INITIATIVES TO ENHANCE MALAYSIA’S...3 Economic Indicators (2011) Population 28.6 million Area 329,847 sq km GDP USD269.34 billion GDP Growth 5.1% Per capita income USD9,382 Malaysia’s

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NATIONAL ENERGY SECURITY CONFERENCE

“CLOSING THE ENERGY SUPPLY-DEMAND GAP”

28 FEBRUARY 2012

Ministry of Energy, Green Technology and Water, Malaysia

INITIATIVES TO ENHANCE MALAYSIA’S ELECTRICITY SUPPLY SECURITY

SOMASUNDRAM RAMASAMYSenior Undersecretary (Energy)

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PRESENTATION OUTLINE

1. Introduction:

Malaysia’s Key Indicators

Evolution of Malaysian Electricity Supply Industry

Malaysia’s Electricity Profile

2. Fuel Mix and Fuel Management Policies

3. Outlook of Electricity Demand & Supply

4. Power Development Plan

5. Fuel Requirements and Way Forward

6. Conclusion

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Economic Indicators (2011)

Population 28.6 million

Area 329,847 sq km

GDP USD269.34 billion

GDP Growth 5.1%

Per capita income USD9,382


Energy Resources (2009)

Oil 5.52 bbl

Gas 87.98 Tscf

Coal 1.94 bil ton

Hydro Potential 20 GW

* Department of Statistic Malaysia

* National Energy Balance 2009

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Evolution in Malaysia Electricity Supply Industry (MESI)

Public enterprises through Municipalities and state departments

First electricity supply inMalaysia by private concerns

Egerton’s White PaperFormation of CEB. Act 116 established.

TNB CorporatisationJBE&G established

Malayanisation:Name change to NEB

Two Oil ShocksRural ElectrificationFive Fuel Policy

Public Listing of TNB & Introduction of IPPs

LLS privatized asSESB and taken over by TNB

Separation of commercial &

operations

Energy Commission Operationalised

1894

1949

1990

1965

1998

1970s

1980s

1992

2001

2008

Consolidation of IndustryFour Fuel Policy

2009

National Green Technology

Policy launchedFragmented

Integrated

Development

Consolidation

Privatization

Competition

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Snapshot of Malaysia’s Electricity ProfileAs of June

2011INSTALLED

CAPACITY (MW)PEAK

DEMAND (MW)

RESERVE MARGIN

(%)

Pen. Malaysia

TNB 7,096

15,476 40%IPPs 14,777

Total 21,873

Sabah

SESB 410

773 33%IPPs 625

Total 1,035

SarawakSEB 1,349

1,067 26%Total 1,349

3 major utility companies in Malaysia

This presentation will concentrate on Peninsular Malaysia since more than 90% of demand is in Peninsular Malaysia

Total installed capacity is 24,257MW

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OUTLINE

1. Introduction:








6. Conclusion

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Fuel Mix - Historical

Historically, oil dominance was replaced by natural gas in 1990’s

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National Energy Policy 1979To ensure the provision of adequate, secure and cost effective energy supply

National Depletion Policy 1980Aims at safeguarding the depleting oil reserves

Four-fuel Policy 1980Aimed at ensuring reliability and security of supply through diversification of fuel

Five-fuel Policy 2001A safe, cost-effective, secure energy supply through renewable, cogeneration,diversification, efficiency and incentives

Fuel Management Policies

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OUTLINE

1. Introduction:








6. Conclusion

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Outlook of Electricity Demand and Supply

54.2% 53.0% 49.6%41.3%

40.2%

39.3%

40.6%28.9%5.2%

4.3%

3.9%4.6%

3.5%

5.9%

7.3%

17.8%

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

2010 2015 2020 2030

RE Nuclear

Hydro Coal

Gas

Post 2030, a more balanced fuel mix with RE & nuclear

* JPPPET 1/2011

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Outlook of Electricity Demand and Supply

Electricity Outlook

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

2003 2008 2013 2018 2023 2028Year

Ge

ne

rati

on

(GW

h)

0

10,000

20,000

30,000

40,000

Pe

ak

De

ma

nd

(MW

)

Generation (GWh)

Peak Demand MW

* JPPPET 1/2011

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OUTLINE

1. Introduction:








6. Conclusion

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Peninsular Malaysia Power Development Plan

Adopting “Loss of Load Probability of 1-day in a year”

Diversifying Fuel Mix with hydro, coal and possibly nuclear in the longer term

Undertaking long-term capacity plans to ensure demand growths are met with adequate capacity

Adopting Incentive Based Regulation Approach

Ensuring adequate Reserve Margin to meet Peninsular demand

The investment made by utilities are based on projected demand growth

Target SAIDI of 55 minutes/customer/year by 2015

PDP Characteristic

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Peninsular Malaysia Power Development Plan

0.00 0.00 0.01 0.10 0.57 0.79 0.68 0.71 0.54 0.73 0.97 0.21 0.54 0.91 0.94 0.81 0.59 0.88 0.54 0.84 0.56 0.92

40.6 34.6 29.8 24.5 20.6 19.6 19.3 18.2 18.6 17.3 16.3 20.5 17.9 16.4 16.0 16.1 16.8 15.7 16.9 15.9 17.0 15.60

10000

20000

30000

40000

50000

60000

20092010201120122013201420152016201720182019202020212022202320242025202620272028202920302031

Reserve Margin (%)

LOLP (days/year)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

Coal 4,000 MW

Hydro 1,666 MW

Gas 11,430 MW

Nuclear 5,000 MW

Total 22,096 MW

Installed Capacity

Peak Demand

Additional Capacity

Needed by 2030

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OUTLINE

1. Introduction:








6. Conclusion

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Fuel Requirements

Gas• Prioritise indigenous resources for local

consumption• Storage for substitute fuels

Renewable Energy• Introducing Feed-in Tariff (FiT) to support

the RE growth in Malaysia• Prioritise RE to be dispatched into the grid

Coal• Secure long term contracts with supplier• Multiple coal supplier countries

Nuclear• Studying the possibility of introducing

nuclear power

Hydro• Develop feasible and viable hydro projects• Hydro potentials from Sarawak

Energy Efficiency• Increase efforts on managing the demand

side

• Introduce specific law on efficient use of energy

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Way Forward

Fuel Mix Study

Study initiated through MyPOWER to determine optimum fuel mix for power sector

Part of Government reform initiative for the whole value chain in Malaysia Electricity Supply Industry (MESI)

Renewable Energy RE

Inception of Renewable Energy (RE) Act 2011

Introduction of Feed-in Tariff will increase the contribution of RE in the fuel mix

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Way Forward

Gas

Short Term:

National Gas Task to resolve and mitigate gas supply issues to power sector

Long Term:

Review Gas Supply Agreements

Enhance supply through Regasification Terminals in Melaka & Johor

Open Access to Peninsular Gas Network and determination of gas transportation charges

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Way Forward

Coal

Peninsular Malaysia is totally dependent on imported coal

In 2010, 85% of our coal was imported from Indonesia

Diversifying coal supplier countries to ensure the security of coal supply- Australia, Russia, South Africa, etc

Explore possibilities of mine ownership in supplier countries

To mitigate Green House Gas emissions, future plant-ups should bebased on Ultra Super Critical technologies, and other technologies suchas CCS, CCT, etc.

Hydro Power from Sarawak

Hydro power importation from Sarawak as a long term option sinceSarawak has hydro potential of more than 20,000MW

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Way Forward

Regional and Bilateral Arrangements

ASEAN Power Grid (APG)

Establish Electricity Open Market among ASEAN countries for resource optimization

Trans-ASEAN Gas Pipeline (TAGP)

Gas exports among ASEAN countries for gas usage optimization

Bilateral Agreement

Bilateral Agreements with neighboring countries such as Singapore, Thailand and Indonesia for power import/export.

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OUTLINE

1. Introduction:








6. Conclusion

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Conclusion

Comprehensive long term planning is imperative toensure reliable & adequate electricity supply, includingAPG and Trans ASEAN for supply security

Over-dependence on certain fuel types is not a viablelong-term option. Better fuel mix to ensure sustainability

Fuel diversification reduces supply interruption risk andsecurity risk. Nuclear is a good candidate for reliability,but the risks have to be properly studied

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2

3

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Technological innovations and R&D can change the mix inthe future

Energy Efficiency & Conservation initiatives need to befurther enhanced

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THANK YOU

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INITIATIVES TO ENHANCE MALAYSIA’S...3 Economic Indicators (2011) Population 28.6 million Area 329,847 sq km GDP USD269.34 billion GDP Growth 5.1% Per capita income USD9,382 Malaysia’s