By Mikhail Raj Abdullah
Tenaga Nasional Bhd’s (TNB) ability to undertake large capital investments is pivotal not only for ensuring the continued security of power supply in Malaysia but also for supporting the transition to a high-value green economy and accelerating the development of the electric vehicle (EV) industry.
In the process, it will be able to support the Madani government’s implementation of the new National Energy Transition Roadmap (NETR) and facilitate Malaysia’s renewable energy (RE) commitments.
TNB also needs to install new infrastructure and invest in new systems, carry out improvements and replace, upgrade and modernise ageing assets to meet the demand and customer expectations of current and new electricity users.
As such, the power company is projecting a higher investment allocation to implement the incentive-based regulation (IBR) mechanism for the fourth regulatory period (RP4) between 2025-2027 compared with RM21 billion for IBR RP3 between 2022 and 2024.
The ability to make large capital investments hinges on the IBR regulation for RP4, which is currently being discussed with the Energy Commission (EC), the regulator which ensures the energy industry is developed efficiently.
Ensuring Fair Returns
Against such a backdrop, ensuring fair returns will be critical under RP4, more so with RP4 slated to support the government’s NETR ambitions.
With the right returns, TNB can help take on investments that not only support the nation’s energy transition agenda and stimulate the economy but fundamentally reshape it by transforming the customer experience and empowering it with innovative solutions.
With the necessary fair returns to sustainably attract investments, TNB will be well-positioned to maintain costs to produce electricity and deliver world-class service reliability to the rakyat.
In a nutshell, the company would continue what can be described as its national service and contribute to Malaysia’s socio-economic development while delivering fair returns to shareholders.
Consumers must remember that for almost 75 years, TNB has been powering Malaysia 24 hours a day, maintaining a secure and resilient system.
As the provider of essential services in the area of electricity, it has undoubtedly fulfilled its main responsibility of keeping the lights on for over 33 million people, thanks to adequate investments.
As a pivotal player in driving the country’s transition towards sustainability, TNB has been actively working towards modernising Malaysia’s energy infrastructure to support the country’s journey towards Net Zero emissions.
Power Grid Must Be Flexible to Meet Demand Fluctuations
The rise of RE prosumers or those who buy electronic components a critical component to achieving the country’s goal of 31% RE by 2025 – means the grid must also be prepared for an increasingly bidirectional flow of energy.
The growing number of distributed energy resources such as rooftop solar panels and energy storage systems also add a significant challenge to the existing infrastructure.
A case in point is the target to have 1.5 million electric vehicles on the road by 2040 which is a significant increase from the 10,000 currently registered in the country.
With the global transportation sector generating the largest share of greenhouse gas emissions, it’s a shift that has to be made sooner rather than later and will require a grid capable of handling the fluctuations in demand.
While the country’s energy grid is relatively reliable and stable, it was not designed for the level of flexibility required in the years to come.
Recognising the world growth potential in the clean energy industry, with an estimated US$1.7 trillion in investments by 2023, Malaysia is focusing on the development of RE, energy efficiency (EE), and grid strengthening.
Transforming Malaysia’s energy grid for future demand involves more than advancement for higher energy production and distribution.
That is why TNB is adopting smart grid technologies, encompassing smart meters, advanced grid monitoring and control systems and robust cybersecurity measures, aligning with international standards such as ISO 55001.
Yet, there is substantial room for advancement, notably with the ongoing development of a comprehensive digital geographic information system for more efficient energy grid management.
TNB’S Smart Utility Programme is actively shaping the distribution network’s role in enhancing Malaysia’s grid flexibility, positioning it for a future-driven role.
The rapid growth of energy needs in Southeast Asia in recent years highlights the need for a grid that is capable of handling fluctuating generation and consumption while maintaining a balance between security, reliability and sustainability and TNB would be well-placed to do just that.
Under-investment in the energy sector can lead to outages and blackouts, as seen in the United States over the past decade.
In contrast, TNB’s energy system investments have been critical in guaranteeing a secure and dependable power supply, unlocking significant benefits for the national green economy and delivering fair returns to its shareholders,
The public must realise that a successful implementation of RP4 with fair returns and investments in the energy system is crucial for TNB to ensure a secure and dependable power supply for the whole country.
— BERNAMA
