Malaysia’s Energy Outlook 2016

2

Malaysia’s ENERGY Energy Outlook MALAYSIA’S PROFILE

3

Introduction: Key Indicators (2015) Population

30.03 million

Nominal GDP (RM billion) GDP Growth 

RM1,070 billion 5.5%

Area

330,290 sq km Energy Resources (2015)

Oil

5.85 bbl

Gas

98.315 Tscf

Coal

1.938.37 bil ton(low grade)

Hydro (potential) RE (potential)  – mini hydro, biomass, biogas, municipal waste, geothermal)

20 GW 2,700MW

• •

•

•

•

•

Efficient utilization of petroleum resources Ensuring the nation exercises majority control in the management and operation of the industry

Supply Objective: Ensure adequate, secure and costeffective energy supply. Utilization Objective: Promote efficient utilization of energy and eliminate wasteful and non-productive usage Environmental Objective : Minimize negative impacts to the environment

To prolong the life span of the nation’s  oil and gas reserves

5

•

•

•

•

Aimed at ensuring reliability and security of supply through diversification of fuel (oil, gas, hydro and coal)

Encourage the utilization of renewable resources such as biomass, solar, mini hydro etc Efficient utilization of energy

Outlines the major strategies to promote RE in the country. Main highlight is the Feed-in-Tariff (FiT) mechanism.

6

Snapshot on Malaysia Electricity Supply Industry INSTALLED CAPACITY (MW) As of Sept 2015

PEAK DEMAND (MW) As of Sep 2015

RESERVE MARGIN (%) As of Sep 2015

Peninsular Malaysia

21,630

16,901

28%

Sabah

1,501.9

914

45%

3,637

2,035

30%

Sarawak

Major Utility Companies

Total installed capacity is 26,768.9MW

8

PENINSULAR MALAYSIA ACCOUNTS FOR 91% OF POWER DEMAND IN MALAYSIA

Peninsular Malaysia, 91% Sabah, 4% Sarawak, 5%

Sarawak

Sabah

10

Malaysia’s Energy Outlook KEY CHALLENGES

11

Source: Frontier Economics, MyPOWER

o

If nuclear is not available post-2020, Peninsular Malaysia will be highly dependent on fossil fuels i.e gas and coal o

o

o

o

Coal is 100% imported; indigenous gas is depleting

Renewable Energy is not able to provide base-load requirement Hydro capacity in Peninsular Malaysia is nearly fully developed

LONG TERM LOAD FORECAST FOR PENINSULA MALAYSIA  - PROJECTED AVERAGE ANNUAL DEMAND GROWTH RATE OF 2.3% UNTIL 2030 Peak Demand

GWh

Sales

Generation

MW

200,000

30,000

180,000

Forecast*

Historical

25,000

160,000 140,000

20,000

120,000 100,000

15,000

80,000 10,000

60,000 40,000

5,000

20,000 -

   3    0    0    2

   4    0    0    2

   5    0    0    2

   6    0    0    2

   7    0    0    2

   8    0    0    2

   9    0    0    2

   0    1    0    2

   1    1    0    2

   2    1    0    2

 Average Period Growth Rates, p.a:

   3    1    0    2

   4    1    0    2

   5    1    0    2

   6    1    0    2

   7    1    0    2

   8    1    0    2

   9    1    0    2

Sales (%)

   0    2    0    2

   1    2    0    2

   2    2    0    2

   3    2    0    2

   4    2    0    2

   5    2    0    2

   6    2    0    2

   7    2    0    2

   8    2    0    2

Generation (%)

   9    2    0    2

   0    3    0    2

   1    3    0    2

   2    3    0    2

   3    3    0    2

   4    3    0    2

   5    3    0    2

Peak Demand (%)

2013-2015

3.9

3.4

3.3

2013-2020

3.6

3.4

3.2

2013-2030

2.7

2.5

2.3

2015-2020

3.5

3.4

3.2

2020-2030

2.0

1.8

1.7

Malaysia’s Energy Outlook Initiatives to Address Challenges

15

S1 S2 S3 S4 S5 16

17

•

Gas / Oil

• •

•

•

Coal

•

• •

•

Hydro

Enhance supply through Regasification Terminals in Melaka & Johor Institute new gas pricing framework Promote competition and transparent pricing through Open Access to Peninsular Gas Network and review of Gas Supply Agreements Study on Stockpiling infrastructure and needs

Diversifying coal supplier countries to ensure the security of coal supply - Australia, Russia, South Africa, etc Encourage the usage of latest technology for higher efficiency I.e supercritical boiler etc. Study on coal storage/stockpiling infrastructure requirements Explore possibilities of resource ownership in supplier countries

Restart review on potential power importation from Sarawak as a long term option since Sarawak has hydro power potential of more than 20,000MW

Regionalisation ASEAN Power Grid (APG) Establish Electricity Open Market among ASEAN countries for resource optimization. Expected to be fully completed by 2020 Trans-ASEAN Gas Pipeline (TAGP) Gas exports among ASEAN countries for gas usage optimization Bilateral Agreement Conduct a bilateral agreement with neighbouring countries such as Singapore, Thailand and Indonesia for power import/export (on-going process)

•

•

•

20

21

•

•

•

•

•

22

Phasing Out Special Industrial Tariff (SIT) 12% 10% 8%    t    n    u    o    c    s    i    D    T    I    S

6% 4% 2% 0%

Kadar Diskaun SIT Semasa

Jan '16

Jan '17

Jan '18

Jan '19

Jan '20

Tarif E3s

10.30%

8.30%

6.30%

4.30%

2.30%

0.00%

Tarif E2s

8.30%

6.30%

4.30%

2.30%

0.30%

0.00%

Tarif E1s

4.80%

2.80%

0.80%

0.00%

0.00%

0.00%

Tarif Ds

3.00%

3.00%

3.00%

1.00%

0.00%

0.00%

SIT discount will be phased out beginning

SIT discount ending

1 January 2016

1 January 2020

•

•

•

24

Malaysia’s Energy Outlook Conclusion

25

The security of energy supply is of paramount importance as energy is the primary driver of the nation’s growth which affecting not only the quality of life for all Malaysians but also enabling the continued growth of the economy. Efforts were undertaken to ensure the long-term sustainability of the energy sector through resource diversification, continuous investments in new infrastructure, and technology enhancement. In addition, the improvement of the implementation of efficient resource utilization measures were also undertaken including rationalizing energy subsidies to move towards a market based energy pricing.

26

Malaysia’s Energy Outlook

27