Ideas proposes reform in electricity supply sector

PETALING JAYA: The Institute for Democracy and Economic Affairs (Ideas) has proposed the need for a comprehensive reform of the electricity supply industry, as well as underscoring the significance of enhancing competitive neutrality within the sector.

Based on the findings, Ideas found reforming the industry is substantial to increase the share of renewable energy (RE) and develop a more competitive market, in line with the National Energy Transition Roadmap framework.

“It is clear from the review of international experience and Malaysia’s regulatory reform attempts that the government should clarify the direction of travel with industry reforms,” it added.

In addition, Ideas agrees reforms should include clear steps to strengthen competition in the generation market, as well as increasing transparency and public participation in decision making.

The second recommendation to enhance competitive neutrality was said to be targeted more broadly across government-linked companies and specifically within the electric supply industry.

It was argued that this policy recommendation could potentially unlock new investment opportunities as well as propel the growth of sustainable green practices.

Presenting the findings, Ideas senior fellow and assistant professor of management Renato Lima de Oliveira said implementing competitive neutrality within the country’s energy sector will aid energy transition.

He said adopting a competitive neutrality framework will be one of the instruments towards further growth of the energy industry, which has a total of 36 gigawatts of installed capacity in RE.

“We have the opportunity to change the market to open up new revenue flows, including energy export.

“Investors will come if they see the market is not tilted towards certain players and if the regulations are actually fair and predictable and supportive of growth,” de Oliveira said.

Energy Transition and Public Utilities Ministry electricity supply division senior undersecretary, Mareena Mahpudz, said steps towards moving forward have been identified, adding however that the biggest challenge for the ministry is to amend the law.“Most of the issues raised have not been addressed by the law as the Act was formulated many years ago.

The biggest task given to the ministry actually is to amend the law and it is not easy,” she said during the panel session.