malaysia country report

 MALAYSIA COUNTRY REPORT 1. INTRODUCTION Country Capital Area1 Population2 GDP3 Malaysia Kuala Lumpur 330,803 km2 28.3 million GDP (nominal): USD 278.7 billion GDP (PPP): USD 447.3 billion Ringgit (MYR) 24,275 MW ( Peninsular 21,817 MW, Sabah 1,111 MW & Sarawak 1,347 MW) Peninsular Malaysia: 99% Sabah: 77% Sarawak: 67% Currency Installed Capacity1 Percentage of Population 5
Electrified Source: 1.
2.
3.
4.
Electricity Supply Industry in Malaysia – Performance and Statistical Information 2010, Energy Commission Malaysia (figure based on calendar year ending 31st December 2010) Department of Statistics Malaysia World Economic Outlook Database April 2012, IMF Government Transformation Plan (GTP) Roadmap, Government of Malaysia The electricity supply industry in Malaysia is dominated by three vertically integrated power utilities, namely Tenaga Nasional Berhad (TNB) in Peninsular Malaysia, Sabah Electricity Sdn. Bhd. (SESB) in Sabah and Syarikat SESCO Bhd. (SESCO) in Sarawak. The three main utilities undertake electricity generation, transmission, distribution and supply activities in their respective areas and are investor‐owned entities with the Government as the major shareholder. In the early 90s, the generation sector was opened for participation from Independent Power Producers (IPPs) to supply electricity to the utilities through Power Purchase Agreements (PPAs). In the distribution sector, TNB, SESB and SESCO remain as the main distributors of electricity, however the Government also issues licenses to local distributors for designated areas (i.e. hill resorts, shopping complexes, industrial parks etc.) and co‐generators. The current industry structure has been able to sustain the development and socio‐economic wellbeing of the country. With this structure, Malaysia has been able to maintain a secure, reliable and quality electricity supply throughout the nation at affordable prices. It has also helped to provide an optimum investment climate for the country. The Malaysian Electricity Supply Industry (MESI) is governed by the Electricity Supply Act (ESA), which was enacted in 1990. The ESA 1990 empowers the Minister responsible for the energy sector to regulate and issue directives for the industry. ESA 1990 was amended in 2001 in accordance with the establishment of the Energy Commission (EC) as the regulator of the MESI. The EC was established through the enactment of the Energy Commission Act (ECA) in 2001. EC is the responsible entity with the power to regulate the energy supply activities in Malaysia and to enforce the energy supply laws and other regulations related to the energy sector. The ESA and ECA empower the Minister responsible for the energy sector and EC to regulate electricity tariff to the consumers in Peninsular Malaysia and Sabah. In Sarawak, the tariff rates charged by SESCO are regulated under the Sarawak Electricity Supply Ordinance 1992. Tariff rates in Peninsular Malaysia, Sabah and Sarawak differ due to the differences in the electricity cost of supply among the regions. Amongst the principles applied in determining the tariff rates are the tariff should be reflective of the cost of supply, provide adequate return for the viability of the utility companies, competitive for businesses and industries, affordable to consumers and at the same time provide social safety net to the most deserving segments in the society (e.g. subsidised tariff for poor and lower income households etc.). Three Major Electricity Utilities in Malaysia
Sabah Electricity Sdn Bhd
(80% TNB holding)
Tenaga Nasional Bhd (TNB)
BRUNEI
Tenaga Nasional Berhad
PENINSULAR
MALAYSIA
SABAH
SARAWAK
Syarikat SESCO Bhd
SINGAPORE
Customers
Installed Capacity
TNB Capacity3
Max Demand4
Note:
1.
2.
3.
4.
Sabah (2011)1
Sarawak (2010)2
Pen. Malaysia (2011)1
7.6 million
21,817 MW
9,110 MW
15,476 MW
Customers
Installed Capacity
SESCO Capacity
Max Demand
0.5 million
1,347 MW
530 MW
1,091 MW
Customers
Installed Capacity
SESB Capacity Max Demand
st
Source: TNB Annual Report 2011 (Figure based on financial year ending 31
Aug 2011)
st
Source: ESI in Malaysia: Performance and Statistical Information 2010, Energy Commission (Figure based on calendar year ending 31
Dec 2010)
TNB capacity includes Janamanjung(2070 MW), excludes KEV (2420 MW)
Recorded on 9th May 2011
0.48 million
1,332 MW
534.8MW
830.1 MW
VIEW OF M
MESI 2. OVERV
2.1 Malaysia E
Economy Outloo
ok The continuing Eurozone sove
ereign debt crisis, coupled with
h several unforttunate events in 2011 – Japan
n’s tsunami and
d nuclear disassters, the US credit rating downgrade d
and
d Thailand’s maassive flood – have affected the developed
d economies an
nd consequentlyy have caused spill‐over s
effectss to the emerging economies. TThe sluggish situ
uations are likelyy to extend into
o 2012. Malaysia’s ecconomy continu
ued to grow on o the back off resilient domestic demand and stronger exports e
despite
e ns caused by th
he Japanese and
d facing supply chain disruption
e
demand. Thailand disassters as well as relatively soft export Malaysia’s GD
DP grew at 5.1% in 2011 as compared to the 7%
% growth registtered in 2010. Since the lau
unching of the
e Government Transformatio
on Programme
e (GTP) and
d Economic Traansformation Prrogramme (ETP
P) in 2010, the
e Malaysian Govvernment is perrsistent with its annual average
e GDP growth target of around
d 6% to chart th
he nation’s path
h towards becom
ming a high‐inco
ome, fully develo
oped country byy the year 2020. emand and ellectricity sales in Peninsularr Electricity de
Malaysia is piccking up, albeit moderately, reggistering growth
h of 2.7% and 3.1% 3
respectively in 2011 as co
ompared to the
e previoous year. For the period of 20012‐2020, the m
moderate growtth trend is expected to continuee at around 3.4%
% to 3.9% per a nnum. Goingg forward, the electricity industry outlook wiill remain challeenging given tthe concerns o
over the fragile global econoomy, impact of fuel pricess and fuel avvailability (espeecially due to the volatility of co
oal prices and gas supply disrupptions) as well as the increasse in operating costs to meet growing custtomer expectattion. Nevertheless, the ne of the nation’s growth indusstry players’ rolee as the backbon
wouldd remain substaantial in realisingg Malaysia’s asp
piration of becom
ming a high‐incoome economy byy the year 2020.. 2.2 Key Statistics of MESI 2.2.1 Peninsular Malaysia Electricity Consumption in 2009 and 2010 SECTOR Electricity Electricity Percentage Consumption Consumption Change 2009 (GWh) 2010 (GWh) Domestic 16,792 18,217 8.5% Commercial 27,859 29,872 7.2% Industrial 36,261 40,071 10.5% Export 166 88 ‐ 50% Others* 1,365 1,373 0.6% Total 82,443 89,621 8.7% *Others include Public Lighting, Mining and Agriculture 2.2.2 Sabah Electricity Consumption in 2009 and 2010 SECTOR Electricity Electricity Consumption Consumption 2009 (GWh) 2010 (GWh) Percentage Change Domestic 1,204 1,295 7.6% Commercial 1,504 1,602 6.5% Industrial 1,099 1,178 7.2% Public Lighting 49 52 6.1% Total 3,856 4,127 2.2.3 Sarawak Electricity Consumption in 2009 and 2010 SECTOR Electricity Electricity Consumption Consumption 2009 (GWh) 2010 (GWh) 7.0% Percentage Change Residential 1,249 1,335 6.9% Commercial 1,623 1,735 6.9% Industrial 1,606 2,593 61% Public Lighting 62 64 3.2% Total 4,540 5,728 26% Source: Electricity Supply Industry in Malaysia – Performance and Statistical Information 2010, Energy Commission (figure based on calendar year ending 31st December 2010) 2.2.4 Peak Demand Region Peak Demand (MW) 1
Peninsular Malaysia 1
Sabah 15,476 830.1 2
Sarawak 1,091 Source: 1.
2.
st
TNB Annual Report 2011 (based on financial year ending 31 August 2011) Electricity Supply Industry in Malaysia – Performance and Statistical Information 2010, Energy Commission (figure based on calendar year ending 31st December 2010) 2.2.5 Annual C
Commercial Energy FFlow in Malaysia (200
08) in kilo tonnes of Oil Equivalent (ktoe
e) Sourcee: National Energy Balance 2008
8, Ministry of Energy, Green Teechnology and Water 2.2.6 Key Statistics of Electriccity Generationss and Grid Systems st
Source: Electricity Supply Industry in Malaysiia – Performance and Sttatistical Information 2010, Energy Commission (figure based on calend
dar year ending 31 Deceember 2010) 2.2.6.1 Transmission and Distribution Network in Peninsular Malaysia 2005 Transmission System Capacity 1. Transmission System Lines/Cables (km) 1
i. 500 kV 890 ii. 275 kV 6,248 iii. 132 kV 10,672 iv. 66 kV 171 2. Transmission Substations i. Number 375 ii. Capacity (MVA) 69,381 2006
2007
2008
2009 2010
890 6,730 10,436 171
890
6,737 11,009 68.7
890
7,616 11,299 ‐
1,209 7,738 11,308 ‐ 1,094
9,657 11,415 0.9
@ 435 @75,189
441 76, 223
386 83,808
385 82,990 392 86,030
2006 2007 2008 2009 2010 159,483 327,238 161,080 343,665 191,714 357,267 341,318 361,763 475,972 376,226 58,265 48,906
58,905 48,961
61,238 66,696
62,852 68,454 63,341 69,456
2005 Distribution System Capacity 3. Distribution System Lines/Cables (km) i. Overhead Lines 155,281 ii. Underground Cables 322,856 4. Distribution Substations i. Number 56,679 ii. Capacity (MVA) 48,377 Notes: 1.
From 2005 until 2008, 440 km 500kV lines are operated at 275kV, in 2009 541 km 500kV lines are operated at 275kV while in 2010 425.9 km 500kV lines are operated at 275kV. @ Including 48 Consumers’ Substations Source: Electricity Supply Industry in Malaysia – Performance and Statistical Information 2010, Energy Commission 2.2.6.2 Transmission and Distribution Network in Sabah 2005 Transmission System Capacity 1. Transmission System Lines/Cables (km) i. 500 kV ‐ ii. 275 kV ‐ iii. 132 kV 1,552 iv. 66 kV 123 2. Transmission Substations i. Number 31 ii. Capacity (MVA) 2,332 2006
2007
2008
2009 2010
‐
640 927 123 ‐
492 1,587 123 ‐
492 1,672 123 ‐ 492 1,674 123 ‐ 492 1,721 123
30 2,299 34 3,603 34 3,793 36 3,913 39 4,517
2006 2007 2008 2009 2010 5,180
468 5,893
623 6,431
762
7,420 1,035 7,490
1,418
4,929 3,852 5,008 3,937 5,214 4,179 5,614 4,235 5,815 4,618
2005 Distribution System Capacity 3. Distribution System Lines/Cables (km) 2
i. Overhead Lines 5,167 2
ii. Underground Cables 471 4. Distribution Substations i. Number 4,727 ii. Capacity (MVA) 2,803 Notes: 2. Only 33kV and 11kV Source: Electricity Supply Industry in Malaysia – Performance and Statistical Information 2010, Energy Commission 2.2.6.3 Transmission and Distribution Network in Sarawak 2005 Transmission System Capacity 1. Transmission System Lines/Cables (km) i. 500 kV ‐ ii. 275 kV 765 iii. 132 kV 138 iv. 66 kV ‐ 2. Transmission Substations i. Number 20 ii. Capacity (MVA) 3,811 2006 2007 2008 2009 2010 ‐
765 138 ‐
‐
765 138 ‐
‐
765 138 ‐
‐ 765 225 ‐ ‐ 765 225 ‐ 21 4,166 20 4,166 22 4,726 23 4,806 24 4,886 2006
2007
2008
2009 2010
17,002 4,753 17,126 5,040 18,565 5,422 19,147 5,709 19,803
6,087
7,588 5,295 7,926 5,642 8,290 6,217 8,500 3,218 8,685
3,321
2005 Distribution System Capacity 3. Distribution System Lines/Cables (km) i. Overhead Lines 16,470 ii. Underground Cables
4,426 4. Distribution Substations i. Number 7,508 ii. Capacity (MVA) 5,329 Source: Electricity Supply Industry in Malaysia – Performance and Statistical Information 2010, Energy Commission
2.3 Peninsular Malaysia ‐ TNB Tenaga Nasional Berhad (TNB) is the largest electricity utility in Malaysia with almost RM73 billion worth of assets. The Company is listed on the main board of Bursa Malaysia and employs approximately 26.7 thousand staffs (excluding TNB subsidiaries) to serve a customer base of around 7.6 million in Peninsular Malaysia. 2.3.1 Generation Capacity and Market Share The total installed capacity in Peninsular Malaysia as of st
31 August 2011 is 21,817 MW in which TNB Generation installed capacity is 9,110 MW, comprising 7,199 MW in thermal plants and 1,911 MW in hydro plants. TNB’s market share by sales as of August 2011 stands at 38%. Generation Installed Capacity
KEV
11.1%
IPP
47.1%
TNB
41.8%
*KEV (60% TNB holding) Generation Market Share
KEV 7.7%.
IPP
TNB 38.0%
54.3%
*KEV (60% TNB holding)
2.3.2 Ensuring the Long Term Supply Security TNB’s Generation Division operates and maintains six thermal power stations and three major hydroelectric power generating schemes in Peninsular Malaysia, while also developing and building new power stations for the Group. The six thermal power stations comprise conventional gas and oil‐fired plants as well as open and combined cycle gas turbine plants. The division further supports the operations and maintenance of three IPPs, namely the wholly TNB‐owned Sultan Azlan Shah Power Station in Manjung and TNB Liberty Power Limited of Pakistan and the majority‐owned Sultan Salahuddin Abdul Aziz Shah Power Station in Kapar. Abdul Aziz To ensure adequate system capacity and supply reliability, TNB will continue to make significant investments in electricity supply systems while ensuring that additional generation capacity is integrated into the system in a timely and efficient manner. In line with the goal of harnessing all possible hydro power potential in Peninsular Malaysia two major hydroelectric projects are currently being developed; the 250 MW Hulu Terengganu Hydroelectric Project and 372 MW Ulu Jelai Hydroelectric Project targeted for commissioning in 2015 and 2016 respectively. TNB is also in various stages of discussion with state authorities for several other hydro projects; Telom (132 MW), Tekai (156 MW), Sungai Pelus (34 MW), Talong Sengoh (200 GWh/yr), Lebir (274 MW) and Nenggiri (416 MW). In the absence of the previously planned import of power from the Bakun Dam in Sarawak, the Government has decided that 2 x 1000 MW new generation capacity need to be added into the system by the year 2015 and 2016. The Energy Commission has been entrusted by the Government to implement international competitive bidding process for new capacity augmentation to enhance transparency, efficiency and cost‐competitiveness in the electricity generation sector. In August 2010, TNB has been awarded a contract to build a 1,000 MW coal‐
fired power plant adjacent to the existing Sultan Azlan Shah Power Station in Manjung, Perak. The new power plant will utilise the latest supercritical boiler technology which is more efficient than conventional coal‐fired boilers. It is expected that the new plant will operate at an efficiency level of 39.8%, which is higher than the current 35% efficiency level of the existing power plant in Manjung. This new coal plant is expected to be commissioned in March 2015. The next 1,000 MW coal plant unit was later awarded to an IPP through a limited competitive bidding process, offered to existing brownfield sites.
To meet the nation’s future electricity needs, TNB also signed a Head of Agreement on 7 May 2008 with Sarawak Energy Berhad (SEB) for the supply of power to Peninsular Malaysia from hydroelectric schemes and coal power plants in Sarawak via High Voltage Direct Current (HVDC) overhead lines and submarine cables. In this agreement, SEB agrees to supply 3,000 MW of electricity to TNB from 2017 to 2020 and a further 5,000 MW from 2021 to 2030. However, such opportunity to fully realise the import of power to Peninsular from Sarawak are subject to the technical and financial commitment of both parties.
To mitigate the energy supply security issue over a longer planning horizon, TNB is also exploring the feasibility and viability of nuclear power as an alternative energy resource. TNB has been working closely with Ministry of Energy, Green Technology and Water (MoEGTW) and other stakeholders and agencies, in particular, the Malaysian Nuclear Power Corporation (MNPC), Malaysian Nuclear Agency and Atomic Energy Licensing Board (AELB) on this option. TNB is also investigating suitable means to increase the penetration of Renewable Energy (RE) and Energy Efficiency (EE) alternatives. Current projects and studies include the 10 MW joint venture biomass power plant in Jengka, Pahang, joint‐feasibility study on potential biogas plants utilising palm oil mill effluent and research and development in tapping the geothermal resources for electricity generation. 2.3.3 Networkk Reliability Stre
engthened System improvvements to strengthen networkk integrity and improve supp
ply security are a top priority at TNB. Over more than 600 years, TNB has h grown its network n
from strength to sttrength. TNB Transmission Division manages and operatess TNB’s 132 kV, 275 kV and 500 kV transmission n
network known as the National Grid system. Its primary reesponsibility is to t ensure high reliability and security of this National Grid G
System, which w
in turn requires the proper mainten
nance of all the equipment. t
main activiities of the Divvision include Accordingly, the control opeerations, asseet maintenan
nce, project management, engineering and
d procurement. The National Grid G is connecte
ed to Thailand’ss transmission system, operated by the Electtricity Generating Authority of Thailand (EGAT), in the north; n
and to
o Singapore’s transmission system, operateed by SP PoweerGrid, in the south. The connection with Thailand T
is via a High Voltage Direct Currentt (HVDC) interco
onnection with aa transmission capacity of 300 MW and a 132 kV High Voltagge Alternating Current (HVAC
C) overhead linee with maximum
m transmission capacity of 80
0 MW. The conn
nection with Sin
ngapore is via two 230 kV ssubmarine cables with a firm transmission capacity of 2000 MW. Among majo
or initiatives implemented in
n 2010/2011 include: 
Increased
d system capacitty with addition
nal 2,940 MVA transform
mer capacitiess, 308.5 circcuit km of transmisssion lines and 19 1 circuit km of underground cables th
hrough the com
mpletion of 65 transmission projects. 
Enhancing supply reliabillity via a Zero Trripping Action Plan (ZTA
AP) & Critical Installation Mainteenance (CRIM) to maintaain low system m
minutes (i.e. currrently at 1.02 minutes). 
Enhancing supply reliability via the deveelopment and implemen
ntation of a SmartGrid – Wide Area Intelligen
nce System (WA
AIS) to maintain zero major disturban
nce since the last six years. 
Reducingg transmission losses by utilizzing low loss conducto
or. 
Deployingg innovation and proven techno
ology through the Intternational Electrotechnical Commission Standard IEC 61850 based b
Substatio
on Protection Automatiion and Control System (SPACS). 
Completeed Phases 1 and a
2 of the Transmission Operation Monitoring & Analysing System (TOMAS), a centraliseed information system consissting of work process m
management an
nd dashboard monitoring. m
In the coursse of establishing TOMAS, TNB has enhanced the accurracy and adequaacy of its existingg transmission asset database. 
The staate‐of‐the‐art computerised Supervisory Control and Data Acqu
uisition/Energy Management System (SSCADA/EMS), co
ommissioned att the National Load Disp
patch Centre (N
NLDC) in December 2009, has been functioning smooth
hly, further enhaancing NLDC’s effectiven
ness in operatiing TNB’s transsmission grid. The new SCADA/EMS sysstem is among the best in the Asia‐Paciffic region and is comparable to those of major utilities in North America. B Distribution Diivision is responsible On the other hand, TNB
for the distribution network operations at the voltage levels of o 33 kV, 22 kV
V, 11 kV, 6.6 kV
V and 415/240 V to customers. One of the major projects being undertaken is the Iskaandar Malaysia 110 or IM10. TNB
B has been entru
usted by the Government to
t develop new
w electricity su
upply infrastru
ucture and reinfforce the existing system in Iskandar Malaysiia in south Joh
hor, to attract global investm
ment. Towards creating a a world‐class electricity su
upply infrastru
ucture in this ecconomic zone, TNB has been givven a very challenging of
SAIDI taarget 10 minutess/customer/year by 2020. Th
his massive pro
oject requiress novel and innovative netwo
ork design, seccurity criteria and SCADA/Auttomation. The project is divided
d into three phases. The first phase, from Ap
pril‐December 22011, involvess strengthening the existing network in the Iskandar region. As of 31st Augu
ust 2011, about 20% of the phyysical work off this phase had been completed
d. Source: TNB
B Annual Report 2011 2.4 Sabah – SESB Sabah Electricity E
Sdn Bhd B is an 80% owned o
subsidiarry of TNB and 20% by the State S
Governmeent of Sabah. Itt is a vertically integrated utiility providing ellectricity generation, transmiission, distribution and supply services s
in the sstate of Sabah and the Federral Territory of Laabuan. 2.4.1 Im
mproving Supplyy Security The tottal installed cap
pacity for Sabah
h was 1331.69 MW (SESB 534.79 5
MW ‐ inclusive of 80 MW M canopy gen‐sets and IPP 796.9 MW) and
d the maximum demand throughout stt
the state was 830.1 MW as of 31 August 2011. The demand
d growth for eelectricity in Saabah is within the projecteed growth of around 7% per year y
up to the year 2011 an
nd to increase substantially s
in the following years, reaching about 1,476 M
MW by 2019. Currenttly, Sabah is facin
ng shortage in e
electricity generaation to meett demand due to
o the unavailabiility and unreliability of several generating sstations particularly diesel stations. Few miitigation actionss have been im
mplemented in 22010 which include the com
mmissioning of the new 2 x 65 MW Ranhill Powertron II gas turbines,, 20 MW mo
obile generattions in Palm O
Oil Industrial Cluster (POIC) Laahad Datu, 6 MW TTeck Guan biom
mass plant and 4.5 MW mini hydro from Su
ungai Pangapuyaan, Kota Marudu
u. SESB’s immediate short and medium teerm plan in Generation is to focus on the
e reduction of ussage of oil for generation and substitute it w
with cheaper sou
urce of supply. The long term
m plan will see th
he use of hydro eenergy as one of the main co
omponents of th
he generation mix. warded a gas‐
In July 2011, tthe Federal Govvernment has aw
fired combined cycle IPP project in Lahad Dattu, Sabah to a onsisting of TNB
B (50%), Petron
nas (30%) and consortium co
the State Goveernment of Sabaah (20%) which will be fueled by natural gas, as opposed to t the initial plaan of utilising coal. 2.4.2 Reinforccement of the Ellectricity Supplyy Network th
Under the 9 Malaysia Plan, the Federal Govvernment had allocated RM600 million to implement 233 projects to strengthen eleectricity supply mainly the tran
nsmission and distribution syystem in Sabah. Among the major projects co
ompleted was th
he Sabah East West Grid Intterconnection which w
was commissioned on th
28 July 200
07. This interco
onnection projeect allows an average transffer of 70 MW to 90 MW of po
ower from the West Coast o
of Sabah to thee East Coast to mitigate the insufficient geenerating capacitty in the east coast area. SESB’s immediate plan forr transmission development would focus on the reinforcement of the existing transmission aand distribution
n systems to enhance system supply stabilitty and reliabilityy as well as to cater for the projected increase in load dem
mand in Sabah. TThe long term transmission plan would deepend on iden
ntified power generation sources and locatiions, and the im
mplementation of a fully integrated 275 kV k ring network, (including upgrading of tthe 132 kV netw
work in the Eastt Coast to 275 kV and establiishing of 275 kV
V Southern East‐West Link), as the backbone in Sabah and to
o be ready for intterconnection to neighbourin
ng Sarawak and Brunei. With the sup
pport from the Government, SSESB aims to achieve 95% electrification coverage by year y
2013 to enable more people in Sabaah to enjoy the benefits of electricity sup
pply, as part off SESB’s contrib
bution to the socioeconomicc development o
of Sabah. The Federal G
Government co
ontinues to provide financial assistance to SESB to impleement various initiatives to improve its syystem. Sabah’s SAIDI S
has shown
n tremendous improvement;; a decrease of o more than ten‐fold, from 4,030 mins//customer/year in 2006 to
o only 366 mins/customeer/year in 2011. Furthermore, SESB S
received substantial dieesel and medium fuel oil subsidies from the Malaysian Govvernment. Source: TNB Annual Report 2011 ESI in Malaysia – Perfformance and Statisticall Information 2010, Enerrgy Commission 2.5 Saraawak – SARAWA
AK ENERGY BERHAD WAK ENERGY BER
RHAD SARAW
Overvie
ew of Sarawak EEnergy Berhad (SSEB) Group Wholly‐‐owned by the SSarawak State Go
overnment, Saraawak Energy Berhad (SEB) is a vertically inteegrated utility group involved
d in the generaation, transmission and distribu
ution of electricity in the statte of Sarawak. SEEB was incorporrated on 26 May M 1967 as Du
unlop Estates Beerhad and had b
been listed on the Kuala Lum
mpur Stock Exchaange (now know
wn as Bursa Malaysia) M
in the same year, before being taken private by the Sarawaak State Govern
nment on 5 Jan
nuary 2010. Presenttly, SEB Group has a total gen
nerating capacitty of 1,328M
MW. Via wholly‐‐owned subsidiary Syarikat SEESCO Berhad (SESCO), SEB co
ontrols the Statee’s transmission
n and distribution infrastruccture, along with 531MW
W of generatting capacity. Th
he balance of its generating capacity is supplied by otheer subsidiaries,, Sejingkat Po
ower Corporaation Sdn Bhd (SPC), (
PPLS Pow
wer Generation Sdn Bhd (PP
PLS), Sarawak Po
ower Generation
n Sdn Bhd (SPG)) and Mukah Power Generation Sdn Bhd (MP
PG). SPC opeerates a 100MW
W coal‐fired pow
wer plant in Kucching while PPLS owns a 1100MW coal‐fired power plant in
n the same viicinity. SPG, meaanwhile, owns aa 317MW combiined‐
cycle, gas‐turbine po
ower plant in Tanjung Kidurrong, Bintulu.. MPG operates a 270MW coal fired power plant in the district of Mukah. SEB is currently co
onstructing thee 944MW Mu
urum Hydroelectric Project (H
HEP) – the first in a series of HEPs in the Gro
oup’s future. Mu
urum HEP is expected to comee on‐
stream on a staggered basis, with initiaal operations byy end of 2013. Currentt projects of SEB
B Bakun HEP The Bakkun HEP, with aan installed capaacity of 2,400M
MW is owned by Sarawak Hidro H
Sdn Bhd, a company 100% 1
owned by the Ministryy of Finance. SEB has secured
d the entire power p
output frrom Bakun with
h the signing off the Power Purchase Agreeement with Saraawak Hidro in 22011. Impoun
ndment of the HEP commencced on 13 Octtober 2010, and the HEP hass now filled to o
operating levels.. The transmiission line conneecting Bakun to Similajau substaation was en
nergised on 133 April 2011, and the Similajau substation was energised on 1 April 2011. Bakun HEP is expected to be fully commissioned by mid 2013. Murum HEP The Murum HEP is fully owned by SEB and is currently under construction. The Murum HEP has an installed capacity of 944MW and is scheduled to start producing power by the end of 2013. Sarawak Corridor for Renewable Energy (SCORE) is a major initiative by Sarawak State Government launched in 2008. SCORE is one of five regional development corridors being pursued in Malaysia, and is a key component of the State Government’s strategy to transform Sarawak into a developed State by the year 2020. The SCORE agenda aims to accelerate Sarawak’s economic growth and development, as well as improving the quality of life for the people of Sarawak. The foundation of the SCORE development strategy is Sarawak’s abundant hydropower and coal resources. The development of these sources of energy will allow Sarawak to offer competitively priced energy and encourage investments in energy‐intensive industries, acting as a trigger for further industrial development in the State. The SCORE development strategy comprises five major growth nodes: Tanjung Manis (Industrial Port and Halal Hub); Mukah (Administrative and Research Centre); Samalaju (Heavy Industry); Baram and Tunoh (Tourism and Resource Based Industries). SEB’s role is primarily to supply power to the energy intensive industries located at Samalaju Industrial Park, and to a lesser extent the growth centres of Mukah and Tanjung Manis. To date, SEB has secured the sale of power to energy intensive SCORE customers amounting to 1,800MW. SEB Generation Development Plan Sarawak Corridor for Renewable Energy In line with the State’s development plans, SEB is aggressively expanding its generation capacity primarily in hydro and coal to deliver power competitively. In addition to securing power from Bakun (2,400MW) and completing construction of Murum (944MW), SEB is undertaking detailed feasibility studies on other potential hydropower projects. Future hydropower projects may include: Baram 1 (1,200MW), Baram 3 (300MW), Pelagus (411MW) and Baleh (1,300MW). The Limbang 1&2 (245MW) and Lawas (87MW) hydro‐power projects may also be developed as a regional system in the North to supply power to Brunei and Sabah. New coal‐fired plants will also be developed, in order to diversify SEB’s generation portfolio, reduce exposure to hydrological variation and fully utilize Sarawak’s natural resources. This includes a new coal‐
fired power plant at Balingian with 600MW installed capacity. It is expected that the new generation developments in SEB Group will result in a balanced generation mix of 69% hydro, 19% coal, 10% gas generation and 2% diesel by 2020. SEB Transmission System Development Plan To support the State’s industrialization, SEB will expand and strengthen the State’s transmission system. With the arrival of new industrial load in Samalaju, power demand in Sarawak is set to increase 4‐fold by 2020. In order to integrate the large generation projects and to securely and efficiently transport this massive volume of power to the State’s load centres, a 500kV transmission ‘backbone’ spanning about 600km between Bunut and Kuching will be developed. The backbone will be constructed in stages, in coordination with the hydropower projects development. The current 275kV network will be strengthened and expanded to tap the 500kV “backbone”, connecting the new power stations into the State grid system. The transmission system will be routed within designated land corridors that are strategically located to maintain orderly future development of transmission system in Sarawak as well as achieving maximum transmission efficiency of bulk generation to the load centers. Future Business Plan In addition to supplying the SCORE industrial demand, SEB will need to meet growing domestic and commercial demand. Opportunities also exist to export power to West Kalimantan, Brunei and Sabah in line with the ASEAN Interconnection Master Plan. While there are no immediate plans for an interconnection between Sarawak and Peninsular Malaysia, the supply of power to West Malaysia remains an option for the future. 3. TOWARDS A SUSTAINABLE FUTURE Sustainable development of the electricity sector will continue to be the main agenda of MESI, in alignment with the National Energy Policy main objectives: 
Supply Objective – to ensure adequate, secure and cost effective supply of energy through development of both renewable and non‐renewable energy resources using the least cost option and diversification of supply sources both from within and outside the country; 
Utilisation Objective – to promote efficient utilisation of energy and to discourage wasteful and non‐productive patterns of energy consumption; and 
Environmental Objective – to minimise the negative impact on the environment. Under the 8th Malaysia Plan, Renewable Energy (RE) was recognised as the Fifth Fuel in the nation’s energy supply mix to complement the other four conventional sources of energy (i.e. coal, gas, oil and hydro). The formation of the Ministry of Energy, Green Technology and Water following the April 2009 Cabinet reshuffle presents another milestone in the commitment of the Government towards Green Technology. Following that, the National Green Technology Policy was launched in July 2009 which identifies green technology as one of the drivers to accelerate the national economy and at the same time to promote sustainable development in Malaysia. In the same year too, during COP15 in Copenhagen, the Government has indicated a voluntary pledge of 40% reduction in carbon emission intensity by year 2020 as compared to 2005 levels, subject to assistance from developed countries in support of the global climate agenda. Moving forwaard, the recenttly announced 10th Malaysia Plan has laid out the Goverrnment’s renew
wed intentions towards the implementatio
on of green energy and technology via the National RE Policy and Action Plan. Amongst oth
hers, some initiatives i
thatt has been undertaken to
o spur the RE grrowth in Malaysia include the enactment of the Renewable Energy Act, thee introduction of a Feed‐in‐TTariff (FiT) mechaanism and the fformation of a dedicated aggency known as the Sustain
nable Energy Development Authority (SEDA
A) in 2011. Thee Government has put a capaacity target of 98
85 MW or 5.5% of generation mix target fro
om renewable energy e
sources under the FiT mechanism byy 2015. Energy Efficiency and Conservation Act is also currrently being deeveloped to prom
mote efficient usage of energy in all sectorss including electricity which is expected to bee ready by the yyear 2014. The Malaysian
n Government has also recenttly announced the nation’s aiim to become a high‐income economy by the year 2020 ass envisioned in
n its New Econ
nomic Model (NEM), Govern
nment Transform
mation Program
mme (GTP) and Economic Traansformation Programme P
(ETTP). Amongst others, the N
NEM calls for gradual g
removaal of the gas subsidy to bee more reflecttive of market price, hence realigning thee utilisation of the indigenous resources to maximise its vvalue creation. Therefore, hikee in electricity price will bee inevitable in the future and electricity consumers wiill need to adjust accordingly. However, the Government h
has given the asssurance that it will continue to provide social s
safety net n
to the mo
ost deserving consumer seggments. Compettitiveness in the commercial and industrial sectors will no longer be depeendent on low energy price b
but to be driven by productivityy, value‐added services, techn
nology and innovation. International ccompetitive bidding for develop
pment of new power plantts is being implemented to enhance transparency, efficiency and cost‐competitivveness in the electricity generation sector. Energy Commisssion has been internattional competitive bidding process. Ano
other initiative currently bein
ng pursued undeer MESI is the m
move towardss Incentive Baseed Regulation (IB
BR), from the currrent Cost Plu
us Regulation. IBR ensure that incentives and risks are shaared with custom
mers through efficiency e
targett set, efficiency sharing m
mechanism, reccovery of foreecast efficientt expenditure and regulatio
on of outcomee or perform
mance. Under th
he IBR also, a fuel cost pass‐thro
ough mechan
nism will be introduced. All of this will in essence translatte to higher opeerational, perforrmance and financial efficiency within the w
whole value‐chaain of the electrricity sector.