Overview on the Energy Resources in Malaysia

Forum on “Nuclear energy as an option for Malaysia”, United Nations Association Malaysia,

16 February 2012

ByYBhg Dato’ Sri Che Khalib Mohamad Noh,

President / Chief Executive Officer,Tenaga Nasional Berhad

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Where Are We Now, Where Are We Going?

• Status and energy Scenario– Current and Future

• Options For the Future– Issues– Challenges

• Why nuclear ?

• Why Not only RE?

• Where Do We Go From Here?

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Planning Today For A Better Tomorrow

To carry out :– Short and long term electricity demand forecast, and

long term planning for generation and transmission network

in order to ensure:– Safe, adequate, secure, reliable and economic

operation

of the country power supply system

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Electricity demand is on the rise in 2012 4

• The Power System was premised on three pillars:

A. Equilibrium with generation capacity plant-up

• To ensure that power sector has ample capacity and sufficient reserves to

cater for meeting demand as well as planned and forced outages of

generation units.

B. Equilibrium with system security and reliability

• To ensure that the generation reliability criteria Loss-Of-Load-Probability

(LOLP) of not more than one day/year is met.

C. Equilibrium with customer tariffs

• To ensure the sustainability of the industry while ensuring the right balance

between costs of supply and customer tariff.

The Equilibrium of the Power Sector5

Equilibrium with generation capacity plant-up 6

Installed capacity

Peak demand

NEW

(2 X 1000 MW

)

NEW

(1 X 1000 MW

)

NEW

(1 X 1000 MW

)

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The power sector was designed based on gas volume of 1,350 mmscfd which was agreed in 2003. No new capacity of gas fired power plant since 2003. There has been a significant

increase of coal fired power plant since 2003 from 3,670 MW to 7,170 MW in 2011.

Equilibrium with generation capacity plantEquilibrium with generation capacity plant--up up

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Peak Demand Growth of Around 3% Until 2030

8Slightly higher growth in the near term (~3.4%) and lower growth projection up

until 2030 (~2.5%)

YearPeak Demand, MW

Sep 2011 vs Sep 2011 vs

May 2011 Nov 2010

2012 -421 -421

2013 -341 -341

2014 -290 -290

2015 -221 -291

2020 -243 -380

2025 -389 -692

2030 -550 -1,04715,476 MW

Dec/Sept 2011 forecast

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Highly Dependent on Fossil Sources

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Oil

Distillate

Natural Gas

Coal

Hydro

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Oil Distillate Natural Gas Coal Hydro

2011

• Malaysia has been highly dependent on fossil fuel sources

• We have been swinging from one source to the other

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• Peninsular Malaysia energy mix in 2011• Fossil fuel dominate 94% of total energy mix• Need more diversification and reduction of fossil fuel

Source: TNB System Planning, December 2011

Generation Mix 2011: Peninsular Malaysia

Distillate2.5%

Oil2.5% Import

0.3%

Gas45%

Coal44%

Hydro5.7%

Total energy generation in 2011 is 103,327 GWh

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Depleting Local Natural Gas

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• Power sector needs 1350 mmscfd at least until 2030

• Local gas resources are depleting

• Future gas development will be more challenging: High CO2

Smaller fields Costly

• Future demand cannot be met from indigenous sources. We would need to import, most probably in form of LNG

Source: PETRONAS presentation

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• Coal is cheaper than gas

• Coal reserve is huge throughout the world

• Coal is imported 100% from Indonesia, Australia and South Africa.

• Exposed to risk of security of supply due to weather, political as well as competition from developing countries : China and India.

• Environmental risks due to carbon emission

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Coal Plusses and Minuses

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• Remaining hydro resources (1,725MW) are small and mainly for peaking (2 – 3 hours operation a day)

• Developing Hulu Terengganu (250 MW) and Ulu Jelai (372 MW) to commission in 2015 and 2016

REMAINING PENINSULA HYDRO POTENTIAL IS TOO SMALL AND NOT ABLE TO MEET FUTURE DEMAND

Limited Local Hydro Potential

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• Malaysia signed the Kyoto Protocol in March 1999 and ratified the Protocol in Sept. 2002

• During Copenhagen 2009

PM has indicated that Malaysia is adopting an indicator of a voluntary reduction of up to 40% in terms of carbon missions intensity by the year 2020 compared to 2005 levels subject to assistance by the Annex 1 countries

• Possibility of more stringent environmental regulations –

• Locally – Clean Air Act

• Internationally – carbon emission limit

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

Gas CC Gas GT Coal Nuclear Diesel

Fuel & Plant Type

tCO

2/MW

h

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Environmental Commitments

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Huge Potential In Sarawak

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Source Capacity

Bakun (Hydro) 2400 MW

Murum (Hydro) 1000 MW

Baram (Hydro) 1000+ MW

Baleh (Hydro) 1400 MW

Ng. Merit (Coal) 1200 MW

BAKUN

MURUM

BARAM

BALEH

NG. MERIT

• Large potential in Sarawak

• With competitive price, potential in Sarawak could be connected to the Peninsular

• Bakun will not be connected directly to the Peninsular. The power will be utilized in Sarawak

1616Source: Ministry of Energy, Green Technology and Water, Energy Commission, MBIPV Project

Solar Biomass Biogas Mini-Hydro Solid Waste

Potential•~6,500 MW (for 40% buildings)

•Yearly average irradiance 1,400 –1,900 kWh/m2

Status•1 MW•MBIPV Projects (SURIA 1000, demo/showcase projects etc.)

Potential•~1,340 MW by 2030

Status•39 MW under construction as of July 2009•Biogen Project, palm oil waste (EFB), other waste e.g. woodchips, paddy husks etc.

Potential•~410 MW by 2028

Status•4.45 MW under construction as of July 2009•Palm Oil Mill Effluent (POME), livestock, agro, industrial waste

Potential•~490 MW by 2020

Status•30.3 MW under construction as of July 2009•Run-of-river scheme with minimum impounding

Potential•~360 MW by 2022•~21,000 tonnes of waste collected every day in M’sia

Status•5.5 MW commissioned as of August 2009

RE requires subsidy to move forward. KeTTHA has introduced FiT on Dec 2011

RE Is a Viable But Limited Option

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Solar Biomass Biogas Mini-Hydro Solid Waste

Relatively high capital cost (RM 19K/kW)

Low production ratio – 15% CF

Need huge area – 5 football fields/MW

Fuel supply security is questionable

Sparse location of mills

Most of the plantations and mills are far from load centers

Relatively high capital cost (RM 5K/Kw)

Location far from load center

Emission issue due to technology status (Broga)

Renewable Energy Limitations

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• Interconnection is also considered as a supply option

• Existing Interconnection

80MW AC & 300MW HVDC Link EGAT / TNB

200MW Link PUB / TNB

• Power Purchase and Economic Exchange may be possible from ASEAN power

THAILANDTHAILAND

M A L A Y S I AM A L A Y S I A

I N D O N E S I AI N D O N E S I A

PHILIPPINESPHILIPPINES

SINGAPORESINGAPORE

BRUNEI BRUNEI DARUSSALAMDARUSSALAM

BakunBakun

JambiJambi

Bt. AssamBt. Assam

K. NgaeK. Ngae

GurunGurun

CAMBODIACAMBODIA

LAOSLAOS

No. PROJECTS1 Peninsular Malaysia - Singapore2 Thailand - Peninsular Malaysia:

Stage 1: HVACStage 2: HVDC

3 Sarawak - Peninsular Malaysia4 Peninsular Malaysia - Sumatra5 Batam - Bintan - Singapore - Johor6 Sarawak - West Kalimantan7 Philippines - Sabah8 Sarawak - Sabah - Brunei Darussalam9 Thailand - Lao PDR10 Lao PDR - Vietnam11 Thailand - Myanmar12 Vietnam - Cambodia13 Lao PDR - Cambodia14 Thailand - Cambodia

Mae MohMae Moh

HongsaHongsa

Nam Nam TheunTheun

Ha TinhHa Tinh

PleikuPleiku

Ban SokBan Sok

UdonUdon

NabongNabong

SavannakhetSavannakhet

Roi EtRoi Et Ubol R. Ubol R.

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BatamBatam

4411

5566

88

77

1010

99

33

VIETNAMVIETNAM

MYANMARMYANMAR

Mae Mae SotSot

BagoBago

Siem ReapSiem Reap

Phnom Phnom PenhPenh

W. Nakhon W. Nakhon

1111

1212

1414

1313

• Continuous effort and collaboration among ASEAN members is on going. Nevertheless, interconnection issues will be evaluated specifically on case by case basis.

Interconnection With Our Neighbors

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0.00

0.05

0.10

0.15

0.20

0.25

0.30

Gas CC -NO subsidy

(21.40)

Gas CC -with

subsidy (10.70)

Gas CC LNG

(27.00)

Coal (USD 88/tonne)

Nuclear

Levelized Cost (RM/kWh)

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Gas CC Coal Nuclear

Carbon Emission (tCO2/MWh)

• Energy Security and Diversification– Reduction of fossil sources dependency

– Local sources is limited, longer fuel cycle for nuclear could provide security and allow better planning and execution

– Multiple sources for power generation helps distribute the risk of energy security

• Economic of scale for long term– Longer fuel cycle results to lower fuel cost

– Cushion other fuel price volatility risks

– Nuclear levelized cost is the cheapest compared to gas and coal options

• Environment concern– Relatively very low or non-existence

emission in comparison to other sources

What is Special About Nuclear?

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What is Special About Nuclear? (cont’d)

(e.g. Finland)

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What is Special About Nuclear? (cont’d)

Fuel Requirement for 1000MW annually

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What is Special About Nuclear? (cont’d)

221 Assumes 1 MW can be generated by 7.4 acres of solar PV cells

Nuclear Power Plant1800 MW

4.5 square km

Solar PV Power Plant1800 MW-equivalent

54 square km1

24 hours a day

Max 20% capacity factor(equivalent to 73 days per year)

90% capacity factor(equivalent to 328 days per year)

Land not including energy storage capability

Maximum 9 hours a day

Land not including geological repository

Source: ENTERGY Arkansas

630 football pitches 7563 football pitches

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What is Special About Nuclear? (cont’d)

On-Site & Monitored

2x Dry Cask Storage (20 tons)

CONFINE & CONTAIN

A 1,000 MWe plant operating for 1 year will produce:

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• Public perception to nuclear – NIMBY syndrome.• Three Mile Island, Chernobyl & Fukushima incidents raised the bar for

nuclear safety globally.• Long lead time, 10 to 15 yrs and high cost of investment.• Extensive preparation - public acceptance, regulatory, site

preparation, manpower development.• Used fuel storage issues• Proliferation and possibility of terrorism• Weapons development

“ Thirty years on, my views have changed, and the rest of the environmental movement needs to update its views, too, because nuclear energy may just be the fuel source that can save our planet from another possible disaster: catastrophic climate change.”- Patrick Moore, co-founder of Greenpeace, in the Washington Post, April 16, 2006.

Public Concerns On Nuclear

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• RE Background & Update

• Historically, RE has not been a major contributor for power generation, mainly due to lack of robust commercial mechanisms, except for hydro generation

• RE Act and Action Plan has been approved by the Parliament and it has started its implementation

• With the establishment of Feed-In Tariff (FiT) scheme through the Act, it is foreseen that RE contribution for power generation will increase

• RE Issues

• Intermittency of RE sources such as solar and cost needs to be addressed

• Developer take-up rate is encouraging, continuous monitoring on the implementation is required to monitor its impact

• RE serves a unique segment in meeting the localized load, but a centralized base plant is still required

Why Not Only RE?There is No Silver Bullet

RE, Nuclear, Fossil Options, EE/DSM are all required to fulfill future demand

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Please Go Home With These In Mind

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• We will be facing tougher time in the future

– Local resources are depleting, more dependency on import fuels

– Higher cost due to more import fuel

• We need to be more prudent in managing risks and planning

– Need balanced development to distribute risks

– Need to open our possible supply options to all possible technologies for the future. We need all resources, gas, coal, hydro, renewable, nuclear

– Need to plan carefully for power system development, especially nuclear

– Need for increased contribution from Demand Side Management (DSM) and Energy Efficiency (EE) especially in terms of policy and establishment of commercial mechanisms

– Need to ensure proper development of nuclear for the country

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Thank You

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Planning Today For A Better Tomorrow