Volume 6 2015 Volume www.st.gov.my Strengthening Malaysia’s Framework Strengthening Malaysia’s The National Grid *Price includes GST *Price MYR 8.48 Volume 6 Volume MYR 8.48 Energy Malaysia Volume 6 KDN: PP 18540/08/2014(033966) www.st.gov.my 02 CHAIRMAN’S OVERVIEW Innovations 45 28 GET SMART! Highlighting smart meters and energy News storage systems, two key components 03 The latest news and updates on industry of the smart grid network. developments, government initiatives and innovation in the Malaysian energy sector. Guidelines Features 32 BECOMING A DISTRIBUTION LICENSEE 05 PLANNING TO GROW The requirements, procedures and processes of Introduced in January 2014 to enhance the National applying for and operating under a distribution Energy Efficiency Master Plan (NEEMP), the National license can be found here. Energy Efficiency Action Plan (NEEAP) is a 10-year initiative driven by the Energy Commission and aimed at reducing electricity consumption by 6%. 34 SUPPLYING ELECTRICITY We showcase the necessary steps that an independent power producer should take in 08 ALLOWING ACCESS order to sell electricity back to the grid. A sneak peek at the amendments to the Gas Supply Act, the effects of gas supply liberalisation on the industry, and the Energy Commission’s role in regulating a more Analysis open market. 36 MALAYSIAN ELECTRICITY DEMAND AND SUPPLY 12 COGENERATION Analysing electricity generation and usage in Thermal power plants that produce both heat and Peninsular Malaysia, Labuan and Sabah, electricity are able to produce two different types as well as their trends. of energy in one area. We look at how Malaysia is adopting this cogeneration technology. 39 LEADING PUBLIC ADOPTION Energy Malaysia highlights the effects of 18 THE NATIONAL GRID energy saving initiative to reduce electricity demand Introduced in 1994, the Malaysian Grid Code in public sector buildings by 5%. sets out the guidelines for the management of the National Grid as well as the roles and responsibilities of its stakeholders. We highlight how the Code helps ensure reliability in electricity supply and generation. 8 21 CONNECTING THE REGION Energy Malaysia highlights the efforts to establish electricity interconnection between Laos, Thailand, Malaysia and Singapore; a significant step in the realisation of an ASEAN power grid. 24 INTELLIGENT NETWORKS A look at how smart grids can help enhance the generation, transmission and distribution of electricity, leading to better managed systems and cost reductions, as well as at the efforts to roll them out in Malaysia. Editorial Board Advisor Datuk Ir Ahmad Fauzi Hasan Members Ir Azhar Omar Ir Othman Omar Asma Aini Mohd Nadzri Ir Abdul Rahim Ibrahim Mohd Elmi Anas Ir Roslee Esman Editorial Committee Siti Suhaila Ahmad Noor Haniza Noordin Maimunah Zubir Tips © All rights reserved. Reproduction of all or any part of this publication via electronic, mechanical, recording or 16 DECODING THE CODE other medium is strictly prohibited without written consent Terms to know when reading from the Energy Commission. The Malaysian Grid Code. ST Publication No: ST(P)08/09/2015 On-Site Conceptualised, Produced and Published for 45 Highlights of events, forums, seminars, conferences and exhibitions organised or attended SURUHANJAYA TENAGA (ENERGY COMMISSION) by the Energy Commission. by AMG Holdings International Sdn. Bhd. (356247-V) 10-3A, Jalan PJU8/3, Damansara Perdana, 47820 Petaling Jaya, Selangor Darul Ehsan, Malaysia. Tel: +603-7729 4886 Fax: +603-7729 4887 Website: www.amginternational.net Printed by Percetakan Skyline Sdn. Bhd. (135134-V) 35 & 37, Jalan 12/32B, Jalan Kepong, 52100 Kuala Lumpur, Malaysia. Chairman’s Overview Strengthening the Grid Over the last two decades, Malaysia has experienced a substantial increase in energy consumption, with electricity demand per person rising from 1,460kWh in 1993 to 4,110kWh in 2013. Rapid economic growth leading to an increase in industrial output and demand for electricity contributed to this. As a visible outcome of a higher standard of living, more people now own and use energy-consuming technology-based appliances and devices. Urbanisation and commercialisation have also increased electricity consumption, particularly with more offices, factories, shopping malls and other entertainment outlets in operation. The National Grid – the Peninsula-wide transmission network which acts as a super-highway for electricity – plays a vital role in delivering this energy demand. It encompass the southern region and run from Yong Peng connects more than 420 major substations to 11,000 East in Johor to Lenggeng in Negeri Sembilan, thus km of transmission lines, linking them together into completing what has been described as ‘the missing a single delivery system. As part of our mandate to link’. The other stretch will be the second corridor from regulate the safe and steady supply of electricity, the Air Tawar in Perak to Bentong South in Pahang. Energy Commission plays a key role in the planning and operations of the National Grid. Both these projects are expected to be completed by 2019, and will increase the efficiency of electricity To coordinate the performance of these functions, transmission. At present, the main challenge is to Energy Commission chairs the Grid Code Committee obtain approval on land matters as the lines run (GCC) which oversees and ensures compliance with through different states. Another means by which we the Malaysian Grid Code, and is also tasked with are ensuring adequate supply of energy is through maintaining safe, reliable and secure provision of signing power exchange agreements with Thailand power throughout Peninsular Malaysia. Admittedly, and Singapore which would facilitate buying the grid has encountered a few incidents from the and selling electricity as and when we need. This time it was set up in the 1960s. Industry records cooperation is also a primer for the ASEAN Power worldwide attest to this physical occurrence, as Grid, which will eventually realise the conceptual electricity demand and facilities expands; the system interconnection throughout ASEAN and strengthen the may experience undue stresses. overall electricity sector in each member country. We are determined that electricity supply in the These are some of the key initiatives towards a country will be maintained at an optimum level. more efficient grid which will enable us to meet Therefore, the Energy Commission is constantly the demands of the future. Malaysia aims to move working with other stakeholders to continually forward rapidly, and the Energy Commission is strengthen the National Grid by making sure that determined that there is sufficient power to fuel this there is enough generation capacity, and upgrading national ambition. the delivery system to cater for projected normal operations as well as foreseeable abnormalities. To illustrate, we have approved the construction of Dato’ Abdul Razak Abdul Majid two new 500kV transmission lines. One of these will Energy Commission of Malaysia 2 News Self-Generating Power with NEM Solar power users can now generate and use their own their own consumption, using renewable sources, which is electricity, as well as sell the excess to Tenaga Nasional also a plus for the environment. Berhad (TNB) with the new implementation of net energy metering (NEM). This is a type of distributed generation According to Sustainable Energy Development Authority allowing consumers to outweigh the cost of their electric Malaysia (SEDA) COO Datuk Dr Ali Askar Sher usage with energy they export to the grid, with an eligible Mohammad, the suggested NEM quota is currently being power generator, in this case, solar panels. looked into and will be reviewed in the medium term, should there be an increase in consumer demand. With the approval of the NEM implementation by the Ministry of Energy, Green Technology and Water (KeTTHA), everyone will be able to generate electricity for The implementation of NEM allows solar power users to generate their own electricity and sell the excess generated power to the national electricity provider. 3 News Kota Marudu The Gas Kota Belud Network An initiative of a coast-to-coast gas pipeline that will Tuaran Beluran fuel two planned gas-fired power plants in Sandakan is in the works, pending approval from the Malaysian government. According to Datuk Seri Dr Maximus Johnity Ongkili, Minister of Energy, Green Technology and Water (KeTTHA), the 350km pipeline would pass through many communities, allowing them access to the gas being transported, boosting the development of the country. The districts that would benefit from this project include Tuaran, Kota Belud, Kota Marudu and Beluran. With the Economic Council’s approval of the The districts Tuaran, Beluran, Kota Belud and Kota Marudu will soon Sandakan power plants, each with a capacity of have access to the gas being 190MW which brings the total output to 380MW, transported via the 350km pipeline. all that is left is getting the pipeline project’s approval from the Cabinet. Incentive- Based Regulation for Gas Sector The implementation of the incentive-based regulation (IBR) framework on the gas sector is expected to encourage greater efficiency. The natural gas sector in Malaysia will undergo a change Enforced by the Energy Commission, IBR in the gas sector will on 1 January 2016 when the Government introduces have a trial run of one year, followed by the first regulatory the incentive-based regulation (IBR) framework. The main period from 2017 to 2019. In a statement