MALAYSIA ENERGY LANDSCAPE...TNB Fuel supply Source: TNB Handbook, 2016 • Market regulation by...

©2018 Business France. All Rights Reserved 1August 2018

MALAYSIA ENERGY LANDSCAPE

August 2018


MALAYSIAN ELECTRICITY MARKET


Philippines

23 GW

64 GW

Indonesia

48 GW

ThailandVietnam

40 GW

Malaysia

36 GW

9 GW

Other ASEAN

(Brunei, Lao, Cambodia)

Installed Capacity (GW)

Coal 65

Gas 97

Hydro 45

Renewables 12

Oil 20

Nuclear 0

TOTAL ~239

14 GW

Singapore

Population (million)

Installed Cap. (kw/person)

FR 67 2.0

SG 5 2.8

MY 30 1.2

TH 67 0.7

VN 90 0.4

ID 250 0.3

PH 100 0.2

MM 54 0.1

Global average ~0.8kW/person

5 GW

Myanmar

Source: GE Power Marketing – MACA 2017

INSTALLED CAPACITY IN ASEAN

Low per capita installed base … Significant future addition requirements


ELECTRICITY MARKET

Market Characteristics

3rd User Market in ASEAN

World Bank has globally ranked Malaysia at 8th place (right after Switzerland) interm of Getting Electricity rank within the Doing Business report.

Electricity demand is expected to grow by 3.5% per year over the next 10years, and 2.7% within 20 years. The average annual electric consumptionwithin the period of 2015-2020 is at 3.1%. In the medium-term, its energyautonomy will not be sufficient.

• Sources : TNB – Business France – Energy commission

Pop. (Millions) GDP per Capita(USD)

GDP 2016 GDP 2017

32.3 9 982 + 4.2 % + 5.9 %Tenaga Nasional Berhad (TNB)

(National electricity operator)

2017 : 47.4 b MYR (9.5 b EUR)

2016 : 44.5 b MYR (8.9 b EUR)

Electricity access :

• Peninsula : 99,8 %

• Sarawak : 91 %

• Sabah : 94,1 %

Electricity network:

• Peninsula : 21 469 km

• Sabah: 2 441 km

Number of Smart Meters :

8.5 M in 2021

MALAYSIA ELECTRIVITY KEY FIGURES

Key Figures


SEB2 475,0

46%

Sarawak Hydro

1.7 45%

Sarawak 5.4 GW

Gas56%

Oil33%

Renewables7%

Hydro4%

Hydro71%

Gas12%

Coal9%

Oil7%

Unknown0%

Source: Operational Installed capacity data - Platt's UDI World Electric Power Plant Database June 2017

TNB53%

MMC21%

NUC13%

YTL 4%3% 1% 2%

Peninsular Malaysia 28.9 GWTNB

MMC

NUC

YTL

Tek Tenaga Perlis

Petronas

NUR

Sabah electricity

Lotte

Others

Sabah Electricity Sdn Bhd

27%

Ranhill Bhd23%

16%

7%

6%

4%

3%

2% 3%

Sabah 1.8 GWSabah Electricity SdnBhdRanhill Bhd

Petronas/YayasanSabahSepangar Bay PowerCorpSpr Energy (M) SdnBhdAvantha group

Eden Inc Bhd

Arl Power Sdn Bhd

Gas51%

Coal33%

Oil8%

Hydro8%

MALAYSIA POWER GENERATION


GOUVERNMENTALINSTITUTIONS

International and Local Key PlayersUSA: General Electric, GE Power - Siemens

Japan: Mitsubishi

South Korea: Jin Technology, Solarpeace Corp.

Malaysia:

• Public: TNB, Sarawak Energy Berhad (SEB), Sabah Electricity Sdn Bhd (TNB 80%and Sabah State Government 20%).

• Private: 18 Independent Power Producer (IPP) in Malaysia: Malakoff, YTL, Ranhilletc.

Smart GridsSiemens, Solarpeace corp, IBM, Accenture etc.

TNB’s Smartmeters partners :

• Impianas Sdn Bhd• Shenzen Kaifa Co. Ltd (China)• Malaysian Intelligence Meters (JV with Shenzen Kaifa Co. Ltd)• Trilliant Smart Grid Communication Platform Asia Pacific

SOURCE : TNB – BUSINESS FRANCE – ENERGY COMIMSSION -2017

Energy Commission

National regulator

KeTTHA

Minister of Energy, Technology, Science, Climate Change and Environment

SEDA

“Feed In Tariffs” regulator

PEMANDU

In charge of Malaysia’s Economic Transformation Plan

MALAYSIA POWER GENERATION


Also known as Suruhanjaya Tenaga (ST) in Malaysia.

Statutory body under the Ministry Of Energy, Green Technology and Water Malaysia.

Established in 2001 under the Energy Commission Act 2001.

Regulate the electricity supply industry and piped gas supply industry in the peninsula andSabah.

Custodian and focal point for Malaysia’s energy data.

ENERGY COMMISSION (ST MALAYSIA)


Tariff Flow

Power consumers

TNB (T&D)

IPPs TNB (Gen)

Fluctuation due to fuel price, exchange rate etc.

Electricity Power Purchasing Agreement (PPA) with IPPs & Service Level

Agreement (SLAs) with TNB

Single Buyer TNB (Fuel)

1

2

Tariff adjustment to reflect uncontrollable fuel costs & other generation costs

a) CAPEX & OPEX b) Power purchase cost

charged by generatorsc) Return on regulated

asset

TNB

Fuel supply

Source: TNB Handbook, 2016

• Market regulation by KeTTHA and Energy Commission

• TNB plays a central role: Single Buyer, Generation, Transmission, System Operator and Customer Services

• Fuel-cost are pass through for generators (both TNB & IPPs are anaged by TNB Fuel division)

US$ 8 cents/kWh

US$ 9 cents/kWh

US$ 11 cents/kWh

Average Base Tariff by Sector

MALAYSIA ELECTRICITY TARIFF


OPPORTUNITIES

SUSTAINABLE CONSUMPTIONThe average annual electric

consumption within the period of 2015-2020 is at 3.1%.

REDUCING CARBON FOOTPRINTMalaysia’s goal is to reduce its carbonfootprint by 45% between the year 2005 to2030 by integrating renewable energy into itsenergy mix.

“GRID TO THE FUTURE”TNB plans to invest 540 Million EUR in thisproject to improve the efficientcy andreliability of its network.

STRENTGH

Installation of 8.5 millions of Smart Metersby 2021 by TNB (on going project).

Public tendering: Large Solar Scale (ongoing project).

Combined Cycle Gas Turbine (CCGT)power plant in Alor Gajah (on goingproject).

Globally ranked at 8th place (right afterSwitzerland) in term of Getting Electricity rank

National electricity access penetration nearly100%.

National aim to integrate renewable energy intothe energy mix (17% by 2030).

SOURCES : TNB REPORTS 2017, ENERGY COMISSION

Electricity, Smart Gridand Renewable Energy

ELECTRICITY AND SMART GRIDS

TOP 5 COUNTRIES

1. CHINA

2. SINGAPORE

3. USA

4. GERMANY

5. JAPAN

Malaysia experienced its highest peak in terms of electricity consumption in April 2016. In addition to this exceptional event, averageelectricity consumption will increase over the period 2015-2020 and energy autonomy could be insufficient in the medium term.

In order to best meet this demand, many investments are made by the national operator TNB to modernize its equipment and increasethe efficiency and reliability of its electricity network.

This modernization programme requires the integration of smart grids. There are many opportunities from this initiative as the nationaloperator is inclined to work with international actors. Although the market is still highly dependent on fossil fuels, Malaysia is increasinglyinterested in integrating renewable energy into its energy mix and in particular in solar energy.


PROJECTS AND INITIATIVES

Malaysia has been actively puching for a bigger postion of renewable energy within its energy mix.

The Malaysian Government and its national operator TNB are putting electricity production as a priority throughthree development axes:

Improvement of energy efficiency

Development of solar energy production capacity

Strengthening the hydroelectric capacity

Below are some of the initatives / policy making decision taken by the country:

Hydroelectric

• The 11th Malaysian Plan plans to increase hydropower capacity from 6% to 24% by 2020.• The goal is for these initiatives is to achieve 15% of the electricity mix by 2020.

Biomass

• The 11th Malaysian Plan plans to push biomass renewable energy mix from 23% to 38% by 2020.

Solar

• Access to finance is strengthened (state and private participation).• The price of electricity is adapted to ensure project’s viability the project viable.

SOURCE : 11TH MALAYSIA PLAN (2016 – 2020)


5%

91%

4%

Solar PV Hydro Biomass

31%

62%

4%2%

Source: GE Power Forecast

• Thermal generation remains the biggest … nearly 90% ofgeneration is still from thermal by 2026

• Increasing renewable generation … large GW addition & ~23%of IB in 2026. However, limited impact in overall generation(growth from 9% to 12% of total)

• Small portion of power transfer in the future … planned fromLaos via Thailand

2016 2026

6.3GW, ~18% of total IB 12.3GW, ~23% of total IB

50%46%

40%

42%REN 9%

REN 12%

-

50

100

150

200

250

2016 2026

Coal Gas Oil HYD

154TWh

222TWh

Renewable Energy Resources

Large hydro Potential 20 GW

Biomass and biogas from Palm Oil Waste 1300 MW

Small-scale hydro 500 MW

Solar Power 6500 MW

Source: GE Power Marketing – MACA 2017

Renewable Energy Capacity Mix Generation Mix

MALAYSIA RE AND GENERATION MIX


ACTEURS INSTITUTIONNELS

RENEWABLE ENERGY KEY PLAYERS

National Operators

• Tenaga Nasional Berhad (TNB)

• Syarikat SESCO Berhad (SESCO)

• Sabah Electricity (SESB)

Public Agencies

• Minister of Energy, Technology, Science, Climate Change and Environment

• Dept. Of Envionment (DoE)

• SEDA

• Green Tech Malaysia

• Malaysian Industry-Government Group for High Technology (MIGHT)

• Agensi Innovasi Malaysia (AIM)

Associations/ Federations

• Malaysian Biodiesel Association

• Malaysian Palm Oil Board

Key Players

Solar

• TNB, Snowy Mountains Engineering Corporation (SMEC), Hitachi, Gading Kencana,MaxGreen Energy Sdn Bhd, Yingli Solar, Amcorp Properties Bhd, Green Innotech Sdn Bhd,ERS Energy Sdn Bhd, Phoenix Solar, AUO Sunpower Sdn Bhd, Jinko Solar, etc. Japan:Mitsubishi

Hydroelectric

• TNB, Sarawak Energy, Tokyo Electric Power Services Co (TEPSCO), Esajadi Sdn Bhd,Hokkaido Electric Power Co, etc.

Wind Power

• TNB

Biomass

• Sime Darby, FGV (Felda), Tradewinds, Wilmar, TH Plantations, Teck Guan, AIM,Global Green Synergy Sdn Bhd, MYBiomass Sdn Bhd, Palm Oil Industry Cluster(POIC), BiotechCorp, etc.


SOURCE : 11TH MALAYSIA PLAN (2016 – 2020)

PROJECTS AND INITIATIVES

Identified Projects

Bakun Hydroelectric Project (Hydroelectric)

Upper Padas Hydroelectric Project (Hydroelectric)

Liwagu Hydro Power Project (Hydroelectric)

Berjaya Berhad Solar Plant (Solar)

Large Solar Scale - LSS (Solar)

• Package P1 (1MWac to 5.99MWac) in Peninsular Malaysia

• Package P2 (6MWac to 9.99MWac) in Peninsular Malaysia

• Package P3 (10MWac to 30MWac) in Peninsular Malaysia

• Package S1 (1MWac to 5.99MWac) in Sabah and Labuan

• Package S2 (6MWac to 10MWac) in Sabah and Labuan


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