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Energy Malaysia Towards a World-Class Energy Sector Volume 15 | 2018 www.st.gov.my MEASURING THE ENERGY Volume 15 Volume A Brand New COMMission’s SUCCESS Energy Industry Energy Malaysia highlights the achievements during RP2 Leading the Way a successful for a Brighter Future Regulatory Period 1. ENHANCING sabah’s supplY Energy Malaysia KDN: PP 18540/08/2014(033966) KDN: PP shines a spotlight on SAIDI 100 Lab, an initiative to improve Sabah’s SAIDI and Sabah Electricity Supply Industry (SESI). MYR 8.00 Volume 15 www.st.gov.my Front Cover v1.indd 1 10 /7/18 6:46 PM S NT E 20 ONT C FEATures INNOVATION 02 12 20 Chairman’s Message What Happens Now? A Technological Change With a successful RP1, the Artificial Intelligence (AI) is the future, industries are looking forward to invading one aspect of our life at a time. 03 the second regulatory period. Energy Matters We take a look at how AI is changing Energy Malaysia examines the the energy sector globally and how the The latest news and updates on changes within industries and how their nation’s energy sector is coping industry developments, government development is parallel to the with the digital invasion. initiatives and innovations in the energy industry’s transition. Malaysian energy sector. FEATURES FEATures 24 15 SAIDI 100 Lab: COVER STORY Keeping Up with the KPIs Powering up Sabah Energy Malaysia takes a look at The Sabah Electricity Supply Industry how the Energy Commission (SESI) has been facing various has achieved its targets during challenges. We took a look at SAIDI RP1 towards becoming a 100 Lab and its mission to improve more efficient regulatory body. Sabah’s electricity supply industry. 06 Out With the Old, 37 In With the New Energy Malaysia delves into what the future may hold for the energy industry with the implementation of Regulatory Period 2 (RP2) while highlighting the achievements in Regulatory Period 1 (RP1). Contents v1.indd 2 11 /7/18 11:02 AM Editorial Board Advisors Ir Azhar Omar 24 Abdul Razib Dawood Members Asma Aini Mohd Nadzri Ir Abdul Rahim Ibrahim Mohd Elmi Anas Ir Roslee Esman Ir Md Zakuan Ibrahim Editorial Committee Siti Suhaila Ahmad Zairulliati Mali Sueharti Mokhtar VIEWS POWER PRACTICE Syarizman Mansor 28 35 Mohd Shafiz Amzary Abd Rahim Strengthening Processes Paving the Future of and Operations the Energy Industry © All rights reserved. Reproduction of all The newly appointed Chief Operating Now that you know what energy or any part of this publication via electronic, Officer (COO), Abdul Razib Dawood economists are, the next question mechanical, recording or other medium is gives his take on the transition to ask would be how to be one. strictly prohibited without written consent from the Energy Commission. happening within the energy industry Energy Malaysia features Bachelor of and his plans for leading the operations Economics (Energy) (Hons.) offered in ST Publication No: ST(P)10/04/2017 aspects of the Energy Commission. UNITEN, the course that shapes your future to become an energy economist. POWER PATHS Conceptualised, Produced 32 COUNTRY FOCUS and Published for Forecasting the 37 Energy Industry Views from the West SURUHANJAYA TENAGA Energy economists have always been A case study on a few countries in (ENERGY COMMISSION) the underdog in the energy industry. This Europe and how they have implemented by time, we shine a spotlight on energy the Incentive-Based Regulation (IBR) economists to further understand the mechanism in their own tariff systems. The IBR Asia Group Sdn. Bhd. role they play in the energy industry. (356247-V) ANALYSIS 10-3A, Jalan PJU8/3, 40 Damansara Perdana, An In Depth View of RP1 47820 Petaling Jaya, An analysis on how the energy Selangor Darul Ehsan, Malaysia. sector fared during RP1. Tel: +603-7729 4886 Fax: +603-7729 4887 Website: www.ibrasiagroup.com ON-SITE Printed by 43 Percetakan Skyline Sdn. Bhd. Highlights of events, forums, seminars, (135134-V) conferences and exhibitions organised 35 & 37, Jalan 12/32B, or attended by the Energy Commission. Jalan Kepong, 52100 Kuala Lumpur, Malaysia. Contents v1.indd 3 11 /7/18 11:04 AM Chairman’s Message Kick Starting Regulatory Period 2 The Malaysian energy industry is in transition, and this The shift from RP1 to RP2 is a period of transition, and is best seen in the implementation of the Incentive- incidentally, the Energy Commission is also transitioning, Based Regulation (IBR) mechanism as a means of from being a regulator to being an advocator and improving the performance and service quality in educator for the energy industry. But some things will electricity and gas supply and ensuring more efficient not change. We will still be committed to balancing the energy pricing. With the foundations for electricity IBR needs of different stakeholders, namely the government, having been successfully set in Regulatory Period 1 energy industry and consumers. We ensure a safe, (RP1), which ran from 2015 to 2017, we have since secure and reliable electricity supply at affordable embarked on Regulatory Period 2 (RP2) where we prices, safeguarding public interest and nurturing will further enhance the IBR mechanism and improve economic development and competitive markets in an efficiency, clarity and consumer awareness. environmentally sustainable fashion. On a personal note, I am humbled and honoured to have The Commission also strives to be transparent in been named the Chairman as we embark on RP2, as determining electricity price and ensuring that electricity I was the CEO of the Energy Commission when we price is fair and affordable through the establishment of embarked on RP1 back in 2015. Of course, my role has a cost-reflective tariff. We have also carried out several changed, and instead of leading the execution of policy, initiatives to create awareness and an understanding of I look forward to working with our current CEO Ir Azhar how the mechanism works and how tariffs are calculated to Omar and his team, and offering my support and guidance. further educate the public at large. Definitely, the groundwork laid out by my predecessor The Energy Commission welcomes all to work with Dato’ Abdul Razak Abdul Majid has ensured that we us towards achieving a world-class energy sector go into this period in a strong position, so on behalf of performance for the nation. everyone at the Energy Commission, we extend our sincere thanks to Dato’ Abdul Razak for his excellent Datuk Ir Ahmad Fauzi Hasan leadership and service. Energy Commission, Malaysia 2 EM15 Chairman's Message.indd 2 10 /7/18 8:27 PM Energy Matters hina State Grid Corporation is generation onto the Internet to looking to advance its plans for facilitate data tracking on web-enabled Internet of C an “Internet of Energy” by looking devices. The corporation is proposing into block chain technology. The energy a decentralised system that can pass giant has detailed its exploration of newly generated data through a hash Energy to a blockchain-powered system that it function and store the results on a claims can store and track information on tamper-proof blockchain. In addition, Conquer China’s consumer’s power consumption and share Bank of China, one of the four the data in a decentralised manner. state-owned commercial banks, has also moved to patent a solution that Electrical Grid The idea behind the utility’s Internet of it claims has the ability to solve the Energy is to integrate more information scaling issues that confront about electricity consumption and blockchains. – Coindesk Malaysia Beats Singapore, UK in the Race of Electricity Reliability ccording to World Bank’s Doing Japan and the United Kingdom, The ranking was achieved Business Report 2018, Malaysia demonstrating the reliability of the through close cooperation A has made it into the top 10 for country’s electrical supply. In the between the nation’s largest Getting Electricity. report, it states that it takes 31 days electricity utility supplier, Tenaga to get connected to the electrical Nasional Bhd (TNB) and the The nation is ranked eighth out of 190 grid in Malaysia, compared to 78 Energy Commission. – New countries, besting even Singapore, days across high-income economies. Straits Times 3 Energy Matter v4.indd 3 12 /7/18 6:10 PM Source: AFP / JOE RAEDLE Solar Power for New Homes alifornia has decided to take a giant “I’m really happy to get this to the finish line. leap by making a requirement that C all new homes must have solar One big step for mankind.” power. The initiative will take two years to be fully implemented, but it gained entry – Andrew McAllister, into the mainstream like never before. California Energy Commission. Though there were concerns that it might add thousands of dollars to the cost of home, state officials and clean-energy advocates say that the extra cost would or have made commitments to 100 Next year, a new rate structure will be be compensated in a form of lower energy per cent clean energy through various introduced whereby customers will be bills. That prospect has won over even the sources. California law requires at least charged based on the time of day they use construction industry, which has embraced 50 per cent of the state’s electricity to electricity. Therefore, homeowners with solar capability as a selling point. come from non carbon-producing sources energy-efficiency features, especially a by 2030. Solar power has increasingly battery, which would allow the storage of Several Californian cities require that become a driver in the growth of the energy when it is most efficiently used, could some new buildings include solar power, state’s alternative energy production.