Using system dynamics to evaluate renewable electricity development in Malaysia

Purpose: The purpose of this paper is to provide an assessment of Malaysia's renewable capacity target. Malaysia relies heavily on fossil fuels for electricity generation. To diversify the fuel-mix, a technology-specific target has been set by the government in 2010. Considering the complexity in generation expansion, there is a dire need for an assessment model that can evaluate policy in a feedback fashion. The study also aims to expand policy evaluation literature in electricity domain by taking a dynamic systems approach.

Design/methodology/approach: System dynamics modelling and simulation approach is used in this study. The model variables, selected from literature, are constituted into casual loop diagram. Later, a stock and flow diagram is developed by integrating planning, construction, operation, and decision making sub-models. The dynamic interactions between the sub-sectors are analysed based on the short-, medium- and long-term policy targets. 

Findings: Annual capacity constructions fail to achieve short-, medium- and long-term targets. However, the difference in operational capacity and medium- and long-term target are small. In terms of technology, solar photovoltaic (PV) attains the highest level of capacity followed by biomass. 

Research limitations/implications: While financial calculations are crucial for capacity expansion decisions, currently they are not being modelled; this study primarily focuses on system delays and exogenous components only. 

Practical implications: A useful model that offers regulators and investors insights on system characteristics and policy targets simultaneously. 

Originality/value: This paper provides a model for evaluating policy for renewable capacity expansion development in a dynamic context, for Malaysia.