Impact of new enhanced dispatch arrangement (NEDA) mechanism on the cost efficiency of Peninsular Malaysia generation dispatch system

• Main Author: Previnsha Naidu A/L Poornachendran, Mr.
• Format: text::Thesis
• Language: English
• Published: 2023
• Subjects: Impact of new enhanced dispatch arrangement (NEDA) mechanism on the cost efficiency

Energy has played a major role in the growth and economic development of a country. The New Enhanced Dispatch Arrangement (NEDA) is an initiative by EC (Energy Commission) to enhance efficiency in the short run electricity generation competition and drive down electricity prices. The impact and key takeaways of market reform in terms of electricity prices and market competitiveness are also highlighted. The research gap identified is that the cost impact contributed by these NEDA participants are very small as their total capacity is only 41.5 MW, which only accounts to 0.16% of the overall installed capacity in Malaysia. The progress towards a competitive electricity market is currently slow as most of the power plants have existing PPA contracts. This dissertation analyses the impact of NEDA mechanism on the cost efficiency of a Malaysian Representative System. There are two main objectives for this research. First is to model the Peninsular Malaysia Generation Dispatch system with their respective heat rates. Heat input estimation will be done to convert average heat rate to the marginal heat rate which will be used by the optimization solver. The second objective is to analyse the impact of multiple NEDA generation to the overall generation cost efficiency. The impact of generation cost efficiency will be then compared and analysed. To obtain the generation cost for each scenario, the methodology implemented will be Security Constrained Economic Dispatch (SCED). The objective function of SCED is to minimize the total system costs within various technical constraints and limitations. PLEXOS will find the most economical and optimal dispatch of generation. The simulation is done for two network constraints, which are Southern constraint and Northern constraint, using four types of load profiles to study the cost impact. For Southern constraint, the results obtained showed an average of 1.3% cost savings per day, when 1000MW of NEDA generation is injected into the grid. The annual cost savings is RM 226 million, translating to a 471% savings in generation prices. Expensive generators in the system are now being replaced by the generation from NEDA players which are paid at the System Marginal Price (SMP). On the other hand, for Northern constraint, the annual cost savings is approximately RM 191 million, which is equivalent to 366% cost savings. This will benefit the electricity industry by reducing generation cost, and consumers will be able to enjoy lower and cheaper electricity tariff.