PLENARY SESSION FOR POWER INDUSTRY, AORC-CIGRE … · -CEO/PRESIDENT, TENAGA NASIONAL BERHAD...

‘WE’VE GOT THE POWER - to serve, to deliver, to excel’


BRIEF OUTLOOK ON MALAYSIAN ELECTRICITY SUPPLY INDUSTRY, TNB & MALAYSIA NATIONAL COMMITTEE OF CIGRE (MNC-CIGRE)

DATUK SERI IR AZMAN MOHD

- CHAIRMAN, MNC-CIGRE

- CEO/PRESIDENT, TENAGA NASIONAL BERHAD

PLENARY SESSION FOR POWER INDUSTRY,

AORC-CIGRE TECHNICAL MEETING,

3 SEPTEMBER 2013 GUANGZHOU, CHINA

MALAYSIA

MNC


MALAYSIA ELECTRICITY SUPPLY INDUSTRY (M-ESI) & TNB

ELECTRICITY DEMAND GROWTH

INTRODUCTION OF GAS TO POWER SECTOR & CURRENT ISSUES

FUTURE ENERGY MIX

MNC-CIGRE

CONTENT

2

MALAYSIA

MNC


MALAYSIA ELECTRICITY SUPPLY INDUSTRY (M-ESI)

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MNC

• Malaysia’s economy or real GDP expanded by 7.4%, 5.1% & 5.6% in 2010, 2011

&d 2012 consecutively after contracted 1.7% in 2009. With government’s ETP

implementation in full swing, Malaysia’s economic recovery is well on track with

forecasted GDP for 2013 to be a respectable 4.1%.

• Malaysia ESI has nevertheless remained vibrant.

• Energy security has been an utmost priority in spite of rapidly depleting

indigenous energy reserves (eg gas & oil) as well as implementation challenges

of alternative fuels – nuclear, hydro & renewable energy.

• Future challenges s may rising cost of supply & subsidy, resulting in volatile fuel

prices and IPP payments, as well as earnings below cost of capital.

Zainudin Ibrahim, TNB, 3rd Power Plant World Asia 2012 – as

cited/quotedverbatim from Sapphira Chan


ESI Structure in Peninsular Malaysia

Current ESI structure remains the same with TNB & IPPs as key players in generation sector

However, business activities of TNB is segmented into 5 business entities in anticipation of full implementation of Incentive Based Regulation (IBR) in 2015

System Operator & Single Buyer are in process to be ring-fenced to enhance transparency, independence and fair play in generation scheduling & dispatch

Source:

• Energy Commission’s Peninsular Malaysia Industry Outlook 2013

4

TNB Transmission (Grid Owner)

TNB Generation

- Thermal plants

- Hydro planrs

- Generation

SPV

IPPs

Grid System Operator Single Buyer

Franchised

Retailers

TNB

Distribution

Retail

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Governance of MALAYSIA- ESI

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ASEAN Power Grid – Inception under ASEAN Minister of

Energy (AMEM) & implemented under HAPUA

• Sarawak and Sumatera interconnections are viable options to increase energy security

• The Singapore & Thailand Interconnections have enhanced system security for all parties

Existing Interconnection •Peninsular Malaysia –Singapore (1986,

2 x 200 MW)

•Peninsular Malaysia – Thailand

•HVAC Bukit Ketri – Sadao (1981, 85 MW)

•HVDC Gurun – Khlong Ngae (2001, 300 MW)

Potential Interconnection

•Peninsular Malaysia – Sarawak (2022)

•Peninsular Malaysia – Sumatera (2018)

•Peninsular Malaysia – Thailand (2015, 2nd 300MW HVDC)

•Rantau Panjang – Sg. Kolok (under discussion)

Note: HAPUA – Head of ASEAN Power Utilities and Authorities

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Introduction to Tenaga Nasional Berhad

Three Major Utilities in Malaysia

PENINSULAR

MALAYSIA

SARAWAK

SABAH

Sabah Electricity Sdn Bhd

(A 83% TNB Subsidiary)

Sarawak Electricity

Board (SEB)

Tenaga Nasional Bhd

(TNB)

SINGAPORE

BRUNEI 21,749MW*

1,237MW

1,141MW*

695MW

11,506MW

* Includes IPPs

FY’09 FY’10 FY’11 FY’12 1HFY’13

TNB -Peninsula

Installed Capacity (MW) 11,530 11,530 11,530 11,462 11,462

Total units sold (GWh) 87,780 95,197 97,888 102,132 52,129

Total customers (million) 7.59 7.87 8.11 8.36 8.47

Total employees 29,149 30,535 31,935 33,568 34,353

Total assets (RM billion) 71.4 75.9 79.1 88.5 88.3

MD: 16,562MW

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TNB’s transmission network performance has

shown remarkable improvements over the years

8

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

2006 2007 2008 2009 2010 2011 2012

System minutes

System minutes

System

minutes 7.30 9.30 6.60 1.02 0.85 1.01 1.03

464

429

392

333

307 305

276

200

250

300

350

400

450

500

2006 2007 2008 2009 2010 2011 2012

No. of transmission related tripping

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Maintaining the excellent achievements is the

new challenge to TNB’s Transmission ivision

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15.59 14.93

9.20

3.07

1.37 1.18 0.99

0

2

4

6

8

10

12

14

16

18

FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012

Min

ute

s/D

eliv

ery

Po

ints

(m

inu

te)

Transmission SAIDI

0.22

0.16

0.13

0.05

0.01 0.03 0.03

0

0.05

0.1

0.15

0.2

0.25

FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012

Inte

rru

pti

on

/Deli

very

Po

ints

Transmission SAIFI

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Demand Forecast & GDP Outlook Peak Demand is expected to grow 3.7% annually until 2015

GDP is still the key variable

driving the demand forecast

Peninsula GDP is projected

to grow at 5.6% in 2013

In the long term, the GDP is

expected to remain strong at

5.9% p.a. (2016-2020) and

6.2% p.a (2021-2030)

10

Year GDP (%) Peak

Demand

(MW)

Generation

(GWh)

2011 5.1 15,476 103,354

2012 4.8 15,826 106,884

2013 5.6 16,539 110.617

2014 5.7 17,131 114,689

2015 5.8 17,671 118,420

Source:

Energy Commission’s Peninsular Malaysia

Industry Outlook 2013

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Electricity Demand Forecast by Sector

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• Historically, the Industrial sector has been dominating the electricity sales

• However, this scenario would change as the nation becomes more service oriented in the future

• The Industrial sector has seen a steady decline since 1990 – 1990 : 47%

– 2011 : 44%

– 2020 : 41%

• It is envisaged that the Commercial sector would overtake Industrial by 2030 Source:

Energy Commission’s Peninsular Malaysia

Industry Outlook 2013

19% 20% 21% 21%

30% 34% 36% 39%

47% 44% 41% 38%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2011 2020 2030

Others

Industrial

Commercial

Domestic

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TNB is committed to deliver the Malaysia- ESI’s objectives

Ensuring system

reliability amidst fuel supply

adversity

Achieving performance and

efficiency-driven tariff

reflecting true cost of service

SECURITY OF

ELECTRICITY SUPPLY 1

EFFICIENTLY-PRICED

TARIFF 2

EXCELLENT

CUSTOMER SERVICE 3 Striving towards best-in-

class customer service

STRONG DOMESTIC UTILITY

Fulfilling the national economic agenda whilst pursuing opportunities to become a

regional champion

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TNB has delivered continuous improvements in Malaysia’s

security of supply…

- 40% Supply Disruptions

- 25% Losses

- 23% Unplanned Outage

1 Based on SAIDI (System Average Interruption Duration Index)

62.3

-40%

2012 2006

101.6

SAIDI

Minutes/customer/year

8.2 -25%

2012 2006

11.0

T&D losses

Percent

3.6 -23%

2012 2006

4.7

Unplanned outage rates

Percent

Distribution Transmission & Distribution Generation

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…with Malaysia now ahead of other emerging/developing

markets and in line with some developed markets

1 As indicated by SAIDI (System Average Interruption Duration Index); latest available data

2 Philippines SAIDI is 160 minutes for Meralco in major areas, while rural electrification by cooperatives average at 1,080 minutes

Source: IEA, World Energy Outlook, World Bank

Security of supply (blackouts)1

Minutes/customer/year

Malaysia is

ahead of many

emerging/

developing

economies and

comparable to

some mature

markets

620

293

686160

Indonesia UK

160-1,0802

Brazil Phillip-

pines

3,180

South

Africa

Mexico Malaysia

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Being a strong domestic leader, TNB will help the country achieve national

economic agenda, meet customer’s aspiration & increase shareholder value

▪ Large, growing and admired employer of choice

▪ International mobility opportunities and word-

class capability building

Inspire our

people

▪ Fair and stable returns in Malaysia – return on

RAB > 9% p.a.

▪ Robust growth of business – net profit growth of

7-11% p.a.

Increase

shareholder

value

Benefit

▪ Deliver secure and reliable supply

▪ Excellent customer service that exceeds

customer expectations

Delight our

customers

Powering the

nation’s progress

▪ Ensure universal access to power

▪ Develop power supply to enable national and

economic development

Strong domestic leader

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MALAYSIA ELECTRICITY SUPPLY INDUSTRY (M-ESI) & TNB))



FUTURE ENERGY MIX

MNC-CIGRE

CONTENT

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MNC

ECONOMIC GROWTH IS THE KEY DRIVER TO ELECTRICITY DEMAND

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Period Average period growth rates, %pa

GDP Sales Generation Peak demand

1980-1990 6.4 9.2 10.3 9.5

1990-2000 7.1 12.0 10.9 11.7

2000-2012 4.7 4.9 4.6 4.2

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ELECTRICITY DEMAND IS EXPECTED TO GROW UP TO 3% PER YEAR OVER LONG TERM HORIZON…

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COMMERCIAL & INDUSTRIAL SECTORS ARE FORESEEN TO REMAIN AS KEY PROPELLERS TO ELECTRICITY DEMAND GROWTH

19

0

10

20

30

40

50

60

70

Industrial Commercial Domestic Public Lighting Agriculture Mining

Ele

ctr

icit

y D

em

an

d b

y S

ecto

r '0

00 G

Wh

2030

2020

2012

Steady electricity demand growth in turn drives the fuel demand for power generation especially coal and gas

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MALAYSIA ELECTRICITY SUPPLY INDUSTRY (M-ESI) & TNB& TNB



FUTURE ENERGY MIX

MNC-CIGRE

CONTENT

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21

1970 2000 1990 1980

National Energy Policy, 1979

Four-Fuel Policy, 1981

Five-Fuel Policy, late 90’s

Oil Price Crunch

70’s Oil

Crisis

National Depletion Policy,

1980

Five-Fuel Policy (late 90’s)

• Renewable Energy and Energy Efficiency as the

fifth fuel and to further diversify energy base

and to create a sustainable energy future

National Green Technology Policy

• To attain energy independence and promote

efficient utilisation whilst conserving and

minimising the impact to the environment

The National Energy Policy (1979) was formulated to create an efficient,

secure and environmentally sustainable supply of energy. Comprises

three principle objectives.

National Depletion Policy (1980) was intended to conserve the

country’s energy resources, particularly oil and natural gas

Four-Fuel Policy (1981)

• Reduced dependence on oil as fuel for electricity generation

• Gas becoming primary fuel

1

2

4

5

National Green Technology Policy

2009

3

NATURAL GAS WAS OFFICIALLY BROUGHT TO THE POWER SECTOR WITH THE INTRODUCTION OF FOUR FUEL POLICY, 1981 MALAYSIA

MNC

THE POLICY DRIVES THE FUEL MIX EVOLUTION FROM OIL DOMINANT TO GAS DOMINANT OVER A FEW DECADES

Malaysia has been highly dependent on fossil fuels: Oil (1970s) Natural Gas (1990s to 2000s) Coal ??

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Oil

Distillate

Natural Gas

Coal

Hydro

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

Oil Distillate Natural Gas Coal Hydro

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Peninsular Malaysia’s Total Generating Capacity1

by Plant Type Gas fired power plants are still dominating

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OCGT 2,331 MW

(11%)

CCGT 9,122 MW

(43%)

THERMAL 7,756 MW

(37%)

HYDRO 1,870 MW

(9%)

As at 31st Dec 2012

OCGT 2,338 MW

(11%)

CCGT 9,149 MW

(43%) THERMAL 7,755 MW

(37%)

HYDRO 1,869 MW

(9%)

As at 30th June 2013

Owner 2012 2013

TNB 6,526 MW (31%) 6,540 MW (31%)

IPP2 14,553 MW (69%) 14,571 MW (69%)

Total 21,079 MW 21,111 MW

Note:

1.Total generating capacity as per Tested

Annual Available Capacity (TAAC)

2. TNB’s Janamanjung and KEV plants are

regarded as IPPs

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• Several breakdowns of gas infrastructure led to severe gas shortages to the power sector • This is made worse by the fast depleting domestic gas fields • The supply shortages of up to 26% adversely impact the power sector operationally and financially

OVERDEPENDENCE ON GAS IS DEEMED RISKY AS THE POWER SECTOR WAS BADLY HIT BY GAS SHORTAGES IN RECENT YEARS

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Annual Average: 1250 mmscfd





- 10%

- 26% - 12%

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MALAYSIA ELECTRICITY SUPPLY INDUSTRY (M-ESI) & TNB)



FUTURE ENERGY MIX

MNC-CIGRE

CONTENT

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• Gas/LNG may help to diversify the fuel mix which indirectly helps to maintain and improve the security level of energy industry

• LNG may also provide a cheaper alternative to distillate and MFO in the event of domestic gas supply shortages

GAS/LNG MAY HAVE AN IMPORTANT ROLE TO PLAY IN THE FUTURE FUEL MIX

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• Based on current domestic gas price, CCGTs provide the most competitive generation cost for the base load

• Nevertheless, as the gas price gradually moves to the market price, coal fired plants are expected to take over as cheapest option for base load

THE LANDSCAPE OF FUTURE FUEL MIX IS VERY MUCH DEPENDENT ON FUEL AND TECHNOLOGY COSTS MALAYSIA

MNC


MALAYSIA ELECTRICITY SUPPLY INDUSTRY (M-ESI) & TNB



FUTURE ENERGY MIX

MNC-CIGRE

CONTENT

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MNC-CIGRE

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Role of Tenaga Nasional Berhad (TNB) in Malaysia ESI and MNC-CIGRE

TNB, being the premier power utility, had mooted the idea of forming the

Malaysian National Committee of CIGRE (MNC-CIGRE) in 1994.

Being the precursor, TNB took a leading role and hence formed a protem

committee in 1995 with an objective of carrying the roles with regards to the

forming of the MNC-CIGRE, which was fully realised in 1996.


MNC-CIGRE

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• The Malaysia National Committee of CIGRE (MNC-CIGRE) has a

membership that ranges from power engineering-related industry to local

higher learning institutions.

• It has been actively involved in many initiatives to promote high voltage

power engineering research, development and training in Malaysia. It has

also been a platform discuss & share important issues on electrical power

systems.

• Reaching out. We also aspire to enlarge our community and welcome new

members especially young engineers.


MNC-CIGRE

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Activities

• Regionally and internationally, MNC-CIGRE has been active in the Asia -

Oceania Regional Council (AORC) of CIGRE as well as in some other

CIGRE-related activities

Future activities

• We support efforts to have the AORC-CIGRE History book.

• For next year, MNC-CIGRE shall join force with our sister organization

CIRED Malaysia in the 2014 Tenaga Expo, a major domestic event

showcasing Malaysian ESI.

• More knowledge sharing sessions.


MNC-CIGRE

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Suggested activity

“Virtual efficiency power plant (EPP) initiative as a game-changer in

electricity supply industry”

Background: • Faced with growing scarcity of resources, decreasing availability of land for electricity

infrastructures and transmission routes and wayleaves, innumerable difficulties in dealing

with stakeholders, growing financial constraints as well as increasing load and aging

infrastructure, how do power utilities around the world adjust to the need to beef up

supply?

• Would virtual efficiency power plants (EPPs) be an imperative option? EPP is a concept

that allows aggregated savings in energy, similar to generation of a physical power plant,

through harnessing of energy-saving technologies, but it is virtual as it does not exist

physically and encourage deferment of investment. It is smart (part of smart grid

paradigm) and chic (to policy makers and regulators).

Scope (each to be addressed in its respective session): • Conceptualizing EPP as energy saving and demand-side management instrument and deferred investment

• Creating definitive framework for EPPs in utilities

• Getting EPPs regulatory-ready

• Utility’s imperative: fast-tracking EPPs in addressing energy efficiency

…Panel session at the end of the Colloquium

THANK YOU

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PLENARY SESSION FOR POWER INDUSTRY, AORC-CIGRE … · -CEO/PRESIDENT, TENAGA NASIONAL BERHAD...

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Transcript of PLENARY SESSION FOR POWER INDUSTRY, AORC-CIGRE … · -CEO/PRESIDENT, TENAGA NASIONAL BERHAD...