TNB To Boost Renewables

The government is targeting to grow renewable energy’s (RE) proportion of generation mix from the current 2% to 20% by 2025-2030, amid escalating prices of fuel to supply the electricity industry.

This bodes well with the electricity supply industry (ESI), now grappling with the escalating global coal price.

Eventually, this new target might allow for more stable tariffs in the future, analysts said.

Some 53% of Malaysia’s electricity comes from coal, 42% from natural gas and the remainder from hydro and RE.

Coal price is currently hovering above US$100 per tonne, up by more than 100% after reaching a 10 year-low in 2016 when it fell below US$50 per tonne.

The price increase since July has thrown a spanner in the ESI’s generation costs as coal is 100% imported.

Over 60% of the coal is purchased from Indonesia, and the rest from Australia, South Africa and Russia.

“Coal demand in the next two years is expected to remain stable at around current levels,” said Hans van Cleef, senior energy economist at ABN Amro.

“Although headlines in the newspapers may suggest that coal demand will peak soon, in reality, demand will remain solid in the coming years,” he added.

To prepare for such scenario, the industry has taken steps to achieve greater efficiency in power generation through coal power plants.

All new coal-fired power plants now use ultra-supercritical (USC) technology that burns less coal for more power, while complying with emission standards.

Tenaga Nasional’s (TNB) 1,000 megawatt (MW) Manjung 4 power plant, which commenced operations in 2015, is Southeast Asia’s first USC coal fired power plant capable of producing enough electricity for two million homes with a 3% reduction in coal consumption.

Going forward, the government has put in place a few mechanisms to boost renewal energy usage in power generation, including Net Energy Metering, Large Scale Solar (LSS), Green Sukuk Financing Scheme and Feed-in Tariff mechanisms.

TNB has embarked on the country’s largest LSS park with the 50MW project in Kuala Langat, Selangor, as well a few joint ventures in biomass and biogas power stations.

TNB’s most recent venture is through its RE subsidiary, where the company plans to offer financing self-generation packages for solar photovoltaic panels for residential customers by year-end.

These packages have already been offered to commercial and industrials customers.