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Effects of fossil fuel price fluctuations on electricity planning comprising renewable energy
Author(s) -
Muis Z. A.,
Hashim H.,
Manan Z. A.,
Douglas P. L.
Publication year - 2011
Publication title -
asia‐pacific journal of chemical engineering
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.348
H-Index - 35
eISSN - 1932-2143
pISSN - 1932-2135
DOI - 10.1002/apj.586
Subject(s) - electricity , electricity generation , subsidy , renewable energy , fossil fuel , electricity retailing , economics , coal , natural resource economics , electricity price , environmental economics , electricity market , agricultural economics , business , waste management , engineering , market economy , power (physics) , physics , quantum mechanics , electrical engineering
Electricity generation mix in Malaysia largely relies on fossil fuel including coal, natural gas (NG), diesel and fuel oil. In the Ninth Malaysia Plan, the government aims to achieve 5% electricity generation mix from renewable energy (RE). Nevertheless, until now, RE contributes less than 1% of the national electricity generation mix. In spite of its emission benefits, NG prices volatility have encouraged calls for investments in RE. Unfortunately, NG price in Malaysia is highly subsidized, thereby making RE implementation unattractive. This article addresses the impact of NG price (with and without subsidies) on RE‐integrated electricity generation in Malaysia. The results show that a small increment in NG price will not affect the selection of RE source for electricity generation. If RE electricity generation is chosen, it will slightly increase the cost of electricity (COE) by 2.2 cents/kWh. Without NG subsidies, this cost can be translated to an additional 3 cents/kWh of COE. Copyright © 2011 Curtin University of Technology and John Wiley & Sons, Ltd.