THE NEW ENERGY POLICY

National Energy Security 2012 Sime Darby Convention Centre

28 February 2011

2

Outline of Presentation

Malaysia Energy Resources 1

Energy Policies 2

New Energy Policy, 2010 3

Progress Under 10th Malaysia Plan 4

Way Forward 5

Vision for the Future 6

3

Malaysia’s Energy Resources

Peninsular 2.4

Sabah2.0

Sarawak1.5

Peninsular 35.1Sabah

11.9

Sarawak 42.9

Oil Reserves Gas Reserves

Total : 89.9 Trillion cubic feet

As at 1 January 2011

Total : 5.9 Billion barrels

As at 1 January 2011

15.00 Billion boe

(89.9 TSCF)

5.9

(Billion bbl)

39 years

25 years

Reserve Reserve Life

Gas

Oil

974.0 kboe/day

657.2 kboe/day

Production

2010

4

Malaysia’s Energy Resources

Peninsular , 1%

Sabah, 19%

Sarawak, 80%

Coal Reserves

Total : 1.938 Trillion tonnes

As at 1 January 2011

1.938

Trillion tonnes

Reserve

Coal

Installed

Hydro

2.38 million

tonnes

Major: 2,091 MW

Mini: 22 MW

Production

2010

Installed Capacity

Installed

RE

Public: 120.1 MW

Private: 644.63 MW

Current Energy Situation, 2010

5

Natural Gas 47%

Crude Oil 29%

Petroleum Products

3%

Coal & Coke 19%

Hydro 2%

Natural Gas 15%

Petroleum Products

59%

Coal & Coke 5%

Electricity 21%

Primary Energy Supply Final Energy Demand

Total : 78,320 ktoe Total : 41,610 ktoe

Agriculture, 3% Non-Energy Use, 9%

Residential & Commercial, 19%

Industrial, 30%

Transport, 40%

6

Trends Of GDP and Energy, 1990 - 2010

Source: National Energy Balance, KeTTHA

0

100,000

200,000

300,000

400,000

500,000

600,000

0

20,000

40,000

60,000

80,000

100,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Trends in GDP, Primary Energy Supply and Final Energy Demand

FED

PES

GDP

FED - Final Energy Demand (ktoe) PES – Primary Energy Supply (ktoe) GDP – Gross Domestic Product (RM million)

Increasing Energy

Demand

EE Initiatives

New Energy Sources

Declining Energy

Reserves

Energy

Net

Exporter

Net

Importer

2019

Demand-Supply Gap

2025 Year

Energy demand is projected to increase from 2,000 PJ in 2009 to 4,013 PJ in 2030 Average rate of 3.6% p.a. Malaysia is projected to be a net energy importer by 2019

Energy Demand-Supply Balance

8

Petroleum Development Act, 1974

National Petroleum Policy, 1975

National Depletion Policy, 1980

Four-Fuel Diversification Policy,

1981

Fifth Fuel Policy, 2000

National Green Technology Policy, 2009

National RE Policy & Action

Plan, 2010

New Energy Policy & 10th Malaysia

Plan, 2010

Energy Policies

National Energy Policy, 1979

Energy Pricing

•Resource Allocation

•Economic Development path

•EE & RE Uptake

Energy Supply

• Diversify Supply

•Alternative Sources

•New Entrants

Energy Efficiency

•Market Competitive

•Low-carbon Economy

Governance

•Integrated

•Regulatory consistency

•Market disciplines

Change Management

•Integrated

•Sequenced

•Gradual

• Social Assistance

9

The New Energy Policy addresses economic efficiency, security of supply &

social and environmental objectives

1 2 3 4 5

5 PILLARS

10

Progress Under 10th Malaysia Plan

Gas Price Revision

Energy Pricing 1

Adoption of market-based energy pricing

Gas prices set by Government to increase by RM3/mmbtu every 6 month

Achieve Market Price by 2016

Itemising subsidy amount in consumer utility bills

Gas Price Revision

Itemised Billing

June 2011

Dec 2011

12

Energy Supply

2

Oil & Gas Sector

LNG Regasification Terminals (RGT)

RGT in Malacca (~ 500 mmscfd)

Refinery and Petrochemical Development

RAPID in Johor

Initiatives to Secure and Manage Reliable Energy Supply

2012

2015

2016

RGT in Sabah(~100 mmscfd)

RGT in Tanjung Pengerang, Johor (~500 mmscfd)

2016

20XX RGT ??

13

SINGLE OPERATOR

SUBSIDISED PRICE

INEFFICIENT

MARKET

INSUFFICIENT SUPPLY

3RD PARTY ACCESS

EFFICIENT MARKET MARKET PRICE

MULTIPLE OPERATOR

SUFFICIENT SUPPLY

Energy Supply

2

Third Party Access for Gas Sector

14

Energy Supply

2

Electricity Sector

Power Generation Plants

300MW Kimanis Gas Power Plant 2013

2013

2015

100MW SPR Gas Power Plant (Kimanis)

1000MW Coal Power Plant (Janamanjung)

2016 1000MW Coal Power Plant (Tg. Bin)

Other Initiatives

Feed-in-Tariff for RE Sources

Studies on alternative energy sources

2017 622MW Hydro Plant

15

Energy Efficiency

3

Measures to encourage efficient use of energy

• RM40million was disbursed for Sustainability Achieve Via Energy Efficiency (SAVE) Programme to SEDA

• A total of RM 45 million was allocated to SIRIM for EE Testing Lab

– RM15.21 million has been disbursed

• KeTTHA is undertaking the task in drawing the EE Masterplan and Act

SAVE

EE Lab

EE Act

16

Governance

4 Improved governance of energy sector to raise productivity & efficiency

Various entities established to address separate element of the energy industry

– Malaysia Electricity Supply Industry (MESI)

– Renewable Energy & Feed-in-Tariff

– Alternative energy sources etc.

Enhancement/Amendments of Acts

• Gas Supply Act 1993

Labs & Workshops conducted to address mechanism for effective coordination between entities

MyPower

MNPC

MPRC

SEDA

New Entities

Stronger Governance

17

Way Forward

Efforts to raise productivity & efficiency

• Gradual & phased implementation

• Assess appropriate timeline for market price of all energy sources

• “Market price” that reflect efficient cost of supply, incentive for investment & transparency

• Address the issue

– “Aging” infrastructure

– Energy efficient vehicle

– Social safety net

Enhancement

Vision for the Future

18

Efficient use of energy

Diversified & responsive energy supply

Efficient resource allocation

High value economic development

19