and a dynamic innovation perspective on the greening of the energy industry," Energy Policy, Elsevier, vol. 35(3), pages 1419-1422, March.
    8. Ventosa, Mariano & Baillo, Alvaro & Ramos, Andres & Rivier, Michel, 2005. "Electricity market modeling trends," Energy Policy, Elsevier, vol. 33(7), pages 897-913, May.
    9. Gan, Peck Yean & Komiyama, Ryoichi & Li, ZhiDong, 2013. "A low carbon society outlook for Malaysia to 2035," Renewable and Sustainable Energy Reviews, Elsevier, vol. 21(C), pages 432-443.
    10. Rahman Mohamed, Abdul & Lee, Keat Teong, 2006. "Energy for sustainable development in Malaysia: Energy policy and alternative energy," Energy Policy, Elsevier, vol. 34(15), pages 2388-2397, October.
    11. Pasaoglu Kilanc, Guzay & Or, Ilhan, 2008. "A decision support tool for the analysis of pricing, investment and regulatory processes in a decentralized electricity market," Energy Policy, Elsevier, vol. 36(8), pages 3026-3034, August.
    12. Aslani, Alireza & Helo, Petri & Naaranoja, Marja, 2014. "Role of renewable energy policies in energy dependency in Finland: System dynamics approach," Applied Energy, Elsevier, vol. 113(C), pages 758-765.
    13. Rüther, Ricardo & Zilles, Roberto, 2011. "Making the case for grid-connected photovoltaics in Brazil," Energy Policy, Elsevier, vol. 39(3), pages 1027-1030, March.
    14. Hashim, Haslenda & Ho, Wai Shin, 2011. "Renewable energy policies and initiatives for a sustainable energy future in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4780-4787.
    15. Johari, Anwar & Ahmed, Saeed Isa & Hashim, Haslenda & Alkali, Habib & Ramli, Mat, 2012. "Economic and environmental benefits of landfill gas from municipal solid waste in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(5), pages 2907-2912.
    16. Dusonchet, Luigi & Telaretti, Enrico, 2010. "Economic analysis of different supporting policies for the production of electrical energy by solar photovoltaics in eastern European Union countries," Energy Policy, Elsevier, vol. 38(8), pages 4011-4020, August.
    17. Ong, H.C. & Mahlia, T.M.I. & Masjuki, H.H., 2011. "A review on energy scenario and sustainable energy in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(1), pages 639-647, January.
    18. Pereira, Adelino J.C. & Saraiva, João Tomé, 2011. "Generation expansion planning (GEP) – A long-term approach using system dynamics and genetic algorithms (GAs)," Energy, Elsevier, vol. 36(8), pages 5180-5199.
    19. Hsu, Chiung-Wen, 2012. "Using a system dynamics model to assess the effects of capital subsidies and feed-in tariffs on solar PV installations," Applied Energy, Elsevier, vol. 100(C), pages 205-217.
    20. Hasani-Marzooni, Masoud & Hosseini, Seyed Hamid, 2011. "Dynamic model for market-based capacity investment decision considering stochastic characteristic of wind power," Renewable Energy, Elsevier, vol. 36(8), pages 2205-2219.
    21. Oh, Tick Hui & Pang, Shen Yee & Chua, Shing Chyi, 2010. "Energy policy and alternative energy in Malaysia: Issues and challenges for sustainable growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(4), pages 1241-1252, May.
    22. Wei, Max & Patadia, Shana & Kammen, Daniel M., 2010. "Putting renewables and energy efficiency to work: How many jobs can the clean energy industry generate in the US?," Energy Policy, Elsevier, vol. 38(2), pages 919-931, February.
    23. Dusonchet, Luigi & Telaretti, Enrico, 2010. "Economic analysis of different supporting policies for the production of electrical energy by solar photovoltaics in western European Union countries," Energy Policy, Elsevier, vol. 38(7), pages 3297-3308, July.
    24. Muis, Z.A. & Hashim, H. & Manan, Z.A. & Taha, F.M. & Douglas, P.L., 2010. "Optimal planning of renewable energy-integrated electricity generation schemes with CO2 reduction target," Renewable Energy, Elsevier, vol. 35(11), pages 2562-2570.
    25. Gan, Peck Yean & Li, ZhiDong, 2008. "An econometric study on long-term energy outlook and the implications of renewable energy utilization in Malaysia," Energy Policy, Elsevier, vol. 36(2), pages 890-899, February.
    26. Shafie, S.M. & Mahlia, T.M.I. & Masjuki, H.H. & Andriyana, A., 2011. "Current energy usage and sustainable energy in Malaysia: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4370-4377.
    27. Shekarchian, M. & Moghavvemi, M. & Mahlia, T.M.I. & Mazandarani, A., 2011. "A review on the pattern of electricity generation and emission in Malaysia from 1976 to 2008," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(6), pages 2629-2642, August.
    28. Tang, Chor Foon & Tan, Eu Chye, 2013. "Exploring the nexus of electricity consumption, economic growth, energy prices and technology innovation in Malaysia," Applied Energy, Elsevier, vol. 104(C), pages 297-305.
    29. Hasani-Marzooni, Masoud & Hosseini, Seyed Hamid, 2013. "Dynamic analysis of various investment incentives and regional capacity assignment in Iranian electricity market," Energy Policy, Elsevier, vol. 56(C), pages 271-284.
    30. Mekhilef, S. & Saidur, R. & Safari, A. & Mustaffa, W.E.S.B., 2011. "Biomass energy in Malaysia: Current state and prospects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(7), pages 3360-3370, September.
    31. Lesser, Jonathan A. & Su, Xuejuan, 2008. "Design of an economically efficient feed-in tariff structure for renewable energy development," Energy Policy, Elsevier, vol. 36(3), pages 981-990, March.
    32. Mahlia, T.M.I, 2002. "Emissions from electricity generation in Malaysia," Renewable Energy, Elsevier, vol. 27(2), pages 293-300.
    33. Hassan Qudrat-Ullah, 2005. "MDESRAP: a model for understanding the dynamics of electricity supply, resources and pollution," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 23(1), pages 1-14.
    34. Sovacool, Benjamin K. & Drupady, Ira Martina, 2011. "Examining the Small Renewable Energy Power (SREP) Program in Malaysia," Energy Policy, Elsevier, vol. 39(11), pages 7244-7256.
    35. Tye, Ying Ying & Lee, Keat Teong & Wan Abdullah, Wan Nadiah & Leh, Cheu Peng, 2011. "Second-generation bioethanol as a sustainable energy source in Malaysia transportation sector: Status, potential and future prospects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4521-4536.
    36. Jafar, Abdul Hamid & Al-Amin, Abul Quasem & Siwar, Chamhuri, 2008. "Environmental impact of alternative fuel mix in electricity generation in Malaysia," Renewable Energy, Elsevier, vol. 33(10), pages 2229-2235.
    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. Groissböck, Markus & Pickl, Matthias J., 2018. "Fuel-price reform to achieve climate and energy policy goals in Saudi Arabia: A multiple-scenario analysis," Utilities Policy, Elsevier, vol. 50(C), pages 1-12.
    2. Abdeshahian, Peyman & Lim, Jeng Shiun & Ho, Wai Shin & Hashim, Haslenda & Lee, Chew Tin, 2016. "Potential of biogas production from farm animal waste in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 714-723.
    3. Shakouri G., H. & Aliakbarisani, S., 2016. "At what valuation of sustainability can we abandon fossil fuels? A comprehensive multistage decision support model for electricity planning," Energy, Elsevier, vol. 107(C), pages 60-77.
    4. Ye, Liang-Cheng & Rodrigues, João F.D. & Lin, Hai Xiang, 2017. "Analysis of feed-in tariff policies for solar photovoltaic in China 2011–2016," Applied Energy, Elsevier, vol. 203(C), pages 496-505.
    5. Dianat, Fateme & Khodakarami, Vahid & Hosseini, Seyed-Hossein & Shakouri G, Hamed, 2022. "Combining game theory concepts and system dynamics for evaluating renewable electricity development in fossil-fuel-rich countries in the Middle East and North Africa," Renewable Energy, Elsevier, vol. 190(C), pages 805-821.
    6. Behrens, Paul & Rodrigues, João F.D. & Brás, Tiago & Silva, Carlos, 2016. "Environmental, economic, and social impacts of feed-in tariffs: A Portuguese perspective 2000–2010," Applied Energy, Elsevier, vol. 173(C), pages 309-319.
    7. de la Hoz, Jordi & Martín, Helena & Miret, Jaume & Castilla, Miguel & Guzman, Ramon, 2016. "Evaluating the 2014 retroactive regulatory framework applied to the grid connected PV systems in Spain," Applied Energy, Elsevier, vol. 170(C), pages 329-344.
    8. Tang, Lei & Guo, Jue & Zhao, Boyang & Wang, Xiuli & Shao, Chengcheng & Wang, Yifei, 2021. "Power generation mix evolution based on rolling horizon optimal approach: A system dynamics analysis," Energy, Elsevier, vol. 224(C).
    9. Rabbani, Rabab & Zeeshan, Muhammad, 2022. "Impact of policy changes on financial viability of wind power plants in Pakistan," Renewable Energy, Elsevier, vol. 193(C), pages 789-806.
    10. Hoz, Jordi de la & Martín, Helena & Montalà, Montserrat & Matas, José & Guzman, Ramon, 2018. "Assessing the 2014 retroactive regulatory framework applied to the concentrating solar power systems in Spain," Applied Energy, Elsevier, vol. 212(C), pages 1377-1399.
    11. Dong, Zhuojia & Yu, Xianyu & Chang, Ching-Ter & Zhou, Dequn & Sang, Xiuzhi, 2022. "How does feed-in tariff and renewable portfolio standard evolve synergistically? An integrated approach of tripartite evolutionary game and system dynamics," Renewable Energy, Elsevier, vol. 186(C), pages 864-877.
    12. Muhammad Ridhuan Tony Lim Abdullah & Mohd Nuri Al-Amin Endut & Farrah Ilyani Che Jamaludin & Jalal ud Din Akbar & Asra, 2022. "Individual Energy Consumption Behavior Leads to Energy Sustainability in Malaysia," Sustainability, MDPI, vol. 14(8), pages 1-21, April.
    13. Elie, Luc & Granier, Caroline & Rigot, Sandra, 2021. "The different types of renewable energy finance: A Bibliometric analysis," Energy Economics, Elsevier, vol. 93(C).
    14. Wang, Ziyi & Wennersten, Ronald & Sun, Qie, 2017. "Outline of principles for building scenarios – Transition toward more sustainable energy systems," Applied Energy, Elsevier, vol. 185(P2), pages 1890-1898.
    15. Zahedi Rad, Vahid & Seifi, Abbas & Fadai, Dawud, 2023. "Policy design for transition from imitation to innovation in emerging photovoltaic sectors using a system dynamics model," Energy Policy, Elsevier, vol. 183(C).
    16. Sharma, A. & Bhakar, R. & Tiwari, H.P. & Li, R. & Li, F., 2017. "A novel hierarchical contribution factor based model for distribution use-of-system charges," Applied Energy, Elsevier, vol. 208(C), pages 996-1006.
    17. Dong, Changgui & Zhou, Runmin & Li, Jiaying, 2021. "Rushing for subsidies: The impact of feed-in tariffs on solar photovoltaic capacity development in China," Applied Energy, Elsevier, vol. 281(C).
    18. Ahmad, Salman & Tahar, Razman Mat & Muhammad-Sukki, Firdaus & Munir, Abu Bakar & Rahim, Ruzairi Abdul, 2015. "Role of feed-in tariff policy in promoting solar photovoltaic investments in Malaysia: A system dynamics approach," Energy, Elsevier, vol. 84(C), pages 808-815.
    19. Roth, Lucas & Lowitzsch, Jens & Yildiz, Özgür & Hashani, Alban, 2016. "The impact of (co-) ownership of renewable energy production facilities on demand flexibility," MPRA Paper 73562, University Library of Munich, Germany.
    20. Groissböck, Markus & Pickl, Matthias J., 2016. "An analysis of the power market in Saudi Arabia: Retrospective cost and environmental optimization," Applied Energy, Elsevier, vol. 165(C), pages 548-558.
    21. Srinivasan, Sunderasan & Reddy, Vamshi Krishna, 2016. "Towards a better understanding of renewable energy YieldCos," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 154-163.

    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. Habib Hussain Khan & Nahla Samargandi & Adeel Ahmed, 2021. "Economic development, energy consumption, and climate change: An empirical account from Malaysia," Natural Resources Forum, Blackwell Publishing, vol. 45(4), pages 397-423, November.
    2. Foo, K.Y., 2015. "A vision on the opportunities, policies and coping strategies for the energy security and green energy development in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 1477-1498.
    3. Basri, Nor Afifah & Ramli, Ahmad Termizi & Aliyu, Abubakar Sadiq, 2015. "Malaysia energy strategy towards sustainability: A panoramic overview of the benefits and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 1094-1105.
    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. Ahmad, Salman & Tahar, Razman Mat, 2014. "Selection of renewable energy sources for sustainable development of electricity generation system using analytic hierarchy process: A case of Malaysia," Renewable Energy, Elsevier, vol. 63(C), pages 458-466.
    6. Fazeli, Alireza & Bakhtvar, Farzaneh & Jahanshaloo, Leila & Che Sidik, Nor Azwadi & Bayat, Ali Esfandyari, 2016. "Malaysia׳s stand on municipal solid waste conversion to energy: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 1007-1016.
    7. Koerner, Sonja Angelika & Siew, Wei Sian & Salema, Arshad Adam & Balan, Poovarasi & Mekhilef, Saad & Thavamoney, Nisha, 2022. "Energy policies shaping the solar photovoltaics business models in Malaysia with some insights on Covid-19 pandemic effect," Energy Policy, Elsevier, vol. 164(C).
    8. Hannan, M.A. & Begum, R.A. & Abdolrasol, M.G. & Hossain Lipu, M.S. & Mohamed, A. & Rashid, M.M., 2018. "Review of baseline studies on energy policies and indicators in Malaysia for future sustainable energy development," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 551-564.
    9. Shekarchian, M. & Moghavvemi, M. & Motasemi, F. & Zarifi, F. & Mahlia, T.M.I., 2012. "Energy and fuel consumption forecast by retrofitting absorption cooling in Malaysia from 2012 to 2025," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(8), pages 6128-6141.
    10. Teufel, Felix & Miller, Michael & Genoese, Massimo & Fichtner, Wolf, 2013. "Review of System Dynamics models for electricity market simulations," Working Paper Series in Production and Energy 2, Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP).
    11. Ahmad, Salman & Mat Tahar, Razman & Muhammad-Sukki, Firdaus & Munir, Abu Bakar & Abdul Rahim, Ruzairi, 2016. "Application of system dynamics approach in electricity sector modelling: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 29-37.
    12. Khorasanizadeh, Hasti & Parkkinen, Jussi & Parthiban, Rajendran & David Moore, Joel, 2015. "Energy and economic benefits of LED adoption in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 629-637.
    13. Lean, Hooi Hooi & Smyth, Russell, 2014. "Are shocks to disaggregated energy consumption in Malaysia permanent or temporary? Evidence from LM unit root tests with structural breaks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 31(C), pages 319-328.
    14. Lean, Hooi Hooi & Smyth, Russell, 2014. "Disaggregated energy demand by fuel type and economic growth in Malaysia," Applied Energy, Elsevier, vol. 132(C), pages 168-177.
    15. Chinhao Chong & Weidou Ni & Linwei Ma & Pei Liu & Zheng Li, 2015. "The Use of Energy in Malaysia: Tracing Energy Flows from Primary Source to End Use," Energies, MDPI, vol. 8(4), pages 1-39, April.
    16. Heidarizadeh, Mohammad & Ahmadian, Mohammad, 2019. "Capacity certificate mechanism: A step forward toward a market based generation capacity incentive," Energy, Elsevier, vol. 172(C), pages 45-56.
    17. How, Bing Shen & Ngan, Sue Lin & Hong, Boon Hooi & Lam, Hon Loong & Ng, Wendy Pei Qin & Yusup, Suzana & Ghani, Wan Azlina Wan Abd Karim & Kansha, Yasuki & Chan, Yi Herng & Cheah, Kin Wai & Shahbaz, Mu, 2019. "An outlook of Malaysian biomass industry commercialisation: Perspectives and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 113(C), pages 1-1.
    18. Ashnani, Mohammad Hossein Mohammadi & Johari, Anwar & Hashim, Haslenda & Hasani, Elham, 2014. "A source of renewable energy in Malaysia, why biodiesel?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 35(C), pages 244-257.
    19. Oh, Tick Hui & Hasanuzzaman, Md & Selvaraj, Jeyraj & Teo, Siew Chein & Chua, Shing Chyi, 2018. "Energy policy and alternative energy in Malaysia: Issues and challenges for sustainable growth – An update," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 3021-3031.
    20. Borhanazad, H. & Mekhilef, S. & Saidur, R. & Boroumandjazi, G., 2013. "Potential application of renewable energy for rural electrification in Malaysia," Renewable Energy, Elsevier, vol. 59(C), pages 210-219.

    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:appene:v:146:y:2015:i:c:p:217-229. 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/405891/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.