**1. Introduction**

Like most other countries, the electricity supply industry (ESI) in Malaysia started rather spontaneously, driven by the need of individual enterprises to electrify their businesses. Natural monopoly began in 1982 after the private and state owned electricity supply companies are consolidated under the National Electricity Board (NEB). Subsequently, NEB became the sole state-owned body that 'monopolised' the supply of electricity to the whole of peninsular Malaysia, having the transmission lines that stretched over 6300 km and close to two million customers at the time [1]. In a monopolised or vertically integrated ESI, the operations of generation, transmission and distribution of electricity are owned and managed by one giant utility company as an entity or together with a number of other companies related to it. Thus, competition is almost non-existent. On the contrary, a liberalised or 'open' ESI provides opportunities for other players in the industry to

participate in the business. It therefore promotes competition, which often translates into efficiency that results from improved operation, management, customer services et cetera. A liberalised ESI also facilitates the creation of regional electricity market where electricity is traded between a number of nearby countries. Such regional electricity market does not exist yet in the Association of Southeast Asia Nations (ASEAN) region, although the intention is there and is not new. The ASEAN Power Grid (APG) initiative was mandated in December 1997 with the aim to enhance regional energy sustainability, security and reliability [2]. According to the plan, the construction of the APG would begin with a regional power interconnection on cross-border bilateral terms, which then expands to sub-regional basis towards a totally integrated South East Asia power grid system. More than twenty years after the mandate, the envisioned APG is still very much a work-in-progress [2]. While the physical interconnection of the grids is mostly ready, the electricity trading between the countries is not [3]. The latter is currently done through bilateral power purchase agreements between the bordering countries. In comparison, the Nord Pool, which started the similar initiative at about the same time, has been thriving successfully and even regarded as the most robust, efficient and harmonised regional electricity market [4,5]. The success is largely attributed to, and made possible by, the region's move to liberalise their ESIs. With ESI liberalisation, efficiency is attained through means such as increased competition in the market that leads to improved operations [6], which can result in the elimination of unnecessary overhead supply (reserve margin) in the monopolised markets [7]. This allows for the capital resources to be utilised more effectively. Liberalised ESIs also promote the creation of pooled energy sources that allows for more efficient use of electricity through increased consumers' response to prices [8]. Greater interconnections have also allowed for increased energy security [9]. In terms of governance, liberalisation has significantly improved the governance of monopoly utilities, the prospects for competition and innovation, and the quality of policy instruments for environmental emissions control [10].

Thus far, there are only two ASEAN countries that have liberalised their ESIs fully and have their own electricity markets; the Philippines and Singapore. Bearing differences in terms of geographical condition, economic development status, total population et cetera, both countries have undergone different experience in liberalising the ESIs. While it has been a 'bumpy ride' for the Philippines, Singapore experiences a smoother transition. Malaysia is expected to be the next ASEAN country to go for full ESI liberalisation. In September 2018 [11], the Malaysia electricity supply industry (MESI) started the second series of its reform, MESI 2.0, where opening the electricity market further is put forth as one of the main agenda. To address the stated MESI 2.0 objectives, recommendations have been made for Malaysia to consider unbundling of its ESI, using the achievements of the countries in the Nordic as comparison [12]. However, emulating the Nordic countries might not be the best option due to the vast differences between the two regions in many aspects. The two countries in the Southeast Asia region that have already attained full ESI liberalisation would be more relevant for Malaysia to look at. This article therefore presents the chronological review of the Philippines' and Singapore's ESIs transformation towards liberalisation with the aim to identify the good practices, the challenges as well as the lessons learnt from their experience. In particular, the review focuses on the following perspectives.


The first three are essential to be considered right from the beginning of a reform move while the RE penetration is included in the scope because Malaysia has clearly set its RE targets. Thus, it is relevant to identify the extent to which ESI liberalisation is able to help achieve the targets. The required information is obtained from the published research work, technical reports, newspaper clips and online communication with the relevant authorities. Analysis results conclude on the significant role played by the enacted legislative framework that is subsequently followed by the formation of the institutional bodies and agencies with sufficient authorities to instate the ESI reform. It is also found that gradual yet clearly defined phases of reform with explicit activities and targets are important to ensure its smooth implementation. Despite the differences in market operations, common components that constitute an electricity market can be identified. However, no significant impact is seen on the amount of RE penetration into the grids as a result of the liberalisation. Beyond Malaysia, the recommendations can potentially be considered for use by the other ASEAN countries too. This is especially necessary when a review of the reform experiences of the countries found a significant disparity between the expected and actual outcomes [13].

The rest of this article is organised into the following sections. Section 2 and Section 3 elaborate on the Philippines' and Singapore's ESI reform journeys respectively. Analysis, lessons learnt and policy implications are presented in Section 4. Section 5 concludes the article and points to potential future work and outlook.
