MALAYSIAS ENERGY OUTLOOK

OUTLINE

Introduction/Malaysias Energy Profile

Key Challenges

Initiatives To Address Challenges

Conclusion

MALAYSIAS
PROFILE
Malaysias ENERGY
Energy Outlook

Introduction: Key Indicators (2015)

Population

30.03 million

Nominal GDP (RM billion)

GDP Growth

RM1,070 billion
5.5%

Area

330,290 sq km
Energy Resources (2015)

Oil

5.85 bbl

Gas

98.315 Tscf

Coal

1.938.37 bil ton(low grade)

Hydro (potential)
RE (potential) mini hydro,
biomass, biogas, municipal waste, geothermal)

20 GW
2,700MW

Energy Policies
National
Petroleum Policy
(1975)

Efficient utilization of petroleum resources

Ensuring the nation exercises majority control in the
management and operation of the industry

National Energy
Policy (1979)

Supply Objective: Ensure adequate, secure and costeffective energy supply.

Utilization Objective: Promote efficient utilization of
energy and eliminate wasteful and non-productive
usage
Environmental Objective : Minimize negative impacts to
the environment

National
Depletion
Policy (1980)

To prolong the life span of the nations oil and gas

reserves

Energy Policies
Four-fuel Policy
(1981)

Aimed at ensuring reliability and security of supply

through diversification of fuel (oil, gas, hydro and
coal)

Five-fuel Policy
(2001)

Encourage the utilization of renewable resources such

as biomass, solar, mini hydro etc
Efficient utilization of energy

Renewable Energy
(RE) Policy +
Action Plan (2010)

Outlines the major strategies to promote RE in the

country. Main highlight is the Feed-in-Tariff (FiT)
mechanism.
6

Snapshot on Malaysia Electricity Supply Industry

INSTALLED
CAPACITY
(MW)
As of Sept
2015

PEAK
DEMAND
(MW)
As of Sep
2015

RESERVE
MARGIN
(%)
As of Sep
2015

Peninsular
Malaysia

21,630

16,901

28%

Sabah

1,501.9

914

45%

3,637

2,035

30%

Sarawak

Major Utility Companies

Total installed
capacity is
26,768.9MW

Primary Energy Supply by Type of Fuels

PENINSULAR MALAYSIA ACCOUNTS FOR 91% OF

POWER DEMAND IN MALAYSIA

Peninsular
Malaysia,
91%
Sabah, 4%
Sarawak,
5%

Sarawak

SOURCE: National Energy Balance 2008

Sabah

Fuel Input to Power Stations

10
Source: National Energy Balance 2013

Malaysias
Energy Outlook
KEY CHALLENGES

11

Malaysias Key Challenges

4 Dimensions of Energy Security

Availability: resources
and infrastructure
Accessibility: barriers
and constraints (fuel and
supplier diversity)

Availability

Acceptability

Affordability

Affordability: cost to
users, and risk to the
economy (reliance)
Acceptability:
environmental, social
objectives

Source: Frontier Economics, MyPOWER

Accessibility

Projected Generation Mix

o If nuclear is not available
post-2020, Peninsular
Malaysia will be highly
dependent on fossil fuels
i.e gas and coal
o Coal is 100%
imported;
o indigenous gas is
depleting
o Renewable Energy is not
able to provide base-load
requirement
o Hydro capacity in
Peninsular Malaysia is
nearly fully developed

LONG TERM LOAD FORECAST FOR PENINSULA MALAYSIA

- PROJECTED AVERAGE ANNUAL DEMAND GROWTH RATE OF 2.3% UNTIL 2030
Peak Demand

GWh

Sales

Generation

MW

200,000

30,000

180,000

Forecast*

Historical

25,000

160,000
140,000

20,000

120,000
100,000

15,000

80,000
10,000

60,000
40,000

5,000

20,000

Average Period Growth Rates, p.a:

2013-2015
2013-2020
2013-2030
2015-2020
2020-2030

Sales (%)

Generation (%)
3.9
3.6
2.7
3.5
2.0

2035

2034

2033

2032

2031

2030

2029

2028

2027

2026

2025

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

Peak Demand (%)

3.4
3.4
2.5
3.4
1.8

* 1% reduction in yearly sales growth rate due to energy efficiency initiatives is assumed

3.3
3.2
2.3
3.2
1.7

Malaysias
Energy Outlook
Initiatives
to Address
Challenges

15

Under the 11th Malaysia Plan :

Encouraging Sustainable Energy
stakeholder coordination and collaboration in the
S1 Strengthening
energy sector

S2 Ensuring the security of supply and reliability for the oil and gas
subsector within a market-based approach

S3

Enabling the growth in the oil and gas subsector

S4 Managing supply diversity for security of electricity subsector

S5

Improving the sustainability, efficiency and reliability of the electricity

subsector
16

Optimisation of Fuel Mix

17

Energy Security
Gas /
Oil

Coal

Hydro

Enhance supply through Regasification Terminals in Melaka & Johor

Institute new gas pricing framework
Promote competition and transparent pricing through Open Access to
Peninsular Gas Network and review of Gas Supply Agreements
Study on Stockpiling infrastructure and needs

Diversifying coal supplier countries to ensure the security of coal supply

- Australia, Russia, South Africa, etc
Encourage the usage of latest technology for higher efficiency I.e
supercritical boiler etc.
Study on coal storage/stockpiling infrastructure requirements
Explore possibilities of resource ownership in supplier countries

Restart review on potential power importation from Sarawak as a long

term option since Sarawak has hydro power potential of more than
20,000MW

Energy Security
Regionalisation
ASEAN Power Grid (APG)
Establish Electricity Open Market among ASEAN
countries for resource optimization. Expected to be fully
completed by 2020
Trans-ASEAN Gas Pipeline (TAGP)
Gas exports among ASEAN countries for gas usage
optimization
Bilateral Agreement
Conduct a bilateral agreement with neighbouring
countries such as Singapore, Thailand and Indonesia for
power import/export (on-going process)

Enhancing Alternative Energy Resources

Electricity generation capacity through RE

sources including biomass, biogas, solar PV,
and mini hydro are targeted to reach 7.8% of
total installed capacity in Pen. Malaysia &
Sabah by 2020 (2,080 MW);
The usage of nuclear power as an alternative
energy resource will be explored further;
The implementation of net energy metering
(NEM), especially for solar-generated
electricity, to provide savings on electricity
bills to consumers.
20

Share Of Renewables In Energy Mix

21

Improving the sustainability, efficiency and

reliability of the electricity subsector
Creating a sustainable tariff frameworks
Subsidy rationalization for electricity tariffs will continue to be
implemented;
The Special Industrial Tariff will be abolished gradually by 2020 and the
implementation of IBR to ensure efficient services of utility companies;
New additions of power plants and extensions of existing power plants
through competitive bidding for greater transparency.

Improving efficiency and reliability of electricity supply

Construction of new power plants to produce 7,626 MW will be initiated to
replace retiring plants and meet the growing peak demand. A number of
500 kV and 275 kV transmission projects to reinforce the grid systems will
be completed to enhance the security of supply;
The additional generation capacity coupled with expanded transmission
and distribution networks will improve the SAIDI for Peninsular Malaysia,
Sabah, and Sarawak.

22

SIT Implementation
Phasing Out Special Industrial Tariff (SIT)
12%
10%

SIT Discount

8%
6%
4%

2%
0%

Kadar Diskaun SIT

Semasa

Jan '16

Jan '17

Jan '18

Jan '19

Jan '20

Tarif E3s

10.30%

8.30%

6.30%

4.30%

2.30%

0.00%

Tarif E2s

8.30%

6.30%

4.30%

2.30%

0.30%

0.00%

Tarif E1s

4.80%

2.80%

0.80%

0.00%

0.00%

0.00%

Tarif Ds

3.00%

3.00%

3.00%

1.00%

0.00%

0.00%

SIT discount will be phased out beginning

1 January 2016

SIT discount ending

1 January 2020

ICPT
The electricity tariff in Peninsular Malaysia is determined
through the Incentive Based Regulation (IBR) framework
and the Imbalance Cost Pass Through (ICPT) mechanism
implemented in January 2014.
The ICPT mechanism allows the government to review the
tariff every six months based on changes in fuel and
generation costs to reflect the true cost of electricity and
provide transparency in the whole process.

ICPT takes into account changes in the price of fuel and

other generation costs such as those related to the PPAs,
displaced cost from Renewable Energy and the cost of
importing electricity.
24

Malaysias
Energy Outlook
Conclusion

25

Conclusion
The security of energy supply is of paramount importance as energy
is the primary driver of the nations growth which affecting not only
the quality of life for all Malaysians but also enabling the continued
growth of the economy.
Efforts were undertaken to ensure the long-term sustainability of the
energy sector through resource diversification, continuous
investments in new infrastructure, and technology enhancement. In
addition, the improvement of the implementation of efficient
resource utilization measures were also undertaken including
rationalizing energy subsidies to move towards a market based
energy pricing.

26

Malaysias
Energy
Outlook
Thank
You

27