Malaysia Energy Landscape

MALAYSIA ENERGY LANDSCAPE

August 2018

Thailand Population Installed Cap. Vietnam (million) (kw/person) Philippines FR 67 2.0 Myanmar SG 5 2.8 MY 30 1.2 Other TH 67 0.7 ASEAN (Brunei, Lao, Cambodia) VN 90 0.4 5 GW ID 250 0.3 48 GW 40 GW 23 GW PH 100 0.2 MM 54 0.1 Indonesia Global average ~0.8kW/person Malaysia 9 GW Installed Capacity (GW) Singapore Coal 65 Gas 97 Hydro 45 Renewables 12 14 GW Oil 20 36 GW Nuclear 0 64 GW TOTAL ~239 Low per capita installed base … Significant future addition requirements

Source: GE Power Marketing – MACA 2017

Key Figures ELECTRICITY MARKET Pop. (Millions) GDP per Capita GDP 2016 GDP 2017 (USD) Tenaga Nasional Berhad (TNB) 32.3 9 982 + 4.2 % + 5.9 % (National electricity operator)

2017 : 47.4 b MYR (9.5 b EUR) 2016 : 44.5 b MYR (8.9 b EUR) Market Characteristics Electricity access : rd 3 User Market in ASEAN • Peninsula : 99,8 % World Bank has globally ranked Malaysia at 8th place (right after Switzerland) in • Sarawak : 91 % term of Getting Electricity rank within the Doing Business report. • Sabah : 94,1 % Electricity demand is expected to grow by 3.5% per year over the next 10 Electricity network: years, and 2.7% within 20 years. The average annual electric consumption • Peninsula : 21 469 km within the period of 2015-2020 is at 3.1%. In the medium-term, its energy • Sabah: 2 441 km autonomy will not be sufficient. Number of Smart Meters : 8.5 M in 2021

• Sources : TNB – Business France – Energy commission

Peninsular Malaysia 28.9 GW Sabah Electricity Sdn TNB 3% 1% 2% Hydro Bhd Sabah 1.8 GW YTL 4% 8% Ranhill Bhd MMC Oil NUC 2% 3% Hydro 8% Petronas/Yayasan Sabah Renewables Gas 3% 4% YTL Sabah Electricity 7% NUC Sepangar Bay Power 4% Tek Tenaga Perlis 51% Sdn Bhd 13% Coal Corp TNB Spr Energy (M) Sdn 6% 27% Petronas Oil Gas 33% Bhd NUR 53% 7% MMC Avantha group Ranhill Bhd 33% 56% Sabah electricity 21% 23% Eden Inc Bhd 16% Lotte Others Arl Power Sdn Bhd Sarawak 5.4 GW

Oil Unkno Coal 7% wn 9% Sarawak SEB 0% Hydro 2 475,0 Gas 1.7 46% 12% Hydro 45% 71%

Source: Operational Installed capacity data - Platt's UDI World Electric Power Plant Database June 2017

International and Local Key Players USA: General Electric, GE Power - Siemens GOUVERNMENTAL Japan: Mitsubishi INSTITUTIONS South Korea: Jin Technology, Solarpeace Corp. Energy Commission Malaysia: National regulator • Public: TNB, Sarawak Energy Berhad (SEB), Sabah Electricity Sdn Bhd (TNB 80% KeTTHA and Sabah State Government 20%). Minister of Energy, • Private: 18 Independent Power Producer (IPP) in Malaysia: Malakoff, YTL, Ranhill Technology, Science, Climate etc. Change and Environment

SEDA Smart Grids “Feed In Tariffs” regulator Siemens, Solarpeace corp, IBM, Accenture etc. PEMANDU TNB’s Smartmeters partners : In charge of Malaysia’s • Impianas Sdn Bhd Economic Transformation Plan • Shenzen Kaifa Co. Ltd (China) • Malaysian Intelligence Meters (JV with Shenzen Kaifa Co. Ltd) • Trilliant Smart Grid Communication Platform Asia Pacific

SOURCE : TNB – BUSINESS FRANCE – ENERGY COMIMSSION -2017

Also known as Suruhanjaya Tenaga (ST) in Malaysia. Statutory body under the Ministry Of Energy, Green Technology and Water Malaysia. Established in 2001 under the Energy Commission Act 2001. Regulate the electricity supply industry and piped gas supply industry in the peninsula and Sabah. Custodian and focal point for Malaysia’s energy data.

Tariff Flow Average Base Tariff by Sector

Power consumers

TNB (T&D) US$ 11 cents/kWh 2 Fluctuation due to Tariff adjustment to US$ 9 cents/kWh fuel price, exchange reflect uncontrollable rate etc. US$ 8 cents/kWh fuel costs & other generation costs TNB

1 a) CAPEX & OPEX b) Power purchase cost • Market regulation by KeTTHA and Energy Commission charged by generators • TNB plays a central role: Single Buyer, Generation, c) Return on regulated asset Transmission, System Operator and Customer Single Buyer TNB (Fuel) Services • Fuel-cost are pass through for generators (both TNB Electricity Power Purchasing Agreement (PPA) Fuel supply with IPPs & Service Level & IPPs are anaged by TNB Fuel division) Agreement (SLAs) with TNB

IPPs TNB (Gen) Source: TNB Handbook, 2016

SUSTAINABLE CONSUMPTION REDUCING CARBON FOOTPRINT “GRID TO THE FUTURE” The average annual electric Malaysia’s goal is to reduce its carbon TNB plans to invest 540 Million EUR in this consumption within the period of footprint by 45% between the year 2005 to project to improve the efficientcy and 2015-2020 is at 3.1%. 2030 by integrating renewable energy into its reliability of its network. energy mix.

OPPORTUNITIES STRENTGH TOP 5 COUNTRIES

Installation of 8.5 millions of Smart Meters Globally ranked at 8th place (right after 1. CHINA by 2021 by TNB (on going project). Switzerland) in term of Getting Electricity rank 2. SINGAPORE Electricity, Smart Grid National electricity access penetration nearly Public tendering: Large Solar Scale (on 3. USA going project). 100%. and Renewable Energy 4. GERMANY Combined Cycle Gas Turbine (CCGT) National aim to integrate renewable energy into power plant in Alor Gajah (on going the energy mix (17% by 2030). 5. JAPAN project).

Malaysia experienced its highest peak in terms of electricity consumption in April 2016. In addition to this exceptional event, average electricity consumption will increase over the period 2015-2020 and energy autonomy could be insufficient in the medium term.

In order to best meet this demand, many investments are made by the national operator TNB to modernize its equipment and increase the efficiency and reliability of its electricity network.

This modernization programme requires the integration of smart grids. There are many opportunities from this initiative as the national operator is inclined to work with international actors. Although the market is still highly dependent on fossil fuels, Malaysia is increasingly interested in integrating renewable energy into its energy mix and in particular in solar energy.

SOURCES : TNB REPORTS 2017, ENERGY COMISSION

Malaysia has been actively puching for a bigger postion of renewable energy within its energy mix. The Malaysian Government and its national operator TNB are putting electricity production as a priority through three development axes: Improvement of energy efficiency Development of solar energy production capacity Strengthening the hydroelectric capacity

Below are some of the initatives / policy making decision taken by the country: Hydroelectric • The 11th Malaysian Plan plans to increase hydropower capacity from 6% to 24% by 2020. • The goal is for these initiatives is to achieve 15% of the electricity mix by 2020. Biomass • The 11th Malaysian Plan plans to push biomass renewable energy mix from 23% to 38% by 2020. Solar • Access to finance is strengthened (state and private participation). • The price of electricity is adapted to ensure project’s viability the project viable.

SOURCE : 11TH MALAYSIA PLAN (2016 – 2020)

Renewable Energy Capacity Mix Generation Mix

250 2016 2026 222TWh REN 12% 4% 5% 4%2% 200 154TWh 31% REN 9% 150 42%

100 40% 91% 62% 50 46% 50% - 6.3GW, ~18% of total IB 12.3GW, ~23% of total IB 2016 2026 Solar PV Hydro Biomass Coal Gas Oil HYD

Renewable Energy Resources • Thermal generation remains the biggest … nearly 90% of generation is still from thermal by 2026 Large hydro Potential 20 GW • Increasing renewable generation … large GW addition & ~23% Biomass and biogas from Palm Oil Waste 1300 MW of IB in 2026. However, limited impact in overall generation (growth from 9% to 12% of total) Small-scale hydro 500 MW • Small portion of power transfer in the future … planned from Solar Power 6500 MW Laos via Thailand Source: GE Power Forecast

Source: GE Power Marketing – MACA 2017

Key Players Solar ACTEURS INSTITUTIONNELS • TNB, Snowy Mountains Engineering Corporation (SMEC), Hitachi, Gading Kencana, MaxGreen Energy Sdn Bhd, Yingli Solar, Amcorp Properties Bhd, Green Innotech Sdn Bhd, National Operators ERS Energy Sdn Bhd, Phoenix Solar, AUO Sunpower Sdn Bhd, Jinko Solar, etc. Japan: • Tenaga Nasional Berhad (TNB) Mitsubishi • Syarikat SESCO Berhad (SESCO) • Sabah Electricity (SESB) Hydroelectric Public Agencies • TNB, Sarawak Energy, Tokyo Electric Power Services Co (TEPSCO), Esajadi Sdn Bhd, • Minister of Energy, Hokkaido Electric Power Co, etc. Technology, Science, Climate Change and Environment Wind Power • Dept. Of Envionment (DoE) • SEDA • TNB • Green Tech Malaysia • Malaysian Industry- Biomass Government Group for High Technology (MIGHT) • Sime Darby, FGV (Felda), Tradewinds, Wilmar, TH Plantations, Teck Guan, AIM, • Agensi Innovasi Malaysia (AIM) Global Green Synergy Sdn Bhd, MYBiomass Sdn Bhd, Palm Oil Industry Cluster (POIC), BiotechCorp, etc. Associations/ Federations • Malaysian Biodiesel Association • Malaysian Palm Oil Board

Identified Projects Bakun Hydroelectric Project (Hydroelectric)

Upper Padas Hydroelectric Project (Hydroelectric)

Liwagu Hydro Power Project (Hydroelectric)

Berjaya Berhad Solar Plant (Solar)

Large Solar Scale - LSS (Solar)

• Package P1 (1MWac to 5.99MWac) in Peninsular Malaysia • Package P2 (6MWac to 9.99MWac) in Peninsular Malaysia • Package P3 (10MWac to 30MWac) in Peninsular Malaysia • Package S1 (1MWac to 5.99MWac) in Sabah and Labuan • Package S2 (6MWac to 10MWac) in Sabah and Labuan

SOURCE : 11TH MALAYSIA PLAN (2016 – 2020)

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