y MYR 8.00 Volume 17 Volume MYR 8.00 www.st.gov.m Volume 17 | 2018 17 | 2018 Volume A look at how competitive bidding process for large-scale solar and combine cycle energy security. plants strengthen ’s Only the best Only

Able

Towards a World-Class Energy Sector Energy World-Class a Towards

both globally and in Malaysia. A study on its potential and challenges eneRgy OutlOOk A Renew

The Future of the Energy Sector Exciting and Electrifying

Energy Malaysia Volume 17 KDN: PP 18540/08/2014(033966) www.st.gov.my

33

editorial Board

Advisor Ir Azhar Omar 32 Abdul Razib Dawood Members Ir Abdul Rahim Ibrahim Asma Aini Mohd Nadzri Mohd Elmi Anas Contents Ir Roslee Esman Ir Md Zakuan Ibrahim Shahrilnazim Shaari Marlinda Mohd Rosli Kamarul Ariffin Ibrahim

Editorial Committee Siti Suhaila Ahmad 24 Zairulliati Mali Sueharti Mokhtar 02 FeAture 20 AnAlysis AnAlysis Noor Hazwani Mohd Ghazali Chairman’s Message 10 How Clean Energy Affects 28 36 Syarizman Mansor The Stakeholders Speak Energy Supply Maintaining Gas The Future is… Mohd Shafiz Amzary Abd Rahim Energy Malaysia speaks to various The strategies by which renewable energy Installation Safety Renewable Energy 04 stakeholders from the industry to get could be used and the hurdles in its Energy Malaysia takes an in-depth Focusing on long-term economic and © All rights reserved. Reproduction of all Energy Matters their feedback on how to move the utilisation are examined by Energy Malaysia. look at Approval To Install (ATI) and environmental objectives, this feature or any part of this publication via electronic, mechanical, recording or other medium is The latest news and updates on Malaysian energy sector forward. Approval To Operate (ATO), the steps delves into how the transition towards industry developments, government strictly prohibited without written consent taken before approval is granted and renewable energy can impact from the Energy Commission. initiatives and innovations in the Power PAth innoVAtion the vital statistics regarding both future development. Malaysian energy sector. 24 types of approvals. ST Publication No: ST(P)01/01/2019 14 Expanding the Gas Floating into New Horizons Supply Network Views Certain natural gas sources are Abdul Hafiz Fikri Abdul Latif, a Project FeAture 42 Conceptualised, Produced CoVer story unreachable via conventional methods. Engineer with Gas Malaysia Berhad, 30 Looking Forward and Published for Energy Malaysia analyses how tells Energy Malaysia about his profession. Strengthening Supply To Reforms Floating LNGs could solve this issue. Energy Malaysia sheds some light Ir Bernard Sagaiyaraj, SURUHANJAYA TENAGA (ENERGY COMMISSION) on the bidding process in the energy General Manager of Bureau Power PrACtiCe Veritas’ Building and FeAture sector, as and how competitive bidding by 27 Infrastructure Division and a 17 strengthens the sector. Launderettes Mandated to Registered Electrical Energy The IBR Asia Group Sdn. Bhd. Empowering Operate at Optimum Manager (REEM) shares (356247-V) the Energy Commission Safety Standard Country FoCus his views on the changes to Unit No. 23A-8, Oval Damansara, Energy Malaysia looks at how the This seminar hosted by the Energy 33 Malaysia’s energy industry. No. 685 Jalan Damansara, Energy Commission is shaping up to Commission aims to increase Norway: Water at Work be a more effective regulator in the Taman Tun Dr. Ismail, launderette owners’ and its employees’ An in-depth look on Norway’s on-site 60000 , Malaysia. enforcement of codes, guidelines and understanding of safe gas practices. efficient use of natural power sources, 45 Tel: +603-7732 5886 regulations as well as safeguarding hydroelectricity and reveal of Norway’s Highlights of events, forums, Fax: +603-7731 5886 the interests of consumers. possible future as a country fully reliant seminars, conferences and Website: www.ibrasiagroup.com on just natural power sources. exhibitions organised or attended Printed by 06 by the Energy Commission. Percetakan Skyline Sdn. Bhd. Leading Malaysia’s (135134-V) Energy Change 35 & 37, Jalan 12/32B, The Minister of Energy, Science, Jalan Kepong, Technology, Environment and Climate L N G 52100 Kuala Lumpur, Malaysia. Change, Puan Yeo Bee Yin shares her thoughts and plans. 14 Chairman’s Message Gearing Towards a Sustainable Future

the country away from exhaustible energy sources. Investing in renewable energy facilities will go a long way in terms of both environmental and economic progression. ThankDatuk Badriyah AbdY Malek o u In the coming years, renewable energy The Energy Commission would like to thank Datuk Badriyah Abd Malek will play a pivotal role in elevating the supply globally and regionally. for her services as the Deputy Secretary-General (Energy & Green With gross power generation projected Technology), Ministry of Energy, Science, Technology, Environment and to almost double on a global scale, Climate Change (MESTECC). renewable energy sources such as hydropower, wind, solar, bio energy, and geothermal will make up a bulk of the supply by 2050.

Wind and solar power has been highlighted as important contributors of the future energy supply, which is why Malaysia needs to actively explore the high potential of solar energy. To explore this further, an analysis was ith transformative initiatives in place undertaken by us to identify high solar for the coming years, the energy growth areas and to determine the W sector is set to undergo major high renewable energy penetration changes and the Energy Commission is scenarios, their limitations and how at the forefront of expediting them. to overcome them.

We have new targets to achieve, new Each success is a stepping stone benchmarks to pass, new expectations to to greater triumphs, not only for the meet, but they all come down to our core industry but to the country and its roles – to regulate, to promote and to advise. people. While we are working to further As a unified front of stakeholders and our reach, changes do not happen C o n g r a t ul a t ion s industry players, we are working towards overnight. Our aim is to continually making our vision for the future of this improve the sector’s performance whilst industry, a reality. ensuring affordability and sustainability. Puan Noor Afifah Abdul Razak Deputy Secretary-General (Energy & Green Technology) While the electricity sector development As we look to the future, this issue of will be driven by the implementation of the Energy Malaysia focuses on the latest We would also like to welcome Puan Noor Afifah Abdul Razak as the new Malaysia Electricity Supply Industry (MESI) developments, potential solutions to 2.0 reforms with the assistance of MyPower hurdles, projected growth areas in the Deputy Secretary-General (Energy & Green Technology), Ministry of Energy, 2.0, the renewable energy supply will also be industry, and other significant ways we Science, Technology, Environment and Climate Change (MESTECC). enhanced for long-term sustainability. can make major strides in achieving long-term targets. To transition smoothly and to meet future demands of the industry, renewable energy Datuk Ir Ahmad Fauzi Hasan will be a game changer in terms of leading Energy Commission, Malaysia

2 Energy Matters

Malaysia Focuses on Government to Reactivate MyPower Renewable Energy alaysia’s Ministry of Energy, According to MIDF Research, n its drive to reform Malaysia’s Science, Technology, “This suggests in the near future, electricity industry, the government is M Environment and Climate sector opportunities could tilt heavily I reactivating the Malaysia Programme Change (MESTECC) is dedicated to towards RE project awards and a Enhanced Office for Power Electricity Reform revving up the country’s renewable dearth of future fossil fuel plants.” (MyPower) Corp agency. This was energy (RE) capacity, and this is announced by the Minister of Energy, expected to lead to a surge in RE It should be noted that Malaysia has Electricity Grid Science, Technology, Environment deals in the future. This was reported been moving towards RE Since 2015, and Climate Change Puan Yeo Bee by MIDF Research after attending as can be seen by the commissioning for Yin during a press conference at the MESTECC Minister Puan Yeo Bee of a number of Large Scale Solar (LSS) Conference of Electric Power Supply Yin’s first town hall session in July. projects. MIDF Research however Industry (CEPSI) 2018 at the KL opined that, despite the Minister flying abah’s electricity grid is set Convention Centre in September. During the session, Puan Yeo pointed the flag for RE, the more likely scenario to be enhanced, with the cost out that Malaysia’s reserve capacity of is for RE to complement rather than S being footed by the Federal As revealed by the Minister, MyPower 30 percent gives it enough of a buffer replace fossil fuels as Malaysia’s main government. This was announced Corp is to help implement the reforms to build up its RE capacity, without energy source. by the Minister of Energy, Science, set out in the Malaysia Electricity having to build more power plants. – Retail News Asia Technology, Environment and Supply Industry (MESI 2.0 initiatives, Climate Change Puan Yeo Bee Yin, and will be active for a total of 36 who also noted that the upgrade months. The agency will have a total of “Solar accounts for the bulk of Malaysia’s RE. However, will help increase the amount of 10 to 20 staff, each of them experts in there is the issue of getting RE sources to reach grid electricity supplied from then west the energy sector. parity for it to be cost competitive and gain a larger share coast of the State to its east coast. of generation mix without burdening end-consumers.” Puan Yeo further explained that In order to reinforce the grid, the goals of MESI 2.0 are three- – MIDF Research six projects have been earmarked fold – namely to boost efficiency so that distribution capacity will in the industry, to future-proof key be between 200 to 400 MW. processes, regulations and structure These include upgrading a 132 in the industry, and to empower Bangkok Banks on kV line from Segaliud to Damrod consumers by democratising and to 275 kV, installing two new decentralising the electricity supply Google Inks Finnish Wind Deal 132 kV transmission lines from industry. The Minister also expressed Blockchain Energy Segaliud to Seguntor and from hopes that the market structure will be Sandakan Elopura to Seguntor more transparent and efficient upon CT giant Google has signed a governments remove subsidies for the respectively, and building a new completion of the reforms. neighbourhood in Bangkok is The project is being carrie out in Bangkok’s 10-year deal to purchase RE wind industry, the number of new wind substation at Bukit Nenas. All in – New Straits Times adopting a revolutionary new Sukhumvit neighbourhood, and will I from three wind farms which power installations have dropped by all, the total cost of these projects A method of trading electricity encompass a mall, a school, a dental are being constructed in Finland. 25 percent to 4.5 GW during the first is expected to be RM840 million, among residents through a blockchain. hospital, and an apartment complex. Under The energy from these wind farms, half of 2018, compared with the same with end 2021 or early 2022 as “The government will act This project, which is one of the this scheme, each location generates which is expected to be 190 MW, period in 2017. the date of completion. as a driver, but the prime largest peer-to-peer renewable electricity from solar power for their own is to be used to power Google’s mover of this transformation energy platforms, has a capacity of use, before selling it to the others through data centre in the country. This is That being said, wind power in Europe In addition, Puan Yeo also 635 kW with commercial operations the blockchain trading system. Any excess part of a growing trend where large is now increasingly competitive highlighted the government’s effort is the local experts and commencing in September this year. will be sent to a storage system and then companies sign power purchase with conventional power in terms of to improvise the electricity supply professionals. Meetings sold to the grid. agreements (PPAs) to buy cheap pricing, while giving organisations the in Sabah such as considering and discussions will be According to David Martin, Managing renewable energy direct from opportunity to comply with corporate the requirements to execute Director of Australia-based Power Thai authorities have been encouraging generators. responsibility or sustainability policies. several other projects such as the held with stakeholders to Ledger – which is the technology communities to develop renewable This is reflected in a blog posting by Southern Link Project that costs assist the government in provider and partner of this project, energy projects, with the Bangkok According to the International Marc Oman, Google’s head of EU RM 1.25 billion. Besides that, implementing this.” “(The project) encourage more Metropolitan Electricity Authority Renewable Energy Agency, the energy, who wrote “In a growing number she also affirmed the objective of consumers to make the switch to predicting that “peer-to-peer energy total capacity of corporate PPAs of locations, the cost of new renewable lowering the SAIDI scale in Sabah – Puan Yeo Bee Yin, renewable energy, as the cost can be trading to become mainstream for power reached a record 5 GW in 2017, energy is competitive with the cost of by 58 percent to 100 minutes per Minister of Energy, Science, Technology, offset by selling excess energy generation in the long run.” with most of the source being wind power from the grid.” consumer, by the year 2020. Environment and Climate Change to neighbours.” – Thomson Reuters and solar. However, as European – Free Malaysia Today –

4 5 Cover Story

Ministry of Energy, Science, Technology, Environment and Climate Change Leading Malaysia’s Energy Change

he Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC) has a lot of ground to cover to keep up with the Government’s plans in increasing the T production of renewable energy, energy efficiency and market reforms.T he Minister of MESTECC, Puan Yeo Bee Yin is making the necessary plans to achieve its green targets. Energy Malaysia looks at the aspirations of the Ministry, particularly with regards to the energy sector.

“Green energy will be a new frontier for growth in Malaysia. The science and technology industry is an untapped market, which I believe can help the nation move up the value chain to come out of the middle- income trap.”

–Puan Yeo Bee Yin, Minister of Energy, Science, Technology, Environmentand Climate Change

An Upgrade in Ministry concern as it is the backbone of as Minister. “If you want your policies economic development. to last beyond your tenure, then a MESTECC was formed by combining Minister needs to build an ecosystem” parts of the former Ministry of Energy, The reasoning behind the amalgamation she explains. To do so, MESTECC will Green Technology and Water and of the former Ministries is to create focus on obtaining the right people, the Ministry of Natural Resources better communication between the and come up a framework that ensures and Environment with the Ministry of various agencies, which all follow the the continuation of policies and Science, Technology and Innovation. same framework instead of multiple processes. With this, MESTECC hopes This, Puan Yeo Bee Yin revealed, plans being produced by multiple to develop Malaysia into a key player in has led Prime Minister Tun Dr Mahathir ministries. This allows for the quicker the ASEAN green energy industry. to joke that the Ministry should be execution of green strategies. called “The Ministry of Many Functions”. Moving Towards Through MESTECC, Puan Yeo is hoping Renewable Energy While some may worry that the inclusion to create a regulatory framework of energy with so many different within the energy industry with a With climate change increasing the portfolios may lead to less focus being built-in ‘ecosystem’. She describes the frequency of extreme weather events, placed on it, the Minister has stressed ecosystem as a cycle that will continue Malaysia needs to move towards a that energy will continue to be a primary to sustain itself even after her departure low-carbon future. Around 56 percent

6 7 Cover Story

“It’s a definition that if it’s not renewable, it’s going to run out at some point. And we will have the choice of the collapse of civilisation— and into the Dark Ages we go—or we find something renewable.”

- Elon Musk, CEO of Tesla

of the Malaysia’s current energy nature of renewable energy disrupts industry is an untapped market, MESTECC will also focus on be an overall renewable energy, At the Conference of the Electrical demand is currently being supplied by the flow of energy use. which Puan Yeo believes can help reforming and restructuring the energy efficiency and power sector Power Supply Industry (CEPSI) oil products, and the use of fossil fuels the nation move up the value chain renewable market for more efficiency. reform. She aspires for all aspects 2018, Puan Yeo also announced is detrimental to solving the global To overcome this problem, MESTECC to come out of the middle-income One way they will do this is by opening to be in synergy within MESTECC, that MESTECC will be reactivating climate change problem. will be looking into ways to increase trap. The goal of MESTECC is to up the market to foster competition and revealed that the Ministry will the special purpose agency, MyPower, energy storage efficiency. Puan Yeo transform Malaysia into a modern thus consequently driving costs down, be working closely with Members of as part of Malaysian Energy Supply As such, the government plans describes this as “The Holy Grail” of and progressive nation with a strong while also placing more emphasis Parliament at the constituency level Industry (MESI) 2.0. MyPower, to increase Malaysia’s renewable the renewable problem. This is why emphasis on science and technology. on energy efficiency and renewable rather than just with Ministers alone. which stands for Malaysia Programme energy usage. Although renewable researchers globally are looking into Puan Yeo explains that the way to energy. Another way MESTECC Office for Power Electricity Reform, energy production in Malaysia has not energy storage technology. Following do this is by refocusing the R&D plans on increasing market efficiency Another aspect that MESTECC will will design and drive the implementation yet reached grid parity, Puan Yeo is suit, the Ministry will channel R&D and entrepreneurship funds. is through reducing government definitely be reviewing is the existing of energy reform over the next hopeful that we are on the right track, funds to find the technology required intervention. Puan Yeo reiterates Incentive-Based Regulation (IBR) and three years. stating, “I think it’s achievable by 2025, to solve the storage issue. R&D funds should be used on that the role of government is not to Imbalance-Cost Pass Through (ICPT) definitely by 2030”. The reason for her research correlated or driven by intervene, but to empower its players. mechanism, which Puan Yeo has been MESI 2.0 has been established to confidence is that MESTECC has been Creating Wealth with Green Energy the green energy market, while Finally, MESTECC believes that critical of in a speech to Parliament. achieve three goals: to increase industry having many discussions on how to the entrepreneurship fund should increasing government transparency The main criticisms she has for the efficiency, to future-proof the industry prepare Malaysia’s electrical grid for Although MESTECC is highly centre on bringing the technology while adopting cost efficient and existing system is its lack of clarity and structure, regulations and key process, renewables and what policies should be dedicated to the decarbonisation into the real world to generate time-based tariffs will further increase efficiency. “How do you define regulated and to empower consumers, democratise implemented that will help take us to of Malaysia, they will not sacrifice interests while creating more jobs. market efficiency. profit versus non-regulated profit? and decentralise the electricity supply the 20 percent target. economic growth for it. As such, “The whole science and technology How would you define ICPT baseline? industry. Puan Yeo is confident that Puan Yeo stresses that the focus will change to be measured by Reforms of Energy Plans How would you calculate them? this transformation programme, One major challenge faced by the renewable energy target should what causes the most impact to the How do you charge of press through which includes future generation, renewable energy industry is the not have precedence over energy economy” the Minister emphasises. At a town hall meeting held for the to the consumers?” These are some of green energy and energy efficiency, will intermittency problem in energy affordability. It is important to make Therefore, to achieve the renewable renewable energy industry, Puan Yeo the issues she brought up which the enhance the consumers’ experience as production, particularly solar energy. the market more efficient so Malaysia energy target, MESTECC will rely mentioned that there will however Ministry needs to review and reform. well as propel the country forward. Puan Yeo explains that there is a can continue to deliver affordable strongly on the technology that will leading international solar panel electricity, even to those at the come into play the next few years, manufacturer based in , bottom of the economic curve. and Puan Yeo is confident that there is which unfortunately does not really enough talent in Malaysia to help the sell their panels nationally due At the same time, the Minister government through this. “MESTECC From the amalgamation of various agencies, MESTECC hopes to build Malaysia’s energy sector to Malaysia’s limitations. This is believes that Malaysia has the will be here to empower our experts into a cleaner and more sustainable industry. They will focus on channelling their funds into the because in Malaysia, we only receive potential to drive a successful green to change the industry” she proudly science and technology required to overcome Malaysia’s limitations in harnessing renewable approximately four hours of direct economy. “Green energy will be a states. Once a market has already sunlight as a lot of our rays are new frontier for growth in Malaysia” been established, further innovation energy, while at the same time restructuring the market to increase competition with goals to reflected back. The discontinuous she says. The science and technology and investments will continue to follow. turn Malaysia into a green economic powerhouse.

8 9 Feature

“As in other countries, customers in Malaysia too, need to be empowered to manage their electricity Industry Players and the Public Voice Their Views on the Energy Sector bills via initiatives and schemes such as home energy report, time-of-use tariff, energy efficiency initiatives, demand side management and Net Energy Metering.”

– Datuk Seri Ir Azman Mohd, President and CEO of Berhad

Improving Transparency

In order to increase industry Under IBR, the base tariff is reviewed of coal, which is between US$91 per efficiency, MESTECC has identified every three years, while fluctuations in metric tonne (MT) and US$105 per several areas of focus. These include fuel and generation costs are factored MT, is much higher than the forecasted enhancing competition in the sector, in every six months under the ICPT price of US$75 per MT, which was used adopting a tariff that is more cost- mechanism. While TNB is responsible to calculate the base tariff. reflective and transparent. for the efficient operation and delivery of electricity, it is neutral on the costs This, he said, will impact the economy As the sole electricity utility in of generation due to market forces. and the rakyat. In order to mitigate the Peninsular Malaysia, Tenaga Nasional The TNB CEO also revealed that effects, Datuk Seri Ir Azman suggested Berhad (TNB) is set to be a key “any savings derived will be passed- that the utility, regulator (the Energy player in the realisation of these through as rebate and conversely any Commission) and the government work objectives. According to its additional costs will be passed-through together to come up with solutions. CEO Datuk Seri Ir Azman Mohd, as surcharge in consumers’ electricity bill.” These include surcharge exemption the groundwork for more transparent for low-income consumers, optimising and cost-reflective tariffs had already According to Datuk Seri Ir Azman, system costs by revising or deferring been laid out with the implementation “Malaysia has one of the lowest tariff power plant projects, managing the of Incentive Based Regulation (IBR) rates in the world, particularly for price of regulated gas to the power and Imbalance Cost Pass-Through residential consumers.” He warned, sector, and setting up a stabilisation (ICPT) mechanism in 2014. however, that the high market price fund mechanism.

he Malaysian energy industry is undergoing an exciting period of transformation spearheaded by the Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC) – led by its Minister Puan Yeo Bee Yin. This is encapsulated in T “Opening up Net Energy Metering is a very the planned reforms to the Malaysian Electricity Supply Industry (MESI) under the MESI 2.0 initiative, which has three key aims, which are to increase industry efficiency, future-proof the positive development which opens up new industry, and empower consumers. ways for players to innovate and compete in the industry.”

With these changes in the pipeline, Energy Malaysia speaks to various stakeholders from the – Datuk Mohamad Nor Ali, industry and consumers to get their feedback, hopes and aspirations for the energy sector. President of the Association of Independent Power Producers

10 11 Feature

and enlightened society ready to The Power Producers’ Views operating or under construction, embrace the use and growth of RE were chosen by the same “We are aware that Malaysia has got 5 fuel policies in a conducive environment. Another group that will be playing bidding process. The key to the and the fifth fuel is renewable. Somebody proposed a key role in helping to bring about successful implementation of these In synchronicity with increasing the the goals of MESI 2.0 are the power projects was that the commercial that there be a sixth fuel, which is energy efficiency. use of RE, Prof Dr Sulaiman also producers. Datuk Mohamad Nor Ali structure offered for these projects Where whatever energy you save is considered as urged for more focus and stronger – the President of the Association of were bankable. commitment be placed on increasing Independent Power Producers (IPP) – energy generated.” energy efficiency (EE) activities. lauded the government for changing On further reforms to the industry, According to him, this can be seen the NEM mechanism and allowing Datuk Mohamad Nor noted that a – Dr Sulaiman Shaari, as another form of fuel, as energy investors to work with factory/building number of structural changes had Vice President of Malaysian Photovoltaic Industry Association saved is energy generated. owners to install solar in their facilities already been implemented to ensure and have private arrangements to sell fairness and improve transparency. This can be coupled through the the electricity to them. These include the formation of the use of ESS in SG systems, which Single Buyer and the Grid System enable excess energy at a particular This, he said, will “open up new ways Operator, both of which are ring- location to be stored and used for players to innovate and compete fenced entities to ensure neutrality, Going further, he noted that the current confidence. Secondly, Datuk Seri towards the establishment of smart grid later or to be directly delivered in the industry” and also bring in as well as the introduction of the third tariff structure needs to be addressed Ir. Azman also stated that a successful (SG) systems, where individuals and and traded to a location where it is more investors into the sector, party access (TPA) system for gas. in order to avoid ‘price shock’ to some transition towards the new ‘end- users are able to generate electricity needed. This, Prof Dr Sulaiman said, who can take advantage of the lower Moving forward, he stated his belief consumers, and that the blanket subsidy state’ will require close and careful using PV technology for their own use or is crucial for taking RE, in particular, cost of solar technology. To further that the Single Buyer and GSO should needs to be replaced with a targeted collaboration among the different even perform energy trading within the solar PV power, to a different the goals of reducing CO2 emissions, become fully independent entities, approach, which identifies vulnerable entities involved. community. dimension. According to him, the the Association of IPPs President also which will improve confidence and consumer groups. technology to do so is already here, suggested that it can be achieved by help transition the industry to become Boosting Solar To further strengthen and proliferate however, the four key foundations increased utilisation of Combined Cycle more open and competitive. The TNB CEO also welcomed the aim the use of RE, Prof Dr Sulaiman must be appropriately addressed. Gas Turbine (CCGT) power plants in of empowering consumers and future Increasing the use of renewable energy identified four key foundations that place of coal, although he warned that proofing the industry, and noted that (RE) is one of the ways to future- must be in place. The first is to have Ultimately, for Prof Dr Sulaiman, costs may go up because of that. Although much has been initiatives such as time-of-use tariffs and proof the industry. Thus, MESTECC is a clear and strong set of cohesive the most important and highly done, there is much that digitalisation are important to bringing determined to increase RE capacity in and integrated policy to promote effective step that has to be taken He is also looking forward to the that about. As such, he revealed that the Peninsular Malaysia to 20 percent by the use of RE. The second is is to focus on creating awareness, improvement of the current New still needs to be worked on utility will be installing 1.5 million smart the year 2025. to have suitable mechanisms to providing education and advocating Enhanced Dispatch Arrangement by the Ministry to prepare meters across Melaka and the Klang initiate, support and facilitate the at all levels, including the public and where in its current form, lacks the country’s energy sector Valley, which will help consumers better This move has been welcomed by manifestation of the policy so that especially the youths. Therefore, sufficient participation. for the future. But with the manage their energy consumption and the Malaysian Photovoltaic Industry the industry may flourish. The third is he hopes that tireless awareness their bills. Association (MPIA), whose Vice to have a formula of acceptable and campaigns by the media are Another point Datuk Mohamad current resources at our President II, Prof Dr Sulaiman Shaari practical standards, guidelines and done continuously, whilst at the Nor touched on is the competitive disposal, it seems like it is Moving forward, Datuk Seri Ir Azman, is optimistic that this will increase the procedures, so that all parties are fairly same time, appropriate education tender process for the procurement very much an achievable expressed hopes that the Ministry take-up of solar photovoltaic (PV)- and efficiently taken care of, especially programmes are done, not just in of generation capacity; a practice task if all the bodies can will continue its initiative for greater friendly schemes, such as net energy to safeguard the safety and interests schools and universities, but also in that’s also commonly done liberalisation in the power sector, metering (NEM), self-consumption of the prosumers. Meanwhile, government and non-governmental overseas. He revealed that three come together towards a as competition improves market (SelCo) or energy storage system (ESS), the fourth is to create a conscious decision-making departments. fossil fuel power plants, currently united vision.

“As my husband and I are retired, we spend most of our “My family and I have always tried our best to be energy time at home, so we use electricity when our neighbours efficient to reduce our family’s electricity consumptions are at work. I’ve noticed that it doesn’t matter what time and save on the electricity bills. We wish to install solar we use, we still pay the same. Perhaps a staggered tariff panels at our home in going green, and look forward for system would really ease the burden for stay-at-home the Ministry to subsidise or incentivise domestic users guardians and retirees.” that are trying to go green.”

– Jennie Ng, – Noor Hisyam, Retiree Operations Executive

12 13 Innovation

Floating into FLOATING LIQUEFIED NATURAL GAS

L N G

New Horizons BY Many will enjoy NATURAL GAS 2050 CAN BE THERE WILL BE A BETTER COOLED TO A LIQUID STANDARD OF LIVING for easy shipment to energy-hungry town and cities 2 around the world BILLION INCREASING more people THE CURRENT ENERGY THE GAS LIQUEFYING PROCESS on earth DEMAND BY HAS ALWAYS HAPPENED 200% AT INLAND PLANTS

s one of the cleanest and safest of all energy sources, natural gas continues to be in high demand and remains as a vital component of the world’s energy supply. An estimated but now the world’s first A 60 percent of the world’s natural gas is trapped in unviable locations where conventional rigs and pipelines will not make do. This is where a floating LNG (FLNG) facility would play Floating Liquid Natural Gas Facility a significant role. will move the liquefying process out to sea, where the gas is extracted and transfer it directly to the ships that will transport it to customers Floating liquefied natural gas, also known as FLNG, is not a new idea. Ever since the 90s, FLNG has been seriously considered by the oil and gas industry as a viable option. However, only in the recent years have technological advances and economic drivers provided the opportunity for FLNG to become a commercial reality.

Source: Royal Dutch Shell

14 15 Innovation Feature

he face of the Malaysian energy market has changed in the last few years, with certain structural and systemic developments. This change has resulted in certain enforcement challenges, which the Energy Commission – as the regulator of the industry – has According to the International Comparatively, FLNG is better than the Our Own Malaysian Pride T Energy Agency, the global demand conventional LNG method, due to the to tackle. Energy Malaysia looks at the regulatory activities carried out by the Energy for natural gas could rise by more opportunity to leverage remote areas Back home, Malaysia’s very own Commission, and how its role can be strengthened. than half by 2040. Most of these for gas, increasing these areas’ financial PETRONAS has successfully gas resources are located in viability. This method also results in developed a FLNG project, PFLNG hard-to-reach areas, posing many less environmental damage due to less Satu, the world’s first floating LNG technical and economic challenges. piping and factories, leading to less of a facility. On 5 December 2016, carbon footprint. Due to the fact that the PETRONAS produced the first LNG How it Works FLNG functions off the land, it eliminates drop from the PFLNG Satu and The Legal Framework and the power to enter premises to the need for pipes connecting it to the delivering its first cargo a few access computer records. “Together Liquefied natural gas (LNG) is land, saving a lot of money that would months later. In order to support its regulatory with the implementation of licensee’s methane gas, chilled to -162°C to otherwise be used for the installation and activities, the Energy Commission obligations under sections 9A to 9D become a liquid. This liquid then procurement of needed material. The PFLNG Satu is rooted at has been entrusted with certain of the Electricity Supply Act on, among occupies about 1/600 the space about 180 kilometres offshore of enforcement powers. According to others, the requirements of licensing of methane in its gaseous form, Acknowledging the Difficulties Bintulu, and is producing Shahrilnazim Shaari, Director of Legal standards of a licensee’s performance, making it practical to transport. 1.2 million tonnes of LNG per annum. Services and Risk Management, service and proper annual accounts, The conventional approach to There are several technical challenges That amount of LNG can be used to this includes the ability to make codes, the Energy Commission expects producing LNG is to pipe the gas that relate to hull motion and its effect generate 100,000 kilowatt per guidelines and directions. improved legal compliance from the over hundreds of kilometres from on process and equipment. The FLNG day. With a design life of 20 years, industry,” Shahrilnazim emphasised. offshore to an onshore plant to facility typically must remain moored the PFLNG Satu can be redeployed Also, under the Electricity Supply Act be processed and liquefied. on location for at least 20 years to other fields as they deplete. This is 1990, it has the authority to obtain Beyond enforcement, which primarily The gas is then stored on site without returning to the port. It must one big reason PETRONAS opted for any information from any person includes curbing power theft, before being offloaded to a LNG be designed to operate in extreme FLNG, as it results in more value for the Energy Commission has been tanker to be taken to market. weather environments and the rough money and makes once unreachable given wider powers to carry-out seas. One of the key design challenges places a viable source of resources. further duties, such as administering FLNG describes a method for also includes the adaptability of the compliance inspections, and carrying developing offshore natural gas in equipment. The equipment will be larger, Other oil and gas companies out audits of performance and safety which the gas is extracted from the heavier and some of the units may have such as Shell and Japan’s INPEX management of electrical installations, wellhead to the floater. Then, the gas tall vertical columns, which calls for Corporation have also taken great electrical work and equipment. is processed on-board the floater modifications before FLNG installation. strides in delivering their first prior to the liquefaction. Only then, FLNG project. Both are targeting the gas is cooled down to shrink the Safety is a sensitive subject for FLNG gas from a connected reservoir gas volume by 600 times becoming because there is no precedent. A new in Australia’s remote Browse LNG. The LNG is then stored in set of safety considerations is introduced Basin, about 200 kilometres off a dual row membrane type cargo because of its complex design and its northwest coast. These FLNG containment system (CCS) before operation procedures. To further advance projects allow for access to gas offloading to LNG carriers. The LNG the development of FLNG, safety must be reserves in remote and stranded The Energy Commission ensures will then be offloaded to a carrier focused on to mitigate the risks of LNG fields which are otherwise that coal is imported at the most and taken directly to market. production and poor analysis. deemed economically unfeasible. EmpowEring reasonable price possible. The industry has risen to the technical challenges with risks have been mitigated, allowing the THE EnErgy first FLNG projects to be commissioned. Pushing the boundaries of technology and innovation, this technological marvel changed the landscape of LNG production not only in Malaysia but globally as well. Commission Becoming a world Class regulator

16 17 Feature

“In the Economic “The Energy Commission Regulation Department, has formulated short we are entrusted to and long term programs balance the needs and plans to bring about of the people for improvements to the affordable electricity energy supply sector.” tariffs with the development of – Shahrilnazim Shaari fuel prices.” Director of Legal Services and Risk Management – Marlinda Mohd Rosli Director of Economic Regulation

so that more energy can be While the Energy Commission is electricity bills. These include One of the functions of the Energy Addressing Supply Costs rationalisation exercise until the year extracted from coal, as well as very supportive of the push towards the Net Energy Metering (NEM) Commission as a regulatory body to date which has seen natural gas alternative ways of procuring coal RE, it is also aware that the cost of scheme, where consumers can is to ensure the continuity, reliability While the Energy Commission’s role subsidies gradually reducing and at the least cost. generating electricity through RE produce electricity via solar and quality of electricity and piped as a regulator encompasses gas prices reaching its market value. currently is marginally higher than panels for their own use and be gas supply at affordable cost to the economic, technical and safety Although there is the option to review It should be noted though that fossil fuels that need to be sourced able to sell the excess to the grid. consuming public— while monitoring aspects, is all boils down to one goal, the mechanism as an alternative to even though it is imported, at the optimum cost as well. Also, factory owners can also the financial viability and operational which is to protect the interest of the reduce the cost of supply, doing so currently coal is cheaper take advantage of the Enhanced responsibilities of the producers and consumers. According to Marlinda would affect the liberalisation of the than natural gas once actual Roping in the Demand Side Time of Use (EToU) system suppliers of energy. Mohd Rosli, the Director of Economic gas market in Malaysia, including market prices are taken into where using electricity during Regulation, this encompasses the Third Party Access (TPA) system. consideration. To illustrate, as of While the aforementioned non-peak hours will be charged at The Energy Commission is also reducing leakages and the cost of The liberalisation aims to increase late September 2018, the price strategies all involve the supply a lower rate than at peak hours. engaging in public outreach supply while increasing efficiency and competition in the Malaysian gas of coal was around RM19 per side, the Energy Commission initiatives to raise public awareness transparency in the system. market, thereby pushing down mmbtu while the price of natural realises that it has to take a multi- Moving forward, a number of of their rights and responsibilities in prices and increasing efficiency gas was RM25.70 per mmbtu. prong approach to the issue of possible plans are in the pipeline, respect of electricity supply. These The aim of doing so is to have an as various players vie for a piece reducing the burden on consumers such as the extension of ETOU include developments in smart affordable price of electricity, thus of the market share. Finding Alternative Sources by approaching it from the demand to domestic consumers. Perhaps metering technology and electrical easing the burden on the consumers. side as well. the most exciting potential safety management. As such, the Energy Commission holds While the liberalisation of the natural In the long run, being too however is the liberalisation of constant discussions with three major gas market will, in the long run, lead to dependent on coal is neither Already several measures have the electricity retail market, “The challenges arising from such a stakeholders, namely the Ministry competitive prices, gas accounts for good for energy security or for been introduced in Malaysia to where consumers can choose wide scope of regulatory duties are of Energy, Science, Technology, 40 percent of Peninsular Malaysia’s the environment. The government empower consumers to take a to purchase electricity from to be expected besides meeting the Environment and Climate Change energy mix, while 54 percent comes recognises this, which is why the more active role in controlling their different, competing retailers. interests of the stakeholders, energy (MESTECC), Tenaga Nasional Berhad from coal, which is imported mostly MESTECC Minister has decided industry and the public. The Energy (TNB) – the nation’s largest utility, from Indonesia and Australia. to focus on renewable energy Ultimately, the purpose of the Energy Commission’s Commission is constantly keeping and PETRONAS – the main provider (RE), with the aim of having RE regulatory initiatives is to future-proof the Malaysian energy abreast of the developments in the of natural gas in the country. In order to reduce the cost of coal, account for 20 percent of the industry and is giving serious attention the Energy Commission is in the nation’s energy mix by the sector, so that all stakeholders – especially the consumers to effectively exercising its functions,” Since 2010, the government has pipeline to introduce ways to optimise year 2025. – can benefit. Shahrilnazim said. decided to implement the gas price the efficiency of coal power plants,

18 19 Feature

As of now, approximately 56 percent In the 70s, Malaysia’s fuel consumption reflects the fuel mix concentration level in of Malaysia’s fuel mix is coal due to its consisted mainly of hydropower and oil. the power supply system. The lower the price advantage and its ability to provide When gas was discovered in the early HHI value, the more type of fuels are in How a balanced fuel mix in the system. 80s, gas became the third fuel source the fuel mix. Due to the fact that coal emits higher followed by coal which was brought in amounts of carbon dioxide compared the late 80s as the fourth fuel. Later Fuel resources are utilised to fulfil to natural gas and any other resources, in the early 2000s, renewable energy electricity demand. As such, electricity the government plans to reduce from was declared as the fifth fuel source. demand is another factor in considering fossil fuel dependence, especially “These are the policies. The evolution the fuel mix. In the case of Peninsular Clean coal,towards renewable energy, with a of these policies was made among Malaysia, the growth of peak demand goal to increase the installed capacity others to be in line with the historical, increases between two to three percent of renewables from three percent up social, economic and environmental annually, from 12,000MW in 2005 to to 20 percent by 2025. However, how considerations,” explains Abdul Rahim. 18,000MW in 2017, and the amount will incorporating more renewable of electricity generated was from energy in the fuel mix affect the Another important factor of fuel 80,000 GWh in 2005 to 121,800 GWh energy security of the supply? mix determination is to ensure the in 2017. Typically, the daily electricity continuity and security of fuel supply. demand pattern is higher during the Factoring in the Energy Mix In this regard, fuel sources should be day. Therefore, baseload power plants diversified and not be too dependent are required to run with the least cost affeCts To recognise the challenges in on a single type of fuel regardless of fuel whilst peaking power plants to increasing renewable energy supply, of the fact that it may be cheaper or support the demand during the day to it is important to understand the factors easily available. “If the energy supply operate with higher supply cost. Since that come into play when determining depends too much on one single approximately 70 percent of the total the fuel mix. The Energy Commission’s type of fuel source, the security of its electricity bill is from the fuel cost, the Senior Director of Industry Planning and supply is compromised,” explains Abdul affordability of the fuel plays another key Development, Ir. Abdul Rahim Ibrahim, Rahim. Malaysia implies the Herfindahl- factor in determining the fuel mix. So, it is energy explains that energy policy plays an Hirschman Index (HHI) principle of important to have a mix that can provide important role in determining the fuel not more than 0.5 in mixture value enough energy to satisfy the demand mix concentration for the country. (HHI < 0.5) for fuel mix. HHI value from the population at a lower cost option.

supply Percentage (%) of Generation Fuel Mix for Peninsular Malaysia (1992-2018) 100% Adding Renewables to the Energy Mix 90% 80%

alaysia utilises large amounts of coal in its fuel mix 70% to fulfil electricity demand. With goals to increase the 60% )

country’s use of renewable energy, it is time to review h W G

M ( 50% the mix. Energy Malaysia examines the challenges and n t i o

strategies in incorporating renewable energy into the fuel mix. r a e

n 40% G e

30%

20%

10%

0%

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Year

Coal Other RE Gas Hydro MFO Diesel

Source: Energy Commission

20 21 Feature

Abdul Rahim stresses that before the The Energy Commission is also government has embarked on percentage of renewable energy installed implementing strategies to tackle Large-Scale Solar procurement capacity reaches this stability concern energy efficiency from the demand and introduced more schemes to zone, it is worth incorporating renewable side by optimising electricity usage. promote renewable generation. energy into the fuel mix. It just needs to If electricity is used efficiently, then These include Net Energy Metering, be managed properly. To mitigate the its consumption is reduced and self-consumption and solar leasing. fluctuation and intermittency problem, subsequently the need for electricity Abdul Rahim says that according to the generation. The government has aforementioned study, it is recommended introduced the National Energy Malaysia is dedicated “Today, we are looking that the renewable energy supply to run Efficiency Action Plan (NEEAP), parallel with an additional 11 percent of which is designed to reduce electricity to incorporating more into more renewable its capacity, sourcing from a conventional consumption by eight percent or more renewable energy into its energy to put into the power plant. Therefore, if there is any by 2025 as compared to business as sudden reduction in capacity (due to usual (BAU). The saving also means a fuel mix. Various strategies supply system” weather conditions in the day), this reduction of about 2500 MW in terms will be implemented to 11 percent of additional power will be able of maximum demand. overcome any security and – Ir. Abdul Rahim Ibrahim, to compensate and stabilise the supply system. “Of course, technology is always Furthermore, to enhance more affordability challenges in Senior Director of Industry available to provide a solution” he adds. renewable energy capacity, the Planning and Development in future electricity supply. Energy Commission

As Malaysia is a leading producer of palm oil, biomass is a viable renewable energy source, especially in areas without grid connectivity.

Finally, the impact of power generation are constrained by resource availability from solar photovoltaic is very weather from fossil fuel to the environment is and are only suitable for small capacity. dependent,” explains Abdul Rahim when now given higher consideration. This However, Abdul Rahim explains that describing solar power potential. is where renewable energy comes into mini-hydro, biogas and biomass have play. Renewable energy, either through no significant constraints when connected To avoid power disturbance and to solar, biomass, biogas or mini-hydro to the grid since the resources generate maintain supply reliability, Energy are well known as green energy. electricity at a low capacity. Commissions together with the Single “Today, the government is looking for Buyer and Grid System Operator have more renewable energy to be put into On the other hand, solar energy potential hired a consultant to conduct a study the supply system,” he said. This is in Malaysia is abundant and is what on the impact of solar energy important because renewable energy Abdul Rahim describes as the largest penetration in the power system has a lower impact on atmospheric renewable energy potential available. of Peninsular Malaysia and Sabah. carbon dioxide. However, solar power has its limitations The study is geared to determine where it can only generate electricity the stability concern due to the The Renewable Challenge during the day. Its effectiveness only intermittency factor. It was discovered and Strategies lasts between four to five hours a day, that if solar photovoltaic energy granted that it is not raining. When large penetration is at 15 percent of the peak In terms of supply stability, capacity solar photovoltaic plants are demand, there will be no significant renewable energy has limited connected to the power supply system impact on the system operation. At 16 dependability. For instance, mini-hydro during dark and gloomy days, the energy percent, the peak load capacity during is environmentally friendly, but it is and capacity input drops and needs to be the daytime will be equivalent to the limited to water flow availability and compensated to stabilise the system. peak load capacity at night. At more located in certain places, mostly in This is recognised as the intermittency than 30 percent, the grid system may remote areas. Biogas and biomass factor, “So, the energy and capacity fall under the stability concern zone.

22 23 Power Path EXPANDINGthe s the sole distributor of natural gas in Peninsular Malaysia, Gas Malaysia Berhad is tasked with laying out the pipelines which transports the gas from their facilities to residential, A commercial and industrial customers. All in all, Gas Malaysia Berhad operates and GAS SUPPLY maintains a Natural Gas Distribution System (NGDS) network measuring more than 2,100 km. One person who is responsible for ensuring that the infrastructure is properly set up is Abdul Hafiz Fikri Abdul Latif, a Project Engineer, who tells Energy Malaysia more about the nature NETWORK of his profession. According to Abdul Hafiz Fikri, in order authorities in the area for approval. it within the allocated time. Another to be a project engineer, an individual Upon receiving the approval they would challenge faced in the limited number must possess a Bachelor’s Degree need to make sure that the pipes are of contractors in the field. in Engineering. While he himself has laid in correct alignment, which would a degree in Mechanical Engineering require the project engineer to provide Travelling is also part and parcel of from Steven’s Institute of Technology the drawing, to identify all the utilities the job in Gas Malaysia Berhad. in New Jersey, he stresses that a at the site. Even though the drawings Abdul Hafiz Fikri, for example, has specific engineering degree is not and procedures are done by the to cover and in required. In fact, a person with a civil contractors, it’s the duty of the the east coast, Kota Damansara and or chemical engineering degree could project engineer to review it. Subang Jaya in in the central also be hired for the position. Of course, area, and Batu Pahat and Kluang in “Project engineers a good grasp of Mathematics and They will then move on to procurement, and some parts of Melaka in Physics is necessary. which involves purchasing the the south. However, a project engineer have to think like a equipment such as parts for the pipes, is only required to be at the site 40 contractor, act like Three of the most crucial responsibilities valves and fittings, as well as hiring percent of the time, as a project a client”. a project engineer has to be mindful manpower for construction work. supervisor would also be at the project of project planning, managing the Once that’s done, construction work site to monitor the progress, which will contractors and sticking to a deadline. commences, which takes up the most then be reported to the project engineer. – Abdul Hafiz Fikri As a project engineer, Abdul Hafiz Fikri amount of time in a project. However, Gas Malaysia Berhad, is required to monitor the contractor’s the duration of the project really One of the biggest challenges Project Engineer work at the site and that the quality depends on the length of the pipe Abdul Hafiz Fikri faces is when specified is maintained without any laid. For example, a five-kilometre pipe contractors decide to cut corners as accidents or incidents. would take approximately six to seven their objective, aside from ensuring months to complete. that the project is completed on time, Three Stages of Site Creation is to maximise profits. Since sites are A Project Engineer’s Routine not supervised 24/7, this provides There are three stages a project the opportunity for them to take engineer has to go through when The life of a project engineer is no shortcuts. The only way to overcome first setting up a site, the first is the walk in the park; Abdul Hafiz Fikri this challenge is to anticipate the move engineering aspect, the second is is sometimes required to manage before it is made. Recalling some procurement and the third one is six projects at a time. This poses wise words his manager imparted construction. Once a project has been a challenge at times, as he needs to him, Abdul Hafiz Fikri said that awarded, the project engineer would to monitor these projects with project engineers have to “think be required to approach relevant limited resources and to complete like a contractor, act like a client”.

24 25 Power Path Power Practice

GAS MALAYSIA : NATURAL GAS DISTRIBUTION SYSTEM

Service Station INDUSTRIAL Left: Given the high utilisation Internal Piping of gas, creating a gas-safe M environment is an important > 140 kPag component of laundry operations. Service Station Inset: Fixed gas leakage detectors are placed where the gas is used. Internal Piping PENINSULAR The gas detection system shall GAS M automatically send a signal to shut < 140 kPag the automatic valve when sufficient UTILISATION Area Station Lower Explosion Limit (LEL) RESIDENTIAL is detected.

Low Pressure Line ODORISER DISTRICT STATION STATION M 300 mmH2O Regulating CITY Station COMMERCIAL GATE M Multiple STATION end user Internal Piping LAUNDERETTES M 300 mmH O 2 Mandated to Operate Service Commercial M M = Meter Station at Optimum Safety Standards

Internal Piping Single M Development/ as safety plays an important role in the business operations of a launderette. The regulatory 300 mmH2O Hospital/Hotel framework that governs gas piping installations at commercial launderettes provides a comprehensive and systematic approach to design, install, operate and maintain gas CUSTOMERS G SUPPLIER GAS MALAYSIA piping systems. (except low pressure line at public area and gas meter)

Source: Gas Malaysia Berhad The Energy Commission is responsible stipulated in the Gas Supply Act 1993 Empowerment, Licensing and Gas to regulate commercial Liquefied and Gas Supply Regulations 1997. Safety on 26th September 2018. As for the future of the industry, Abdul Hafiz Fikri states that the challenges he faces with Petroleum Gas (LPG) and natural The objectives of the seminar were gas piping systems throughout Laundry franchisees and operators to inform the participants about the the contractor will soon come to pass in hopes of them adopting a more ethical route and Peninsular Malaysia and Sabah. were invited by the Energy Commission legal requirements and installation to not cut corners but to maintain safety and quality. The public also needs to be educated This is made possible from the to Hotel Bangi-, Selangor to standards pertinent to launderettes and understand on the nature of the work and that when the gas pipes are laid it is done provisions related to piped gas supply participate in a seminar titled Legal gas piping installations. in a safe and secure manner. He also hopes for more pipeline contractors out there to come out and participate in Gas Malaysia Berhad’s infrastructure projects in order to meet During the seminar, the participants were informed of the correct procedures to obtain future gas demand. installation approvals such as Approval to Install (ATI), Approval to Operate (ATO) and license related to commercial LPG piping installations as well as industrial best practices that can be applied to their premises. The participants were also informed that only registered gas contractors and competent persons are allowed to design, install and maintain commercial gas piping system.

26 27 Analysis

Approval To Install (ATI) & Approval of the piping system. The requirement design calculations and drawings To Operate (ATO) for ATO is stipulated in Regulation to the Commission for review. Maintaining 16 of the GSR. The purpose of ATO A complete ATI application will be As stipulated in Regulation 15 of the is to ensure that the piping system is approved within 15 working days Gas Supply Regulations 1997 (GSR), installed and tested according to the and the ATI certificate can be the Approval to Install (ATI) is an approval approved standards as indicated during downloaded and printed by issued by the Commission to the owner ATI submission. the applicant. (through a registered gas contractor) of the gas piping system prior to the How To Apply For ATI & ATO? Similarly, the ATO can also be installation. The ATI was introduced in applied online through the OAS the GSR to ensure that only certified The ATI is applied online via a for a processing fee of RM 100. competent contractors and competent registered gas contractor through The applicant is required to submit persons by the Commission are allowed the Commission’s Online Application the ATO application form together to design and install the piping system System (OAS). In the OAS, the applicant with the Certificate of Completion according to relevant standards accepted who is the competent person hired for (B form), Test Certificate (C Form), by the Commission such as *MS 830 the project will declare details of the pictures of the installation as well and *MS 930. system to be installed such as the type as the as-built drawings of the piping of premises, the scope of work, the type system and other relevant documents Subsequently, after the installation has of gas used and the class of installation. specified in the OAS. A complete been completed and tested, a registered The applicant will then make an online ATO application will be approved gas contractor will then apply for an payment of RM 200 as a processing within 7 working days and the ATO gaS Approval to Operate (ATO) from the fee and submit the hardcopy of the certificate can be downloaded and inStallatiOn Safety Commission prior to the commissioning application form together with the printed by the applicant. explaining ati and atO Number of ATI Issued Number of ATO Issued

2016 2017 2016 2017

NG 236 315 191 287 NG

LPG 1007 1197 691 1162 LPG

TOTAL 1243 1512 882 1449 TOTAL

Both years showed a large difference between the amount of ATIs and Source: Energy Commission ATOs issued, signifying a general preference for LPG over NG. as installations and operations have always been a rigid, strictly monitored process. This is due to the vast amounts of potential accidents that could happen in the industry. The strict g application process is divided into plenty of carefully taken steps. Energy Malaysia takes Both the installation and operation of gas facilities are fraught with both hazards and an in-depth look at Approval To Install (ATI), Approval To Operate (ATO), the steps taken before opportunities. This means ATIs and ATOs must both be meted out with extreme care in approval is granted and the vital statistics regarding both types of approvals. order to ensure the safe operation and progress of the Malaysian gas industry.

28 29 Feature

Solar power has been in use in Connecting the Plant by submitting proposals based on Strengthening Malaysia for a number of years, the Request for Proposal (RFP) with individual home and business Of course, one of the most important documents issued by the Energy owners participating in scheme such things to consider is how the LSSPV Commission. as the Feed-in Tariff (FiT). However, plant will be connected to the grid, it was not until 2016 that power so that energy generated can be The bid preparation then takes producers got in on the action. sold to Tenaga Nasional Berhad approximately six months to prepare, Supply (TNB) or Sabah Electricity Sdn. where a Power System Study (PSS) In March that year, the Energy Bhd. (SESB) under a Solar Power will be conducted, Preliminary Commission announced the first round Purchase Agreement. According to Environmental Impact Assessment of bidding to build LSSPV plants, Mohd Rizal, the Energy Commission (EIA), conditional approval from Enhancing Energy Security through Competitive Bidding with the aim of having a total capacity has identified a number of injection relevant authorities, such as the of 250 MWac, with 200 MWac in points for the plants to connect Public Works Department (JKR) Peninsular Malaysia and 50 MWac in to the electricity network. Power and proof of financing support from s of January 2018, coal made up 54 percent of Malaysia’s energy mix with natural Sabah. However, such was the scale System Study will then determine financial institutions. gas accounting for 40 percent. However, with subsidy rationalisation and a weak of the response that the Commission whether or not a plant can be built ringgit pushing up the prices of gas and coal respectively, it is important to look at ended up approving a total of 19 there and as to how much the The Energy Commission then A projects with a combined generation particular injection point can receive conducts its evaluation which would ways to enhance the security of the nation’s energy supply. This can be done by placing capacity of around 450 MWac in energy generated by the plant. take four months. All bidders will increased focus on alternative sources and improving the way we utilise existing ones – January 2017. be screened by a working group strategies which are manifested through Large Scale Solar Photovoltaic (LSSPV) plants Incidentally, one of the main and evaluated by the Technical The fact that the tender was challenges facing the solar PV in Committee (TC) where the TC would and Combined Cycle Power Plants (CCPPs). oversubscribed is testament to the Malaysia is that of intermittency then make recommendations for the belief that power players in the country of sunlight. While Malaysia has Commission’s Board approval. have in the prospects of solar power. abundant sunlight for the most part, Additionally, as revealed by the Deputy it also has periods of overcast skies Once they are short-listed and Director of Systems Operations at the and monsoon rains, which limits the selected to enter, negotiations will Energy Commission, Mohd Rizal Ramli, amount of sunlight available, in turns be made to finalise the project the price of solar PV modules had gone impacting the amount of electricity documents, particularly the Solar down, which made LSSPV farms even generated by solar PV. From system Power Purchase Agreement. more viable investments. perspective, a sudden, large drop of Once these are finalised, they can outputs due to weather conditions proceed with the construction of This was reinforced in the second could result in significant power their facilities, which will take round of tenders, which took place imbalance, poses risk on reliability 12 to 18 months depending on in February 2017, in which the and quality of supply. the complexity of the work. Energy Commission set a target aggregate capacity of 460 MWac, The Bidding Process Competitive Bidding for with 360 MWac from Peninsular Conventional Power Malaysia and 100 MWac from Sabah. The high number of tenders made For this round, the Commission received for the two rounds of LSSPV bids With the Minister of Energy, Science, bids with a total generation capacity is also reflective of the success of Technology, Environment and Climate of 1,632 MWac, more than three times the competitive bidding process, Change YB Yeo Bee Yin planning for the target amount. A total of 41 bids which is implemented according clean energy to make up 20 percent with a combined capacity of around to the Electricity Supply Act 1994, of Malaysia’s energy generation by 562 MWac were later shortlisted. and related regulations, codes the year 2025, we can expect a and guidelines. continued focus on LSSPV. According to Mohd Rizal, the increased number of projects selected during the For Round 1bid, the process begins However, solar power and other second round is due to the reduction in with a prequalification exercise to alternative sources of energy are the maximum capacity. As he explained, identify the technical and financial just there to complement and not “We went down to 30 megawatts capabilities of potential developers replace existing ones such as coal maximum per project, that’s why we and the suitability of their proposed and gas. As Alwi Abdul Rahman, have more participants bidding this sites. Once pre-qualified, the bidders the Deputy Director of Conventional time around.” can participate in the next stage Capacity Procurement at the Energy

30 31 Country Focus

“Intermittency of sunlight is one of the biggest challenges for solar PV in Malaysia, as we have periods of overcast skies and monsoon rains, which limits the amount of sunlight available.”

– Mohd Rizal Ramli Deputy Director of System Operations NOrWay Commission explained, intermittent renewable energy sources cannot generate the amount of energy Water at WOrk needed to meet demand.

With this in mind, the next best step – to fulfil the nation’s mission to reduce its carbon footprint and strengthen energy security – is to find ways to optimise conventional energy sources. This is best done through the use of gas turbines CCPPs, which have the ability to produce 50 percent more energy than open-cycle plants. importance, and is an exercise in its Once they pass the pre-qualification own right. According to Alwi, this can exercise, shortlisted parties will be Just as with LSSPV plants, the take up to two years; not counting invited to participate in the tender bidding process for CCPPs is a the time taken for the government to process, where they will have to competitive one. As Alwi explained, approve the funds, to secure the land, submit a technical and commercial this is because a previous exercise and access the site for soil tests and proposal. The successful bidder will into directly-negotiated CCPPs other data. All in all, an open tender usually be the one able to offer the resulted in tariffs that were so exercise for CCPP can take up to six lowest tariffs. ne of the most beautiful countries on Earth, Norway utilises its natural resources for more unattractive, it put an end to that years, including selection of plant site than just tourism. A Scandinavian country with an abundance of glaciers and deep coastal particular method of procurement. and approval of land for transmission As the nation’s energy fjords, it is natural progression for this enterprising country to explore the possibilities of its line and gas pipeline. O However, even with competitive sector regulator, the Energy topography in hydroelectricity, resulting in an open electric market heavily based in clean energy. bidding, the process is not without its Those who wish to participate in a Commission is tasked with share of complications. For instance, tender must also undergo a pre- safeguarding the security if the commissioning date for the qualification exercise, and must be According to the main factors of user hydropower starting from the late The industry advisory body Energy transmission line or gas pipeline were either an experienced sole developer of Malaysia’s energy population and capacity of natural or 19th century, fulfilling the goal of Norge is positive that the country unknown, that would affect when or part of a consortium. The sole supply and ensuring that man-made water sources, hydropower converting enormous water force could be fully operational on clean the plant commences operation. This developer or lead consortium receive energy at plants may be built in various sizes into cheap electricity to help fuel the energy, becoming the world’s first city in turn will result in an inconclusive member must have good financial from ‘micro-hydros’ to power a country’s industrialisation and laying fully powered by renewable energy tender exercise. fundamentals. They should also competitive tariffs. Through few homes to ‘superdams’ such as the foundations for companies such by 2050. This would open up the have sufficient previous experience commissioning LSSPVs the Hoover Dam in America which as Norsk Hydro and Elkem. In 1892, potential to mitigate issues arising Therefore, the pre-tender phase – in building and operating power and CCPPs pursuant to services millions. Former Norwegian Prime Minister from climate change and decrease of Gunnar Knudsen also sent a letter demand of manpower in Norway’s oil which is when the exact location plants or (in the case of insufficient competitive bidding exercises, of the plant and timeframe for the experience) be a partner with an With some of the lowest electricity outlining the importance of hydroelectric industry. Under Energy Norge’s green routing of transmission line and gas organisation that has the it is able to meet those two tariffs in Europe, Norway is also power for industrial potential which kick- energy programme, a 24-point plan pipeline are determined – is of great necessary qualifications. requirements. highly self-sufficient with 99 percent started long term efforts to ensure the has been developed for a smooth of national power production due to Norwegian state retained a controlling switch to electricity which includes hydropower. Pioneer industrialists interest in this field to ensure usage in free charging and tax exemptions for secured the rights to develop perpetuity for the benefit of the nation. drivers of electric cars.

32 33 Country Focus

4 Electricity transmitted to homes and businesses.

1 The dam raises the water level of the river and when opened, results in water falling to the next level.

3 Turns the generator and produces electricity.

The Tysso II 180-MW hydropower plant was comissioned and built with Alstom-manufactured equipment in 1967.

Point of Pride

A progressive world leader in unofficial competition for capacity, greater domestic efficiency clean energy and environmental efficiency and aesthetics. Increasing but also to expand in order 2 The turbine is then turned by policy, and currently the largest numbers of such installations to accommodate exports for the force of the falling river. hydroelectricity producer and sixth have been put into operation due international demand. largest in the world, Norway would to global warming resulting in an play a large role in the Future increased average water inflow This long-standing effective speculated fully interconnected to help alleviate rising water hydroelectric network has also European Super Grid not only in levels along with providing clean allowed the government of keeping up a steady supply of energy to all of Norway and its Norway to explore alternative clean renewable energy to the neighbouring countries as needed. beyond everyday uses such How It Happens continent but also in mitigating any This state of affairs has prompted as electric and hybrid modes supply instability. proposals for the government of transportation as well as The first of the four major components The turbine then converts the kinetic the turbine’s mechanical energy of Norway to refurbish and creatively applications for of every hydropower plant is the dam energy from the falling water into into electrical energy as any Power plants are symbols of upgrade all hydropower resources, energy storage to ensure which raises the water level for it to mechanical energy. Windmills also other generator. national pride in terms of self- primarily in terms of environmental minimal disruption in the fall and controls the water flow. function on the same premise with the sufficiency and in a state of improvements not only for electrical grid. The resulting reservoir is effectively power source of wind instead of water. Finally, properly insulated transmission the resulting stored energy. lines convey the electrical energy As a nation with goals of greater environmental sustainability and in possession of abundant The generator is connected to the to homes and businesses, providing The force of falling water causes the turbine by shafts and gears spinning cheap renewable energy to lower natural resources, Malaysia is uniquely primed to follow Norway’s example in the utilisation turbine to spin by pushing its blades. as the turbine does so and converting costs and promote industrial growth. of hydropower.

34 35 Analysis

cross the globe, nations both large and small, are increasingly acknowledging the importance of research and development in the field of renewable, inexhaustible energy. A Malaysia is certainly an integral part of this ongoing drive, being a growing nation with rising energy demands. Energy Malaysia takes an in-depth perspective on the possibilities and challenges of RE in Malaysia.

POWER GENERATION USING RE

Global Outlook on Renewable share Renewable Energy POWER Indicators for energy The recent 2018 Renewable Energy use in the Power sector Roadmap Report by the International 24% Renewable Energy Agency (IRENA) 85% has revealed the need for a global shift towards RE sources to cater for rising energy demands the world over. Electricity RENEWABLE demand Globally, it has been forecast that the ENERGY SHARE gross power generation will almost IN TOTAL 20 204 TWh/yr 41 508 TWh/yr ELECTRICITY double with RE making up to GENERATION 85 percent of the supply by 2050. RENEWABLE ENERGY INDICATOR Of the 85 percent, the highest RE contributors would be from hydropower, wind, solar photovoltaic, HYDROPOWER WIND concentrated solar power (CSP), bioenergy, and geothermal. Upon an 1 248 1 828 411 5 445 in-depth look into these potential GW GW GW GW sources, it was determined that solar and wind energy specifically will of which 155 GW pumped hydro 325 GW 399 GW Onshore 4 923 GW play an important role in the power generation sector. 12 GW Onshore 521 GW SOLAR 223 7 122 In line with these reported projections, GW GW ENERGY RELATED STRANDED ASSETS fossil fuel use for energy would drop CO EMISSIONS to one-third of today’s consumption. Seeing the biggest decline in usage Delayed Policy Action 119 384 Ct CO /yr would be oil and coal, at 70 percent BIOENERGY 12.4 2 GW GW 1.4 and 85 percent respectively. On the USD trillion other hand, the use of natural gas would peak towards 2027 and would 1.9 Ct CO2 /yr subsequently be the largest source 10 227 GEOTHERMAL GW GW Avoided CO2 1 of fossil fuel by 2050 despite emissions in 2050 USD trillion declined production. compared to 8.8 Reference Case Ct CO /yr To facilitate the transition of the 5 633 CSP GW GW INVESTMENT energy sector globally, energy POWER POWER SYSTEM Total investment for GENERATION FLEXIBILITY efficiency and RE will have decarbonisation AND GRID* a resounding impact both OTHERS economically and environmentally. 0.3 881 24.6 (incl. marine, hybrid) GW GW 18 While other avenues can also USD trillion USD trillion help mitigate climate change, * This includes investment needed for transmission and the adoption of RE and energy distribution grid expansion, increased generation flexibility, efficient methods can together 2015 REmap Case 2050 electricity storage reduce 90 percent of the energy- related carbon dioxide emissions. Source: International Renewable Energy Agency

36 37 Analysis

Local Significance of no sign of slowing down. Our energy According to the latest IRENA Renewable Energy needs are heavily dependent on either Renewable Energy Roadmap Report’s IMPACT OF SOLAR PV PENETRATION TO THE SYSTEM OPERATION finite resources such as fossil fuels or figures, it has been forecasted that Malaysia has been blessed with a hydroelectric plants which are costly and the construction of new power plants 5,609MW wealth of energy resources, to provide need a lot of acreage for implementation. or hydroelectric dams will not be able System is able to accommodate Stability concerns zone for our national demands. The nation is The fluctuating costs of fossil fuels to supply the demand adequately. surpassing 32 million people as of late also constitute a major segment of the Breakthroughs in RE technology dictate Solar Capacity 1,039MW 2,077MW 3,116MW 4,155MW 6,232MW 8,310MW 10,387MW 12,464MW 14,542MW 2018 and the energy demands show budgetary concerns in the energy sector. that Malaysia should also look into at 2025 (MW) implementing a greater percentage PV Penetration of energy from renewable sources. Level (based 5% 10% 15% 20% 30% 40% 50% 60% 70% The nation’s geography and abundance Source: Energy Commission on peak demand) of sunlight due to being close to the Equator, certainly boosts the chances of successfully implementing photovoltaic energy generation, for instance No significant impact to the Strengths of Renewable system operation Energy in Malaysia >16% Evening peak Infinite availability and inexhaustible becomes dominant supply are the two terms most commonly associated with RE. 43% Solar power is one such source that Load-shedding+Post Malaysia would do well to explore. event voltage stability • The study found that the system is technically 60% & 70% Severe The first step would be to identify key issues (difficult to capable to accommodate solar PV penetration >27% Solar Curtailments potential regions with higher solar resolve) up to 30 percent of peak demand. Coal generators (150 & 630 GWH) + irradiance, where solar-powered facilities affected Dispatch schedule can be set up to reap the full benefits. • Beyond the limit, thermal plants performance not feasible with all will be affected and subsequent to that, load 33% & 38% reliability constraints As per an analysis undertaken shading will be activated. Load shedding zone by the Energy Commission, potential Possible to mitigate solar growth areas were identified as per • A proper planning of RE penetration into the with more costly higher solar irradiation. , , grid system need to be emphasised to avoid dispatch KL--Melaka, Pahang, those circumstances. Johor and were all recognised as high-potential regions where solar photovoltaic installations are expected Source: Energy Commission to grow.

Along with photovoltaic plants, biomass plants are another highly viable option for Malaysia. Looking into this Potential of Solar up potential solutions to overcome the or interrupting the energy supply avenue to replace current energy Energy Penetration challenges. It also looked into the solar to avoid excessive pressure on the trends is especially pressing given the development in other countries and generation plant. SOLAR IRRADIATION MAP OF environmental and waste issues of To fully gauge the capabilities of measures adopted in managing high PENINSULAR MALAYSIA the oil palm industry. Biomass power solar energy in Malaysia (particularly RE penetration level. To avoid these circumstances, a proper plants make use of oil-palm by-products Peninsular Malaysia and Sabah), planning of RE penetration into the otherwise deemed as wasteful. a study was conducted by the The study found that the system is grid system needs to be emphasised. Energy Commission to determine the technically capable of accommodating Accordingly, a summary of potential Although the cost of setting up the acceptable level of RE penetration solar PV penetration up to 30 percent control measures were explored, specific DAILY SUM: 4.2 4.4 4.6 4.8 4.8 4.8 infrastructure to generate RE from such (specifically solar) into the grid system. of the peak demand. Though beyond to these conditions. While some of the 2 sources may be considerable at the time this limit, the thermal plants performance challenges could be specific to a grid kWh/m of incorporation, the long-term economic The assessment tested the limits on will be affected and subsequent to system, the control measures adopted by YEARLY SUM: 1534 1607 1680 1753 1826 1899 and environmental benefits far outweigh solar penetration into the grid system, that, load shedding will be activated. utilities with higher RE penetration levels Long-term average of daily/yearly sum, period from 1999 (2007 in the East) to 2015 this initial expense. explored control measures and drew Load shedding is the action of lessening also have many similarities.

38 39 Analysis

Challenges and Electricity generation (TWh/yr) 50 000 Control Measures Control Measures 4% 3% Others for RE Integration (incl. marine Interconnection standards (Grid Codes) and hybrid) 40 000 Geothermal Interconnection standards (Grid Codes) should be strengthened to ensure the VRE generators' Wind Challenges steady-state and dynamic behaviours ful l power 36% system operation requirements. CSP Variable Renewable Energy (VRE) generator 30 000 4% technical requirements Implement and improve VRE forecasts <1% Solar PV 3.5% Very limited connection requirements in the early Bioenergy System operators should implement VRE forecasting % 1% years when VRE penetration level was low, 24 system and continuously improve the forecast Renewables 16% resulting in undesired frequent VRE generator 20 000 3.5% 22% accuracy. VRE forecasting is the key enabler for stable Hydropower disconnections and cascading eects. 10% power system operation. 4% 85% Nuclear 23% Renewables High variability and stochastic nature of VRE 4% Widen the balancing area, interconnections 10 000 76% Natural gas Non-Renewables 12% The high variability and stochastic nature of VRE Interconnections can improve reliability of supply. generation output pose challenges on stable 4% Oil Widening the balancing area with interconnection has 39% 1% 15% power system operation. 10% Non-Renewables two eects: achieving geographically diversi ed VRE Coal variability; and sharing of reserves; resulting in less 0 reserve requirements. 2015 2015-2050 2050 Increase in reserve requirements changes REmap Case This interconnection also allow short-term trading of The variability and stochastic nature of VRE excess energy from VRE, enabling optimum utilisation The Rising Importance of Solar and Wind Energy in the Power Sector increase the reserve requirements on both the of generation resources in the interconnected systems. volumes and ramp rates. Source: International Renewable Energy Agency Improve reserve dimensioning methodology

Germany studied adaptive reserve dimensioning, taking into account daily VRE forecasts. Current State of Power Generation the country’s interior. Most households this means that energy security in the and enterprises in the country still country must constantly be improved as The reach of RE in Malaysia is quite prefer to be connected to the default it can be affected by external influences. Improve exibility of power system limited as of now. Most of the nation grid, and are rather hesitant to install For instance, the supply chain of coal is still dependent upon the existing new infrastructure. and its prices may affect the continuity of High penetration, shortage of ancillary Improve exibility of existing baseload generators that services providers National Grid Network, which in turn power generation in Malaysia. Simply put, provides ancillary services to the system and strengthen is already designed and suited to the More than 80 percent of the country’s it brings to the forefront the imminent the transmission grid to allow the exible operation of present system of energy generation. energy needs are still supplied by need to set and meet RE targets in the As the penetration level become high, the existing existing generators. exible generators such as hydroelectric and exhaustible sources. Fundamentally, coming years. While Peninsular Malaysia is largely open cycle gas turbine generators would be Market design to accommodate VRE pushed oine, reduce the reserve providing powered by coal or gas-fired plants, East Malaysia, particularly generators in the system during the VRE high By designing an ancillary services market with high Sarawak is more inclined towards generation periods. incentives, another revenue stream for conventional generators can be created, making them nancially hydroelectric power. The existing Looking forward, the Ministry of Energy, Science, Technology, At the same time, higher reserves are required for viable with reduced load factor. facilities and equipment in place are Environment and Climate Change has set a target for stable operation of the system. particularly suited to this need, and 20 percent of the country’s electricity to be generated from Alternative reserve providers therefore may require modifications to suit the influx of energy from new renewable sources by 2025. In line with this, a detailed The battery storage technologies are promising with ‘0’ RE sources. framework is being planned to assure both energy affordability Source: Energy Commission stability limit and very fast ramping capability. and RE adoption in order to propel the country’s development The VRE generators such as wind turbines are Smaller scale RE plants are already technically capable of providing balancing power and present in some offshore islands, forward. Steadily and surely, Malaysia stands to join the global voltage support services. as well as outposts and settlements in shift towards cleaner and renewable energy.

40 41 Views

How will these changes affect the local energy sector and what are some of the possible Q: challenges that will be faced with these changes put in place?

A: I see the glass as optimistically ‘half-full’ with opportunity to ingest new technologies and establish Looking this MESTECC direction. The local utility market them as energy sector leaders for the ASEAN. is craving for more innovation and to increase energy generation diversity in Malaysia. What we MESTECC could also consider imposing a Carbon Tax need are for more means to generate energy on companies generating energy through coal or other without increasing our carbon footprint and which fossil fuels in order to fund clean energy and climate To minimises the use of land. This is in order to protect change reversing initiatives. However, that requires political Forward our ecosystem. courage. Additionally, Green Tax rebates may be introduced for companies generating clean energy to ease their Under the direction MESTECC is heading, more financial burdens. Furthermore, Clean Energy should also localised clean energy generation solutions can be include Energy Efficiency (EE) and not just Renewable rEForMS developed. The local utility market can also use this Energy (RE) as the energy that you do not use, is ‘clean’.’

he changes to the Malaysian energy industry, as announced by the Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC), will affect all areas T of the economy. An ASEAN Energy Management System (AEMS) Energy Manager and a Registered Electrical Energy Manager (REEM) – Ir Bernard Sagaiyaraj – the General Manager of Bureau Veritas Building and Infrastructure division – gives his views on the subject.

What are some of the changes you foresee taking place in the local energy market, with Q: the establishment of the Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC)?

As a combination of the former Ministry of Science, research and innovation were solely focused on A: Technology and Innovation (MOSTI), the former Ministry academic purposes. of Energy, Green Technology and Water (KeTTHA) and the climate change division of the former Natural I am also happy that MESTECC is inviting experts Resources and Environment (NRE) Ministry, MESTECC from the energy industry to participate in R&D, in helps to bridge the gap between science, innovation order to rejuvenate our local energy sector and reduce and the energy sector. As such, science and technology greenhouse gas emission to slow down global warming innovations can be easily commercialised without the or climate change. This will also act as a catalyst to gap factor. attract Malaysian entrepreneurs and innovators to work on clean or renewable energy since the Ministry is Further commercialisation of R&D efforts is also another willing to support innovation in this industry. Local car change that is set to take place, especially in light of manufacturers could also use this opportunity to get MESTECC announcing that 50 percent of R&D funds involved in electric car R&D with the move to produce will be allocated for experimental research. Previously, it commercially in near time future. “The local energy market must readily adopt technological change or advancement when the energy policy focuses on clean energy generation.”

– Ir Bernard Sagaiyaraj, General Manager of Bureau Veritas Building and Infrastructure Division

44 45 Views On-Site

In your opinion, what are the strategies that the government, stakeholders and industry players Competitive energy markets Q: should take to overcome these challenges? Bringing to the Fore What is in Store A: The local energy market must readily adopt technological technology enhancement is nothing without financial change or advancement when the energy policy focuses feasibility and the correct business process. Firms should lobally, countries are moving away from regulatory domination of the energy market on clean energy generation. One pressing needs is therefore find the appropriate financial model to offset the for proper knowledge workers to design, operate and increase in capital cost expenditure when establishing new towards multi-stakeholder competitive energy markets. Change brings about development maintain EE and RE systems. Also, these companies large scale clean energy projects. g but it is also a disruptor to set ways and practices. In this context, the Chair of Energy can also could tie up with local and overseas technology Economics of Energy Economics at UNITEN and Chief Economist, Institute of Energy partners familiar with clean energy, digitalisation, the One popular model is Energy Performance Contracting Internet of Things, AI, nanotechnology and automated where the project investor and the customer share the Economics, Japan, Prof. Dr Ken Koyama on 9 October 2018, spoke at the Energy Commission knowledge sharing. energy savings or the savings on the tariff. The business on ‘Competitive Energy Markets: Why it matters and what is the challenge?’ process must also be crystal- clear to the customer Digitalisation and automation are crucial as these are the who must understand concepts like energy baselining themes of the Industrial 4.0 revolution. At the same time, methodologies and moving baselines.

projected production plans and sales Q: MESTECC is currently reviewing power projects that have been awarded through direct to turn the conventional car market negotiations, with the aim of focusing on competitive bidding. How will this affect the local to a predominantly electric vehicle energy market? market by 2030. A: Competitive bidding process for IPPs will definitely change solar PV energy generation, they encountered certain Dr Koyama brought up the issue the energy market landscape. Presently, the local energy financial challenges which prevented them from that utility suppliers may be faced sector distribution is mainly being handled by TNB, fulfilling their goals. with a ‘missing money’ problem and they either generate energy or purchase from IPPs. in a competition-based wholesale These are companies that were awarded with IPP rights Malaysia’s energy landscape is monopolistic in market. This means the cost of the with advantageous fixed upside pricing, and were also electricity generation in Malaysia. There is really no upkeep and implementation of utility given various benefits through the Power Purchase energy ‘market’ and increasing the market share of resources at the electric service

Agreement (PPA) and fuel subsidy. IPP in energy generation sector will energise the Chair of Energy Economics of Energy Economics at UNITEN and Chief Economist, Institute of standard customers can rely on, flywheel in the decentralisation of the energy sector. Energy Economics, Japan, Dr Koyama, delivering his speech on competitive energy markets. cannot be offset by income garnered. However, TNB has to purchase the electricity at a higher The decentralised energy sector will reduce capital The inflow of renewable energy rate which directly contributes to increased energy utility needed for energy distribution and increase the exacerbates the problem. Dr Koyama tariffs. With the competitive bidding process, IPPs need efficiency of utilising energy generated. Dr Koyama presented statistics In contrasting global power generation also spoke of the need for financial to reduce the selling price of electricity rate and maintain that showed trends in global energy and global power capacity, Dr Koyama backing to support electricity supply a decent profit margin by producing and managing However, one of the bigger hurdles of decentralisation demands and capacity, energy sources asserted that half of the world’s total security in a deregulated market, resources more efficiently. is the actual physical distribution system which is and their necessity in the future. power capacity will be comprised of while electrification continues. now controlled by a single utility and this needs to be He predicts that Asia will be the gravity intermittent renewable energy, which He also elaborated on the solution, IPP rights could also be awarded to companies addressed. Of course homes can be connected to a smart centre of the energy market, namely requires refinement with the aim of the introduction of different types generating energy through RE. While this has been grid with smart meters and distributed sensors but today, China, in the 2040s. Dr Koyama reducing cost and enhancing grid of capacity markets, from capacity done before to companies which planned to pursue electricity still needs to enter your home via a cable. further deliberated on deregulation or stability. In a further comparision of markets meeting supply capacity liberalisation and the mix of factors primary energy sources such as oil, obligations to strategic reserved that affect the energy sector’s market coal, gas, renewables and nuclear, capacity, which provides power reform, such as price, renewable graphically, from 1990 to 2050, generated on demand. Market reform Q: MESTECC is also pushing to increase the contribution of renewable energy (excluding energy introduction, the inability in Dr Koyama found that coal falls is necessary to make the electric hydro) from 2 percent to 20 percent in the medium term. With regards to incorporating more obtaining investments or achieving an significantly and below renewables, energy market, uniform. renewable energy locally, how will this affect local utility providers and IPPs? adequate energy mix. whereas dependence on fossil fuels will still be high in 2050. A: Increasing RE generation to 20 percent will definitely Malaysian energy companies should therefore look A tool of industrialisation, electrification, In the light of emerging reduce dependency on coal, which accounts for into exploring options like hybrid or mixed mode continues to progress, globally, Government policies implemented challenges, Dr Koyama 54 percent of energy generated. However, since energy generation method to reduce this limitation. ahead of oil, natural gas and coal, in Germany, Norway, France, concluded that it is vital Malaysia has to import coal, it is not sustainable in reports Dr Koyama. Electrification is the United Kingdom, India and China and the long term. Energy storage methods are also not properly utilised process by which a machine or a system car manufacturer plans to produce for any nation to take in the Malaysian energy sector. They can help store is wired to a circuit that burdens an Fuel Cell Vehicles (FCV) and Electric into account the lessons On the downside, local utility providers and IPPs energy generated off peak to be used during peak electricity generator. In an ideal situation, Vehicles (EV) were also discussed. learnt from ‘advanced would be affected by higher cost of energy period. This helps to improve the efficiency of RE on a global scale, electricity generation Car manufacturers highlighted were generation as geographical factors in Malaysia apart from alleviating the energy generation load should exceed the load placed on it by Toyota, Volkswagen, Renault-Nissan, experiences’ to work limit consistent RE generation throughout the year. throughout the day. consumption, eventually. Hyundai, Ford and Honda with towards market reform.

46 45 On-Site

reimagining All in all, the event provided the perfect platform for utility of the future the electrical power supply The Conference of Electrical Power Supply Industry 2018 players to discuss the best way forward in dealing with the future of the industry. By bringing together the experts, lively discussions and valuable market structure and a tariff based knowledge was shared during on market conditions. CEPSI 2018. Thanks to the joint efforts of AESIEAP The highlight of the first day was without a doubt the speech given and TNB, the event was With almost 2,000 attendees from over 30 countries, CEPSI 2018 garnered a who’s who of by Prime Minister Tun Dr Mahathir undoubtedly a success. the Asia-Pacific power sector. Mohamad, who made his second appearance in CEPSI, having been Prime Minister in 1996 when Malaysia last hosted the conference. In his speech, the Prime Minister revelled in how electricity has n 14 August, Energy Commission Talk Round 10 on “Geopolitics and Uncertainties in the provided us with the power to do almost anything, but warned that we World Energy Market with Special Focus on Oil and LNG” was presented by Prof. Dr Ken Malaysian Prime Minister, Tun Dr Mahathir Mohd delivering a special address at the conference. will need to find less polluting means Koyama, Chair in Energy Economics of Energy Commission at UNITEN. The talk was of generation. o attended by representatives from the Commission, industry players and stakeholders. eld every two years, the Conference of Electrical Power Some of the key changes that Supply Industry (CEPSI) is the premier event of the Malaysians can expect then, as mentioned at the event are a and explained that oil consumption h Association of the Electricity Supply Industry of East push to reach a balance between can turn into a decline in the not too Asia and the Western Pacific (AESIEAP). Bringing together affordability & adoption of renewable prediCting the world distant future in some circumstances. top players in the power industry from over 30 countries, it is energy; followed by an expansion For example, the rising of dependence to 20 percent RE capacity in the on the Middle East crude oil will the definitive platform for the discussion of challenges and Peninsular by 2025. energy market increase geopolitical risk for a stable opportunities in the sector. supply. He concluded by stating that Also highlighted is a possible the role of the consuming countries collaboration between electric power The presentation aimed to address declining alongside the oil production will continue to be as important as Having hosted CEPSI in 1996, come up with solutions by‘reimagining’ industries and telcos, with the latter the emerging geopolitical risks and in Venezuela. He also added that producing countries’ own efforts. Malaysia once again played host to beyond our own current limitations. riding on existing power lines thus uncertainties in the world of energy geopolitical problems and supply the prestigious event from 17 to 22 resulting in greater efficiency and market, and its implications to the interruptions could cause severe September 2018. Organised by Tenaga The Minister also announced that convenience. Also smart meters are stability, volatility and sustainability shortage in the oil market. Nasional Berhad (TNB) and held at as part of Malaysia’s Energy Supply being rolled out to allow consumers of the energy market. Additionally, The stability, volatility the Kuala Lumpur Convention Centre, Industry (MESI) 2.0 reforms, MESTECC to track their electricity usage on a the presentation also highlighted the On the downside, Dr Koyama also and sustainability of the its theme “Reimagining Utility of the will reactivate MyPower to design daily basis.This will go a long way importance of advanced technology to forewarned that there could be an Future,” underpins the current reality and drive the implementation of to reduce carbon emissions, as it affect the future of energy transition increase in the accelerated production global energy market are of how the electric supply industry power electricity reform for three encourages users to be cautious with and will try to shed light on the issues of shale oil which will offset global affected by the geopolitical is transforming. years. These goals include increasing their electricity consumption. of geotechnology. production problems and that there risks in addition to industry efficiency, future-proofing could be a serious ‘trade war’ and global In her keynote address on the first day the industry structure, regulations Environmentally concerned Dr Koyama shared that there are economic slowdown. uncertainties. Therefore, of the conference, YB Yeo Bee Yin, and key processes, and empowering Malaysians will also be glad to know major uncertainties for the oil market it is critical to forecast the Minister of Energy, Science, consumers by democratising and that the country has eschewed beyond 2018 as the oil market will The economic impacts of peak the geopolitical risks and Technology, Environment and Climate decentralising the electricity supply the use of nuclear power over become vulnerable to geopolitical oil demand were also brought to Change (MESTECC) reflected the industry. In addition, it aims to bring concerns about public safety and risks. There could be a major shortage attention as Dr Koyama delved into uncertainties for a stable theme by urging industry’s experts to about a more transparent and efficient the environment. whereby Iranian oil export could be the implications of peak oil demand global energy market.

46 47 Seminar on Electrical Design, Installation and Safety First For Lasting Cable was jointly organised by the Energy Commission and the Malaysian Cable Manufacturers Association a (MCMA) on the 28th August. The seminar was attended by 170 representatives from government agencies, stakeholders, manufacturers and importers across Malaysia. ENERGY COMMISSION PRESENTS

Officiated by the Chairman of the These sessions were conducted by and fires. Additionally, it was shared Energy Commission, Datuk Ir Ahmad representatives from the Energy that substandard wires and cables Fauzi Hasan, on behalf of the Deputy Commission, Standard and Industrial are one of the main causes of those ENERGY Minister of Energy, Science, Technology, Research Institute of Malaysia accidents. With that, the presenters Environment and Climate Change (SIRIM), Jabatan Kerja Raya (JKR), highlighted the proper standards and (MESTECC), YB Isnaraissah Munirah Jabatan Bomba dan Penyelamat, procedures, and requirements of a Majilis, the seminar acted as a platform Tenaga Nasional Berhad (TNB) properly certified cables and wires. EFFICIENCY to educate industry players and and the Institution of Engineers consumers on testing, commissioning Malaysia (IEM). To finish off the presentations, and maintenance for a lasting electrical a dialogue session was conducted to cable in addition to identifying unsafe/ These sessions touched on issues share insights and comments on all non-compliance of cables. Further, it is like the factors of electrical accidents the 8 presentations. CHALLENGE also to ensure public safety in relation to electrical cable design for domestic and non-domestic installations in Malaysia. 2019 Case studies and analysis of electrical accidents and fires involving cables were also discussed during the seminar. safety first!

In his keynote speech, Dato’ Dr Abdul Seminar on Electrical Design Installation & Razak, MCMA President, stated that Safety First For Lasting Cable there has been RM5 billion loss due to fire accidents. He further explained the importance of pre-identifying fire hazards and emphasised the eradication of substandard cables in the energy market Thinking of joining EE Challenge? SAVE ENERGY will have a tremendously positive effect Here is how it works on the rate of electrical accidents. SAVE THE ENVIRONMENT FOR THE FUTURE During his opening speech, Datuk Ir Fauzi STEP 1 SUBMIT REGISTRATION FORM TOGETHER BEFORE 31 pointed out that in 2017 there were 53 WITH SCHOOL’S ELECTRICITY BILLS. MARCH 2019 For More Information electrical accident cases reported and thus far in 2018, 37 cases have been Visit : www.st.gov.my reported. The investigations conducted 01 APRIL-30 Email : [email protected] by the Commission show that the leading CARRY OUT ENERGY SAVING MEASURE SEPTEMBER STEP 2 IN YOUR SCHOOL Call : 03-8870 8762 cause of the electrical accidents is due 2019 to improper installation and maintenance of equipment. Other causes include dangerous activities near public electrical 01 APRIL-30 MONITOR AND SUBMIT ELECTRICITY installations, trespassing at electrical SEPTEMBER STEP 3 BILLS FOR 6 MONTH REGISTRATION OPEN installations and misuse of electrical 2019 For Secondary School Only Until systems. He then raised the awareness on electrical safety and urged that there The seminar was a good platform promoting communication should be an increase in the safety of 15 SEPTEMBER among wire and cable industry associations, relevant trade VIDEO SUBMISSION electric cables. STEP 4 2019 and professional groups as well as wire cable manufacturing The seminar also held discussions on enterprises in the country – to work out substantial steps they 31 MAR various topics such as electrical safety can only take when done together, like raising awareness on the 15 OCTOBER on cables, testing and certification STEP 5 REPORT SUBMISSION of cables and electrical fire analysis, importance of proper installation and maintenance of equipment 2019 2019! to name a few. and eradicating substandard electric cables.

48 Suruhanjaya Tenaga (Energy Commission of Malaysia) st_ malaysia st_ Malaysia ORDERLY SUPPLY and USE OF ENERGY

Suruhanjaya Tenaga (ST), a statutory body established under the Energy Commission Act 2001, is responsible for regulating the energy sector, specifically the electricity supply and piped gas supply industries in Peninsular Malaysia and Sabah.

The Energy Commission...

Advises Ministers on all matters concerning the national policy objectives for energy supply activities, the supply and Licenses and certifies use of electricity, the supply of gas through pipelines and the use of gas. electricity and piped gas suppliers, competent electricity and Regulates gas personnel, training providers, contractors, equipment and installations, energy service companies and energy managers. electricity and piped gas tariffs and the quality of supply services, as well as promote competition and prevent misuse of monopoly power. Monitors and audits performance and compliance of licensed and certified suppliers, Promotes service providers, installations, equipment importers, manufacturers and retailers. good practices, as well as research, development and innovation in the electricity and piped gas industries. Investigates Plans and develops complaints, accidents, offences and industry issues; and enforces compliance. laws, regulations, rules, codes, guidelines, programmes for the orderly development and functioning of the electricity and piped gas industries.

Suruhanjaya Tenaga st_malaysia ST_Malaysia Portal ST (Energy Commission of Malaysia)

Energy Commission No. 12, Jalan Tun Hussein, Precinct 2, 62100, Putrajaya Toll Free Number: 1 800 2222 78 Telephone: 03 8870 8500 Fax: 03 8870 8637 Website: www.st.gov.my

BC.indd 40 8 /2/19 5:41 PM