Malaysia shifts from coal to a mix of solar, gas and electricity

Malaysia will shift away from coal and focus on solar power, said the CEO of the state utility Tenaga Nasional on Wednesday. He added that using renewable sources would keep costs low.

Southeast Asia's 35 million-strong nation has increased its coal-fired fleet in order to lower electricity costs. However, it plans to increase the use of solar and natural gas - with the latter being cheaper but the former more flexible.

Solar is cheaper per unit than coal and gas. In an interview, Megat Jalaluddin, CEO of TNB said that the best option is to have a mix that will address affordability.

MALAYSIA MAY NEED LNG Imports in the Future

Malaysia will add 6-8 gigawatts to its gas-fired power and double the 9 GW of renewable energy capacity it has today as part of reducing coal dependence by 2029. Data from the energy think tank Ember show that coal accounts for about 43% of Malaysia’s annual electricity output. Gas is around 37%, and solar makes up over 2%.

Despite being the fifth largest exporter of LNG, the country has stated that it may start importing super-chilled fuel in the next decade due to the growing demand for power from data centres.

Jalaluddin predicted that gas consumption in the power sector would rise from 700 million standard cubic feet a day (MMSCFD), to approximately 1,000 MMSCFD by 2030, forcing utilities into importing LNG at a higher price to meet increased demand.

Malaysia relies almost exclusively on its local, relatively inexpensive natural gas for electricity generation. The cost per unit of LNG-fired energy is about 29% higher than the local gas-based power, he added.

Jalaluddin also said that Malaysia wants data centre developers to expand beyond southern Johor, which is home to two thirds of the country's 4,000 megawatt capacity data centres. New data centres with a 500 MW capability will be coming online next year in central Pahang and Melaka, he added.

He said: "As the owner and operator, we'd like to see an infrastructure built in an even manner across the country." Mark Potter edited the report by Sudarshan Varadahan.

(source: Reuters)