About About MESI

In the past, the Malaysian Electricity Supply Industry has undergone several reforms to meet the industry objectives. The objectives are to deliver secure and reliable electricity supply at economically competitive tariffs while ensuring environment sustainability and provides customer satisfaction through customer’s choice. The MESI objectives are summarised in figure below.

MESI Evolution

The privatization of The National Electricity Board (NEB) back in 1990, is marked as the first milestone of MESI Evolution. It is also recorded as the largest privatization exercise carried out by the Government of Malaysia. In 1993, a number of companies were granted licenses by the Government to build and operate power plants in Peninsular Malaysia in order to enhance reliability and sustainability of electricity supply. These Independent Power Producers (IPPs) or also known as ‘First generation IPPs’ were contracted to supply up to 30% of the nation’s electricity demand during that period of time.

In 2001, the Energy Commission Act was enacted by The Government which led to the formation of the Energy Commission in the later year. This independent regulatory body is mainly responsible for the enforcement of regulation and law as well as to facilitate MESI development. 8 years later, The Government had decided to establish MyPOWER corporation to plan and manage the delivery of reform recommendations for MESI with the objective of achieving a high performing electricity supply industry. The reform program has resulted in formation of a ring-fenced Single Buyer Department and Grid System Operator (GSO) in 2012 and later, implementation of Incentive Based Regulation (IBR) and Imbalance Cost Pass Through (ICPT) in 2017. Reactivation of MyPOWER took place in late 2019 and currently, the agency is coordinating study and analysis on MESI with an ultimate goal of future proofing the industry.

MESI Structure

Presently, MESI operates in a Single Buyer Market model and under this model, Single Buyer is obligated to manage electricity procurement to meet demand in Peninsular Malaysia. The procurement process is being executed based on PPA/SLA, NEDA and interconnection agreements. Long term supply is secured via competitive bidding and under certain circumstances through direct awards. Meanwhile, day-ahead dispatch schedule is conducted via least cost option taking into account generator outages and system constraints. Electricity generated delivered to end consumers through TNB grid network and retailers.