The National Grid Strengthening Malaysia's Framework - Suruhanjaya Tenaga

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The National Grid Strengthening Malaysia's Framework - Suruhanjaya Tenaga
Energy Malaysia

                                                                                            Volume 6 2015
                                                                                            www.st.gov.my
Volume 6
KDN: PP 18540/08/2014(033966)

                                                            The National Grid
                                                                Strengthening Malaysia’s Framework

                                MYR 8.48    Volume 6
www.st.gov.my

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The National Grid Strengthening Malaysia's Framework - Suruhanjaya Tenaga
02 CHAIRMAN’S OVERVIEW                                      Innovations
                                                            28 GET SMART!
                                                                                                                    45
News                                                        Highlighting smart meters and energy
                                                            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
                                                            32 BECOMING A
Features                                                    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
18 THE NATIONAL GRID                                        Energy Malaysia         highlights the effects of
                                                            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.
The National Grid Strengthening Malaysia's Framework - Suruhanjaya Tenaga
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.
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The National Grid Strengthening Malaysia's Framework - Suruhanjaya Tenaga
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
The National Grid Strengthening Malaysia's Framework - Suruhanjaya Tenaga
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
The National Grid Strengthening Malaysia's Framework - Suruhanjaya Tenaga
News

             Kota Marudu                                                       The Gas
            Kota Belud                                                         Network
           Tuaran                                                              An initiative of a coast-to-coast gas pipeline that will
                                        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 to the media, Gas
supplier of piped gas in Peninsular Malaysia, Gas Malaysia                 Malaysia said, “In support of the liberalisation of the natural gas
Bhd, will be subjected to the IBR, which aims to incentivise               industry, which is to gradually align current piped gas towards
better operational performance through efficient allocation                market prices, IBR is introduced to promote efficient resources
and use of resources.                                                      allocation and usage, and sustainable financial performance.”

  4
The National Grid Strengthening Malaysia's Framework - Suruhanjaya Tenaga
Feature

Planning to Grow
Maximising National Development
with Energy Efficiency
A rapidly developing country, Malaysia’s
economic growth and advancement is highly
dependent on the cumulative efforts of all its
sectors—from manufacturing and transportation
to logistics and construction. As its population
grows, development ramps up and the economy
progresses further, the toll will be on the demand
and consumption of more energy to boost
production, and the environment, which will
suffer the effects of pollution and degradation.
This is where the efficient use of energy comes
in—the aim is to apply less power to accomplish
the same level of tasks, or grow the economy
without increasing carbon emissions.

It is important to note that the efficient
use of energy has been a national
priority since the Ninth Malaysia Plan
(9MP), implemented between 2006
and 2010. However, since the 2000s,
the country’s energy intensity ratio
(which indicates the efficient use of
energy, if less than one) has been over
1.0. It was with this consideration that
the government—spearheaded by the
Ministry of Energy, Green Technology
and Water (KeTTHA)—introduced the
National Energy Efficiency Master
Plan (NEEMP) in 2010, a ten-year
plan created after consultations with
more than 60 industry stakeholders,
including government ministries,             a 6% reduction in electricity demand.
agencies, industry associations and          To accomplish this, the plan is based
the private sector.                          on five core thrusts that will optimise the
                                             use of electricity and minimise waste to
ACTION POINTS                                contribute to sustainable development
                                             and increased national competitiveness.
To improve on the NEEMP, KeTTHA              Among its aims is to save 50,594GWh
proposed the National Energy Efficiency      of electricity.
Action Plan (NEEAP) in January 2014,
a more-effective initiative intended to      In addition to the five thrusts (that
address several barriers on energy           includes implementing EE programmes
efficiency (EE). Also designed to be         and encouraging commercial financial
implemented over a 10-year period, the       institutions to support EE), the NEEAP
NEEAP aims to cut consumption through        also outlines five strategic actions and

                                                                                                 5
The National Grid Strengthening Malaysia's Framework - Suruhanjaya Tenaga
five initiatives (such as energy efficient            development of the nation, there are        widespread adoption, and lack of
building designs, rating and labelling                a number of challenges that need to         dedicated financial support—in terms
of appliances, and setting a Minimum                  be overcome to achieve these results.       of loans and monetary packages for
Energy Performance Standard).                         These include the low price of energy       EE projects and appliances. The lack
                                                      in the country owing to subsidies, and      of consistency in the implementation
According to the NEEAP Draft Final                    currently further enhanced by the global    of EE strategies is also the operational
Report published last year, the plan is               decline in oil prices. This translates to   barrier that was identified and is to
expected to reduce CO2 emissions                      taking electricity for granted leading to   be resolved by the NEEAP.
by 40 million tonnes over 10 years                    higher consumption. A solution is the
and about 90 million tonnes of CO2                    gradual removal of energy subsidies—        ADVANCEMENT STRATEGIES
equivalent over the lifetime of energy                forcing consumers to pay more attention
efficient equipment purchased as part                 to their power use.                         Unlike a number of ASEAN countries
of the initiative.                                                                                (such as Thailand, Singapore and
                                                      According to the NEEAP report,              Vietnam) that have already advanced
BREAKING BARRIERS                                     other issues that affect the adoption       the implementation of their national
                                                      of EE strategies in the country are the     EE strategies, Malaysia’s NEEAP is
While the impact of EE strategies                     absence of a national plan or guideline     still relatively new. Nevertheless, it
through the NEEAP is beneficial to the                to implement EE and achieving               has good basic guiding principles

         ENERGY SAVINGS AND DEMAND REDUCTION
             7.0

             6.0

             5.0

             4.0
       GWh

             3.0

             2.0

             1.0

             0.0
                       Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

                                        Residential                         Commercial                            Industrial

                                                                  % of Demand Reduction
Over a 10-year period, the National
Energy Efficiency Action Plan (NEEAP)
is expected to reduce electricity
consumption by 6% across residential,
commercial and industrial users.                                                                                    Source: Energy Commission

6
The National Grid Strengthening Malaysia's Framework - Suruhanjaya Tenaga
Feature

                                         THE BIG PICTURE

                                            Reduce
                                          Energy Bill

                       Government                                      Improve Economic
                          Cut down                                       Productivity
                       on government
                     energy expenditure                                                    Industry
                                                                                  Energy efficient technologies
                                                                                         and processes

                       Reduce
                    Environmental                                       Improve
                        Effects                                          Quality
                                                                         of Life
                         Commercial
                    Energy efficient buildings                          Residential
                                                                  Energy efficient appliances
                                                                                                         The overall aims of the
                                                                                                         NEEAP include encouraging
                                                                                                         subtainable consumption of
                                                                                                         electricity, which will result
                                                                                                         in enhanced economic
                                                                                                         productivity as energy-
                                                                                                         efficiency solution enable
                                                                                                         greater output with lesser input.

that will help promote and enhance               appliance. Applicable to government
awareness of EE and its benefits                 and private sectors, only BCRs of more
among consumers. One of these is                 than 1.0 will be considered effective.         decision making and initiative-
making EE projects and appliances                                                               planning processes. Others include
more cost-effective for users. For the           Another principle the NEEAP is                 creating incentives to encourage
NEEAP, the standard used is the                  adopting is targeting and involving            consumers to adopt EE measures, as
Benefit-Cost Ratio (BCR) that measures           small and medium enterprises (SMEs)—           well as improving the competitiveness
the rate of energy savings in monetary           as they constitute more than 99% of            of EE appliances, which will help users
gains in relation to the cost of the             companies in the country, in the               save more on their energy consumption.

                               More than just encouraging users to reduce their demand for electricity,
                               NEEAP and EE strategies aim to decrease Malaysia’s carbon footprint,
                               lessen its dependence on imported fossil fuels and the long-term cost of
                               importing oil and gas. Adopting energy efficiency is also beneficial for
                               consumers, who will be able to save on their monthly costs, as well as
                               minimise the impact of economic development on the environment.

                                                                                                                                             7
The National Grid Strengthening Malaysia's Framework - Suruhanjaya Tenaga
Allowing Access
New Policy to Enhance Malaysia’s Gas Industry
In the decade between 2003 and 2013, piped natural gas consumption in the
country increased by 44.3%, from 6,981ktoe to 10,076ktoe. As demand grows
amid limited and declining supply, there is an urgent need to utilise available power
as efficiently as possible while ensuring a sustainable and reliable supply, as well as
energy security. One of the measures the authorities in Malaysia is taking to ensure
the continued availability of natural gas in the country—and continued national
development—is the liberalisation of the gas market.

The liberalisation of the industry       system was Petronas. Speaking to            “Although gas prices are currently
through the Third-Party Access (TPA)     Energy Malaysia, Ir. Roslee                 regulated and subsidised by the
aims to enhance the existing Gas         Esman, Director of the Energy               government, such subsidies may
Supply Act (GSA) 1993, which             Commission’s Gas Development                be removed in future to make gas
outlines the supply and distribution     and Regulation Department,                  impor ts economically feasible.
of gas at competitive prices in the      notes that the proposed liberalisation      This will translate to higher costs for
country. Prior to the proposed opening   of the industry will be beneficial to       the consumers and the industry if
of the market, the sole importer of      the sector’s stakeholders, consumers        measures are not taken ahead of
gas into Peninsular Malaysia via         and the continued development of            time,” Ir. Roslee explains.
the Peninsular Gas Utilisation (PGU)     the country.
                                                                                     He adds, “What the liberalisation of
                                                                                     the market does is open the industry up
                                                                                     for other players who are interested in
                                                                                     importing gas using the regasification
                                                                                     terminal or Peninsular Gas Utilisation
                                                                                     (PGU) pipeline. With Petronas as the
                                                                                     only player in the industry, pricing may
                                                                                     not be as competitive for stakeholders,
                                                                                     who adhere to a Petronas-set price.
                                                                                     The idea behind the liberalisation is
                                                                                     that with more players involved in gas
                                                                                     importation, consumers will also be able
                                                                                     to enjoy lower and competitive tariffs.”

                                                                                     Ir. Roslee also notes that with gas
                                                                                     reserves declining, the process of
                                                                                     tapping and extracting from the energy
                                                                                     source becomes more expensive. This
                                                                                     highlights another reason for the TPA: a
                                                                                     more open market means that industry
                                                                                     players in the country can purchase gas
                                                                                     at competitive prices.

                                                                         With access to existing gas
                                                                         infrastructure, such as the Petronas
                                                                         Floating LNG Regasification Terminal,
                                                                         third-party operators can help boost
                                                                         the use of natural gas in Malaysia.

8
Feature

                                                                            “One of the challenges is
                                                                            the strict implementation
                                                                            of subsidy rationalisation
                                                                            programme to reflect the
                                                                               actual cost of supply.
                                                                           People need to understand
                                                                               that adopting market
                                                                             prices will be a massive
                                                                             boost to the Malaysian
                                                                           economy, and will increase
                                                                              competitiveness in the
                                                                                   gas industry.”
                                                                                      - Ir. Roslee Esman
                                                                                    Director, Gas Development
                                                                                    and Regulation Department

                           THE THIRD-PARTY ACCESS (TPA) BUSINESS MODEL

        Sales and
        Purchase Agreement                                                                               Gas Sales
                                                                       SHIPPERS                          Agreement
                                                                    Owner of the Gas
                                            Re-gas Service
                                            Agreement

                                                                            Transportation
                                                                            Agreement

                                       Regasification (RGT)
                                       Terminal
                                                                       Transporter
                                                                                                               Offtakers/
                                                                                                               end-users
                                                        Conne
                                                              cti
                                                        Agree on                             Conne
                                                             ment                                  cti
Liquefied                                                                                    Agree on
Natural Gas                                                                                       ment
(LNG)                • Inter-shipper
Traders/             Agreement                                        Petronas Gas Berhad
Producers                                                             (PGB) Network Code

The TPA will open the Malaysian gas                                                              Physical connection/gas flow
market, making it more competitive                                                               Commercial arrangement
as more players get involved in the
importation and distribution of the
commodity.                                                                                                  Source: Petronas 2014

                                                                                                                                    9
Feature

 TPA AGREEMENT PRINCIPLES
 The TPA enables gas industry players access to the PGU and RGT based on these core principles.

 Key Services                     Peninsular Gas Utilisation                                      Regasification Terminal (RGT)
                                  (PGU) Pipeline                                                  Sungai Udang

 Access to facilities                                           • Shipper Registration & Accreditation
                                                                       • Submit application to
                                                                      Petronas Gas Berhad (PGB)
                                                                    • First Come, First Serve basis

 Capacity                         • Fixed / Variable Capacity                                     • Submit application to PGB
 Reservation                      • Submit application to PGB                                     • Subject to availability
                                  • Subject to availability

 Nomination                       • Daily nomination process                                      • Daily nomination process
                                  • Path-based nomination                                         • Gas Day: 6am to 6am (24hours)
                                  • Gas Day: 6am to 6am (24hours)

 Agreement                        • Gas Transportation Agreement (GTA)                            • Regasification Services Agreement (RSA)
                                  • Gas Connection Agreement (GCA)                                • Inter-Shipper Agreement (ISA)

 Sublet                                                                           • Not allowed

                                                                                                                             Source: Petronas 2014

ATTRACTING COMPETITION
                                                      Market on the 23rd of April 2015,                    at global industry prices, to secure
Stipulated under the fifth entry point                Dato’ Abdul Razak Abdul Majid                        domestic availability and in anticipation
project of the Economic Transformation                noted, “While the codes elaborate                    of future increases in demand.
Programme’s (ETP) Oil, Gas and                        on agreements and ser vices, a
Energy sector, the proposed TPA will be               Competition Guideline for the                        RENT TO USE
regulated by the Energy Commission,                   Malaysian Gas Market encourages
and will require licenses encompassing                a conducive, transparent and fair                    The big picture here is that liberalising
import into regasification terminals                  gas industry environment. It does                    the gas industry will create benefits
(RGT), regasification, shipping and                   this by creating a level playing field               for the country that are more than
transportation, and distribution and                  without discrimination among the                     domestic. For one, the TPA will allow
retail. The Energy Commission will                    users of the facilities by the suppliers.            local and foreign companies compete
also oversee the Gas Code, which                      In addition to that, the Guidelines also             on a level playing field in the country
is a set of three TPA codes (for the                  prevent anti-competitive behaviour                   with the commodity sold and shipped
Malaysian Regasification, Transmission                and abuse of dominant position.”                     at global market prices.
and Distribution system infrastructure)
expected to be ready for implementation               In essence, the TPA takes advantage                  Ir. Roslee also notes, “Only the
after Gas Supply Act (amendment)                      of the completion of the Petronas LNG                tariff  for use of infrastructure such as:
approved by the Parliament.                           Regasification Terminal in Sungai                    RGT, transmission and distribution, will
                                                      Udang (RGTSU) in 2013 to encourage                   be regulated. Other than that, the
Speaking at a workshop for the                        petroleum companies to commence                      gas price will depend on the market
Liberalisation of the Malaysian Gas                   supplying gas to the Malaysian market                supply-demand.”

                                  Expected to be tabled in Parliament later this year, the TPA has undergone
                                  a process of discussions and consultations with stakeholders in the gas
                                  industry to receive and incorporate feedback into the amendment since it
                                  was proposed two years ago. As subsidies and domestic gas sources fade,
                                  liberalising the Malaysian gas industry promises to boost the availability of
                                  the commodity at attractive and competitive prices.

10
Safe And Efficient
        Usage Of Electricity
                     Test the automatic circuit breaker switch in your home today!
  Automatic circuit breaker switches found in the button is pressed and you can restore the switch to its
  electrical distribution board in your home is to protect original position.
  you and your family from the dangers of electric shock.
                                                           If the automatic circuit breaker switch does not trip after
  Ensure that the automatic circuit breaker sensitivity the test button is pressed, you should immediately consult
  does not exceed 100 mA or 0.1 A and is tested at least a Registered Electrical Contractor for inspection and
  once a month to ensure that it always functions replacement of the automatic circuit breaker switch.
  satisfactorily.
                                                           If you are using an electric water heater in the bathroom,
  A simple way to test the automatic circuit breaker is to make sure that the automatic circuit breaker switch with a
  press the test button (marked ‘T’). Automatic circuit sensitivity of not exceeding 10 mA or 0.01 A is installed
  breaker switch that works well will trip when the test in the water heater circuit.

                               VALUE OUR LIVES. AVOID ACCIDENTS AND WASTAGE!
                                PRACTISE EFFICIENT WAYS OF USING ELECTRICITY
                  Switch off electricity when not in use. The more you waste, the more you pay.
Use energy-efficient electrical appliances such as refrigerators, fans, TV, lights and air-conditioners with energy efficiency labels.
                               Use electrical appliances at moderate speed, temperature and load.
                          Use natural lighting and ventilation to reduce the use of electrical appliances.
                                    Monitor the electricity consumption level at your premises.

                            Energy Commission No. 12 Jalan Tun Hussien, Precinct 2, 62100, Putrajaya
            Toll Free Number: 1 800 2222 78 Telephone: 03 8888 8500 Fax: 03 8888 8637 Website: www.st.gov.my
Cogeneration
            Producing Electricity and Thermal
              Energy from a Single Source
     To generate electricity, a fuel source—natural gas, coal, biomass,
     hydro and solar photovoltaic cells—is introduced into a power
     plant, a rotating machine which spins, creating a relative motion
     between a magnetic field and a conductor to create electricity. This
     process also generates significant amounts of heat. Expounding
     on the system of utilising the electricity and the heat from a single
     power plant, the Energy Commission’s Head of Licencing Unit,
     Nurhafiza Mohamed Hasan and Head of Capacity Development
     Unit Mohd Rizal Ramli, speak to Energy Malaysia.

12
Feature

       “Cogeneration offers a more efficient
        system of generating electricity and
        heat simultaneously. However, being
      more efficient does not always translate
       to being cheaper, particularly in initial
                 investment costs.”
                           - Mohd Rizal Ramli
                     Head of Capacity Development Unit

The process of producing electricity        alternative to having two different
and heat simultaneously from a single       sources for electricity and heat.
power plant is called cogeneration or
combined heat and power (CHP). It           For reliability and to maximise their
should however be noted that there          benefits, cogeneration plants are sited
are also combined cooling, heat and         proximate to industries that utilise the
power (CCHP) plants that generate           electricity and heat. These include
thermal energy and condenses steam          industrial facilities, petrochemical
to chilled water for heating, ventilation   plants, hospitals, schools, government
and air-conditioning (HVAC) systems.        buildings and large residential
By putting the free heat ‘waste’ to use,    facilities. In Malaysia, one of the most
utilising the same amount of energy         notable is the 25-hectare Pengerang
required to produce only electricity,       Cogeneration Plant (PCP). Slated to
CHP systems offer a higher efficiency       become operational in 2017, it will
with less carbon emissions. It also         have an electricity generation capacity
provides a significantly cheaper            of 1,220MW and steam generation

                                                                                 13
capacity of 1,480 tonnes per hour.           plants for their use, as well as to supply
                                                The electricity and heat will be used        the national grid.
                                                to power the Pengerang Integrated
                                                Complex (PIC). The PIC is the                “Examples of CHP plants in Malaysia
                                                largest Refinery and Petrochemicals          include the Pengerang Cogeneration
                                                Integrated Development (RAPID)               Plant and Centralised Utility Facilities
                                                project in Malaysia, and will comprise       (CUF) in Kerteh, Terengganu and in
                                                petroleum cracking facilities, oil           Gebeng, Pahang,” Rizal reveals.
                                                refineries, petrochemical plants,            However, he explains that currently,
                                                as well as liquefied natural gas             the demand for cogeneration plants
                                                (LNG) import terminal, power and             is driven by specific industries, and
                                                regasification plants. It is also part of    not as high as it should be. “While
                                                the larger, 20,000-acre Pengerang            many industries require electricity
                                                Integrated Petroleum Complex (PIPC)          and steam, many businesses are
                                                in Johor.                                    yet to understand the competitive
                                                                                             advantage they can have from using
                                                COMPETITIVE ADVANTAGE                        CHP,” he said.

                                                According to Nurhafiza, the Energy           INDUSTRY-WIDE BENEFITS
                                                Commission has so far issued licenses for
                                                19 public and 23 private cogeneration        A business case may not have to be
                                                plants, with capacities of 747MW and         made, as the overall advantages of
                                                550MW respectively. Private plants           implementing cogeneration plants
The cogeneration process offers a higher        are generators and companies that            cannot be overemphasised. One of
efficiency by producing electricity and
thermal energy from the same amount of          implement the system for their own           such benefits is the higher efficiency
fuel as conventional generators, with less      personal use, while public licenses are      of energy conversion and use – up
emission and wastage.                           issued to organisations that install CHP     to 80% with modern generators,

                                                              Electricity 42%               Thermal power 45%

     Fuel 100%                       Cogeneration                                                       Leaks 13%

                            COGENERATION VS CONVENTIONAL PLANTS

                                                                            Electricity 38%

       Fuel 100%                             Traditional
                                                                                                         Leaks 62%
                                             Power Plant
                                                                                                                         Source: Cobbil.it

14
Feature

           “In terms of policies to
        encourage the development
          of CHP plants, I believe
        KeTTHA is looking into that.
      However, even without a policy,
      applications keep coming, and
        we process them according
          to their financial viability
        and technical requirements.
          Under Section 14 of the
       Energy Commission Act, one
         of our responsibilities is to
      encourage efficiency in energy
       generation—this translates to
        encouraging cogeneration.”
              - Nurhafiza Mohamed Hasan
                     Head of Licencing Unit

Nurhafiza explains. For industrial and      natural gas. Still, Rizal points out that   notes that another advantage of CHP
commercial users, CHP offers additional     the predominant use of natural gas          plants is that licensees do not have
competitiveness with significant cost       for fuel generation may be beneficial       to follow any special procedure, as
savings and increased employment. For       for the gas industry, as it will see        “the process is exactly the same as
instance, the PIPC is expected to require   the commodity become more widely            conventional generators—with a 60-
up to 2,000 workers from various            used in the country, and reduce             day processing period.” However,
industries and with different skill sets.   the importation of coal for power           the Energy Commission considers
                                            generation. It is important to note         cogeneration plant applications
In many scenarios, CHP offers               that Malaysia is currently the world’s      more stringently, as “we don’t want
domestic energy supply security, as         second largest producer of natural          industries to develop CHP plants just
well as the opportunity to increase         gas after Qatar.                            to sell to the grid.” Rather, the plants
the diversity of generation plants.                                                     need to have been created for private
This however may not be the case            Concurring, Nurhafiza added that            use and the excess waste heat and
in Malaysia, where the primary fuel         in some Malaysian states, biomass           steam should be what the operators
source for cogeneration plants is           is also used as a fuel source. She          want to distribute to other users.

                    In terms of national energy mix, Rizal explains that core areas of consideration
                    are the security of supply, cost and the environment, “and cogeneration fits into
                    these categories with cost advantage, supply security and lower CO2 emissions.”
                    He adds, “This is one of the reasons why the PIPC project is significant. In
                    addition to the power the complex generates and consumes, it will also sell
                    electricity to the national grid at competitive rates.”

                                                                                                                             15
The Code
     Confused by the numerous terms from The Malaysian Grid Code?
     Energy Malaysia presents some of the commonly used terminologies,
     based on the Glossary and Definitions section of the Code.

     • Grid System: Systems of generation,
     transmission and distribution of electricity
     covering larger network across countries
     or continents. The grid system ensures a
     continuous availability of sufficient energy
     supply for all consumers, with adequate
     margin between supply and demand. It also
     develops and maintains efficient, coordinated
     and economical transmission system for bulk
     delivery of electrical energy.

     • Grid Owner: The party that owns the
                                                                                  GENERATION
     high-voltage backbone of the Transmission
     System, and is responsible for maintaining
                                                         • Generating Unit: A plant and/or apparatus which
     adequate grid capacity in accordance with
                                                         produces electricity.
     the provisions of the Grid Code and license
     standards. In Malaysia, Tenaga Nasional
                                                         • Plant: Fixed or movable items used in the generation,
     Berhad (TNB) Transmission Division represents
                                                         and/or supply, and/or transmission of electricity.
     the Grid Owner.
                                                         • Apparatus: Equipment, such as devices and fittings, in
     • Grid System Operator (GSO): Ring
                                                         which a conductor is used.
     fenced entity within TNB which is responsible for
     operational planning, real-time re-scheduling,
                                                         • Generators: Companies licensed by the Energy
     dispatch and control of the grid system in
                                                         Commission to generate electricity in Peninsular Malaysia
     compliance with the provisions of the Grid Code
                                                         and Sabah. Currently, generators include TNB Generation
     and coordinates all parties connected to the
                                                         Division, Sabah Energy and IPPs.
     Grid System.
                                                         • Independent Power Producer (IPP): A
                                                         power company (not affiliated with TNB) with a Power
                                                         Purchase Agreement, such as YTL Power Generation and
                                                         Pahlawan Power.

                                                         • Power Purchase Agreement (PPA): An agreement
                                                         in the form of a contract between the one who generates
                                                         electricity (the seller) and the one who is looking to purchase
                                                         electricity (the buyer). In this case, generators are the sellers,
                                                         and the buyer is the Single Buyer Department of TNB.

16
Tips

                                                                             TRANSMISSION

                                                      • Transmission Network: Also knows as
                                                      Transmission System, it consists (wholly or mainly) of high-
                                                      voltage electric lines (transmission lines of 132kV and
                                                      above) owned or operated by TNB Transmission and used
                                                      to transmit electricity from one power station to a substation
                                                      or to another power station. It can also be between
                                                      substations or to or from any external interconnection, and
                                                      includes any plant and/or apparatus and meters owned
                                                      or operated by TNB Transmission in connection with the
                                                      transmission of electricity.

                                                      • Power Station: An installation comprised of
                                                      generating units owned and controlled by generators.

                                                      • Substations: Stations that take the electricity from
                                                      power plants and from the transmission lines and transform
                                                      it from high to lower voltage. They distribute electricity to
                                                      consumers, as well as supervise and protect the distribution
                                                      network to keep it working safely and efficiently.

                                                      • National Load Dispatch Centre (NLDC): This is
                                                      the control centre from which the GSO directs the control of
                                                      the Peninsular Malaysia Power System.

• Single Buyer: A ring fenced entity within
TNB responsible for least cost dispatch scheduling,           DISTRIBUTION
managing Power Purchase Agreements and
settlement process.                                   • Distribution Network:
                                                      Also known as Distribution
• Settlement: Processes and procedures for            System, it consists (wholly or
calculation of payments under relevant agreements.    mainly) of electric lines which
                                                      are owned or operated by a
• Connection Application: An application              distributor, and used for the
made by a generator to the grid owner and grid        distribution of electricity from
system operator (GSO) for connection of plant         supply points or generating
and/or apparatus or user system to the grid           units to customers and other
system.                                               distributors.

• Directly Connected Customers (DCC):                 • Distributor: A person
A customer receiving electricity directly from the    licensed to distribute electricity,
Transmission System.                                  who operates, maintains, and
                                                      distributes electricity through a
• Users: Persons using the Transmission System;       distribution network. They own
the users in the grid system are the grid owners,     and manage the power poles
DCC, and people controlling and maintaining the       and wires which deliver power
grid system.                                          to homes and businesses.

• User Network: Also known as User System,            • Consumer: A person
it is any system owned or operated by a user.         supplied with electricity.

                                                                                                                  17
The National Grid
     A Framework for Advancement

       The journey of electricity begins at
       generation (primarily by coal or gas-
       fired plants, thermal, hydroelectric
       plants, or renewable energy sources,
       such as solar photovoltaic generators).
       The second major part of the process
       is transmission, where electricity
       is ‘stepped up’ by substation
       transformers (voltage raised to
       increase transportation efficiency) and
       transferred to the National Grid—
       a highway network of high-voltage
       cables that carry and transmit power
       across the country. For consumers to
       safely use this transmitted electricity,
       it will need to be ‘stepped down’ by
       substation transformers proximate to
       residential and industrial users.

18
Feature

The journey from generator to                                Grid Network
consumers occurs almost instantaneously,
and the National Grid is one of the
main reasons and most important
infrastructures that makes this process
possible. In play are a number of
key components that work hand-in-
hand to ensure that consumers—
across various economic sectors,                                                                                Substation
including residential, industrial and
transportation—have access to                                     Power Plants
a stable and reliable supply of
electricity.
                                                             Large Power                                                                                      National Grid
                                                              Consumers
System Drivers
These components include the Energy                                                                         132kV                                           500kV
Generators, Network Operators,                                                                                                                              275kV
Grid System Operators (GSO), Grid                              Hospitals,
Owners, Interconnected Parties,                            schools, small
                                                          industries and                                                         Substation
Single Buyers, Distributors and Directly                     commercial                          240V                   11kV
Connected Consumers. In Malaysia, the                             centres                                                                The network of high voltage
                                                                                                                                         power lines (500kV, 275kV,
National Grid refers to the transmission                                                                                                      132kV, and 11kV) in the
system across the peninsula (with                                                                                                     National Grid transports power
interconnections in Khlong Ngae and                          Residential                                                                    from power plants to load
                                                                  areas,                         240V    Substation                    centres (substations) or directly
Sadoa in Thailand, and Woodlands,
                                                             workplaces                                                                   to large power consumers.
Singapore), while Sarawak, Sabah                              and shops
and Labuan have separate grid
networks. In Peninsular Malaysia, the                                                                                              Source: Tenaga Nasional Berhad

                                                                                                                    20,950 circuit km high-voltage
               Development of the Grid System                                                                       network comprises 500kV, 275kV,
                                                                                                                    132kV, 33kV and 11kV supply
                          TNB                                                                                       cables, while in Sabah and Sarawak,
                          established                 1st Malaysian            Malaysia – Thailand                  the network comprises 275kV, 132kV
 Peninsular
 Grid System                                          Grid Code                300MW High-Voltage Link              and 33kV cables.
 established                                          introduced
                                                                                                                    Power generation in the National Grid
                                                                                                                    is done by licensed independent power
                                                                                                                    producers (IPPs) and Tenaga Nasional
                                                                                                                    Berhad (TNB)—Malaysia’s largest
                                                                                                                    energy utility—which also generates,
1953 1970 1990 1992 1994 1996 1998 2010                                                                             transmits, manages and distributes
                                                                                                                    electricity along the grid. In Sabah
                                                                                                                    and Sarawak, Sabah Energy Sdn Bhd
                                                                                                                    (SESB) and Sarawak Electricity Supply
                                                                                                                    Corporation (SESCO) respectively
                                                                                                                    generate, transmit and distribute
               1st 275 kV                                             1st 500kV                                     electricity in their respective State Grids.
               Circuit                                                Circuit
               commissioned                                           commissioned
                                                                                                                    Industry Regulations
                                        1st IPP                                                                     With several processes and users
                                        established                                    Launch of new
                                                                                       Malaysian Grid &             involved in the energy generation and
                                                                                       Distribution Codes           distribution chain, it is essential that
                                                                                                                    they have and recognise a common
                                                                                                                    base to ensure that service delivery
                                                                                 Source: Energy Commission          is at pre-determined standards.

                                                                                                                                                                    19
Feature

     This benchmark is the Malaysian Grid
     Code (MGC) and the Malaysian
     Distribution Code (MDC), created by
     their respective regulators – Energy
     Commission for the peninsular, Sabah
     and Labuan, and the State Electrical
                                                       of the various players, and ensure the
                                                       continuous development and operation
                                                       of the grid.

                                                       Developing Distribution
                                                                                                               5           Benefits of Grid
                                                                                                                           & Distribution
                                                                                                                           Codes
                                                                                                                           1 Encourages healthy
                                                                                                                           competition in the electrical
     Inspectorate for Sarawak.                         Concurrently, the MDC was created                                   supply industry (ESI)
                                                       because there were no regulations
     First introduced in 1994, more than               to guide the parties involved at the                                2 Promotes enhanced
     four decades after the establishment of           distribution level of electricity supply                            development, maintenance
     the Peninsular Grid System, the MGC               at that time. In addition, the MDC
     was later revamped and the MDC                    provided guidelines on the relationship
                                                                                                                           and operations of the
     officially created in 2010, and both              between the Distributors, the Energy                                country’s grid network
     effected on 1st January 2011. The                 Commission and users of the electricity
     overhaul of the MGC aimed to update               distribution network.                                               3 Furthers the interest
     the previous standards to be in line                                                                                  of consumers
     with the current state of the electricity         To ensure that the opinions of all parties
     supply industry (ESI), separate the roles         involved in the ESI are considered,                                 4 Helps ensure uniform
                                                                                                                           high quality of electricity
                                                                                                                           generation and supply
     PARTIES IN THE NEW CODES                                                                                              5 Facilitates systematic and
                                                                               The revamped Malaysian
                                                                                                                           operational planning for the
                                             Interconnected Party              Grid Code 2010 sees                         development of the ESI
                                             Party outside the                 the Energy Commission
                                                                               overseeing the operators
                                             country connected at
                                                                               and processes in the
      Entire Grid                            transmission voltage              electricity grid in the
      System Operator                                                          peninsula.
      Operates the Peninsular                                                                                  a Grid Code Committee and a
      Malaysia Grid System                                                                                     Distribution Code Committee were
                                                            Generators                                         constituted. The former comprises the
                                                            TNB and IPPs                                       Energy Commission as its Chairman,
                                                                                                               with 9 representatives from TNB, 6
     Directly Connected
                                                                    Network Operator                           from IPPs, 1 from a Network Operator,
     Customers                                                      Operates network at any voltage
     Connected and metered at                                                                                  2 from the Energy Commission and
                                                                    and may import/export to grid              1 independent technical expert.
     transmission voltage
                                                                      TNB Transmission
                                                                      Grid Owner                               On the Distribution side, the Energy
           Distributors                                               Develops, owns, operates and maintains   Commission also sits as its Chair,
           Connected to grid, operate only                            the high voltage transmission assets     with 5 delegates from TNB, 4 from
           at distribution voltage and                                Single Buyer                             other distributors and 1 from the
           import power from the grid.                                Manages Power Purchase Agreement         Energy Commission. It also includes 2
                                                                      (PPA) and settlement process             members from distribution generators,
                                                                                                               1 consumer, 2 observers from TNB, as
                                                                                    Interconnected Party       well as additional members if required by
                    Peninsular Malaysia                                                                        the Distribution Code Chairman (DCC).

                                                                             Source: Energy Commission

                            Equally as important as the National and State Grids that serve as backbones of
                            electricity supply, ensuring that industries and the national economy continues to
                            thrive and grow, the MGC and MDC are crucial components that regulate the ESI.
                            The regulations also promote healthy competition between all the players involved in
                            the generation, transmission and distribution of electricity, while securing the interests
                            of consumers—from large industries to residential users—who can be assured of
                            reliable and stable power supply and minimal incidences of electricity lapses.

20
Feature

                                                       Connecting
                      Laos
                                                       the Region
Myanmar
                                                                      The ASEAN Power Grid
     Thailand
                                    Vietnam
                                                   Philippines

                         Cambodia

                        Malaysia
                                                  Brunei

                        Singapore
                                                  Indonesia

    For more than 10 years, the member states
    of ASEAN have been working towards closer
    integration, with one of the milestones – the
    single-market ASEAN Economic Community
    (AEC) – due to come into force by the 1st
    of January 2016. In addition to seamless                     addition, national utility company Tenaga Nasional Berhad
                                                                 (TNB) has been in talks with its counterparts in Indonesia to
    movement of goods, services and people                       connect power lines between Melaka and Sumatra.
    across ASEAN, there is also an initiative to
    link the electricity supply, transmission and                Perhaps the most ambitious project under the APG is
                                                                 the Laos, Thailand, Malaysia and Singapore Power
    distribution networks of member states into a
                                                                 Integration Project (LTMS-PIP), which was mooted during the
    single ASEAN Power Grid (APG).                               32nd ASEAN Ministers of Energy Meeting in Vientiane in
                                                                 September 2014.

    The initiative for ASEAN-wide collaboration in energy        As explained by Razib, the project aims to enable the sale
    matters can be traced back to June 1986 and the signing      of electricity from Laos to Singapore using transmission lines
    of the Agreement on ASEAN Energy Cooperation in              running through Thailand and Malaysia. “That agreement
    Manila. Then, slightly more than 10 years later, the APG     will be signed in 2016, with operation date starting in
    was mooted at the Second ASEAN Informal Summit 1997,         2018,” he explained.
    held in Kuala Lumpur.
                                                                 According to the Joint Statement on the LTMS-PIP, which
    According to Abdul Razib Dawood, Head Market                 was issued in September last year, a Working Group has
    Operations Unit at the Energy Commission, one                been set up to “study the technical viability of cross-border
    example of the APG at work is a recent interconnection       power trade of up to 100MW from Laos to Singapore,
    between Sarawak and West Kalimantan in Indonesia. In         using existing interconnections.”

                                                                                                                            21
Driving Forces
Part of the driving force behind the
LTMS-PIP is Laos’ aim to become the
“Battery of Southeast Asia” via its
hydropower projects. The country
already generates 3.2GW worth of
power through such sources, and
exports around two-thirds of that to
neighbouring countries such as China,
Myanmar, Thailand, Cambodia and
Vietnam. By the year 2030, that
capacity is expected to reach 24GW.

As reported by Li Yanfei for the
Indonesia-based Economic Research
Institute for ASEAN and East Asia
(ERIA), the LTMS-PIP could result in all
countries involved saving as much
as US$26 billion (RM108 billion).
Li explained that while the trade is
mainly between Laos and Singapore,
“Thailand and Malaysia would also
benefit because the power goes
through their territories and they can
carry out some sort of relay power             Above: With an expected capacity of
trade in between.”                              2,400MW, Bakun Dam in Sarawak is
                                              expected to not only generate power for
                                                Sarawak’s needs but also to be sold to
From an overall ASEAN point of view,            Peninsular Malaysia and neighbouring
the success of the LTMS-PIP will go a long     countries through interconnections, thus
way in ensuring the realisation of the         contributing to the ASEAN Power Grid.

APG. Technically, the project is helped             Below: Industries in countries like
by the fact that Peninsular Malaysia         Singapore, such as this mould factory, will
already shares interconnection with             benefit greatly from the ASEAN Power
                                              Grid as it will allow them to access more
both Singapore in the south and                          affordable means of electricity.
Thailand in the north.

Obstacles in Sight
That being said, several challenges
still need to be overcome. As Razib
Dawood explained, “This includes self-
sufficiency policy adopted by each
country where export is only allowed
when there is excess energy.”

Razib also pointed out that, “Unlike
the European Union, where there
is uniformity in taxation and other
regulations, in ASEAN, we still respect
the individual rights of member
states.” He went on to highlight that
efforts are being made to overcome
these obstacles, mainly through the
harmonisation of regulations and
technical performance standards, so as
to ease cross-border electricity trading.

22
Feature

ASEAN INTERCONNECTION PROJECTS

                                                Expected Completion Date
1 Peninsular Malaysia -
Singapore (New Extension)                                        2018
                                                                           Another potential stumbling block with
                                                                           regards to the LTMS-PIP is the stability
2 Thailand - Peninsular Malaysia
                                                                           of power grids in the member countries.
•   Sadao - Bukit Keteri                                   Completed
                                                                           This was raised by Malaysia’s Minister
•   Khlong Ngae - Gurun                                    Completed
                                                                           for Energy, Green Technology and
•   Sungai Kolok - Rantau Panjang                             2015
                                                                           Water (KeTTHA) Dato’ Sri Dr Maximus
•   Khlong Ngae - Gurun (2nd Phase, 300MW)                    2020
                                                                           Ongkili, who said, “We need to have
                                                                           a proper grid within our countries first,
3 Sarawak - Peninsular Malaysia                                  2023
                                                                           before we can export to each other
                                                                           within the ASEAN belt.”
4 Peninsular Malaysia - Sumatra                                  2018
                                                                           This is where the Energy Commission,
5 Batam - Singapore                                       2015-2017
                                                                           as the national regulator, comes in.
                                                                           Through proper oversight of the grid
6 Sarawak - West Kalimantan                                      2015
                                                                           system and coordination with the
                                                                           various parties involved in transmission,
7 Phillippines - Sabah                                           2020
                                                                           it is able to ensure that Malaysia has
                                                                           the right infrastructure to be a key
8 Sarawak - Sabah - Brunei                                       2020
                                                                           participant in cross-border electricity
• 2016 Sarawak - Sabah
                                                                           trading.
• Sarawak - Brunei                                               2012

9 Thailand - Lao PDR                                                       Long-Term Benefits
•   Rel Et 2 - Nam Theun 2
                                                                           The long-term benefits of LTMS-PIP
•   Sakon Nakhon 2 - Thakhek - Then Hinboun                Completed
                                                                           and the APG as a whole outweigh
•   Mae Moh 3 - Nan – Hong Sa                              Completed
                                                                           any challenge brought about by
•   Udon Thani 3 - Nabong                                     2015
                                                                           implementation. By ensuring ASEAN-
•   Ubon Ratchathani 3 - Pakse - Xe Pian Xe Namnoy            2018
                                                                           wide power trading, member states
•   Khon Kaen 4 - Loei 2 - Xayaburi                           2018
                                                                           can purchase electricity when needed,
                                                              2019
                                                                           such as during times of high-demand
                                                                           but low-capacity, or sell it when they
10 Lao PDR - Vietnam                                      2011-2016
                                                                           have too much in reserve but not
                                                                           enough demand locally.
11 Thailand - Myanmar                                     2016-2025
                                                                           This could even prove cheaper than
12 Vietnam - Cambodia (New)                                      2017
                                                                           depending on local generation, as
                                                                           different countries may have more
13 Lao PDR - Cambodia                                            2016
                                                                           affordable ways of producing power.
                                                                           For example, in Malaysia, coal-fired
14 Thailand - Cambodia (New)                              2015-2020
                                                                           power plants depend on imported coal
                                                                           for fuel. However, with the APG and
15 East Sabah - East Kalimantan                                  2020
                                                                           electricity trading in place, Malaysia
                                                                           would be able to buy electricity from
16 Singapore - Sumatra                                           2020
                                                                           Indonesia, where coal is locally available.

                                 Ultimately, the integration of an ASEAN Power Grid will go a
                                 long way in bringing together the ASEAN region as a cohesive
                                 and united economic market. Definitely there is some way to
                                 go but each step taken in the right direction is a step towards a
                                 better and more energy-secure future.

                                                                                                                   23
Intelligent Net works
Multi-Impact Monitoring
Across all economic sectors around the world, technology is enhancing
the execution of processes, and in the energy sector, innovative
systems are already delivering on its promise to improve operations.
One of such examples is the smart grid, which encompasses the entire
electricity network including generation, transmission and user stages
of energy supply. In developed nations, as well as emerging ones—
where growth is occurring rapidly—such systems are essential to
ensure that advancement is economically and environmentally viable.

                               BENEFITS OF HAVING A SMART GRID

                                                     Distribution            HEMS* /                 Energy     Demand
                                         AMI*        Automation                                      Storage    Response
                                                                             BEMS*

     Increasing Renewable
          Generation

        Improved Grid
          Reliability

         Reduce Non
       Technical Losses

             EV*
         Integration

         Rising Peak
           Demand

            Ageing
        Infrastructure

     *EV     –   Electric Vehicle                     Some factors that can catalyse the adoption              Source: Bloomberg New
     *AMI    –   Advanced Metering Infrastructure     of smart grids include an increase in peak                 Energy Finance 2012
     *HEMS   –   Home Energy Management System        demand, ageing conventional infrastructure,
                                                      and the rising adoption of electric vehicles
     *BEMS   –   Building Energy Management System
                                                      (EV) by households.

24
Feature

                                                                        “Smart meters
                                                                       provide real-time
                                                                        online readings
                                                                          for both the
                                                                        consumer and
                                                                           supplier.”
                                                                           – Abdul Razib Dawood
                                                                         Head of Market Operation Unit

As a rapidly advancing economy,               intelligent meters (that provide real-time   users with financial constraints can
Malaysia stands to benefit tremendously       usage information and can turn on            monitor their overall consumption in real
from the implementation of smart grid         appliances at off-peak periods) to smart     time, and decide whether they want to
systems. More so, the government              substations that can process consumer        turn off appliances that consume high
plans to incorporate more renewable           usage statistics before sending to the       amounts of electricity.”
sources of power into the national            generators.
energy mix. In addition, as the nation                                                     In the future, however, smart meters will
transitions into a high-income, industrial    Real TimE                                    be used to encourage consumption
nation, customers will increasingly                                                        of electricity during off-peak hours, in
demand a higher level of reliability          Following Tenaga Nasional Berhad’s           addition to monitoring and managing
of supply, which translates to a need         (TNB) launch of its 1,000-unit smart         usage. According to Razib, under the
to increase the operational efficiency        meter pilot smart grid project funded        concept of Time-of-Use (TOU) electricity
in the generation, transmission and           by the government across Melaka and          pricing, a higher tariff may be introduced
distribution of power.                        Putrajaya (800 and 200 respectively)         for peak times—for instance, between
                                              in 2013, Razib Dawood—Head of                12 noon and 3:00PM, when it is most
A smart grid is an infrastructural system     Market Operation Unit at the Energy          expensive to generate and supply
of power generation, transmission and         Commission—notes that while this is an       electricity—and a lower tariff for off-
supply that utilises ICT to enable a bi-      experimental programme, it is expected to    peak periods to encourage consumers
directional communication between the         form the basis for future development.       to only turn on their power-intensive
end-users and the distributors, in contrast   “The expected outcome currently is the       appliances then.
to existing systems where information         situational awareness and consumers’
only flows from the generators to the         behaviour,” he explained.                    On a larger scale, a smart grid will
users. Tapping into the available data,                                                    allow grid owners to monitor and curb
the consumption patterns of electricity       The smart meters allow bi-directional        power proliferation and theft. “With a
users are more accessible to power            communication between the grid and           smart meter for instance, communication
producers, who can determine peak times       the consumers, while enabling the            between the consumer and supplier is
more accurately.                              latter to monitor their current and past     two-way, and it is easier for electricity
                                              electricity consumption in real-time on      distributors to detect occurrences of theft,”
It comprises equipment that can be            a display panel. “Will that motivate         Razib points out. He also notes that an
implemented in various stages of the          users to save more?” Razib asks,             additional benefit for electricity utilities
generation to consumption chain, from         adding, “By the middle of the month          is that they reduce the time and cost

                                                                                                                                     25
Feature

required to physically travel around to                                HOW SMART GRIDS HELP
read conventional meters. “Smart meters
provide real-time online readings for both
the consumer and supplier,” he said.
                                                             Need for new
                                                                                                                 Smart grids help fill gaps in
                                                     generation investment                                       electricity supply and reduce
                                                                                                                 constraints from peak power
A Bigger Picture                                                                                                 demand while strengthening
                                                                       Energy                                    energy security.
These are beneficial results for the energy                           security
industry—generators, distributors and
users—accomplishing one of the primary
tasks of the Energy Commission, which is                       Adding ageing
safeguarding the interest of the consumers,                     infrastructure
while ensuring a healthy sector. For TNB’s
RM8 million pilot smart meter project,                    System reliability /
capital was raised from the Malaysian                      quality of service
Electricity Supply Industries Trust Account
(MESITA or Akaun Amanah Industri
Bekalan Elektrik – AAIBE). MESITA is a trust              Climate change /
fund formed under Section 9 (3) of the                 enviromental drivers
Financial Procedure Act 1957 for a number
of purposes, including energy efficiency                     Reduce peak
projects, development and promotion                     demand constraints
of the electricity supply industry, rural
electrification programmes and advance
for projects approved by the Trustees of              Increasing distributed
the Electricity Trust Fund.                              energy / resources

The trustees, in a special committee—                     Reduce demand
Electricity Supply Industries Trust Account          growth and new loads
Committee (Jawatankuasa Akaun Amanah
Industri Bekalan Elektrik – JAAIBE)—manage
the fund and comprise representatives from            Increasing renewable
the Performance Management & Delivery                            generation
Unit (Pemandu), the Energy Commission,
TNB, Independent Power Producers (IPPs),
and the Ministry of Energy, Green Technology                                       0          5           10            15            20
and Water (KeTTHA), which also chairs                                                  Number of Global Respondents Surveyed
the committee. Contributions to MESITA
are from power generating companies,                                                              Source: Bloomberg New Energy Finance 2012
including IPPs, and are voluntary, representing
1% of their electricity sale to the national
grid or the transmission network.                 vendors and system integrators) organised   smart grid policy. According to Razib,
                                                  a MiniLab to discuss, share information     while there is none yet, “KeTTHA is in
In 2014, the Energy Commission and                and knowledge, and gather input from        the process of formulating a smart grid
Pemandu, as well as other energy industry         industry players. One of the outcomes       policy based on the outcome of the
stakeholders (such as equipment suppliers,        of this is the planned formulation of a     current pilot project by TNB.”

            In addition to the smart meters, TNB has already implemented its Phasor Measurement
            Unit (PMU), which forms a core part of smart grids, and helps protect the grid and prevent
            massive blackouts from the cascading impact of a single error. In essence, the aims and
            benefits of implementing a smart grid is multi-faceted and favourable to the entire energy
            industry, as well as the economic development of the nation—including operational and
            network efficiency, reliability, emission reduction and customer empowerment.

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