SURVIVAL – the Future of Our National Electricity Industry
Total Page:16
File Type:pdf, Size:1020Kb
(AWER) Malaysia Research Energy and Water of Association of 2011 © Published by: Association of Water and Ener Copyright Passion . Resourceful . Professional . Sustainable . Continuous Improvement gy Research Malaysia (AWER) SURVIVAL – the future of our national electricity industry CONTENT (AWER) Part Item PageMalaysia 1 Background Information 2 2 Electricity Industry In Malaysia 8 3 Sustainable Electricity Industry with Equitable Tariff 12 4 CASE STUDY 1: Power Purchase Agreement (PPA)Research 18 Renegotiation 5 CASE STUDY 2: Sarawak To Be Regulated under 22 Energy Energy Commission CASE STUDY 3: Liberalisation of Electricity industry 23 6 and – Is It A Holistic Solution for Malaysia? 7 The Way Forward 26 Water This report is published by Persatuanof Penyelidikan Air dan Tenaga Malaysia (AWER). This report is copyright of AWER. Persatuan Penyelidikan Air dan Tenaga Malaysia (AWER) Email: [email protected] Website: www.awer.org.my Copyright © 2011 by Persatuan Penyelidikan Air dan Tenaga Malaysia (AWER). Association All rights reserved.of No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without prior written permission of the publisher. 2011 ISBN 978 -967-10394-1-0 © 1 | Page Copyright SURVIVAL – the future of our national electricity industry Part 1: (AWER) Background Information 1.1 Electricity Industry Model Malaysia The electricity industry works in a simple model of converting energy resources into electricity. The structure, operation and financial implications form a NATURAL MONOPOLY in the electricity market all over the world. Diagram 1 shows the simple flow of electricity industry model in Malaysia. Research Diagram 1: Electricity Industry Model in Malaysia Energy and Water of Energy resources are converted into electricity (a form of energy) and connected through a grid system. This grid system is known as transmission and eventually the electricity will reach to end users via a distribution system. The energy resource conversion into electricity and its usage is a linear process. This means that energy resources are converted and eventually will be used up. Such situation makes Malaysia in need of an efficient, effective, equitable and secured electricity model to functionAssociation as well as enabling sustainable development to achieve Vision 2020. of While the regulator, policy maker and industry are geared towards reforms, Association of Water and Energy Research Malaysia (AWER) would like to analyse the situation to assist in betterme2011 nt and enhancement of the reforms to protect the nation, the people as well as© meeting the growing demand of electricity. 2 | Page Copyright SURVIVAL – the future of our national electricity industry 1.2 Benchmarking Malaysia’s Electricity Industry (AWER) The electricity industry in Peninsular Malaysia and Sabah is regulated under the Energy Commission. On the other hand, electricity industry in Sarawak is being regulated under the state government. Now the utility companies will be benchmarked based on statistics obtained from official reports. Note: [Peninsular (Tenaga Nasional Berhad - TNB), Sarawak (Sarawak Energy Berhad - SEB)Malaysia and Sabah (Sabah Electricity Sdn Bhd - SESB) where necessary]. 1.2.1 Comparison of Malaysia’s Market and Foreign Market According to BP 2030 Energy Outlook, world primary energy use is projected to grow by an annual average of 1.7% from year 2010 to year 2030. InResearch Malaysia, based on statistics provided in National Energy Balance 2008, Malaysia records an annual average primary energy use increase by 6.1% between year 2000 and 2008. This figure is close to average GDP increase in the same period which is 6.0%. The energy demand increase is not only closely linked to GDP but also to population increase. This only proves that Malaysia’s energy demand will be increasingEnergy above projected world average primary energy usage. While meeting our own demands, we need to ensure that electricity industry would be able to cater andequitable tariff to ensure continuous growth of economy. Table 1: Comparison of Economic and Energy Indicators in selected Countries for Year 2009 Country Income GDP Water Population GNI per Energy status* (USD) capita use** of (USD) Australia HI 924,843,128,521 21,874,900 43,770 5996 Canada HI 1,336,067,710,612 33,739,900 41,980 7411 France HI 2,649,390,172,579 62,616,488 42,620 4041 Germany HI 3,330,031,687,465 81,879,976 42,450 3894 Indonesia LMI 540,273,507,315 229,964,723 2,050 874 (2008) Malaysia UMI 193,092,897,727 27,467,837 7,350 2693 (2008) Singapore HI Association182,231,748,149 4,987,600 37,220 3828 (2008) South Korea HI 832,511,649,033 48,747,000 19,830 4693 Thailand LMIof 263,772,103,261 67,764,033 3,760 1591 (2008) United HI 2,174,529,808,278 61,838,154 41,370 3195 Kingdom United States2011 HI 14,119,000,000,000 307,007,000 46,360 7075 (Source: Compiled from World Bank) USD: US ©Dollar; GDP: Gross Domestic Product; GNI: Gross National Income (Atlas Method) (*HI: High income, UMI: Upper middle income, LMI: Lower middle income) (**unit: kg of oil equivalent per capita) 3 | Page Copyright SURVIVAL – the future of our national electricity industry Table 1 outlines the economic and energy indicators of selected countries for year 2009. (AWER) The countries with high income status are having higher energy use per capita compared to countries with lower middle income and upper middle income status. This is parallel with the increase in economic growth and productivity within these countries. Furthermore, all the countries above have different market structures for electricity market that caters the needs of people, businesses and political arrangements. Malaysia In order for Malaysia to achieve a developed and high income nation status, the energy use per capita will definitely increase. Therefore, Malaysia’s electricity industry needs a holistic planning. 1.2.2 System Average Interruption Duration Index (SAIDI) Research SAIDI is commonly used as a reliability indicator by electricity utilities for the distribution system. SAIDI is the average outage duration for each customer served. It is calculated as: SAIDI = sum of all customer interruption durationsEnergy total number of customer served Table 2 (page 5) shows the SAIDI performance andof selected utilities around the world. AWER has converted the SAIDI into a comparison index to highlight Malaysian utility companys’ performance. If the index is more than 1, it means the particular Malaysian utility company performs better; and if it is less than 1 (shaded area), it means the particular Malaysian utility company’s performanceWater is lower. AWER has also included the new ofrecord for SAIDI in Sabah for year 2010. After massive improvement works done in Sabah, the SAIDI was recorded at 687.39 minute/customer/year. Overall, TNB’s SAIDI performance is better than both SEB and SESB. In addition to that, TNB has also performed a good SAIDI benchmarked internationally. Therefore, it is advisable for both SEB and SESB to further improve their SAIDI performance. At this point, KeTTHA and Energy Commission play a vital role to assist both companies to achieve the goal. Association of 2011 © 4 | Page Copyright SURVIVAL – the future of our national electricity industry Table 2: Comparison Index of SAIDI for TNB, SEB and SESB compared international utilities (AWER) Utility company / Country* SAIDI* Comparative index= (minute per SAIDI of the selected utility . customer per year) SAIDI of TNB or SEB or SESB TNB SEB SESB SESB (2010) Aurora, New Zealand (2009) 183 2.77 0.85 Malaysia0.06 0.27 Orion, New Zealand (2009) 62 0.94 0.29 0.02 0.09 TNB Distribution (2009) 66 - 0.31 0.02 0.10 SESB (2009) 2867 43.44 13.27 - 4.17 (687.39 – 2010) SEB (2009) 216 3.27 - 0.08 0.31 Research Singapore (2009) 0.69 0.01 0.003 0.0002 0.001 TEPCO, Japan (2008) 3 0.05 0.01 0.001 0.004 United Kingdom (2008) 68 1.03 0.31 0.02 0.10 Citipower , Australia (2008) 26 0.39 0.12 0.01 0.04 Metropolitan Electric Authority, 50.65 Energy0.77 0.23 0.02 0.07 Thailand (2008) Victoria (2008) 197 and 2.98 0.91 0.07 0.29 Powercor, Australia (2008) 142.6 2.16 0.66 0.05 0.21 South Australia (2008) 150 2.27 0.69 0.05 0.22 New South Wales (2008) 180 2.73 0.83 0.06 0.26 Tasmania (2008) Water304 4.61 1.41 0.11 0.44 United States (2008) 86 1.30 0.40 0.03 0.13 Western Power, Australia (2009) of 221 3.35 1.02 0.08 0.32 Energex, Australia (2009) 322.3 4.88 1.49 0.11 0.47 Pacific Corp, California (2009) 330.52 5.01 1.53 0.12 0.48 (228.25 if major (3.46) (1.06) (0.08) (0.33) incident excluded) (*Source: Electricity Supply Industry In Malaysia – Performance and Statistical information 2009, Energy Commission) Association of 2011 © 5 | Page Copyright SURVIVAL – the future of our national electricity industry 1.2.3 Average Selling Price of Electricity (AWER) Table 3: Average selling price of Electricity in Malaysia and selected countries in Asia Utility / country Domestic Commercial Industry Public Agriculture Overall (sen/kWh) (sen/kWh) (sen/kWh) lighting (sen/kWh) (sen/kWh) (sen/kWh) PLN, Indonesia 19.84 28.40 21.43 22.08 N/A 22.18 Malaysia Kepco, South Korea 34.83 31.16 23.34 23.92 12.67 26.37 SESB 22.64 28.50 24.46 30.06 N/A 25.54 SEB 31.17 32.12 23.70 47.08 N/A 28.90 Taipower, Taiwan 30.67 36.45 26.46 12.79 N/A 29.24 TNB 27.69 37.72 28.82 20.56 37.06 31.54 Egat, Thailand 34.58 41.88 31.08 N/AResearch N/A 32.58 CLP, Hong Kong N/A N/A N/A N/A N/A 40.47 Meralco, Philippines 65.60 57.93 46.47 N/A N/A 57.24 Tepco, Japan 85.60 59.60 59.60 N/A N/A 68.24 (Source: Electricity Supply Industry In Malaysia – PerformanceEnergy and Statistical information 2009, Energy Commission) [N/A: Not Available] Table 3 outlines the electricity tariff comparison forand different category of users based on selected utilities in Asia.