Malaysia

Tenaga Nasional Bhd (TNB) has made it easy for customers to apply for electricity supply with the launch of its on-line service called e-Application. Aimed at improving efficiency, the e-Application can also be used to help customers monitor the status of their applications and verify documents. "It will quickly allow customers to decide on any follow-up action, if necessary, to speed up the application process," TNB said in a statement. TNB chief operating officer and chief executive Datuk Azman Mohd was quoted as saying that the system would assist developers in mananging their request for electricity supply and this would help TNB in planning for the future. E-Application will also facilitate the sharing of information with registered contractors with valid licences from the data base of the Energy Commission. Customers can also select contractors via the online service hence eliminating the risk of engaging unauthorised contractors. The e-application system will be fully implemented by housing developers beginning January 1.

While Tenaga Nasional Bhd (TNB) still faces an erratic gas supply problem, a silver lining may emerge with the coming onstream of 4,500 megawatts (MW) by 2016. In fact, it might be boom years again for the power engineering business in the second half of 2012 and 2013, said OSK head of research Chris Eng. “The replacement of the first generation power purchase agreements (PPAs) with new contracts should be positive in the longer term for both the independent power producers and TNB, although the impact would only be felt in 2016,” he said. “With the gas price hike postponed and gas supply still erratic, we have cut TNB's earnings forecast in the short term. However, the new PPAs coming into force may lead to its capacity payment rates dipping in the long term,” he said. “TNB is a clear-cut post election play as it will likely get to enjoy more tariff hikes and most importantly, a coal cost pass-through after the general election,” he said. While the official reserve margin still stands at above 35%, the shortage of gas and the aging the power plants mean that the country's actual reserve margin is probably significantly lower. “As the first generation PPAs expire from 2015 to 2017, it would be crucial to start the competitive bidding process now to ensure that the new plants are ready by 2016. Without these new plants, Malaysia's reserve margin is likely to drop to 10% by August 2017,” he said. According to him, re-negotiation of the first generation PPAs had ground to a halt because TNB did not see the need to offer the first generation independent power producers (IPP) a discounted cash flow positive deal. There is, therefore, some 4,105MW of first generation capacity expiring between 2015 to 2017. Even with the expansion of 1,000MW at Janamanjung and another 1,000MW at Tanjung Bin, the country is short of 2,105MW of power, not to mention the expected growth in electricity demand. “With Bakun power in no way headed for Peninsular Malaysia, it would appear that we are on the cusp of a power plant building frenzy. This is reminiscent of 1993 when the first generation PPAs were first awarded and it was contracts aplenty for power engineers in Malaysia,'' he said. While all five first generation IPPs had actually submitted proposals for renegotiation of their PPAs, Eng viewed that Genting Bhd and Sime Darby Bhd might be less interested this time around, given the cessation of talks and the invitation for fresh PPA bids. “Genting has indicated that it is keen to sell its power assets and is left with only the 720MW Genting Sanyen CCGT in Malaysia while Sime Darby only owns the 440MW open cycle gas turbine (OCGT) peaking plant in Port Dickson. “The more serious bidders are likely to be MMC (with an effective generation capacity of 5,020MW of 23% of the peninsular's generation, Tanjong (440MW via Powertek and 720MW from Panglima Power) and YTL Power (1,202MW in Paka and Pasir Gudang),” he said. Overall, the industry is still faced with a shortage of gas supply but an erratic supply of gas had been flowing through the Bekok C bypass platform since September. Eng noted that there were days when TNB received less than 1,000 million metric standard cubic feet per day. Factoring in these issues, TNB's earnings forecast has been pared down by 13% for 2012 and 4% for 2013 by the research house. Meanwhile, Maybank Investment Research said there would still be challenges as gas supply was still low, which meant that TNB would still incur a hefty alternative fuel cost bill in the first quarter of 2012 for the supply shortfall.

The Energy Commission (EC) says it expects the competitive bidding process for the 4,500 megawatt (MW) power-generation capacity to involve a combination of new and existing power plants. An EC official told StarBiz that the competitive bidding process was still in its early stage of inviting prospective bidders to register their interest, and that the power regulator was still working on the details of the plan. Nevertheless, he confirmed reports that the EC was targeting to have a total of 4,500MW power-generation capacity to come in through the bidding process. This, he said, was to replace the capacity of the first generation power-purchase agreements (PPAs) and to cater to future demand. “Basically, what we're looking for are players who can offer us the least cost,” he said, in response to queries about EC's notice on Tuesday calling for prospective bidders for the development of a gas-fired power plant in Peninsular Malaysia. Chin says more energy needed to meet future demand. The EC had said in the notice that the power plant was to sell its capacity and energy to Tenaga Nasional Bhd (TNB) under a new PPA. The site or sites would be made available by the EC, or alternatively, prospective bidders could propose new sites for EC's consideration. According to Energy, Green Technology and Water Minister Datuk Seri Peter Chin, 4,500MW more of gas-based power generation would be required by 2017 to replace retired capacities and meet future energy demand in the peninsula. The first generation PPAs, accounting for around 4,100MW of gas-based generation capacity, would be expiring in 2015 or 2016. TNB had in recent weeks announced that the first generation PPAs, involving YTL Power Generation Sdn Bhd, Segari Energy Ventures Sdn Bhd, Port Dickson Power Sdn Bhd, Powertek Bhd and Genting Sanyen Power Sdn Bhd, would not be renegotiated and would be allowed to lapse. Adding to the future power supply pressure in the country was the expected growth of electricity demand by an average of 4% per year in the next five to 10 years. While the independent power producers (IPPs) under the first generation PPAs would see their contracts lapse, TNB president and chief executive officer Datuk Seri Che Khalib Mohamad Noh had recently said they could still participate in the bidding process for new licences that would be held by way of open tender. TNB, which had been facing an increasing challenge of rising fuel costs that ate into its profit margin in recent years, had for years been subject to high-capacity payments to IPPs under the existing PPAs, especially the first generation ones that were signed in the mid-1990s. Under the deal, the national power company was obliged to pay relatively “high” fixed charges to IPPs for the supply of their power-generation capacity, regardless of whether it was fully utilised. It appeared, therefore, the terms and conditions of the PPAs had always tilted strongly in the IPPs' favour. “The idea to allow the first generation PPAs to lapse is to pave the way for an open-tender process and more competitive pricing for TNB,” an analyst said. “It is clear why TNB prefers to have an open-tender process. For one thing, it would push players towards greater efficiency and result in lower input prices for the supply of power, both of which would benefit TNB, and ultimately, consumers,” he explained, while noting the fact that it was very difficult for TNB to increase the selling price of electricity to end-users, as the prices were currently controlled by the Government. here  

Malaysia's Energy Commission is targeting to have a total of 4,500MW power-generation capacity involving a combination of new and existing power plants through bidding.

The Energy Commission has moved to open up the bidding process for the replacement of first generation Power Purchase Agreement (PPA). This was revealed by Association of Water and Energy Research Malaysia (AWER) President S. Piarapakaran in a statement. He did not elaborate. While conglatulating the Energy Commission for the move which he described as bold, he called for a transparent and fair bidding process. "Opening up the bidding up to 49 percent foreign equity will allow Malaysia to have more industry players that can invest in better and efficient technology," he said. He also urged the Energy Commission to blacklist first generation independent power producers that did not renegotiate their PPAs from this bid.  

“The future ain’t what it used to be!” (seen on a bumper sticker) Climate change is the only constant The need to address the issue of climate change has become a matter of priority, and players in the shipping industry must stand up and be counted to play their part to reduce carbon emissions. Being a crucial facilitator of trade and at the forefront of activities such as offshore oil and gas exploration and production, shipping is omnipresent and hence commands international attention. Expectations are therefore high for the industry players and regulatory authorities to take urgent, meaningful action to introduce eco-friendly practices in shipping. One way or another, industry players must prepare themselves for a lower carbon future, and that future is looming in the horizon. Delaying actions - or worse, not taking any action – is simply not an option. There is growing pressure for transport operators, including in shipping, to take serious actions to mitigate the risks of climate change. Signs are all around that the world is under serious pressure from a scorned Mother Nature whose delicate balance has been upset by the ravages of climate change. Raging bushfire in Russia, fatal floods in Pakistan, tragic mudslides in China and the separation of a 60 sq km chunk of ice from a glacier in Greenland are just some reminders of the terrible impacts of climate change. The failure of the United Nations Conference of Parties on Climate Change (COP 15) held in Copenhagen in December 2009 to reach a consensus to advance the agenda is a wake-up call for industries, including the transport sector, to act quickly to reverse the adverse impacts of climate change on the environment. Pressure is growing for world leaders to come up with a concrete plan at the COP 16 meeting in Cancun, Mexico in late 2010 to reverse the ill effects of climate change. All eyes are on COP 17 in Durban, South Africa to make advances on this most important agenda. A December 2009 report published by Lloyd’s List stated that despite shipping contributing a mere 3.3% of the global total of carbon emissions from economic activities, emissions from shipping were estimated to have doubled since 1990. The report projected that this percentage would grow by a factor of two to three by 2050 from 2007 levels should no regulatory measures were put in place to lower the emissions from shipping. Pulling up shipping’s weight This should make industry players sit up and take note of the dire prospect, and not become complacent and ‘lulled’ by the fact that shipping contributed only a small percentage to the total global carbon emissions. Industries must rally behind the commitment of governments to reduce carbon emissions and contribute towards fulfilling that objective. The shipping industry especially must make the issue of reducing carbon footprint as a priority and must aim to put in place strategic measures to reduce or limit the volume of carbon emitted from their operations. While admirable efforts had been initiated and were being planned by the International Maritime Organisation (IMO) to lead the way in reducing carbon footprint in the shipping industry, many issues and challenges must be addressed and overcome for the shipping industry to cut down its carbon emissions in a systematic and meaningful way. What is urgently needed is for IMO to put in place a globally accepted regime to curb carbon emissions. A national or regional regime based on a piecemeal approach would not do, given the global nature of shipping. The intensity of opposition towards reduce carbon emissions in shipping could be seen in proposals such as applying the Common But Differentiated Responsibilities among maritime nations and introducing market-based instruments. Other issues include the lack of financial resources, the need to develop adequate and skilled manpower, overcoming technological challenges, high cost of compliance, lack of enforcement, and that challenge of balancing ‘going green’ with business imperatives. IMO’s Greenhouse Gas Study updated in 2009 reported that the application of ‘known technology and practices’ could make vessels more efficient between 25 to 75%, depending on the types of vessels. However, adapting such technology and practices may give rise to other issues. In the event that shipowners pass the costs incurred from ‘going green’ onto their customers, the latter will in turn pass their costs down to end users and consumers of the cargo they ship. Given the considerable costs involved in practicing ‘green shipping’, there may not be much of an incentive for shipowners to increase efficiency of their ships to a level that will make a difference on a global scale. Unless they can gain competitive advantage by ‘going green’, or at least can avoid competitive disadvantage, it is hard to imagine that shipowners are going to adopt a voluntary technological revolution to change the entire shipping industry to a greener one. What more at a time when many of them are reeling from the crushing impact of global recession, credit crunch and falling demand for shipping services. These issues and fears need to be exhaustively debated and addressed before a consensual approach to address climate change can be attained by shipping industry players. While it is encouraging to note the growing awareness among stakeholders in the sector of the need for them to reduce carbon outputs, there is also a need to anticipate the effects of adapting measures to mitigate the risk of climate change. This calls for nuanced measures and policy options leading to implementable, practical and effective solutions to reduce carbon emissions in the shipping sector, while meeting the need for smooth and efficient flow of trade along the maritime supply chain.  

Panasonic Corporation will establish a new solar manufacturing unit in Malaysia next month.

Sabah Electricity Sdn Bhd and the Universiti Sains Malaysia signed an MoU aimed at increasing energy efficiency via lower cost methods.

The Bakun hydroelectric project's spillway gates is nearing completion along with other relevant work and is set to start operations on Friday.

The Sarawak Government has yet to decide on whether to enforce the Renewable Energy Act.

Dismal interest in renewable energy resulted in only 18% of its 350MW installed capacity target achieved for 2005-2010, says the Malaysian government.

Yes they have more hydro projects on stream but there’s no way that hydro power will catapult the demand for more gas and coal, says the Malaysian government. “We predominantly rely 46% in gas,44% in coal and remaining in hydro and other renewable shares are bit of pieces. When we look at our own refinement, our use of gas and energy is depleting as a way of our demand, very soon we will now see our demand outstripping supply,” Dato’ Sri idris Jala, minister in Prime Minister’s Office and chief executive officer of PEMANDU said during the Singapore International Energy Week.

Emerson will provide a 120,000 square foot data centre to the Malaysian IT services provider.

Malaysia's Energy Commission clarified that the bidding process for the Tanjung Bin Power Station project was conducted five years before it begins operations in 2016 because of the lengthy construction period.

A number of countries in Southeast Asia such as Thailand, Malaysia, the Philippines and Indonesia have begun to pursue wide-scale investment in solar power.

Sarawak Energy has appointed Limbang-born Marconi Madai, to the position of General Manager, Corporate Risk & Health, Safety and Environment.